Managing a co-op or condo community is far from an easy job. Six managing agents from some of the city’s top firms recently participated in the continuing series of roundtable discussions hosted by The Cooperator and the Federation of New York Housing Cooperatives and Condominiums (FNYHC) to provide some insight into the intricacies of co-op and condo management.
Meeting informally over coffee and bagels, the managers discussed their biggest challenges. Among those were how they keep current in an ever-changing industry, how management contracts and fees are determined, how managers work in concert with the board of directors and interact with the resident shareholders and unit owners, and their thoughts on professionalism and licensing in the real estate industry.
Albert Pennisi, FNYHC president and Queens-based real estate attorney and senior partner with the firm of Pennisi Daniels & Norelli, LLP, served as moderator, and was joined by Federation executive director Greg Carlson, and board members Mona Shyman and Donna Klein. The managers represented included David Baron of Metro Management, Michael J. Wolfe of Midboro Management, Rochelle Captan of the New York Association of Realty Managers (NYARM), Jay Fingerman of AKAM Associates, Jeffrey Friedman of Vintage Real Estate, and Dan Wollman from Gumley-Haft Real Estate.
Managers have to develop an effective relationship with their boards, says Wolfe, Midboro’s president and a longtime property manager. A property manager’s job today is much more complicated that it was just five or ten years ago, explains Wolfe. Before, he says, they just managed the operations of the building. Now they have to deal with issues on a 24/7 basis and take care of maintenance, record-keeping, relations with the board and shareholders and owners, and more. The board has to do its job, and at the same time, let the property manager do theirs.
“If they micro-manage every move that the property manager does, and require approval [for everything], it definitely makes the life of the property manager miserable and doesn’t make for an effective manager,” Wolfe says.
And managers today have to attend a lot more meetings of longer duration and frequency. “Boards don’t necessarily need a meeting on every little item unless it’s absolutely necessary,” says Wolfe. By using email and proper communication, a manager can often conduct the business of the co-op, condo or rental building without necessarily having face-to-face meetings with the owner all the time.
“I think the board has to realize that a property manager that goes to a 7 o’clock board meeting probably hasn’t had dinner yet, and will be getting out of that meeting at 9 o’clock. He is probably getting home at 11 o’clock, still wired—and that’s not very effective for their property, or any other property the manager represents,” continues Wolfe.
It’s all about cooperation and mutual understanding and respect, Wolfe says. “Although we are the paid professionals—we are collecting a fee—and [the board members] are volunteering—let’s not dwell on the one item that is not doing well and bash the agent or the agency for the one item that didn’t go right. There are probably 99 things on your plate that are going well. We must realize that we’re all working towards a common goal—to make the building the best building on the block or the best building in the neighborhood. If we team up with the board or the superintendent and take a little pressure off the account executive, I think more people will stay in the industry and there will be more retention on both sides—the buildings retaining the agency, the agency retaining the buildings.”
Fingerman agrees, and adds that managers must refrain from getting caught up in board politics. That said, he admits that trying to stay neutral without taking one side or the other can be a tricky proposition.
Carlson believes the biggest challenge for the 21st century property manager is staying current and being careful in board and shareholder relationships. Ten or 15 years ago, managers basically collected money and paid the bills. Now they have to be aware of current local laws and state regulations, discrimination issues and being politically correct, for example. Echoing Wolfe’s sentiment, Carlson agrees that “it’s a very busy plate that the manager has—especially if you’re a portfolio manager. Boards have a tendency to think that they’re the only building that you should be concerned with.”
According to Carlson, boards must understand that managing in today’s world is much more complicated than it’s ever been. While email, cell phones and other technological advances have made communicating easier and faster, technology has also upped the ante on what clients expect from their managers. Boards often feel entitled to instant gratification from their agents, but that may not always be possible—or reasonable. The key is in striking a balance between expectations and reality.
Board Issues—Education, Respect and Advice
The roundtable attendees also spoke about what happens when it’s not so much the board’s expectations of their manager that is the problem, but their method of dealing with each other.
“There are two things that kind of jump out at us lately in dealing with some of our buildings. First is the issue of fractured boards,” says Baron. “Boards that are just not cohesive amongst themselves. There are different cliques of people on the board, and it makes managing the building and running meetings very difficult. If they’re constantly challenging one another, it’s difficult to get a consensus—and even when things are agreed upon, it becomes a contest when the boards are not cohesive.”
“Another issue, ” continues Baron, “that I think many boards are confronting—or not confronting—is that they require a 25 percent [maintenance] increase or a 19 percent increase and the voters and shareholders don’t stand for that. And then they don’t realize why their oil bills are not being paid, or why they can’t paint, or do cement work or other things that are necessary. It’s basically because they’re not funding their capital programs, and they’re not funding their operations. That to me is a very big challenge that we’re going to confront. They’re not willing to put their arms around the true deficits that they have.”
According to Wollman, managers have to get the respect, so to speak, that they deserve. Managers are oftentimes not held with the same esteem as building professionals or engineers, and they should be, he says. One possible way to cut through cliquishness and board disagreements is for managers to take a strong stance as trained professionals when interacting with their boards and helping them make sound decisions on behalf of their building.
“It seems to me,” says Baron, “when you pay a doctor for his or her opinion, you listen to the opinion or you might get another opinion. You pay an accountant for an opinion, and you might get the same thing. With a management company, you might not get a second opinion, but when we present something to the board, whether it’s a budget or a capital expenditure or a problem, we are the professionals. If we present it that way, [we may find our boards] very responsive to recommendations we’ve had for them, especially when it comes to budgeting. I find that if you give board members the information as a strong case, in most cases… they will go with you as the professional. It’s all about giving them information on a regular basis and making sure they understand the implications.”
Captan agrees. “I’m in a unique situation [among those gathered here], since I’ve been managing my property for 29 years. I agree with a lot of what you’ve all said, and feel that it also comes down to respect. I thing the biggest challenge is to steer [the board] in the right direction and for them to be educated to what’s going in on terms of new laws and that sort of thing. I think it’s up to the manager to let them know, ‘Hey, we’re dealing with Local Law 11, or we’re dealing with an energy crisis, so please contemplate these things, because this is what’s going to make or break us.’ So I think that education and respect are equally vital.”
The Manager’s Role
In addition to educating and guiding their boards, the assembled managers also discussed the day-to-day, nuts-and-bolts duties a good managing agent must take into account in the course of running a building.
“We make sure the doorman is there at eight o’clock in the morning,” said Friedman, “and we make sure that there’s heat in the building, and that supplies are there, and that the place is clean. I see my role almost as that of a champion of the board to the public, to show the shareholders that yes, your board is involved, they’re working hard, they’re working with management, and they’re concerned about the success of the building. We in management are the spokesperson for the board, if you will. It’s not my role to put the board down to a shareholder who’s not happy with a neighbor who happens to be on the board. We stand with the board—and if we stand with them, they’ll stand with us.”
“I agree that it’s a partnership,” says Wolfe. “We’re managing partners. What makes a manager ineffective is one that just sits there at a meeting while the board runs the meeting themselves. We’re the paid professionals—and while we may have lawyers, engineers, architects, and psychiatrists [serving on our boards], we have to be all of the above. Be very proactive—not an innocent bystander—and really push the board to be proactive as well. At the end of the day, you’ve got to run the building!”
Debra A. Estock is the managing editor, and Hannah Fons, the associate editor of The Cooperator.