Though often responsible for millions of dollars in property and charged with the oversight of complex building functions, few co-op/condo board members are real estate professionals. Board members are resident volunteers who come from many walks of life and various professional backgrounds—most of which don’t include a lot of experience running a multifamily building.
The learning curve for a new board member can be steep, especially if that board member is not dedicated to acquainting himself with a building’s affairs. Until their on-the-job experience catches up with their duties, new board members often will rely heavily on more experienced fellow board members for direction. Their main guide is usually the property manager.
Property managers are busy with the duties of looking after the buildings they manage, but they recognize the importance of helping new board members become effective decision-makers for their communities. Depending upon the property manager or the management company, assisting new board members might mean having them familiarize themselves with certain documents related to the community, or recommending that they join organizations meant to facilitate property management.
In whatever way a property manager chooses to approach a new board member educational process, he or she must be met halfway by the new board member. The new member must take seriously their responsibility as part of the board, and he or she must do the work needed to make wise decisions. Barring such dedication, all of the pointers, tips and suggestions provided by a property manager won’t automatically transform a new board member into a good board member.
Questions & Answers
One of the first questions a new board member usually asks a property manager is what his or her responsibilities are. The property manager helps the board member to understand the scope of his or her role on the board by acquainting the new board member with the duties as defined in the community’s bylaws, says Irwin H. Cohen, president of A. Michael Tyler Realty Corporation in Manhattan. The property manager also provides each new board member with a list of shareholder/owners and their contact information, copies of the building’s bylaws, and a copy of the proprietary lease or the condominium declaration of covenants, conditions and restrictions (CC&R).
Many property management firms also identify organizations that the new board member might want to join to learn more about managing a community. The New York Association of Realty Managers (NYARM), the Federation of Housing Cooperatives and Condominiums (FNYHC), the Council of New York Cooperatives and Condominiums (CNYC) and other groups can be helpful in educating new board members.
If a new board member is appointed to an office on the board, such as treasurer, the time it takes for the member to learn their job could be greater than that of the typical new board member. In such cases, the property management team will explore with the new member his or her duties as treasurer, or secretary, or whatever the new office, Cohen says. Some of the appointed positions on a board require more expertise and a greater time commitment than others.
But even new members who don’t hold offices on the board need to do their homework to be prepared to govern their communities. To assist, property managers often provide new board members with copies of board meeting minutes for the previous six months or so, says Cohen. Some management companies go as far as a year back.
According to Cohen, new board members are informed by property managers of emergency procedures for the building or community, and they also are provided with resource materials on contractors that are working on the building or that regularly service the building or community. Property managers try to work with new board members to train them in the duties of their elected positions. “We work with them and try to bring them up to speed,” he says.
Another way new boards can become more familiar with how their management company operates is to go straight to the source. “By visiting the property management company’s departments that service the property, new board members get the whole picture of what the management company provides for the building, and how it does so,” says Alvin Wasserman, a director of Fairfield Property Services in Manhattan.
As part of a new board member’s education process, Fairfield Property Services personnel invite them into the company’s office for a tour. New board members see the accounts payable and accounts receivable departments, as well as the purchasing department, sales, the mortgage arm of the company, and its insurance sector.
In addition to inviting new board members to the firm’s offices, Wasserman says his staff helps new board members to understand the information gathering process that is part of managing a building or community. Board members are shown how files are maintained on each unit in a community—from sales to maintenance of the apartment. The idea is to show the board members the work that’s being done for the building, as well as how that work is done.
“Your property manager is just the tip of the iceberg,” Wasserman says. “The property management firm is the iceberg.”
Some management companies take new board members on a walking tour of their own properties, as well. “The point is to give them an orientation, and an appreciation of the work involved in managing their property,” he says.
And sometimes that work is more intense and time-consuming than expected. “A lot of board members are busy,” Cohen says. “The hope is that the elected board members will be proactive.”
Not all board members take their duties as seriously as they should. That disconnect between a board member’s duties and what he or she actually does as part of their volunteer job can be the starting point of common problems faced by a board. All of the members of a board must do their part to ensure that the board is working effectively, because the failings of one board member can very quickly hurt the entire group.
The secretary and treasurer are extremely important positions. If the people chosen for these jobs don’t take them seriously, their neglect could be problematic for the entire board, Cohen says.
“Minutes are a very important thing,” he continues. “If a new board member is appointed secretary and doesn’t make meetings or take the minutes at meetings, it will [adversely] affect the whole board. Secretary and treasurer are extremely important positions on the board.”
As it is with many of life’s pursuits, when it comes to being a good board member, showing up is half the battle. But attendance at meetings is just part of what’s needed to be an effective board member, says Paul Brensilber, president of the Manhattan-based management firm Jordan Cooper & Associates.
“Board members should show up monthly. To be effective, new board members also need to read the board meeting minutes for the past six months,” Brensilber continues. “A lot of board members leave the heavy lifting to one or two people on the board, but everyone should do his part.”
According to Cohen, a common problem among boards is the simple waning of enthusiasm. “That initial enthusiasm often turns into disinterest, or indifference. That’s a major flaw, but another problem is lack of attendance by members,” Cohen says. Neglectful board members can waste meeting time having the property manager apprise them of the evening’s issues, adds Cohen.
“The board member is also obligated to review the information presented before making decisions. They have to do that due diligence,” Cohen says.
Part of a board member’s due diligence is requesting, and reviewing, materials that pertain to the management of the community. New board members should request from the property manager a copy of the building’s budget, and for a copy of the building’s latest financial statement. If a new board member finds an ongoing issue of the board that he or she is unfamiliar with, they should ask the property manager and the more experienced board members about the issue, Brensilber says.
“Read the meeting minutes and see what progress has been made,” Brensilber says, adding that new board members shouldn’t simply follow the previous board’s lead on issues. “New board members should have goals they want to accomplish before their terms expire.”
A common problem of board with new members is the tendency of them to not do the work they need to in order to be a truly effective governing body. Sometimes, because they are busy with their workday lives, or even sometimes due to laziness, board members don’t perform the work they should to keep up with the board’s business.
“They become part of the system, deferring to prior board members’ decisions, rather than looking to make changes,” Brensilber says.
The property manager’s role in helping freshmen board members acclimate to their new positions is about providing the new folks with continuity while the business of the board continues. The role of the board is to set goals, and the management company presents the solutions and implements them, Brensilber says.
If a building has a board that’s ineffective, with members who don’t do their appointed tasks, the result could be that an inordinate part of the burden of overseeing the building falls into the hands of the property management company. Because of ineffectiveness on the part of some building boards, some management companies are doing more than their fair share of the work.
“For many buildings, the management company has become like the operating company, and the board just sits back. The management company works better if the board is up to speed,” Brensilber says.
New board members who want to tackle their new duties should familiarize themselves with all types of documents that they’ll be reviewing while on the board, including procedure manuals, purchase and alteration applications, and sublet applications. While some of that familiarity with a board’s paperwork comes from a board member regularly participating in the board’s work, some of that understanding comes to those who seek it.
“It’s a never-ending process, because a board’s needs are constantly changing. It’s an ever-changing process,” Cohen says.
Having more hands involved in the management of a community can make the work progress more smoothly, property managers say. Smart boards will delegate responsibilities, and get their fellow residents involved in the process. It helps build consensus among residents, and it helps to bring continuity on the board.
“Get as many people as you can get involved in subcommittees. This forms the basis for the next generation of leadership,” Cohen says.
Jonathan Barnes is a freelance writer and a frequent contributor to The Cooperator and other publications.