The Property Management Shop
by Marc Wilson
Q. I work as a property manager with one of the larger property management firms in San Francisco. I enjoy what I do, and I have good communication with most of my clients, the property owners. Unfortunately, I always seem to end up with one or two difficult owners. One owner in particular gets angry with me whenever I spend money on repairs and maintenance. I dread mailing out the monthly statements, because I know this owner will call my office and complain about the maintenance work and bills. He always insists that I get three bids for even the smallest of jobs, and then he never makes a decision. My vendors are no longer willing to submit bids pertaining to his property, because they find the effort is a waste of their time. I am becoming increasingly more concerned about the growing amount of deferred maintenance at this property, fearing especially the risk of liability. Do you have any clients like this? How do you handle them?
A. Most apartment building
owners find it difficult to surrender complete control
of their property to a property manager. In most cases,
owners have worked hard managing their properties for
10, 20 or even 30 years, before each hands over “his
baby” to your
management company. Similarly, the buildings that you
manage probably represent a non-trivial percentage of
your clients’ incomes. These facts make it difficult
for owners to grant you complete autonomy. Some owners
will never be able to stomach third-party
professional property management. Others are never able
to make a smooth transition into retirement from their
own management role. They might not have other interests,
or they might simply be too control
oriented to walk away from the management responsibilities.
Your job is to facilitate the removal of your clients from their day-to-day responsibilities of property management. Similarly, you have a responsibility to yourself and to your employer to identify those owners who will not be able to make the transition. You are an independent contractor who has been hired to perform certain management duties. You are not an employee who is paid by the hour, nor are you in the business of receiving detailed job assignments from your clients. Your responsibilities are to manage your clients’ properties to the best of your ability. If you want or desire to be micro-managed by your clients, then you don’t want to be a property manager. Instead, the best fit for you might be as an on-site manager.
I only communicate with my clients if I am going to replace a major building system at the property such as the roof or the boiler system or perform a major repair such as an external paint job. In these instances, I figure the owners deserve a consultation. Virtually all other building repairs and general maintenance is performed at my sole discretion. Why? Because owners have faith in my ability to make the right decisions: that is why they have hired me to manage their properties. The truth is that I don’t learn anything from verbal interaction with my clients concerning repairs and maintenance. It just takes up my time and reduces my hourly income. Remember that the majority of owners have a strong desire to remove themselves totally from their property management responsibilities.
You need to show them that you are capable of making appropriate decisions with their money. Don’t consult with your owners; just manage their properties. They need to understand that they do not have the option of micro-managing your time and energy. Owners simply have the option to retain your services or to terminate your services. The bottom line with each owner is that either you manage the property or the owner does it. You never, ever do anything together. When a specific owner receives your monthly statement, he/she might call to complain. In this case, the owner might say, “why didn’t you call me” or “be sure to call me about all future repairs.” When this happens, be passive-aggressive. Don’t insist on your right to autonomy; just say “yes sir” and “I understand sir.” Then in the future, make sure not to call your owner with routine repairs and maintenance questions or concerns, for they are all routine jobs. Believe me, your owner will start to understand that you are making appropriate decisions, and that you do not require constant management. If the owner does not settle down, this is due to one of two reasons: either he/she really just wants an employee/on-site manager or he/she has no faith in your decision-making ability. In either case, you will need to find a new client.
As a general rule of thumb, I don’t consult my clients regarding any repair or maintenance issues that, if brought to the attention of the Department of Building Inspection, would result in a Notice of Violation. Similarly, I don’t consult my clients regarding any repair items that are generated pursuant to an actual Notice of Violation. I am being paid to handle these types of repairs, and that is what I do. If the property needs a new roof, don’t call the owner and have a verbal conversation. Just mail him three bids to replace the roof and instruct him to sign one and mail it back to you. This is called an “either/or” close. The question is not whether or not the roof will be replaced; the question is which roofer will be hired. You should always try to get the best possible pricing for your clients, for if you do, there is no need to discuss pricing. You are already doing the best job that you can. Again, let me repeat, the owner can either continue to retain your services or he/she can terminate your services. Constant communication with your clients will not make the job less expensive.
As a professional property manager, you should try to make repair and maintenance items as automatic as possible. For each of your properties, develop a routine process. All fire extinguishers and fire alarm systems should be serviced on a regular schedule by a competent vendor who has a key to the property. Your fire escapes should be similarly inspected, serviced and certified on a regular basis. Your leasing agent should have a special form that he/she completes whenever he/she shows a vacant unit. This inspection form should list all repairs needed in the vacant unit and around the common areas of the property. Teach your leasing agents what to look for during their inspections, such as rotten rear stairs, roof leaks, rotten hand railings, dirty common area hallways and other similar types of problems. Your cleaning staff should have an item on the bill that indicates whether all the light bulbs and smoke detectors within a vacant unit are fully operational. Your handymen should report and repair any items that they notice when inside the apartment, even when they are called to the apartment for some other reason. Be automatic and show initiative. Always be proactive rather than reactive. Your clients will appreciate your hard work and their newfound freedom.
The opinions expressed in this article are those of the author and do not necessarily reflect the viewpoint of the SFAA or the San Francisco Apartment Magazine. Marc Wilson has been managing and selling San Francisco apartment buildings for over 15 years. Please send your questions concerning property management issues to Marc Wilson at 1699 Van Ness Avenue, San Francisco, CA 94109. He can be reached at 415-229-1275. Copyright ©2003 San Francisco Apartment Magazine