2004 Oct
2004 Oct Vol. 24, No. 10
Focus on...Board Operations
The Need to Know
Most of the time, "communication" and "openness" are watchwords for boards and management. Clear, transparent communication between boards, managing agents, and shareholder/owners should be right up there with "location, location, location" as a mantra of successful urban living. But where does the line get drawn between what boards can - and should - discuss amongst themselves in closed board meetings, and what to discuss openly amongst all the shareholders? Well-publicized cases of corruption and opacity in corporate America have resulted in an increased demand for transparency and openness in all governing organizations - including co-op and condo boards - that is forcing some board members and agents to re-examine their own building policies. Read More
Working Together
Among the thousands of multifamily buildings in the metro New York area, it is a consistent lack of intelligent maintenance practices that prevent buildings from attaining high performance and energy efficiency. Read More
From the Court to the Board
Since my column in June of this year, there have been some significant cooperative and condominium cases that have been given little publicity. The most interesting case, may be the West Gate House case which brings the infamous Jennifer Realty (sponsor divestiture) and Pullman (shareholder "objectionable conduct"¯) doctrines together for the first time. In a few cases, the courts give the business judgment rule a good workout. In two cases, we learn more about the courts' views on board rulemaking and in another case, we learn what could happen if a contract is not drafted thoroughly. Read More
Manhattan's Gated Community
When describing Gramercy Park to someone who's never been there, certain words immediately spring to mind. Historic, posh, and elegant would be good words to start with. "Star-studded"¯ and "exclusive"¯ might be useful, too. Read More
Green Building Saves the Green
The environmental benefits of "green"¯ buildings have never been questioned. The reduced intake of resources and the reduced output of waste accomplished through environmentally sensitive building reduce the negative environment impact of a building. Although the environmental benefits of green buildings are clear, how to afford a more environmentally sustainable living environment is not. Cost is a frequent excuse against building green. While it is true that the initial cost of green building can be more - an extra $3 to $5 per square foot, by some estimates - the life cycle cost of a green building is significantly less. Read More
Preparation and Planning
Every five years, the boards of co-ops and condominiums are forced by law to consider how to execute repairs to their exterior facades. Unless there is a known dangerous condition, not too many buildings consider the issue well in advance of the cycle required by law. However, it is a subject that's well worth some advance planning. Once the cycle comes around, the architects, engineers and contractors who handle this type of work are incredibly busy - they may not be available to work one-on-one with your building, and prices for their work may not be as competitive. There are also financial considerations that make advance planning a good idea. If the building has not really done adequate early investigative work and finds that a greater exterior renovation is needed than was expected, they may have to secure some outside financing, such as refinancing the building's mortgage. All of this takes time. Read More
Treasuring the Role
Of all the members of a co-op building's board, the treasurer is in a unique position to uphold the fiduciary responsibility of the corporation, similar to that of a chief financial officer in the corporate world. Read More
Welcome Aboard
Serving on a co-op board or condo association certainly has its advantages. Not only does the position give shareholders a chance to have more say in how their community is run, it helps add to their knowledge and understanding of what goes into running that community. Read More
To Let, Or Not to Let
Even though subletting is often frowned upon by boards and sometimes forbidden outright, that doesn't stop shareholders all over the city from renting out their co-ops. Shareholders may sublet as a means of making money on an apartment that's not their primary residence, or as a way to avoid paying maintenance on an apartment they won't be occupying for an extended period, perhaps because of work or travel. Sometimes even a building's sponsor will rent out unsold units as a way of generating extra income. Read More
Failure to Communicate
With any sort of multifamily housing arrangement comes the possibility of a certain amount of conflict between the various involved parties: shareholders, board members, management, and sponsors. In theory, a key role of a board of directors is to settle such conflicts. But what if your problem is with the board itself? Read More
