Maintenance

DIY versus MPPM

Typically, single-family homeowners and small-scale landlords are apt to utilize the do it yourself (DIY) maintenance regime, except maybe under those circumstances when a licensed plumber, electrician, or other technician is needed. In contrast, investors will engage a professional property management company to perform all management and maintenance functions. Typically, condominium and cooperative associations will hire a professional property management company that reports to the board of directors—very few are self-managed.

The scale of the real estate asset is the determining factor that not only drives but also dictates the scale of the maintenance regime. This statement may be more axiomatic than didactic for obvious reasons. However, the DIY maintenance approach, though dealing with “one to not-so-many” units, has less discipline than the large-scale developments that require a structured maintenance regime that is governed by a management agreement with the owner, organized around professional standards, and accountable to the owner, lenders, and other investors for discharging the company's fiduciary responsibilities with respect to such matters as leasing units at or near the economic (or market rent rate) occupancy level, collecting rents on or before [Page 436]the due date, managing risk, and, in the context of this entry, maintaining the physical asset in an effective and responsible manner. This is not to imply that all DIY homeowners and small-scale landlords lack the organizational capacity to manage all maintenance requirements effectively. Yet situations do arise where a homeowner has insufficient savings to cover the cost of an emergency repair, or a small-scale landlord is spread too thin, both financially and time wise, to chase maintenance calls from one property to another, much less perform preventive maintenance. Overall, the DIY maintenance regime is an ad hoc approach poised only to perform in a reactionary mode.

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