How to tell good condo managing agent from bad ones

[Puddington]

A few persons asked about this, so I am posting here based on the collective experience from myself and a few friends who sit on their MCST Council.

How to watch out for bad MA?

Please don't flame, these 12 lessons are taken from the school of hard knocks...

1) Good MA is pro-active. They inspect the premises, get inputs from the maintenance contractors, and don't wait till residents complain about facility issues.

2) For large estates, the MA has a live-in facility manager, so the estate is better kept as the guy cannot 'run'.
For smaller estates, make sure your MA is not coming to the estate just to get the Treasurer to sign the monthly cheques. Otherwise, he is a BAD MA.
MA management fees differ depending on size of estate, but if it contributes more than 20% of total op expenses, the MA is probably paid more than his
contributions. Try to break down the MA's contributions... for instance, the mkt rate for accounting and admin support only costs $250-$500 / mth by 3rd
party companies. If your MA constantly gets the security guard or cleaner to do his job, you should question whether an MA is required.

3) There are some MAs who privately negotiate for kick-backs from renewing maintenance contracts or introducing a new project contractor.
Hence, if your MA keeps pushing for high cost increases from maintenance contractors, instead of helping to negotiate for fair rates, watch out.
Some MAs allow maintenance contractors to build in a high auto-increment in price per year in the contract and to push for long multi-year contract.
The solution is simple -- always try to get an independent quote from other channels besides your MA before you sign that contract.
The BCA directory of registered contractors has a full list of contractors in different areas of expertise. Where doubtful, don't over-commit to a long contract. Don't be FOG (fear, obligation,guilt) by the MA or the contractor in the contract negotiation.

4) Similarly to point 3, some MAs would try to capitalise on the Council's ignorance, and try to get the Council to spend on repairs using Sinking Fund instead of claiming from Developer warranty in the warranty period. Reasons are two fold: 1. Many MAs get repeat business from developers who handover the management of newly completed estates to them. Don't be surprised if the MA has more interest with the developer than with any single MCST and work in hand with developer to reduce their after completion liabilities. Consult a legal counsel if necessary. Don't just rely on what the MA says.
2. If the Council spend on repairs using the Sinking Fund, the MA is likely to be the one recommending a contractor and some MAs may ask for a kick-back from the contractor.

5) If your MA has a tendency to flag on major repairs coming from the maintenance contractors just before end of the financial year, be careful, review whether it is a true need, or real big item expense, or is the MA trying to soak up the budget?

6) Bad MAs capitalize on their middle man position to 'push' maintenance contractors to highlight facility issues 'requiring expensive repairs', and get kick-backs in the process. Bad MAs are only concerned about asking Council to spend more on repairs or on contract renewals. They are less concerned about daily operations.

7) Bad MA try to push the AGM date as late as possible, or even later than 4 months pass the end of the financial year. By the time the next year's budget is reviewed, almost half of the financial year has passed and the money has been spent or committed. If the Council wants to pursue any matters against the MA, the Council may find itself falling foul of BMSMA instead...

8) Bad MA incurs a lot of additional costs 'under the radar', like 'disbursement costs' or 'general expenses' or 'stationary expenses'.

9) Bad MA would get a "friendly" auditor to audit the expenses. That's when it's useful to have an accountant on board to sniff out the oddballs as the auditor is no longer playing that role. If possible, the Council should hire its own auditor that has direct report to the Council.

10) Most maintenance contractors are in more awe of the MA than of the Council because the MA is the one facilitating the payment. Never forget that it is the Council that is delegating its powers to the MA. The Council should always retain its decision making powers (since it is also legally responsible even if it is executed by the MA), and be prepared to exercise its authority over poor performance by the MA or maintenance contractors.

11) To exercise maximum flexibility over the selection of MAs, the AGM should determine that the Council has the right to hire other MAs in the midst of the year if the incumbent MA is under performing.

12) Be careful if the MA seems keen to support some Council members over others persistently, they may be easier to exploit from the MA perspective.

[tcl]

Thanks for sharing

[teddybear]

Thanks for the nice summary.

Just to contribute some of my friends and my experience:

1) Cases where Council Chairman collude with the MA to milk the MCST.

2) Cases where majority council members (including the Chairman) are kakis out to milk the MCST and always discouraging and/or making things difficult for other owners to join the MCST council (very easy for them since they have majority votes to out-vote anybody who joined the Council, and they ensure they always have the majority votes).

3) Cases where MA collude with maintenance & repair contractors / vendors to milk the MCST by quoting high prices, or certain electronic things like security systems keep spoiling at different places and keep needing repair and replacement.

4) Cases where MA always pushing Council to award contract / maintenance & repair jobs to a particular vendor (MA's preferred vendor).

5) Cases where for big contracts, MA don't even get 3 quotes, or they get 3 quotes but always 1 from their preferred vendor and the other 2 are always much more expensive then their preferred vendor (even though their preferred vendor quote is already well above market rate).

