Looking for advice on transitioning from a managed to a self-managed condo

by Prince Of Petworth December 3, 2015 at 2:25 pm 28 Comments

Photo by PoPville flickr user Melodious

“Dear PoPville,

We are a small 6 unit condo building in DC and are looking to transition from using a management company to self-management to manage our association. We welcome any tips in the transition, including any paperwork that we would need to file in DC and how to best work with our current management company in that transition. Any experience or guidance is highly appreciated! Thanks!”

  • Nathan

    I can’t comment as to the transition, but the initial setup for our small self-managed condo was easy. I’m assuming you already have a Federal Tax ID number, which is what too the longest to receive. With that and a board resolution to open a bank account you can open a commercial account at any bank. You’ll also have to make sure the contact information is changed for your master insurance policy, and any common (water probably? – thats all we have) bills paid by your current management company.

    • Anon Spock

      I would think just changing over names on utilities, insurance, etc; getting the keys back; getting contact info for service providers you wish to keep. You already have a bank account. Make sure taxes are filed on time (it’s March not April).

      • Nathan

        True, maybe it can just be easily transferred over.

        Yes, taxes are important. You shouldn’t owe anything, but still need to file.

        • Anon Spock

          Should be in your name already but changing authorized users. Could be faster too close and reopen for commercial. I’m not sure.

    • Tax Accountant

      Out of curiosity – why did getting your Federal Tax ID take a long time? Did you hire someone to do that for you? Because you can literally go onto the IRS website and get a federal tax ID instantly. No waiting.

      • Nathan

        Yeah that is what I tried to do, but for some reason it wouldn’t give me one instantly. I had to fax the form in and wait for them to fax it back. Not sure what the deal was.

    • K

      Do you have a CPA that files your tax return? If so can I have their contact information. We need to file our 1120-H

  • board member

    A friend’s small condo building (5 units) takes a hybrid approach. It is mostly self-managed, but they do have a management company for accounting purposes only. So the owners have to figure out how/when to fix things, shovel snow, set up appointments with contractors, etc. But the management company handles the books and taxes.

    • Tall E

      My building is considering this setup, we’d really appreciate a recommendation for a company who is good at the accounting part and our board can manage the rest. Thanks!

      • sam-g

        I recommend getting quotes from many DC area firms and conducting phone interviews to ask about their team and experience. Some of the large ones might be good, but also very highly priced. The really good smaller niche ones might be maxed out with clients and can’t take anymore. You’ll just need to get a bunch and compare. Here are some ones to start, that I have not yet used but might be of help. All of them will offer customized financial-only service options ranging from financial only to financial plus some occasional assistance to board etc…. When I was looking for my board, I got some that charged as much for financial as another did for a full service management. We ultimately went with full service management since mine is a 12+ unit building and makes more financial sense to do so with having more units to pay into the service and still keep dues down.





    • Hopkins Court

      We do something similar in our 8-unit building. Chatel Real Estate does our books and provides support in scheduling vendors. It’s a pretty good system that has worked better than having volunteers take care of everything.

  • sam-g

    Consider working with your bank to see if they offer tools for associations to collect payments directly from owners. Maybe consider going with a bank that offers this. This will reduce the workload on someone on your board from having to collect dues and deposit checks etc. Owners can pay directly through the bank.


    also there are firms that do financial management only like asessment collection, account management, and managing the books that might have lower costs than a full service property manager…

    Lastly, buildium can offer you financial management and HOA collection tools connected to your bank that can allow one of your board members to centrally manage finances and access their accounts via a HOA website. This is what the property managers use. Yours would be $50 a month for fees.

    About the same price annually is quickbooks, but doesn’t tie in E-payment offerings and backed up data, board member access to financials. etc….

  • anon

    Our 12 unit condo made the switch about 2 years ago. The main thing is changing the name and/or contact info for utilities and insurance – super easy if you have a helpful management company (we did not, but it was still pretty easy!)

  • EmilyH

    Our 12 unit condo building considered self managing, but were warned that it “looked bad” to potential buyers. Not sure if you’ve considered this aspect… but also not sure if it’s accurate. Anyone have an issue with a condo sale due self/hybrid instead of professional management?

    • Anon Spock

      Speaking as a buyer: I only considered the numbers and presentation (do things look organized and well managed) not who does the managing. In a very small building, I’d be more leery because there isn’t a big pool of people able to help
      I wouldn’t place too much weight on property managers. Quite a few are terrible, so you never know what you’re walking into even if they pass the initial sniff test.

    • anon

      I get that management companies can really cost a lot for a small building, but they sound pretty scary to buy into. It is like a four person team at work–one person ends up doing the majority of the tasks. Large buildings are usually disfavored on PoPville because they are too dense, but there are some benefits from a building that can better spread out the costs of management and assessments.

