Being on a board of a condo or co-op is no picnic. There are tons of decisions to be made, disputes to settle, finances to keep track of and a chance of being sued for a slip-up. So why do so many people decide to serve on a board—some for years at a time? Even though it's easy to lose sight of them under the pressure and responsibility, there are benefits to being on a board.
Even long-serving board members: those individuals who get elected and re-elected term after term and have been in office since the Truman administration—enjoy giving back to their community and protecting their most important investment. There are, however, pros and cons for boards that have several long-term members on board.
Accentuating the Positive
Perhaps the biggest benefit of having a cadre of seasoned board members overseeing one’s condo or co-op community is the fact that they have unparalleled institutional memory. “Veteran board members provide a level of experience and understanding as to the needs, expectations, and limitations of a building,” Seth Kobay, president of Majestic Property Management Corp. in Great Neck, says.
“They typically have a firm understanding of the co-op’s finances, have been through annual budget preparation and have been involved in financial decisions, both large and small. This understanding and knowledge is vital when future discussions of a building’s needs are involved. Long-time board members also understand a building’s infrastructure and the role of building personnel. They are aware of compliance issues and requirements and how this will affect future performance,” Kobay says.
Steve Osman, president and CEO of Metropolitan Pacific Properties, Inc. in Astoria, agrees. “You can't replace that kind of experience. Obviously, the day-to-day experience with the board member, whether refinancing major projects, knowing the constituency and the shareholders in the building is a great help to management.”
Multi-term board members also are important because they can hold down the metaphorical fort when new members join the board. In today’s world, running a co-op or condo community can be like running a small multi-national corporation—the stakes are high with hundreds of units and millions of dollars in play. It can take up to a full term for new board members to learn the ins-and-outs of procedures, bylaws, meeting rules and other details.
While newcomers are learning, experts advise the more experienced board members shoulder the burden and at the same time, provide important mentoring opportunities—this is the perfect chance to help groom and cultivate new members. Veterans should make themselves available to novices to address any questions or concerns they might have regarding the position.
Management can also help ease the transition for newbies by providing them with necessary educational materials and resources that offer a background of the building, and a clear outline of the expectations they are supposed to fulfill.
“One of the things that a managing agent should do, and this is something that we do, we educate our boards and give our new board members every year—and even our incumbent board members—a board book, so they understand what their responsibilities are as a board member and what the fiduciary responsibilities are to the co-op or condo association,” Dan Wurtzel, president of property management at New York City-based FirstService Residential, says. The booklet should contain “a list of documents which includes minutes, financial statements, lists of pending action items, accomplishments over the last year so they can ramp themselves up and understand what's been going on in the building and where to pick things up from,” he says.
Uncertainty of building knowledge and position requirements can be detrimental to productivity, Wurtzel warns.
“Otherwise, what ends up happening is you have new board members who come on and they have an agenda and they have some great ideas but it takes them a long time to understand the intricacies of how a board operates,” Wurtzel says. “They sort of sit on the sidelines or in the background until they feel like they have a good handle on things. That can create some inefficiencies and you want board members to be able to contribute when they come on, and not six months later.”
In pragmatic terms, long-serving board members also can help ease whatever difficulties an association board may have in recruiting new candidates to seek board positions. Because these positions are voluntary and because they can be so time-consuming, many residents these days choose not to run for leadership positions within their condo or co-op community. That means a fair number of board members may be seeking re-election term after term simply because there is no one else willing to take up the torch, Osman says.
On the Down Side
Despite the myriad benefits that long-serving board members bring to the table, there are times when that longevity can be a detriment to the community rather than a positive. “It cuts both ways. If you have a board that has been standing for a while and everyone is happy with what's going on and there's no challenges, then there really isn't an issue unless somebody resigns or they don't run. There are other people running to fill that open position,” Wurtzel says. “Some boards can get stale. They can lose touch with what their shareholders and unit owners [think] is in the best interest of the building—sometimes that can happen.”
Kobay agrees, saying, “Long-time board members sometimes become complacent to do business as usual while some flexibility may be warranted. Sometimes, these members feel that they have more important things to say than newer board members and do not like to see their power dwindling or taken away. A board always needs fresh ideas and all members should be open to the same,” he says.
These instances, though, are rare, acknowledges Osman. “They might become complacent, but I haven't really personally experienced that. I find that people who continue to run for the board do so because they want to do good.”
