SPOTLIGHT / GLOBAL PRACTICES
Revolution of 1917. As a rule, all MCs
have a full set of licenses to perform
special maintenance work. Unlike
management through an HOA, however, the homeowner’s control is considerably restricted under a management company. Therefore, all MCs are
very tightly supervised by district housing inspectorates. Additionally, a large
percentage of older buildings belong to
district administrations. As property
owners, these administrations also help
to oversee the management company.
There are two choices for types of
management companies. First, there
are the companies formed on the
foundation of the Soviet housing and
communal services. Residential Com-
munal Services, or ResCom Services
es for the maintenance and updating
provided by RCS is set by the city ad-
ministration. Unfortunately, there are
a few drawbacks to using this type of
management company. ResCom Ser-
highly skilled, which can cause issues
when complicated repair projects are
required. In addition, management
companies serve as intermediaries be-
tween homeowners and utility provid-
ers. Although they collect money from
owners, they are in no hurry to transfer these funds to the resource-supplying
companies. As a result, many buildings accumulate huge debts to their utility pro-
viders, who may end up holding the property owners responsible.
The second type of management company was created by modern housing devel-opers.;Many;developers;have;already;built;hundreds;of;structures,;often;in;different
cities. Many have already taken over properties of other, small developers, and of
old Soviet structures, so managing the properties they have built is a logical step in
their evolution. Like ResCom Services, they also handle all management responsibilities, but their main goal is to generate business related to the properties they
manage. The developers were quick to realize that there is a cap to the amount
of revenue created by providing management services, because pricing is set by
the city. To increase income, developers may provide additional types of services,
such as mobile applications that collect all current information about the property
and provide it to the owner, and round-the-clock call centers that have drastically
improved customer satisfaction. Although the number of such management companies is still relatively small in comparison to HOAs, the industry is growing rapidly.
WHAT THIS MEANS FOR THE RENTAL MARKET
The rental market was slow to develop in Russia, given the high percentage of people who own their own homes. Nonetheless, demand has grown for less permanent
housing as people move within Russia.
In the current market, a number of developers are building units for the express
purpose of renting them out. These apartments are cheaper than usual, because
they are registered as commercial real estate. To help support the growth of the
fledgling;market,;the;state;has;implemented;a;program;for;subsidizing;the;con-struction and maintenance of such rental housing. However, in order to be eligible
for the state subsidy, these projects must be rented out by the developer to private
citizens, not sold to them.
and the housing market continues to develop and thrive. Although there are few
constants in the property management market, it is certain that the industry will
never stop evolving to better meet the needs of residents.
NIKOLAY VECHER, CPM, FRICS, IS VICE PRESIDENT OF GVA SAWYER IN MOSCOW.
OF A TYPICAL