• Performance Evaluation of Condominium Management and Maintenance Modes: From a Perspective of Principal-Agent Relationship

Abstract

Two types of principal-agent relationship existed in the process of condominium management in Taiwan: relationship between owners and management committees and relationship between management committees and management services providers. Condominium management and maintenance modes were redefined by the transfer degree of decision control right and management right according to the frameworks of principal-agent theory, corporate governance and related literature: owner control, partial third-party control, and fully third-party control modes. This paper mainly investigated which mode would result in good performances and what factors might account for the performance differences among these condominiums. Empirical results showed that communities using owner control mode had higher management and maintenance efficiency. Moreover, management modes, household number, building age, usage pattern and cohesiveness of sense of community were significant factors affecting management efficiency. It was suggested to refer to NGO’s reward system to lessen agency problems and that communities using partial third-party control mode could make efforts in enhancing cohesiveness of sense of community in order to achieve efficient management.

Keywords: Condominium Management Modes, Principal-Agent Theory, Corporate Governance, Data Envelopment Analysis