Policies and Procedures A Manual Clarifies Responsibility

The best-run co-ops and condos regularly update their house rules document, providing essential information to residents, the board and the professionals who work with the building, on everything from payment of arrears to installation of window guards. These properties also develop and distribute, either as part of the house rules or as a separate reference document, a policies and procedures manual that clearly defines how the board and residents are to communicate with management and go about certain activities such as applying for permission to make alterations to apartments, arranging for sublease or rental approval, moving in and out of the building, providing keys for emergency access and countless other items. Because the list goes on and on, having a manual can make life a lot easier.

A Useful Document

Boards of buildings where policies and procedures manuals exist quickly testify to their usefulness. Al Volpe, a long-time board member and current treasurer of Berkeley Towers II, a 442-unit co-op in Woodside, and vice president of the Federation of New York Housing Cooperatives, says that his property's document is useful for both current and incoming residents. "When new purchasers come in, we give them the manual," says Volpe. "And there is no charge for extra copies."

Florence Tonjes, board president of a 202-unit co-op on Fifth Avenue, also recognizes the value of promulgating policies and procedures. Last year, her building produced a comprehensive rules and regulations document, and Tonjes recounts an incident where one resident actually apologized to another for having violated the building's policy when it was shown to him in writing. "It's worked well," says Tonjes. "With a codified document of rules, regulations, policies, and procedures, nobody can say they didn't know because it's all right there, written down."

Tonjes' co-op is managed by Cooper Square Realty, a property management firm in Manhattan, whose president, David Kuperberg, is something of an expert on policies and procedures manuals. Kuperberg has written several articles on the topic and has been instrumental in the creation of such documents for several of his portfolio properties. So important does Kuperberg think this document is, that Cooper Square issues a sign-off sheet to all prospective incoming residents indicating the prospect has received, and understands, all information contained in the document.

"Some properties," says Kuperberg, "even make it a requirement that the outgoing resident provide their copy of the document to the new resident coming into that unit, and charge residents who lose or must otherwise replace their copies." Kuperberg recommends that the document be updated on a regular basis, and completely updated and re-issued every three to five years. "It's not necessary to re-do the whole thing every time a new policy is passed or a new procedure is put in place," he says, "although it is advisable for the board to issue a timely memo to residents informing them of these changes when they do take place."

"The main advantage of such a document is communication," adds Craig Schiller, a partner with the Manhattan law firm Schiller & Associates, PC. "We strive for uniform enforcement of all policies and procedures, and by referring to a published document as a guide, board action will be understood to be reasoned rather than arbitrary, and enforcement will be more consistent.

"It is also particularly helpful," adds Schiller, "for a new owner or resident to receive such a document because an institutionalized procedure which may be obvious to long-time residents may be news to a newcomer." Schiller points out that a policies and procedures manual can be a valuable sales tool. "The document," he says, "will convey the tone of the community, which is absent from the usual legal paperwork."

Interacting with Professionals

"What I've discovered from my experience is that many shareholders still haven't gotten over their renter mentality," adds Donna Klein, executive director of the New York Association of Realty Managers (NYARM). "As such, they tend to treat the professionals around them, especially the building's managing agent and attorney, as the landlord and the 'enemy,' instead of realizing that these people are working for the benefit of the residents."

Klein believes that a manual of policies and procedures helps to ameliorate this mind-set, giving "a basic blueprint of the protocol of how to conduct oneself and communicate with these professionals and with other residents in the building."

Echoing Klein's sentiments, Lawrence Vitelli, senior managing director of Insignia Residential Group, a property management firm in Manhattan, advocates that any policies and procedures manual include specific protocol on how to communicate with the building's outside professionals.

"It's important for all residents to know what the procedure is to contact all the people associated with the building," says Vitelli. "We normally advise residents of communication protocol through management letters and memos. And if the co-op has a newsletter, we'll use it to remind people of the proper way to contact the managing agent and also what items it is appropriate to call the building staff to address."

