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More Great Information on Large Boston:
Dont Just Investigate Your Boston Condo, Investigate The Mangement Company Too by Jeff Persons
A cautionary tale about how accumulated mistakes made
by the management company can bankrupt a condo association!
Boston Real Estate buyers often ignore the management company when they buy into a new building. They just hear professionally managed which sounds fine. This can often be a very expensive mistake that your Accredited Buyers Agent will keep you from making.
Here is an example of how incompetence at the management company can drive up condo fees as well as make life miserable for the owners. This is kind of a long story that I cannot make short, but the education value in considerable so please bear with me.
Once I bought a dream-come-true condo on the third floor, front facing on beautiful Commonwealth Avenue in the heart of Back Bay. Fantastic bay windows overlooking what Robert Frost called The most beautiful street in America. The condo was tree level so it was perfect for people watching as well as enjoyment of the sparkly lights they keep turned on for 5 months a year.
I bought the unit in 1997, before I got into real estate in 2002, so I was really a babe in the woods. I did not even know what a Buyers Agent was at this time but this incident actually inspired me to start a career in Boston real estate as a Buyers Agent with an emphasis on buyer protection.
My first clue that I should have used a Buyers Agent came six months after I moved into my dream home. I got a bill to fix the roof in this 52 unit building. My share for the 650 sq ft I owned was $8000. This would not have come as a surprise if I had had a Buyers Agent when I bought the unit. If I had a Buyers Agent, he would have gotten a copy of the condo association meeting minutes where I would find the conversations about the new roof. But since the new roof had not been officially assessed and I was working directly with the Sellers Agent, the meeting minutes were WITHHELD FROM ME. A Sellers Agent will not offer these to the buyers because the Sellers Agent cannot by law reveal anything about the condo that the seller doesn't want revealed. Once the repairs are officially assessed then they have to tell you all about it.
So I paid the $8000 and started to read the minutes to the condo association meetings in earnest. Reading the latest minutes I noticed a lot of conversation about refurbishing the 2 elevators in the building. Projected cost for my unit was $16,000, but again not assessed yet. Here is where I decided to sell my dream (nightmare) home. Being the honest type, I shared the projections of the future elevator repairs with the new owners even though I did not have to because the new elevators had not been assessed yet. I made sure they got a copy of the minutes and budget so at least they knew it was coming when the bill arrived 6 months later.
It gets a lot worse.
Then the condo association and the management company started to make a sad comedy of errors that I followed with great interest and great compassion for the owners from the safe confines of my new 2nd floor dream home on Marlborough Street.
First really big mistake was the management company and the condo association PREPAID the elevator company. The new elevators arrived but they were the wrong size. The elevator company blamed the management company which blamed the elevator company. Since the job was prepaid I bet you can guess who had to cough up the additional $95,000 to make the new elevators fit into the shafts.
So the people who bought my 3rd floor unit, after paying the $16,000 for the new elevators were asked for their portion of the $95,000 to retrofit the wrong size elevators into the building. Because the management company had prepaid, they did not have any choice, they had to pay even though the wrong measurement was done by the elevator company and the management company.
I sure am glad that I was out of the building at this point,
just the emotional anguish of these incompetent
irresponsible people costing me money!
But you want to hear the corker? It took them 3 more years to complete the elevator project. It must have been hell for the 4th, 5th, 6th and 7th floors as they had to walk up the stairs for a total of 4 years. So much for buying into an elevator building. In the end I think the new owners of my unit paid $22,000 for the elevators when all was done.
But you want to hear the bottom line? The condo fees for the 52 units went up by 50 percent. So my little one bedroom with 650 sq ft that had a condo fee of $350 when I bought it, now has a condo fee of $575. You can imagine how much much harder that makes these 52 units to sell now! Who wants to sign up for a $575 condo fee for a one bedroom when most condo fees for that size unit is about $350?
But you want to hear who is to blame? Besides the condo association trustees who apparently did not have enough business sense to keep from prepaying for a $500,000 elevator, thus forfeiting leverage to make the elevator company fix their mistake, the real blame goes to the management company who by the way does not care.
So how do you avoid making the same mistake?
Investigate the management company. This can be as easy as talking with the trustees of several of the buildings that the management company has a contract with and ask them how happy they are with them. If you are a buyer and you are working with a Buyers Agent, he can be a big help here. Besides the fact that most of us Boston Buyers Agents already know the good management companies from the bad ones, your Buyers Agent can track down all the documents they dont want you to see. The sellers do not want you to see the meeting minutes and the budget and in a lot of cases you WILL NOT see these unless you or your Buyers Agent tracks them down. After repeated phone calls, I've even had to show up at the management companies door demanding I get a copy.
You would not think so but Property management is a difficult and very low profit margin business so they try to get a large number of buildings to make up for the tight margins with volume. Problem with that is, the more buildings they get the less they care about yours.
Jeff Persons can help you find Boston Homes and Boston
Suburb Homes For more information about Boston Condos
visit: http://wesellboston.net
Article Source: http://www.earticlesonline.com/Article/Dont-Just-Investigate-Your-Boston-Condo--Investigate-The-Mangement-Company-Too/738325