With any sort of multifamily housing arrangement comes the possibility of a certain amount of conflict between the various involved parties: shareholders, board members, management, and sponsors. In theory, a key role of a board of directors is to settle such conflicts. But what if your problem is with the board itself?
Michael Brower of Michael Brower Realty Co. Inc. in Hackensack, New Jersey says that a lack of communication is the nearly-universal reason for most shareholder complaints against a board. The most common complaints - not enough meetings held, failure of a board to promptly follow up on its decisions and responsibilities, et cetera - can usually be traced back to a board's failure to communicate. Unfortunately, communication problems often go unchecked, because the impact of a lack of communication is intangible; the morale of the shareholders is adversely affected, but the sheer monetary value of shares is not.
Greg Carlson of Carlson Realty, Inc. in Queens sees one particular type of non-communication - "non-response" - as the top complaint. "This is when you've put forth an honest effort to communicate with the board - phone calls, letters, etcetera - and nothing gets done. Life can be frustrating when you've got a problem and no one seems willing to listen."
To make matters worse, says Carlson, frustrated people sometimes build their complaints to an incendiary level that allow exaggeration and rumor to enter the equation. According to Carlson, that's what happens when a shareholder who feels slighted once winds up telling his or her neighbor that they've called and written the board 80 times without any result. And that simply breeds bad feeling and mistrust towards what might be a perfectly conscientious board.
But Michael Berenson of AKAM Associates, Inc. - a large management company based in Manhattan - points out that sometimes, when shareholders complain that their board members are "not listening," what they really mean is that the board is listening and responding, but that the complainant just doesn't like the answer. "If resident A likes to blast his stereo and resident B likes peace and quiet, when the issue goes to the board, any decision may lead to inaccurate complaints that the board "˜just isn't listening,'" says Berenson, who points out that a board's responsibility is to the community as a whole - they can't please all the people all the time.