Working in groups can be a challenge. Working in groups when people’s homes—and possibly their life savings—are involved can be a far greater challenge. It’s one faced every day by those brave souls who volunteer to serve on their co-op or condo board. While there is no sure-fire recipe for building a board that is 100 percent successful day in and day out, there are definitely traits and tactics that the most well-run and effective boards share.
Don’t Get Personal
One of the biggest components to success is ensuring that those individuals who are elected to the board do not come to their new duties with a personal mission. Some red flags include if a person “[has] some kind of agenda. They're on the board because they don't like somebody, or because they have a personal pet-peeve about an owner's dog, or an owner in general. So if [they] have issues that aren't for the best overall,” says Joseph Balzamo, president of Alliance Property Management, LLC, in Morristown, New Jersey.
Board-member aspirants need to keep in mind that the job is to serve the building, and act in the interest of the association as a whole. Criterion number one should be that “it's your property, it's your money. You have a vested interested in making sure the building is being properly managed,” says Balzamo.
While you will certainly have a personal vested interest in the building, it's important to consider the building as whole when working on the board.
“I think when board members go into board meetings, they have to leave their egos at the door. They have to realize they are not there for their own agendas but they were elected by the unit owners and they are there to do what the unit owners want, not what they want as individuals. They have to represent the unit owners,” says Leslie Kaminoff, RAM, NYARM, CMCA, CAM, the founder and CEO of AKAM Living Services, Inc., a property management company, which has offices in New York City.
“Way too often you see boards, who are up in arms about something and the board won’t react to it because a couple of the board members are happy with the situation the way it is. They have to remember that they can’t personalize. It’s running a business and it’s like a political office. You were elected by the owners and you are there to represent the owners and not yourself,” he explains.
Board members who have issues with not getting their own way can be toxic for the building as a whole. If you are a member of a five-person board and three people vote opposite of you, it's important that you respect the decision. Otherwise, the board may not operate with trust and mutual respect—which is to say, a board that is dysfunctional and potentially headed for disaster.
It's also very important to have a proper understanding of what a board wants from you as a member. Whether it's your legal expertise, your deep pockets, or your time, you should know exactly what is expected of you, and why you were asked on so there's no confusion or friction as you settle in to your responsibilities. “The most important thing is for every board member to understand what they can and cannot do,” he says. “For example, board members cannot act as individuals, they can only act as boards. Just because you are president of the board doesn’t mean that you can go into the management office and change policy. You would need a vote in order to change policy,” says Kaminoff.
Likewise, if a board is seeking out a new candidate for a particular reason, it needs to be upfront about that. It can be very tempting to stock your board with experts, especially for a smaller building with less management. To have a board member with, say, financial or legal acumen can be a potential cost saver. Also, a board that has a makeup of diverse backgrounds and experiences can be a plus.
If your association self-manages its property, a board with a range of professional experience can be a great asset. On the other side of the spectrum, if your building hires full-service management, you may not need to seek people out simply for their expertise.
“There is no expectation in terms of what your professional background is. Your only necessary requirement is that you're a homeowner. It's good if you have something to offer, but it's not the most important,” says Balzamo. Balzamo adds that part of a property manager's job is to teach board members more about the role of managers and guide them through certain decision-making processes. While an attorney or an accountant can have helpful skills for hard decisions, board members who are simply open to learning and listening to expert advice can be just as valuable.
For most owners and shareholders, the dynamic of their board is not something they give too much time or thought to, unless a problem arises or rumors of dissent begin circulating. The way a board gets along and functions, though, can be a key component in the health and well-being of the building or community.
Whether your board is stacked with a group of veterans, or a bunch of rookies, every member should value competence and hard work. That means a willingness to devote time not just to meetings and events, but also to understanding the bylaws and responsibilities that comes with board membership. Boards that don't take the time to review their own rules end up making decisions that do not comply with their organization’s declaration or bylaws. They were not doing these things out of malice, but rather a lack of knowledge. Board members need to have a strong understanding of their jobs.
Finding the Right Path
For boards, there are certain traits to aspire to, the characteristics that will—regardless of the situation—be far more likely to garner good results than bad. Experts believe that the traits that characterize a good board include dedication, integrity, transparency, fairness and assertiveness. Experts also agree that the most successful boards find ways to steer clear of common problems such as becoming too comfortable or casual about their roles.
