Retracing The Six Steps The Rules For a Financially Healthy Co-op Haven't Changed

When "A Six Step Program for Boards - Plan Ahead for a Healthy Financial Future" was published in The Cooperator back in 1996, very few boards were running their buildings like businesses, and even fewer had a long-range plan. While some buildings still bounce from month to month and crisis to crisis, an increasing number of boards are operating their co-ops in a more business-like fashion. Whether this is thanks to more experienced board members, more pro-active managing agents, more diligent accountants (or articles like this), really doesn't matter. The result is a brighter outlook for those boards that have made a habit of the "Six Steps."

So what are these Six Steps? If you don't already know, you need to "get with the program" as soon as possible. The following points can help you help your building toward long-term financial stability and health.

The Steps

1. Discard the deadly notion that your co-op is some sort of non-profit welfare entity. It's a business. You may not like how that sounds, but that's reality. You don't tolerate endless agenda-less meetings, late payments, noisy neighbors, or associates who break the rules at your "real job." Why tolerate that nonsense in your building? Have an agenda and a time schedule for every meeting; follow the agenda and send board members back to their families on time. Expect timely payment of maintenance charges; impose hefty late fees and interest when they're not. Develop a set of fair house rules, and enforce them strictly and even-handedly. Hire competent professional advisors; demand the service you're paying for - and then follow their advice. In short, employ in your board duties the same skills and sound business judgment you apply every day in your "paying" job.

2. Get a physical. Anyone who doesn't see their doctor for a complete physical exam at least every five years is asking for trouble. Any board that doesn't give their building the same regular attention is also courting a crisis. Hire a good engineer to do a complete top-to-bottom inspection of your building and all of its systems once every half-decade or so. Make sure that the engineer understands that this inspection will form the foundation of your board's new long-range maintenance-and-repair plan. Ask the engineer to organize his/her findings into four categories:

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