John Rogers has been hired by a condominium association to take over its management. The previous management company had written the contract so that it would be paid a percentage of the unit owner’s monthly common area charges. Consequently, those charges had more than doubled in the last few years although the unit owners felt that very little maintenance has been performed. Also, an elderly woman who needed a wheelchair was ready to file a complaint with the fair housing officials because she was not given a ramp or a nearby parking space. Other tenants / owners had additional maintenance complaints. John sees a challenge.
What was wrong with the previous company’s charging a percentage of monthly fees?
What form of management fee should John propose and why?
How should John tackle this problem?