The reality

You’ve probably never read your building’s property management contract all the way through. Most board members haven’t either. If you did, you’d find a carefully defined scope of work — vendors coordinated, maintenance dispatched, assessments collected, reports generated.

What you wouldn’t find: anything about fiduciary duties. Reserve funding strategy. Compliance tracking. Case documentation. Institutional memory. The legal obligations that make your board personally accountable to unit owners.

That’s not an oversight in the contract. It’s the contract. Property management was never designed to cover governance. And yet most boards — paying $10,000 to $18,000 a year for the service — assume it does.

Operations and governance are different jobs. One has a contract. The other has a fiduciary duty.

What your building is paying — and what it’s getting.

What the contract covers. What it doesn’t.

The markup problem most boards don’t know about.

Beyond the management fee, most property management companies mark up vendor invoices — the plumber, the landscaper, the elevator contractor — by 10 to 15 percent before passing the bill to the association. It’s legal. It’s common. And boards have almost no visibility into it. (more…)