Breaking the Cycle
For any co-op or condo community unhappy with a long-serving member of the board, the easiest solution is simply to vote that person out at the next election. Sometimes, though, that is easier said than done. Board members reluctant to let go of power can make it difficult for their fellow residents to unseat them. And that can be self-perpetuating, until residents begin to believe that there is no way to vote someone out and so, they simply stop trying. Because of that, term limits might be included in a co-op’s bylaws.
Just as in federal, state and local governments, the debate on term limits arises from time to time. While there are no laws regarding term limits for co-op boards, for condos, that's a different story.
According to article 9-B, section 339-V of New York Real Property Law, condo boards must impose staggered terms. The section states the bylaws of a condo must include, “the nomination and election of a board of managers, the number of persons constituting the same, and that the terms of at least one-third of the members of such board shall expire annually.”
Regardless of an association's rules on term limits and re-elections (experts say most co-ops don't implement term limits), it is advised to conduct elections in staggered terms in order to avoid losing experienced, qualified and interested members all at once. With residents' apathy at a high and free time at a low, it can be quite difficult to fill the seats of the board, Osman says.
“Remember, in a co-op or condo you have a limited group of people that want to run for the board, so to put term limits or anything like that in place is detrimental,” he says. “It's not like when you're doing it for public seats like the New York City Council. It's different because you have a bigger pool to pick from. In a normal co-op or condo, there's usually five percent—or even less—people that want to run for the board, then you have to see of that amount who's really qualified. Again, you don't normally have huge turnovers on boards unless people are unhappy. If they're not happy, they won't vote them back in. But staggered terms are extremely important for continuity.”
Perhaps the most effective way to ensure that all board members serve to the best of their ability—no matter how many times they have been re-elected—is for unit owners and shareholders to be vigilant in their own oversight. By attending meetings, reading minutes, scanning financials and keeping up with any and all correspondence coming from the board, residents can help keep their community on the right track and their board members functioning to the best of their abilities.
And for residents who are dissatisfied with aspects of their community and the way it is being run, they can make sure they vote in their board elections and get others to vote as well. Or, they can even take up the baton and run themselves, bringing fresh perspective and new energy in service to their fellow residents.
Regardless the ratio of novice versus veteran board members, all boards can use some fine tuning and further education: enter Argo University for Boards. Manhattan-based Argo Real Estate has been providing board members with a training program for several years. However, the program recently stepped it up a notch by introducing quarterly, issue specific seminars this year, meant to provide extra support to board members.
“Being a board member is a tough—and often thankless—job,” says Ken Nilsen, director of operations. We want to do everything we can to help make our board members’ job easier. They’re volunteers, after all. Helping them understand building systems, laws and regulations, and other areas that they wouldn’t necessarily know about is a part of this,” he says.
Argo University seminar topics were chosen via an annual survey taken by board members, which asked them what topics they were most interested in and concerned about. The largest area of interests were incorporating “green” upgrades and systems in their buildings and topics regarding fuel and energy conservation, as well as budgeting and understanding property taxes, Nilsen says. The first seminar, which took place in June, addressed the issue of emergency generators. Additional seminars covering the aforementioned topics are soon to come and will surely leave board members feeling more educated and assured about their positions.
“Our goal is to pack a lot of learning into a short amount of time and give board members the chance to network with board members from other buildings—so you’re in and out in a few hours, and you walk away smarter and more connected than you were before,” Nilsen says.
The Council of New York Cooperatives & Condominiums (CNYC) (www.cnyc.org) and the Federation of New York Housing Cooperatives & Condominiums (FNYHC) (www.fnyhc.org) also offer instruction for board members throughout the year. And, don’t forget about The Cooperator’s Co-op & Condo Expo, now in its 27th year. It will take place at the New York Hilton early next year. So stay tuned for more information.
Thankfully, the benefits of having committed and long-serving members of the board seem to far outweigh the cons. There is no doubt that the role of a board member has gotten increasingly complex and time-consuming in recent decades, requiring significant energy, skill and experience to be successful. It can be a difficult load for new board members to bear. That is why boards that have that institutional memory in the form of long-serving members often flourish, finding that perfect balance between experience and innovation.
Liz Lent is a freelance writer and frequent contributor to The Cooperator. Editorial Assistant Enjolie Esteve contributed to this article.