Legal Questions Answered By Griffin & Murphy, LLP

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Griffin & Murphy, LLP, is a boutique law firm in Washington, D.C. concentrating its practice in real estate law (including development, finance, leasing, zoning and condominium conversions), as well as estate planning and probate, civil litigation, and business law. The attorneys of Griffin & Murphy, LLP are licensed to practice law in the District of Columbia, Maryland and Virginia. Griffin and Murphy, LLP was founded in 1981.

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I need some help that may benefit other readers as well. I bought a condo in a small 14-unit condo building in Mount Pleasant almost 2 years ago and everything has been good except for our management company. They do not respond to requests in a timely manner and often not at all. They have been terrible about simple things like sending bank statements for the condo’s bank accounts and cashing condo fee checks – even worse they ignore serious requests about leaks and a mice issue we had a few months ago. We have complained and have sent them a series of very firm emails but there has been no change. It has gotten to the point where our condo president is fielding all complaints and requests, which is ridiculous because we are not paying her, we are paying them. We pay the company $500 a month to manage the condo. Is this a super cheap rate compared to what other readers pay to management companies to manage buildings of a similar size? And have any other readers ever had to “fire” a management company? Last would anyone suggest a good and reasonably priced company that our condo board could approach? Thanks so much for your help!




You are right that your association president should not be fielding complaint calls. You are paying the management company to field calls, respond to issues, and solve problems regarding the operation of your building. While the management company is slow to pay contractors to fix problems in the building, our guess is that they have no problem paying themselves.

Does your association have a contract with the management company? If there is no contract, you can fire them at any time. If you have a management contract in place, you will need to review it and see what it says about the “term” of the relationship, any dispute resolution process, and finally what can be done to terminate the contract. You will want to look to make sure the contract was signed by the association, because sometimes an association will “inherit” a management company from the developer and the developer may have overlooked the actual paperwork to establish a contractual relationship between the management company and the association (i.e., the contract may be with the developer and not with the association). Continues after the jump.

Your association should immediately send a written letter by certified mail to the management company (preferably to the owner or president of the company) putting them on notice that their services are not satisfactory. The emails you sent are fine, but a written letter will carry more weight. Writing the owner or president of the company may help you if the problem is that you just happen to have a bad manager at an otherwise good company. The letter should succinctly outline the problems and give a reasonable timetable for the management company to cure them. Most importantly, the letter should give the management company a very short deadline for providing you with clear written statements of the association’s finances. It is one thing if the management company is slow to respond to calls or is a poor problem solver, but it is completely inexcusable if the company is mismanaging funds and not providing clear documentation of expenses to the association. A management company could lose its license and be out of business if they are not appropriately managing their clients’ funds.

Finally, if the letter does not change the management company’s ways and no documentation of the association’s finances shows up by the deadline, you would have a great case for terminating the contract. Based on your letter, it sounds as though the association has its own bank accounts. At a minimum the president, treasurer or some other signer on the account should call the bank and ask for either copies of back statements or how to get online so that you can access this information quickly. Look at every check and make sure the disbursements from the account seem correct.

Regarding your question as to whether the management company is charging the association a cheap rate, at $500 per month your association is paying a little over $35 per door. While other factors can come into play, that is on the lower end of the spectrum that we have seen (note: we are also involved in running a commercial property management business). A management company that provides quality service, responds quickly, solves problems, and sends timely financial information will probably be more in the $630-$700 per month range ($45-$50 per door) for a building the size of yours.

This response was prepared by Mark G. Griffin and Patrick D. Blake of Griffin & Murphy, LLP. The material contained in this response has been prepared for informational purposes only and should not be relied upon as legal advice or as a substitute for a consultation with a qualified attorney. Nothing in this response should be considered as either creating an attorney-client relationship between the reader and Griffin & Murphy, LLP or as rendering of legal advice for any specific matter.

