What are a property manager's responsibilities?

A property management firm is a third-party vendor hired by your board, or by the sponsor or developer for new construction or conversions. Property management firms assign one property manager (frequently abbreviated PM and sometimes called the managing agent) and often a team to support each client’s building.

Your property manager runs the day-to-day operations of your building. Responsibilities include bookkeeping (including collections and payments), ensuring that your building adheres to all building codes, responding to resident requests, and implementing various board decisions.

Your property manager reports to your board but does not have the same fiduciary responsibility your board does; they are simply contracted to act as an agent. As such, the property manager must work within your board’s decisions or direction. Your property manager may be involved in projects and may gather and provide bids from a variety of service providers, but they aren’t the decision-maker, and they don’t have the same responsibility to look for cost savings that board members have

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Most large property management firms also have a closing department to manage apartment sales, transfers and sublets, whereas smaller firms may or may not offer this service. The property management firm also oversees the building’s staff and typically the annual owners or shareholders meetings.

• Bookkeeping includes accounts payable (paying vendors and service providers on the behalf of your building) and accounts receivable (collecting maintenance, common charges, and various lease incomes). Both accounts payable and accounts receivable are often outsourced to third-party vendors. Bookkeeping also entails bank reconciliation, which is often done in-house by the property management firm’s accounting department. Bank reconciliations should be provided to the board on a monthly basis.
• Record keeping includes service contracts for the many vendors that service your building. This includes everything from smaller contracts like the exterminating service, to larger ones like the elevator maintenance company. Insurance records are very important, and your property manager typically handles the annual renewal as well as all the Certificates of Insurance (COIs), both for the building and for owners who are getting furniture delivered or their air conditioner or refrigerator serviced. Other records include the capital project drawings, sales, transfers, sublets, gym memberships, storage and parking leases and many others.
• Staff oversight can be a bit messy. Your staff reports to the property manager, who is responsible for training and overseeing your building’s staff. The rest of the staff reports to the super or resident manager, who then reports to the property manager. The property manager is hired by and reports to the board. Because of this long chain of command, communication and setting up standards are crucial for the proper upkeep of your building. Your property manager or super provides the staff with handbooks and training.
• Building code compliance includes making sure that the building adheres to all safety codes and gets all required inspections. For example, your property manager typically initiates and schedules the FISP inspection of the facade and keeps your board apprised of the inspection details as the date approaches. As recently as a decade ago, property management firms managed the building code compliance in-house, but these days, your property manager can create an account with a third-party service for each of their buildings that notifies them of compliance deadlines as well as any violations for noncompliance.
• Resident Service includes answering requests and taking complaints from residents. For example, when an owner or shareholder has a mouse in their apartment, the first person they call is either the property manager or the superintendent. If the issue persists, the second or third call is most likely to the property manager.  
• Many co-op and condo boards are under the impression that the property manager helps their building reduce its costs. In some respects, this notion is correct in that they typically enter the building into an ESCO agreement with an energy supplier with the intent to lock in energy prices for the building. They often also obtain several proposals for vendor services; however, those may or may not be high, low or even average. The reality is that the property manager does not benefit financially from saving money for your building.

Property management companies often establish in-house insurance and energy brokerages or align themselves with licensed insurance or ESCO firms to capitalize on brokerage commissions. However, the consequences of such arrangements can be detrimental to their clients, particularly in terms of competitive rates. Due to their vested interests, these companies may not be as diligent in seeking out the best bids available. While these arrangements are primarily observed in the insurance and ESCO sectors, similar practices can be found in other industries as well. As a result, your board should exercise caution and thoroughly evaluate the implications when renewing insurance policies and energy supply contracts.

Mandatory annual meetings are either administered by your property management firm or by a third-party election firm. Co-ops are governed by the New York Business Corporation Law. Article 6 addresses everything related to elections, annual meetings, proxies and so on. Condos are governed by the New York Condominium Act, Article 9-B. Your property managemer typically handles sending out notices and invitations, collects nominations, schedules, and sets up the meeting whether virtually, in-person, or hybrid.