Choosing the right property management company is a tedious but important task for any Board of Directors.
The use of a Request For Proposal (RFP) process by a cooperative board will greatly enhance the selection of the most appropriate company. Evaluation of the critical aspects of these proposals, in response to a well-prepared RFP, will be simplified and more precise since responses will be directed towards clearly stated goals and requirements. (For more information about using an RFP process, refer to the April 2011 issue of the Chicagoland Cooperator.)
How to Start
In summary, the proposals should respond to the co-op’s need for: people, e.g. the property manager and divisional leadership; support activities, e.g. building staffing, project management and shareholder care; financial requirements, e.g. payroll, financial statements and budgeting; and participation with the board, in performing at a level that will produce, in the eyes of the beholder, a “great building in which to live.”
Proposal review should begin by using an “elimination process.” Seek to reduce the number of candidate property management companies to three so that each one can be fully examined in detail.
Paring Down the Selection
Knock out applicants if their stated qualifications are weak; if their writing reveals a lack of understanding of ongoing co-op issues; or, if their pricing is clearly out of line compared to the services to be rendered. During building walk-throughs ask the potential companies their opinions about the facility, and how it compares to other properties that they manage. If the proposed property manager is present, attempt to determine what he/she observes, based on past experiences and challenges.