Advocating for Residents Organizations Go to Bat for Shareholders/Owners

Successfully running a condominium, cooperative, or homeowners’ association is no small task. A board and/or management must consider the interests of its residents when making sweeping decisions to benefit the property and those who call it home. On top of that, the association must keep abreast of codes, laws, regulations, and rules at local, state and federal levels that may impact how they conduct their business, maintain their buildings, and screen potential applicants – just to name a few important factors. Taking into account that a board is likely made up of volunteers, some or all of whom have full-time jobs that have nothing at all to do with real estate or finance, it seems like a tall order.

Fortunately, there are organizations operating from the national level on down that focus solely on advocating for issues pertinent to multifamily residential associations. When caught in a bind, an owner, shareholder, board member, or even a professional manager can reach out to one of these organizations – many of which are not-for-profit – to, at the very least, receive some guidance on where they can turn to solve their problem. 

The Cooperator spoke with several leaders of organizations in various markets to discuss their histories, missions, current initiatives, and how interested parties can better get involved with working on behalf of broader condo/co-op/HOA interests.

One Nation, Indivisible?

Codes, regulations, business practices, and even the terminology that shape how associations are run may vary by locale. But when it comes to co-ops in particular, certain overarching issues affect cooperative living nationwide. Those are the issues that the Washington D.C.-based National Association of Housing Cooperatives (NAHC), under the leadership of its president, Greg Carlson, looks to address.

THE COOPERATOR: What would you say that the NAHC offers residents who are having problems with their association?

GREG CARLSON: “Well, if it’s a legal problem, that can get tricky, as we don’t always have lawyers on staff who can offer professional consultation. But we’re starting a whole network whereby someone can call the organization and then – along with a disclaimer that we are not attorneys – we can steer them toward an expert. That said, it’s difficult to do certain things on the national level, as real estate laws and regulations are drilled down either locally or by state. It’s hard for someone in Michigan to comment on matters that pertain to New York or Connecticut.”

COOP: But you guys can act as a hub and identify who can help people?

GC: “That’s what we’re really starting to do now, yes. But mainly NAHC serves to educate. We have an annual meeting every October with 60-some seminars that cover co-op issues from soup to nuts. And by that I mean financial considerations, governance and ethical issues, marketing, operations, legal and legislation. We also provide a management certification program called Registered in Cooperative Management.

“Our next big move is to advocate for issues that co-ops face on the national level – because the cooperative mode of housing has been discriminated against in Washington since the dawn of time. We have a government relations specialist who works on our behalf, in coordination with the Community Associations Institute (CAI), to confront a common problem: that Federal Emergency Management Agency (FEMA) grant money is unavailable for common areas of co-ops, condos, or HOAs.”

COOP: How do they expect people to renovate in the wake of an emergency? Empty the coffers?

GC: “That, or a small business loan. We’ve been fighting to address this via legislation, as FEMA digs in its heels. We’ve a couple of bills floating around in Congress. Republican-sponsored bills, which is what’s needed right now, to get something passed.”

COOP: How would you recommend someone with the desire to take up cooperative housing issues go about it?

GC: “Whatever market they happen to be in, find a local organization and volunteer for things. CAI is a good resource. Basically every group I encounter is always looking for people.”

COOP: Are there any other pertinent cooperative issues that you guys are working to address?

GC: “Reverse mortgages and the veterans’ guarantee program. Co-ops cannot use either of those programs, even though they’re available to any other type of housing. That’s what I’m working on now.”

The Big Apple, Baby

New York City is still a hub for cooperative living, and the Council of New York Co-ops and Condominiums (CNYC) is out here navigating the labyrinth of rules and regulations with which buildings and associations must grapple. Mary Ann Rothman, CNYC’s corporate secretary, waxes about the organization and her experience within it.

COOP: Where would you steer people who want to familiarize themselves with the CNYC?

MARY ANN ROTHMAN: “Start with our website, and those of our affiliated organizations [that include the NAHC], see what specifics interest you, and then come to a meeting. We also offer a few classes per month in the evenings. Some are ad-hoc and confront issues as they come up, while others are workshops designed to – for just one example – better inform treasurers on how to conduct the financial business of an association. But they’re all free-flowing, and the people who show up really set the agenda. We try not to leave until everyone has had their questions answered.”

COOP: We’ve found that in many associations, any individual officer can end up being whoever is available and willing in the moment.

MAR: “To serve on a co-op board, you just have to prove a functional and prudent person. You don’t need an advanced degree in finance, but you certainly need as much help as you suspect you might. There’s no such thing as a stupid question to ask an accountant or a managing agent or whomever. A willingness to admit that you don’t know something is a good first step.

“And we also have one big all-day conference every November, on the Sunday 11 days before Thanksgiving. The theory is that, by that time, people have already planned any upcoming vacations but have yet to start cooking for the holiday, so they’ll be around.”

COOP: How would you describe the mission of the CNYC?