16 Comment

  • You couldn’t get me to manage 5 condos (whiners) for $500 a month. You probably don’t need to go through all the trouble the lawyer laid out as your building manager would probably gladly quit.

  • If you do decide to fire your management company, make sure the board of directors receives all the documentation BEFORE the end of the term or contract. We fired our management company in June of 2009 and the new management company still has not received all the documentation for our assosiation. We are still in limbo as to what has been paid or what we owe or who has paid what.

  • Lady, they presumably negotiated this price to what was agreeable for all parties involved. Just because it’s a low fee doesn’t mean they don’t deserve the services the management company contracted to provide. Fine, you wouldn’t manage a building for $500 a month, but this company agreed to. These people are not whiners–they’re victims of a crooked management company that is stealing their money. I’m shocked to hear they exist in DC. Simply shocked.

  • That is super cheap. I live in a 15 unit building and the management company charges 700-800 per month.

  • Let’s begin with the premise that this is not a legal question requiring legal counsel and the clarification that Community Association Managers (CAMS) are not licensed in the District of Columbia.

    This is a common problem in community associations and there is a solution, but it is not a permanent solution because of the very nature of proper community association management being continuous and perpetual requiring constant vigilance by all concerned parties: unit owners, their volunteer elected boards, and their appointed and paid CAMS.

    Meeting no more than once a month, the board sets policy ONLY, it does not manage the community or its day to day affairs. The board’s number one job is the selection, hiring (and firing) of its management company.

    Since community association managers are not licensed by our public sector local government, then seek classification and quality management through the private sector and the Community Association Institute (CAI) with chapters in all 50 states.

    Hire only CAI certified Managers working within CAI certified Management Companies and fill the need to maintain the common elements of your association, keep up your quality of life, and keep up your property values.

    It’s more costly when you have only 12 units to spread the cost of professional quality management, but that comes with the territory and the choice you made in buying into common ground living with fewer units to spread the cost.

    But then what is the alternative ? Is it fair to burden just one or two volunteer owner residents with the responsibility that should be equally shared by all unit owners or should you for the sake of the whole bite the bullet and pay for professional management ?

    This comes up a lot in urban living and the answer is (especially in states and municipalities that do not qualify and license CAMS) hire a CAI accredited Manager within a CAI accredited Management Company.

    Also, the price quoted by legal counsel above is more like for larger associations and quite low for the instant case.

    Common ground living is not easy, but it can be made easier if all 12 neighbors share in the ungrateful, unpaid volunteer job of serving on the board. Take turns every year or two, rotate and share in the responsibility that comes with the ownership of real property. Responsibility first; rights second.

    Don’t like common ground living, buy your own lot and square.

    CAI national headquarters is right here in Alexandria, Virginia.

    I’m not a lawyer or a CAM and I’m quite disappointed with the answer by Griffin and Murphy who are a lot more educated than I.

    I’m just a long time, life long Washington D.C. landlord trying to help out a neighboring property owner in need and perhaps anyone else reading this.

  • I think this is often the problem in new condo buildings. The Developer is often the manager or related to the manager. The condo fees are nice little cash cow for the developer after the development is done. Developers often write these contracts in such as way that it is very hard to get out of them for a few years.

    I hope this is not your problem. BUt for anyone buying in a newly built or converted building, be aware and ask lots of questions.

    • You are being so tired and commonly cynical.

      Condo fees are not a nice little cash cow.

      The fees go to pay the common expenses of common ground living and there are many. Read all the line items on any community association’s budget. The truth is in the details.

      Management contracts are most always made for one year and then go month to month and most developers are anxious to move on. Few want to manage what they built good or bad.

      Your cynicism does not contribute anything here.

      The only thing I’d say on your tirade against developers is that they get all the glory for building and creating something good or bad and then it’s the managers and unit owner volunteers have the ungrateful long haul job of keeping it up.

  • We fired our management company (a very major DC area management company that gets positive reviews from other buildings) two years ago after really abusive communication and substandard service and after talking to the president. He literally wrote us, “good riddance.”