Vitelli says that, in his experience, most residents don't call a building's professionals, and that it's very rare for a resident to be in contact with a property's lawyer or accountant. But this may be because Insignia maintains open communication with residents who are undertaking activities that would require the input of an outside professional. For example, Vitelli says that, "if a resident is doing an alteration, we'll send him a letter explaining what he has to submit to the managing agent, informing him of the communication process that's going to take place.

"It's then the managing agent's responsibility to provide the shareholder's information to the architect or engineer," explains Vitelli, "and then send a letter back to the shareholder with the architect's or engineer's comments. This way, all communication is between the resident and the managing agent or, in some cases, between the building's architect and the resident's architect." Even though Insignia has this system in place and it works well for their properties, Vitelli does say, "I think it's a great idea to have the communication protocol written down, and that should be separate from the formal house rules document."

Gerry Picaso, a principal of Gerard J. Picaso, Inc., a property management firm in Manhattan, and a member of the board of governors of the Association of Cooperative and Condominium Managers (ACCM), agrees that the manual should state that, "No resident or owner should ever go to any of the building's professionals except the managing agent, and then all communication should be in writing. The building's legal counsel, accountant, engineer and architect all usually work on an hourly rate, and there is no reason that anybody should be contacting them except the board or the managing agent." This is true, says Picaso, because, "if there's a project going on in the building and 30 people start calling the engineer, the building is going to wind up with a huge bill."

Picaso also points out that too many people communicating inappropriately with a building's professionals can give fuel to a rumor mill regarding the project at hand, "which is why," he says, "all information should be channeled through one source, either the managing agent or the board." Schiller agrees, adding, "It's also incumbent upon the board to inform the building's professionals that they are not to accept, or respond to, calls from unauthorized individuals."

Creating the Manual

Since creating a manual requires that someone go back through the building's records to assemble all the existing policies and procedures that have been put into effect, review of the building's minutes and other documents becomes an integral part of the process. This is useful because such a review may reveal contradictory or out-of-date information that needs to be either clarified or updated. For this reason, Volpe advises that building records be organized in a fashion that will be permanent. "Establishing a filing system that will not change with change-overs of boards and management is important to the continuity of the building," says Volpe.

Kuperberg offers the following step-by-step procedures for creating a policies and procedures manual: First, create an ad hoc committee to oversee the project. Then provide to the committee all available minutes and historical documents. Third, arrange for the committee to review the minutes and documents with a specific eye to the policies and procedures of the building. Include the roles and functions of the board, committees, building staff, security personnel, professional management and outside professionals, and the methods in which residents can most effectively communicate with these people.

Also include a discussion of the co-op or condo's rights and obligations, followed by a discussion of the residents' rights and responsibilities, including all existing house rules and policies. Finally, include a discussion of procedures appropriate to all guidelines and policies, and the indication that an addendum of forms appropriate to these procedures appears at the end of the document. Assemble and include the addendum of up-to-date sample forms in use in the property and by management.

Tonjes says that her building formed a committee that included both new building residents—for their views on what they perceived to be lacking in the policies—and long-time residents who had a background on what had happened when these policies were put into effect and who could share what they thought should have been done in the first place. "We sat down one evening and created a list of areas to address," says Tonjes. "Each person took two or three items and wrote their opinion of how they would like to see it addressed until all of the items we had on the list were addressed.

"Then we collected all the information and met again, consolidated it, and went through each issue until we had a rough draft, which then went before the entire board. The second draft went on to corporate counsel and our managing agent for their input. Finally, we had a document. Today, people have to sign for it, they're responsible for it, and they have to pass it on to the next person who comes into the apartment."

"The creation of a truly useful policies and procedures manual will take a bit of effort and coordinated teamwork," says Kuperberg. "But, once accomplished, the document needs to be updated only every three to five years to ensure its accuracy and currency. And the time and effort invested in its creation will serve the board residents, management, building professionals and the property in good stead for a long time to come."

Barbara Dershowitz is Contributing Editor of The Cooperator.

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  • I am a shareholder and 1 year board member of a building that is only 55% owner occupied and 45% sponsor owned by our management company. Most of the sponsor units are rentals with no sight of converting to sales. consequently, the coop has a rental mentality Plagued by apathy. What can I do to help create a strong active and involved board and shareholders that will have a vested interest in our coop?