6) Cases where meeting minutes have been massaged (certain topic/issue discussed and supported by majority council members has not been recorded in meeting minutes because Council Chair is against it being implemented) and do not reflect the factual events and discussions made during the Council meeting. A typical ploy is not to furnish the written meeting minutes until a week before next council meeting, usually 2 months later (so that Council members would most likely have forgotten or don't remember well enough to question what has been recorded in meeting minutes).

7) Council member (in that particular case is the Chairman) has conflict of interest and he is pushing to award contract to a particular vendor who is his friend / business client.

8) Cases where particular individual go around canvassing for owners to appoint him as their proxy so that he "can vote on issues during AGM on their behalf for their benefits" (obviously, with selfish personal agenda / axe to grind against other council members - In the particular case, he had been found by existing council members to have not acted honestly and having conflict of interest in a large contract he push to be awarded to a particular vendor).



A few persons asked about this, so I am posting here based on the collective experience from myself and a few friends who sit on their MCST Council.

How to watch out for bad MA?

Please don't flame, these 12 lessons are taken from the school of hard knocks...

1) Good MA is pro-active. They inspect the premises, get inputs from the maintenance contractors, and don't wait till residents complain about facility issues.

2) For large estates, the MA has a live-in facility manager, so the estate is better kept as the guy cannot 'run'.
For smaller estates, make sure your MA is not coming to the estate just to get the Treasurer to sign the monthly cheques. Otherwise, he is a BAD MA.
MA management fees differ depending on size of estate, but if it contributes more than 20% of total op expenses, the MA is probably paid more than his
contributions. Try to break down the MA's contributions... for instance, the mkt rate for accounting and admin support only costs $250-$500 / mth by 3rd
party companies. If your MA constantly gets the security guard or cleaner to do his job, you should question whether an MA is required.

3) There are some MAs who privately negotiate for kick-backs from renewing maintenance contracts or introducing a new project contractor.
Hence, if your MA keeps pushing for high cost increases from maintenance contractors, instead of helping to negotiate for fair rates, watch out.
Some MAs allow maintenance contractors to build in a high auto-increment in price per year in the contract and to push for long multi-year contract.
The solution is simple -- always try to get an independent quote from other channels besides your MA before you sign that contract.
The BCA directory of registered contractors has a full list of contractors in different areas of expertise. Where doubtful, don't over-commit to a long contract. Don't be FOG (fear, obligation,guilt) by the MA or the contractor in the contract negotiation.

4) Similarly to point 3, some MAs would try to capitalise on the Council's ignorance, and try to get the Council to spend on repairs using Sinking Fund instead of claiming from Developer warranty in the warranty period. Reasons are two fold: 1. Many MAs get repeat business from developers who handover the management of newly completed estates to them. Don't be surprised if the MA has more interest with the developer than with any single MCST and work in hand with developer to reduce their after completion liabilities. Consult a legal counsel if necessary. Don't just rely on what the MA says.
2. If the Council spend on repairs using the Sinking Fund, the MA is likely to be the one recommending a contractor and some MAs may ask for a kick-back from the contractor.

5) If your MA has a tendency to flag on major repairs coming from the maintenance contractors just before end of the financial year, be careful, review whether it is a true need, or real big item expense, or is the MA trying to soak up the budget?

6) Bad MAs capitalize on their middle man position to 'push' maintenance contractors to highlight facility issues 'requiring expensive repairs', and get kick-backs in the process. Bad MAs are only concerned about asking Council to spend more on repairs or on contract renewals. They are less concerned about daily operations.

7) Bad MA try to push the AGM date as late as possible, or even later than 4 months pass the end of the financial year. By the time the next year's budget is reviewed, almost half of the financial year has passed and the money has been spent or committed. If the Council wants to pursue any matters against the MA, the Council may find itself falling foul of BMSMA instead...

8) Bad MA incurs a lot of additional costs 'under the radar', like 'disbursement costs' or 'general expenses' or 'stationary expenses'.

9) Bad MA would get a "friendly" auditor to audit the expenses. That's when it's useful to have an accountant on board to sniff out the oddballs as the auditor is no longer playing that role. If possible, the Council should hire its own auditor that has direct report to the Council.

10) Most maintenance contractors are in more awe of the MA than of the Council because the MA is the one facilitating the payment. Never forget that it is the Council that is delegating its powers to the MA. The Council should always retain its decision making powers (since it is also legally responsible even if it is executed by the MA), and be prepared to exercise its authority over poor performance by the MA or maintenance contractors.

11) To exercise maximum flexibility over the selection of MAs, the AGM should determine that the Council has the right to hire other MAs in the midst of the year if the incumbent MA is under performing.

12) Be careful if the MA seems keen to support some Council members over others persistently, they may be easier to exploit from the MA perspective.

[bargain hunter]

i am not very familiar with extremely large projects. Just wondering, for d'leedon's case, will it be easier to manage or harder, more transparent or easier to kelong?

[RSG]

i am not very familiar with extremely large projects. Just wondering, for d'leedon's case, will it be easier to manage or harder, more transparent or easier to kelong?


Transparency wise, size of project is neutral. As for complexity and difficulty in managing, extremely large project is definitely harder to manage. The main advantage for extremely large project is the economy of scale especially in sharing the cost of management / maintenance.

