Money is a topic some people are skittish about discussing. When you’re a board member or the managing agent of a residential co-op or condo building however, there’s no benefit to skirting financial realities just because they may be difficult or contentious—on the contrary, not talking openly and candidly about a building’s financial picture, or the need for a special assessment or fee increase can have serious consequences for the entire community.
The Manager's Role
“A managing agent needs to do every possible thing to inform the board of their finances,” says property manager Steven Greenbaum of Mark Greenberg Real Estate (MGRE) with offices in Long Island and New York City. “Board members are volunteers. Managers know the day to day.”
“The managing agent must be instrumental in guiding the board to make prudent financial decisions,” adds Carole Newman of the Long Island-based accounting firm of Newman Newman & Kaufman, LLP. She cites that the managing agent should strongly encourage the board to adopt a realistic break-even operating budget every year. She adds that a manager must have a thorough understanding of the financial aspects of the building operations.
“Certainly the manager must support sound financial decisions,” says Rick Montanye of the Long Island-based accounting firm of Marin & Montanye LLP. “The manager typically presents a budget that must be realistic and encompass known and potentially unforeseen circumstances. Right now the economy is difficult and the building’s professional team, including the manager, accountant, attorney and in many cases, the building’s engineer, must work together to adequately plan and handle financial problems as they arise.”
Greenbaum and Montanye both provide monthly reports for their boards about the financial state of the buildings they represent.