    • Anon

      I am the treasurer in a seven unit building. We are completely self managed. We have never had an issue from a buyer/lender (although I was told to be careful of self managed buildings when I bought). It is true that I do most of the work for our building, but it’s really not that difficult, and we have never had personality disputes, although I am sure they could happen. I really don’t think that if someone likes a place enough to consider making an offer, being self managed would deter them. I’ve even been told that our building has been more responsive and organized than those with management companies. We have looked into a management company, and found the additional expense just did not bring enough returns. Hiring a management company for the finances alone makes no sense to me. Receiving & depositing checks, and paying the bills is the easiest part of my job. I created an Excel spreadsheet I’ve used for years to track everything, and it makes everything pretty easy.

  • Rabiznaz

    From a different perspective, self-managed small buildings can oftentimes result in a lot more friction amongst owners based on differing views of how things should be handled. The financial benefit to being self-managed is substantial but speaking from experience it also can lead to a lot of unexpected headaches. I live in a small building and the absence of a management company has created an environment where the work of maintaining the building is unevenly distributed and everything has the possibility of devolving into heated disagreements based off of mismatched opinions on pretty much every issue. I think if your building has very similar approaches to owning property being self managed is a great option, but I’d caution against becoming self managed if you know that there are vast differences in property ownership mentalities.

    • Anon Spock

      +1 to all of this
      Relieved a lot of headaches and didn’t overtax already busy ppl

    • anon

      4:54 anon from below and this is exactly what I am referring to.

    • JoDa

      While in some cases a management company isn’t totally necessary, I do think it’s often worth it if you can find a reasonable and responsible company. My building is only 15 units and we all get along well, but just being on the board is some work, and I can’t even imagine how much more work it would be if we didn’t have the management company getting quotes, handling finances, COMPLYING WITH LAWS, and arranging other things for us. Here’s a good example: when someone buys a unit in the building, they are, by law, entitled to a resale package that includes a couple months of financial statements, the reserve study, deficiency reports, bylaws, plats and plans, rules and regs, and other things. Is there someone in the Association willing to keep all those records and produce them on demand (they get 10 days from accepted offer)? That seems like it would be hard for anyone without an accounting AND association management background, and if I had that background, I wouldn’t do the work for free. Just giving you some food for thought. We pay something around $60/month/unit for management, they handle a WHOLE LOT of stuff, and I feel like it’s worth it.

      • Anon

        The documentation required for a sale is very straightforward. You supply your current budget, By Laws, insurance certificate, and fill out a form. Yes, you have to disclose thing like if any units are in arrears, etc, but there is no request for a study, or multiple years of info, etc. Once you’ve been through it, it’s pretty easy. What the above poster references is way beyond anything I’ve had to provide, and I’ve done about 6 unit sales. I keep a folder of everything needed electronically. When we have a request due to a sale, I just send the current docs, and a standard letter we created to pro-actively respond to questions. I assure you, I have no accounting or legal background. One time we had a foreclosure, and in that case the two lawyers in the building took the lead. In that case, only, a management company would have been helpful. Although, we came through the situation OK, a few hassles aside.

        • JoDa

          Hey, more power to you. I’ll just note that a reserve study is actually required by the Condo Act. I won’t buy in a building without one, since it’s unlikely they’ve alternatively had someone (an engineer/contractor/someone equally qualified) thoroughly inspect the common elements and know fairly well when and how much they will cost to replace (legally, not an acceptable substitute, but practically, passable). Special assessments suck, and I know of far too many horror stories. Even with a reserve study, my building has had to do a (mercifully) small and brief special assessment for something that failed a little sooner than expected (damn you two bad winters in a row), but even that caused a good bit of consternation. We almost never have people fall into arrears, but even the small amount extra sent a few owners scrambling for funds.

  • anon

    Don’t do it! I live in a 4 unit condo building and there is a lot more room for hurt feelings when you do not have a management company in charge. It makes every decision feel like a battle and it is really annoying.

  • April

    Our small building (though larger than yours) went the other way around – from self-managed to managed with lots of board oversight. I am the outgoing board president and would be happy to share some experiences/recs (as well as why we prefer to spend the money on having some management in place!) feel free to contact me if you want to chat more.

    • K

      I am a part of a self managed condo and would be interested I. Chatting with you about how you all ran the building. I’m in a four unit building and we are self managed.

  • Hookdntx

    My condo association just went the opposite route from hybrid to fully managed. The upkeep of the building had fallen to the board and No one in my 10 unit building wanted to be on the board.

    There is less tension and more getting done. If you do go the self managed route ENSURE That you have all of your vendor names and the scheduled maintenance worked out at the annual meetings

    • Daniel

      Mine did the same. The biggest problem of the self-managed condo building is that repair work in the common areas goes completely neglected. No question that it’s probably cheaper to self-manage and a good idea if you have a few owners who are handy and really willing to put in the necessary time and work. But unless you know that for sure ahead of time, I would encourage you to keep the management co (or change to a different management co).


Subscribe to our mailing list