The property manager and the board: how the cooperation works

The property manager is the housing company’s most important expert and handles many tasks, but the board’s responsibility for running the company cannot be handed over to them. Good cooperation is based on a clear division of work, a good flow of information and following up on how decisions are progressing.

What the law says about the division of work

Under chapter 7, section 17 of the Limited Liability Housing Companies Act (opens in a new tab) (asunto-osakeyhtiölaki, 1599/2009), the property manager takes care of the upkeep of the property and buildings and handles the company’s other day-to-day administration in accordance with the board’s instructions and orders. The property manager is also responsible for ensuring that the accounts comply with the law and that financial management is reliably organised, and must give the board the information it needs to carry out its duties.

For measures beyond day-to-day administration, the property manager needs the board’s authorisation, unless waiting for the board’s decision would cause the company material harm. Even then, the board must be informed of the measures as soon as possible. The property manager has the right to attend board meetings and to speak at them, unless the board decides otherwise. The board can also dismiss the property manager.

The board’s own duties are covered in the article on the duties of a housing company board.

The property manager prepares, the board decides

In practice, the board sets goals, makes decisions and monitors their implementation. The property manager prepares decisions, gathers the necessary information and quotes, tenders services in line with the board’s decisions and takes care of implementation. The property manager’s duties are set out in more detail in the property management contract, so the board should know it: what the basic fee includes and what is invoiced separately.

When the property manager brings a proposal to the board, it is natural to ask what alternatives were looked into, why this one is recommended, what the biggest risks are and how the solution will affect costs in the years ahead. Such questions are part of careful decision-making, and a good property manager does not find them awkward.

Follow-up is part of trust

The board is doing its own job when it monitors, for example,

• whether agreed projects are progressing as planned
• whether costs are staying within budget
• whether the board receives enough information to support its decisions
• whether residents’ fault reports are dealt with quickly enough.

This kind of follow-up is ordinary good governance. A board that knows what has been decided and what is still open makes the property manager’s work easier.

Example: a decision that goes nowhere

The board decides to commission a condition survey of the facade, and this is recorded in the minutes. Six months later nobody knows where things stand: the survey has not been ordered and no quotes have been requested. This is not necessarily the property manager’s fault. Often the problem is that the progress of decisions is not reviewed systematically. The solution is simple: at the start of every meeting, go through the open items and agree who will do what next.

Even the property manager does not see everything

The property manager knows the property well, but they do not visit every apartment or see the building’s everyday life as residents do. The first sign of a fault often comes from a resident, the maintenance company, a cleaner or a board member. Information therefore needs to flow in every direction: from residents to the property manager, from the property manager to the board, and from the board back to residents. The role of the maintenance company is covered in the article on working with the maintenance company.

The property manager rarely has comprehensive information on the condition of the apartments’ interiors. An apartment round report is one way to give both the property manager and the board the same picture of all the apartments. More on cooperation on the page for property managers.

Build the cooperation deliberately

At least once a year, the board and the property manager should review together the year’s goals, planned repairs, the company’s biggest risks, the reports the board needs and how the progress of decisions will be followed up. When expectations are clear to both, misunderstandings decrease.

The most common pitfalls are familiar: assuming that the property manager is also responsible for the board’s decisions, not knowing what the property management contract contains, not following up on whether decisions are implemented, and the board hearing about a problem only once it has already arisen. The same remedies work for all of them: read the contract, go through the open items at every meeting and talk openly about expectations.

This article provides general information and does not replace case-specific legal or technical advice.