Whether you are already a condo or co-op board member, or just became a new member your board, it never hurts to brush up on your knowledge about proper board practices to make sure things run smoothly in your building.
That’s what audience members got at a discussion titled “Best Practices for Cooperative and Condominium Boards,” hosted by the Council of New York Cooperative and Condominiums (CNYC) at the New York Society of Ethical Culture on February 22. The panelists—Andrew Brucker, an attorney with Montgomery McCracken Walker & Rhoads; Richard Montanye of accounting firm Marin and Montanye; and Michael Wolfe of property company Midboro Management—shared their expertise about what boards should do and should not do.
The Annual Meeting
Essentially a primer about board operations, the conversation kicked off with a discussion of the annual meeting whose main purpose, according to Wolfe, is voting on a new board and discussing this past year's finances. On whether the annual meeting has to be held on a certain date specified in the bylaws, Brucker put it this way: does the world come to the end if that doesn’t happen?—suggesting that it’s not sacrosanct. He also said that the best time to hold the annual meeting is in May or June, which is better for shareholders.
And importantly, according to Montanye, double check to make sure the meeting date is correct. He also said that if the building's financials aren't available or ready yet, explain to the shareholders the reason for the delay—then proceed with the meeting and schedule another meeting when the financial information is ready.
Brucker also advised that it's best to review last year's meeting minutes to remind oneself about an issue that was still open. “Communication is extremely important,” he said, in reference to being in touch with shareholders. He added that bylaws, considered as a community’s ‘‘bible.’ should be reviewed while also thinking about improving them.
The Board of Directors
The next topic focused on the board of directors. Brucker emphasized the importance of their roles: “You should take it seriously. You should be on the board to help the cooperative. You got to do the right thing.” Then the panelists delved into the serious matter of discrimination when it comes to screening prospective applicants. Brucker advised boards that they cannot discriminate and that they should not even interview someone in person if they don't like what's on the application.
When it comes to communicating about the board package, Wolfe advised a less-is-more approach—for example. if you want to discuss something, set up a conference call as there seems to be too much chatter via email. To that point, Brucker said that if you are using email, select an email provider like Yahoo and Gmail and not from a server; basically, don't use email for anything controversial.
The three men also tackled the review of corporate documents and management reports; Montayne advised that it's best to to schedule the monthly meetings when the management report is ready. Wolfe also suggested attaching a one-page summary onto the management report so that folks can get the main points without having to go through the entire report. The panelists were also in general agreement that everybody should have open access to the minutes, but it's a bad idea to have them published on a website and that they should be housed in the managing agent’s office.
Working with Professionals
Another subject brought up was working with professionals such as the attorney, the management agent and the accountant. Brucker emphasized the importance of relying on such professionals for board operations. “Take advantage of your professionals...we have no agenda.” he said.
“At the end of the day, it's your building,” said Wolfe, who mentioned that one of the management's roles is recommending professionals to the board to work with.
Echoing a point discussed earlier, Montanye told the audience to get in touch in reference to professionals, “Communication is very, very important,” he said. “Use resources that are available.” In the establishment of responsibilities regarding financial matters, He advised that there should be some sort of point person, for example, the board’s treasurer.
Other topics that were listed on the agenda included admissions for co-ops and condos—such as creating a proper application, reviewing the application package, the interview, acceptance and rejections, and understanding discrimination law; and alterations, in which the boards must establish guidelines, adopt an alteration agreement, and that the information should be passed on once established.
For information about upcoming CNYC events, click here.