This in an anxious time in which to sit on the board of directors. With defaults and foreclosures accounting for some 20 percent or more of the units at some condominiums, frustration among board and association members is off the charts.
“The economy is driving people to feel upset generally,” observes attorney Dennis H. Greenstein, a partner in the law firm of Seyfarth Shaw LLP in New York City. Plus, “oil was very expensive last year and real estate taxes are flying through the roof. And when you put capital repairs and improvements to the building on top of that, we’re getting increases in maintenance charges, common charges and assessments.”
“I think that’s why transparency has become such a big issue,” says David Hartwell of Penland & Hartwell, LLC, a real estate law firm based in Chicago, where owners face the same financial challenges. “When everything’s good, nobody seems to care, but when things go bad, suddenly, they ask, ‘why aren’t they telling us what’s going on? How do you make these decisions? Who’s running the joint?’ ”
While it is next to impossible for those running the joint to completely forestall accusations of lack of transparency, board members and management can make the bitter pill of cost increases easier to swallow by paying scrupulous attention to the way they communicate with owners.
“In this modern age, there seems to be a push for as much transparency as one can get. The question becomes at what stage is there transparency?” asks attorney Steven M. Goldman, a partner in the Real Estate Department of the White Plains-based law firm of Kurzman Eisenberg Corbin & Lever, LLP. “In other words, when you're first vetting out contracts, should they be open to review and discussion by everyone? It is in the best interest of the co-op or condominium to have that sort of discussion,” Goldman says.