That ability to work well with management is a key component of success. “The board shouldn’t get involved with the staff, such as giving orders to the staff because it’s confusing,” says Kaminoff. “When that happens it takes the authority away from the manager because then the staffer knows it can always go to their favorite board member. The most successful boards also find a way to avoid getting comfortable with the status quo. If a routine develops over time, boards can get complacent and lose sight of what they're approving for the property.”
The best boards, says Balzamo, “address problems proactively. Knowing for example your roof has a ten-year shelf life—at that point, start to make a budget that will contribute to that, as opposed to waiting ten years, and saying, 'Oh, everybody we need a roof,' or the boards that say, 'I'm not going to be here in ten years, that's not my problem,'” he says. “A good board will let a manager manage.”
Balzamo also recommends that boards put a high value on efficiency. One way to do that is getting a reserve study, or a capital improvement study, both of which help boards keep their finances in order by incorporating large-scale expenses into the budget before they even take place. Every board wants to save as much money as they can, but using funds intelligently will end up saving more cash than going for the lowest bid, whether it be a capital project or a management contract. Boards will help their bottom line when their property managers address smaller issues before they become larger, more expensive issues,” says Balzamo.
Rather than focus on the price of a property management contract, boards should weigh what specific services a management company is offering, and their reputation among other buildings. Balzamo recommends “getting more informed about what actually goes into the management of your property. You know, know a lot of time especially when I'm bidding on a job I don't have a lot of information on the work, and sometimes boards are looking at the cheapest price. That might not be the best thing to look at if you're trying to get the most out of management.”
Making it Better
What if a board is facing some difficulties and realizes that the way they work is not working well? There is hope. To help board members become more efficient and effective leaders, there are consultants that can help a leadership team get back on track. Some firms will conduct a full review of the HOA or co-op, and will examine the declaration, by-laws, minutes, budget and any other documents that will help tell the story of the building or community. Then, after a three- or four-week analysis, the review can come back to the board with details about what they can do improve their effectiveness.
Also, for buildings that self-manage, an outside consulting firm can provide guidance on building processes that will make the board function more smoothly and with less pain on the part of everyone involved. Adhering to those processes can become second nature for the board, allowing them to move on to tackling bigger and more involved issues in the long-term.
Board members also can turn to each other for help. Getting focused and working toward a common goal can help refresh a tired board or motivate a new board that perhaps feels overwhelmed by the magnitude of their charge. No matter what the circumstance, boards can improve on their own performance and, in turn, improve the performance and function of their HOA or co-op, making things better not only for themselves but for their friends and neighbors as well.
Become Better Educated
Unlike realtors, plumbers and electricians, there is no specific license required for someone to call themselves a property manager. New York has no licensing requirement for management personnel, unlike other parts of the country.
But boards and managers can hone their skills by becoming involved with organizations like the Federation of New York Housing Cooperatives and Condominiums (FNYHC), the Council of New York Cooperatives and Condominiums (CNYC), the New York Association of Realty Managers (NYARM), the Institute of Real Estate Management (IREM) or Community Associations Institute (CAI), or even the city’s Housing Preservation and Development (HPD) agency, all of which provide training and education for board members and homeowners. Courses for board members—and the managers they work with—are available throughout the year, and with the popularity of the Internet, helpful information is available at every board member’s fingertips.
Board members and managers can become more effective and efficient leaders by taking courses and attending seminars and trade shows. The Cooperator’s Co-op & Condo Expo, is now in its 26th year of serving board members, managers and real estate professionals in the Greater New York area. The 2013 show will be held at the Hilton New York on April 16, 2013 from 9 a.m. to 4:30 p.m.
In its introductory online course, “Fundamentals of Community Volunteer Leadership,” CAI, a nationwide advocacy organization, notes that “the effectiveness of a board depends on the effectiveness of its individual members, so it’s important to start with competent, intelligent, mature people who are willing to work hard and make sacrifices. The association is neither a civic league nor a social club. Running it requires making hard decisions and being involved almost on a daily basis.”
That, it seems, is the definition of a successful board in a nutshell. So with effort, training, education, commitment and good relationships with management, owners and shareholders, a board can make its own very heavy burden lighter and turn the experience of leading their community into a rewarding one, both for themselves and those they serve. And soon, a good board will be on its way to becoming a great board.
Liz Lent is a freelance writer and frequent contributor to The Cooperator. Editorial Assistant Tom Lisi contributed to this article.