Can a management company mark up vendor invoices?

It happens, it is not always disclosed, and it is one of the few things in this industry that can quietly cost more than the management fee itself. A markup is a percentage added to a contractor's invoice before it reaches the association — ten to twenty percent is the range that shows up most often.

Related and more common: rebates and volume discounts flowing from a national vendor program back to the Management Company, with the association paying list. The association never sees a markup on the invoice because there is not one. The money moves on the other side.

Ask directly, in writing, and ask it as three questions. Do you mark up vendor invoices, and at what rate. Do you receive rebates, commissions, referral fees, or volume incentives from any vendor we would use. And do you or any affiliate own a company that would bid on our work.

None of these is disqualifying if disclosed and priced into the comparison. An affiliated maintenance arm can genuinely be faster and cheaper. What is not acceptable is a Board discovering the relationship after signing, because at that point every future bid is suspect.