Is a co-op or condo owner, protecting your building's financial stability is of paramount importance in
maintaining the value of your investment and your quality of life. As stories of mismanagement and fraud continue to come to light, boards are well advised to institute a workable system of financial checks and balances for their properties. There needs to be someone looking at the management report every month, making sure that there are funds available for operating expenses, capital improvements, etc., and determining how to invest the property's funds, says Carole Newman of Prisand-Newman, one of the city's most active co-op and condo accounting firms.
Make sure you're paying only for what you get, and paying only your own bills, advises Mark Shernicoff, treasurer of the Council of New York Cooperatives and a partner in the accounting firm of Zucker & Shernicoff, which represents over 100 co-op and condo buildings. Mistakes happen. But if you pay Con Ed twice, you'll get credited for an overpayment, while if you pay Joe Blow the repairman twice, you may not.
At the Dorchester, a 108-unit co-op at 110 East 57th Street in Manhattan, A designated board member periodically reviews the building's checking account, says board president Elizabeth Whitcomb Brown. All board members read and review the monthly management financial report, one board member is given every bill for approval before payment, and at least two board members control the bidding on large jobs and unusual expenses.
The board should establish rules that are implemented by the managing agent, advises Richard Montanye of Marin and Montanye, an accounting firm that represents hundreds of co-ops and condos. Any departures from board mandated policies must be noted.