    We signed up with a new company that tripled! our fees but included many more services (like free cleaning). Though we are a 10 unit building, we pay $100 per door.

    Though we were prepared to increase our dues based on the new fees, the shocking result was actually that the new management company, after renegotiating several contracts (especially insurance), decreased our total costs so much they saved us money (even with the 300% increase in fees). I’m the treasurer and it’s an amazing relief to be growing our reserve fund without having increased dues in four years. I’ve been blown away by how much we’ve saved by paying much more in management fees.

    Two warnings: 1) The transition between management companies was complicated, painful, and expensive. Documentation was not readily forthcoming and switching payments were complicated.

    2) Owners’ expectations for services in nice condos are generally unreasonable. It’s not a hotel. Also, we spread our major repairs across several years because of the management company’s limited capacity to manage complex projects. It’s not been completely smooth, but at least it’s workable.

    • Janson I’m the treasurer of a small condo building (6 units) and I would like to speak with you further about your experience. Is there anyway we could talk offline?

      • I’d love to talk to you more too. My small building’s been through multiple do-nothing management companies. We’d love to find a company that earns its fees.

  • we fired our mgmt company last year for a 14-unit condo for those exact reasons. Instead of paying $750/month for us (the Board) to do 80% of the work, we now pay $0.00 per month and do it ourselves.
    a) it’s not that much more work than we did anyway
    b) problems get solved quicker and more cost effectively
    c) we have $750/month more to add to reserves and upkeep.

    • That’s admirable and good that the 14 of you in your building can get along well enough to do this, but as the years pass the arrangement is often unsustainable for a host of reasons.

      I do hope with time you prove me wrong, but the sacrifices made just aren’t worth it and more importantly often turn out to be detrimental to your quality of life, the building itself, and your property values as well.

      Hire professionals. Penny wise, pound foolish applies here. We all come from different walks of life and what you’re doing is all and good and,

      I don’t mean to downplay your situation, but I would not buy or invest in a unit in your building.

  • We fired our condo management company a few years ago and changed to Urbane Results. They are more expensive that the one guy in his apartment we had before, but they were able to renegotiate our insurance and trash costs, so in the end we pay the same as we did before. Not only are they protecting the value of my investment, they have increased it by making the building nicer.

  • I’m currently in a four unit building & we’re considering dropping a useless management company. They are non-responsive, frighteningly unable to keep financial records, and are only relied upon to draft checks for utilities, trash, cleaning, and insurance. My question is: For those who manage their own buildings, have you tried & would you recommend any particular property management software?

  • to the anonymous responder who said self-mgmt is unstainable and penny-wise and pound foolish and detrimental to property values. you couldn’t be more wrong. first of all, it’s almost always the case that if there are 14 unit owners, only 3 or 4 care enough to be involved and the other 10 just want to pay their dues. So all it really takes is 3 people on a Board who are good leaders and share a similar philosphy that is in the best interest of the community. We fortunately have this situation. 2nd, the $750/month we save goes towards property upgrades, repairs, and to build up reserves. Why wouldn’t you want to live in a condo building that has healthy reserves and the luxury of making repairs w/o special assessments or raising dues? We haven’t had to raise dues or special assess in almost 3 years and have reserves of $30,000. Lastly, the time commitment problem is a myth. We have all of our bills paid electronically every month, we maintain a condo email account and facebook page to communicate, we split up the duties of dealing with the vendors, and the monthly budgets are very easy once you set up the template in excel.

    Finally, no mgmt company earning $750/month can afford to spend much time worrying about whether or not a vendor is giving the best price or attending to a unit owner’s problem in a timely fashion.

    As far as the software question, just sign up for a small business account with Bank of America, find somebody who knows how to set up a spreadsheet in excel, and you’ve got all you need.

  • I, too, would love to hear the names of some well-regarded condo management companies. It seems like such a crapshoot sometimes as to whether you’ll get professional service or not.

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