MAR: “To provide information, education and advocacy for co-ops, condos and their residents, and about co-ops to lawmakers and government entities.”

COOP: How did you personally get involved?

MAR: “Some time ago, my then-husband and I bought into a co-op, when the wave of conversions from rental to co-op was just getting started in New York City. Soon thereafter, it became evident to a lot of people in co-ops that buying in does not necessarily confer knowledge as to how a building should be managed. 

“So the story of the CNYC goes that a woman who lived on Central Park West called together about a dozen friends who, when we’d see each other at cocktail parties and such, would all lament about how our co-ops were making mistakes. They decided to stop re-inventing the wheel and join forces. I missed that inaugural meeting, but a man from my building attended, and we soon found ourselves among the charter members of what became the CNYC. This was way back in 1974!”

COOP: What else should we know about the CNYC?

MAR: “We’re always happy to have more members, and we’re very collaborative with other similar organizations.

“It’s important to note that fully half of the co-ops in the nation are in New York, so it’s not surprising that there are myriad organizations here focused on cooperative living. In NYC, you have local organizations like the Association of Riverdale Cooperatives and Condominiums, and the Queens Borough President’s Council. Then there are organizations that adhere to a specific type of co-op. The Urban Homesteading Assistance Board, for example, has created thousands of units of affordable housing – mostly from abandoned buildings. The UHAB also trains prospective shareholders as to how to run buildings as co-ops. And there’s the Coordinating Council of Cooperatives, which brings together a lot of the big union-built cooperatives in a lot of different parts of the city.”

Nor’eastern

In New England, associations start to take on different shapes and sizes. High-rises become less prevalent, as the more suburban enclaves can support anything from lakefront communities to townhouse collectives. Because the region is no monolith, it takes a certain focus to pinpoint then address shared cooperative interests. Kimalee Williams, the president of the Cooperative Housing Association of New England (CHANE), attempts to spin all of the requisite plates.

COOP: How did you get involved in CHANE?

KIMALEE WILLIAMS: “I had been managing properties since 1994 – a combination of condos and some co-ops. And it can be hard to find a management company that is even co-op friendly. So I was recruited by the founder of CHANE, Roger Wilcox, who introduced me to the national association. It was at that point I realized that I wasn’t in a bubble – that there were people similarly concerned with co-op issues across the country. 

“So my role as president started out as providing technical assistance to member co-ops. Roger spent a lot of time recruiting, getting our name out there, and letting co-ops know that we were a resource. And then we also serve as a resource to NAHC, which in turn provides additional member services. Basically, when someone joins CHANE, their dues also enroll them in the national organization, through which they have the benefit of the annual conferences, and I serve as their New England rep.”

COOP: How would you describe the recruiting process?

KW: “Oftentimes, non-members from various co-ops will reach out and say, ‘I have a problem at my association, and I heard that you can help.’ So I’ll spend an hour or so offering guidance, and then let them know that they can join us fairly inexpensively. Membership is based on co-op size, and it starts at $80 per year. I don’t think I have any association that pays more than $350. But, as stands, a lot of those funds are eaten up just on phone time, so we’re working on the payment model. Because in New England, you have different breeds of co-ops than you’ll find in New York City. It’s a big challenge for us to represent these different shapes and sizes, as we don’t charge much, and therefore haven’t been able to offer as much as help as we’d like.

“In Connecticut, for example, even the judicial system isn’t particularly familiar with co-ops. So you need people who have experience dealing with both boards and the courts. You can bring a co-op member in for eviction, and find that neither judge nor mediator really knows what that involves.” 

COOP: How would you advise owners or shareholders who want to be more involved with community advocacy?

KW: “If they’re new to co-ops, they probably have no idea what’s going on, and need help understanding how co-ops work. So I typically try to explain how they must utilize governing documents, bylaws, articles of corporation, and the declaration, and remind them that [co-op governance] is a democratic process. As much as they may be feeling lost or confused, they must educate themselves. I encourage our national-level training program, or even additional side-training. 

“In addition to board members and co-op shareholders, we also serve management companies that are less familiar with the co-op concept. They may have a portfolio of market-rate condos and still be unfamiliar with how to effectively manage a co-op, which is quite different [from condo or rental management].

“So, at CHANE, we make sure to remind boards and management that they’re dealing with real human beings in what should be a functional democracy, as well as a corporation. Because you’re often asking individuals who may not be business-savvy to increase their own maintenance charges in order to make sure that the corporation as a whole runs efficiently. And it’s challenging to urge people to look beyond their own self-interests. When people refuse to increase maintenance charges to meet the increase in expenses that naturally occur, it doesn’t take long to see a co-op become troubled. 

“We’re increasingly seeing organizations like HUD dwindle in enthusiasm for co-ops, or the state housing finance authorities offload much of their limited equity co-ops because people therein were unwilling to make the necessary decisions to preserve the asset. Co-ops can be burdensome to asset managers on both a federal and state level.”         

Mike Odenthal is a staff writer/reporter for The Cooperator. 

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