Are Your Condo Management Fees Too High?
It's a question boards ask regularly, especially when fees increase or when a new director joins the board and starts reviewing expenses. The answer is more nuanced than it might seem.
What Management Fees Actually Cover
Before evaluating whether your fees are too high, understand what they include.
Management fees typically cover:
- The assigned manager's time (site visits, board meetings, owner communications, vendor management)
- Administrative support (correspondence, record-keeping, meeting preparation)
- Financial management (accounts payable, monthly reporting, budget preparation)
- After-hours emergency response (may be included or billed separately)
- Use of the management company's systems and platforms
Some companies charge a flat monthly fee that includes all of this. Others charge a base fee plus additional charges for specific services. Understanding your fee structure is the starting point for evaluating it.
What "Too High" Actually Means
A management fee is too high if:
- It exceeds what comparable providers charge for comparable services
- The services being delivered don't match what the fee is supposed to cover
- The corporation is paying for services it doesn't need or use
A management fee is not too high simply because it's higher than what you paid before, or higher than what a neighbour's building pays. Different buildings have different needs, and different management companies have different cost structures.
How to Evaluate Your Fees
Get comparable quotes. The most direct way to evaluate your fees is to request proposals from two or three other management companies. This tells you what the market is charging for comparable services.
Review what you're getting. Compare the services in your current contract to what you're actually receiving. If there are gaps, that's worth addressing — but it's a service quality issue, not necessarily a fee issue.
Consider the total cost. A lower management fee that results in deferred maintenance, reserve fund shortfalls, or governance problems is not a bargain. The total cost of management includes the consequences of poor management.
When to Negotiate
If comparable quotes come in significantly lower than your current fee, you have grounds to negotiate. Most management companies would rather adjust their fees than lose a client.
Approach the conversation professionally: present the comparable quotes, acknowledge the value of the existing relationship, and ask whether there's room to adjust.
The Bottom Line
Management fees should reflect the value being delivered. If they do, they're not too high — even if they're higher than you'd like. If they don't, that's worth addressing — through negotiation, or if necessary, through a change in provider.