[bargain hunter]

i can imagine a lot of voting required to push some ideas through.


Transparency wise, size of project is neutral. As for complexity and difficulty in managing, extremely large project is definitely harder to manage. The main advantage for extremely large project is the economy of scale especially in sharing the cost of management / maintenance.

[teddybear]

Large projects are more difficult to manage.
Large projects are easier to kelong /milk.
Large projects are more difficult to maintain in good condition.
... (Well, too many cons for large project!) ...


i am not very familiar with extremely large projects. Just wondering, for d'leedon's case, will it be easier to manage or harder, more transparent or easier to kelong?

[teddybear]

In 1 incident I heard, this MA company is a local name and manages many many estates in Singapore some more! We would think that the milking problem probably occur at the estate manager (EM) level but from some incidents and events and the director strongly supporting the EM and the Council Chairman despite of strong and clear evidence of inappropriateness in contract-warding by both of them working in unison made people suspect that the whole milking thing may actually be top-down in collusion usually Council Chair (company-wide culture)...........



Thanks for the nice summary.

Just to contribute some of my friends and my experience:

1) Cases where Council Chairman collude with the MA to milk the MCST.

2) Cases where majority council members (including the Chairman) are kakis out to milk the MCST and always discouraging and/or making things difficult for other owners to join the MCST council (very easy for them since they have majority votes to out-vote anybody who joined the Council, and they ensure they always have the majority votes).

3) Cases where MA collude with maintenance & repair contractors / vendors to milk the MCST by quoting high prices, or certain electronic things like security systems keep spoiling at different places and keep needing repair and replacement.

4) Cases where MA always pushing Council to award contract / maintenance & repair jobs to a particular vendor (MA's preferred vendor).

5) Cases where for big contracts, MA don't even get 3 quotes, or they get 3 quotes but always 1 from their preferred vendor and the other 2 are always much more expensive then their preferred vendor (even though their preferred vendor quote is already well above market rate).

6) Cases where meeting minutes have been massaged (certain topic/issue discussed and supported by majority council members has not been recorded in meeting minutes because Council Chair is against it being implemented) and do not reflect the factual events and discussions made during the Council meeting. A typical ploy is not to furnish the written meeting minutes until a week before next council meeting, usually 2 months later (so that Council members would most likely have forgotten or don't remember well enough to question what has been recorded in meeting minutes).

7) Council member (in that particular case is the Chairman) has conflict of interest and he is pushing to award contract to a particular vendor who is his friend / business client.

8) Cases where particular individual go around canvassing for owners to appoint him as their proxy so that he "can vote on issues during AGM on their behalf for their benefits" (obviously, with selfish personal agenda / axe to grind against other council members - In the particular case, he had been found by existing council members to have not acted honestly and having conflict of interest in a large contract he push to be awarded to a particular vendor).

[Puddington]

In 1 incident I heard, this MA company is a local name and manages many many estates in Singapore some more! We would think that the milking problem probably occur at the estate manager (EM) level but from some incidents and events and the director strongly supporting the EM and the Council Chairman despite of strong and clear evidence of inappropriateness in contract-warding by both of them working in unison made people suspect that the whole milking thing may actually be top-down in collusion usually Council Chair (company-wide culture)...........

Usu EM won't "偷吃” unless MA company culture already support that. Of coz if he suay suay kenna caught, no director will save him.

Every Council member has one vote by BCA law so unless the whole Council is sleeping or majority of Council supports the Council Chair, unlikely that the Council Chair can push for something against the majority.

[KimChiu]

Singapore is a very hygienic city. However, as a foreign like me, I'm so surprised to know that they are lacking with recycling policies! I have purchased a condo unit at d'Leedon condo (www.linc2properties.com/d-leedon) , and I’m very much contented with the location of the place and my neighborhood are so friendly. Aside from that it is my first time to see rooftop bars, the freshest tropical fruits, funny signs, sports and green living. There are a lot reasoned to love this place.

[tedpoh]

In 1 incident I heard, this MA company is a local name and manages many many estates in Singapore some more! We would think that the milking problem probably occur at the estate manager (EM) level but from some incidents and events and the director strongly supporting the EM and the Council Chairman despite of strong and clear evidence of inappropriateness in contract-warding by both of them working in unison made people suspect that the whole milking thing may actually be top-down in collusion usually Council Chair (company-wide culture)...........

I agree that it is currently very difficult for the innocent council members and residents to exercise some supervisory function over these managers since they are not technically training and do not participate in the day-to-day operations of the projects in the condomnium. They have to rely a lot of the estate managers on such things and to look out for their interest. There is some attempt to make the processes more transparent such as getting three quotes, however, this is easily manipulated and as earlier mentioned could result in milking. There is also difficult in tracking the actions of the managers and the council members.

There is this new company, www.pegaxis.com, which provides a software as a solution service which allows the MCSTs to post request for quotations to the general market and thereby will allows the MCST to get more quotations from a wider pool of vendors. The software also increases trackability for the actions of each member and estate manager. Perhaps, this will give the residents the peace of mind that their EM is not milking them.

[Arcachon]

https://www.facebook.com/groups/917833728302212/