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How managers and boards may better understand each other
“The board said/the property manager said.” Cut out the complaints and the gripes. A Habitat guide to understanding the other side’s point of view within the management-board relationship.
Scenario 1, The Board. You’ve employed your managing agent for a number of years and he has always seemed like a nice guy. He returns phone calls promptly and seems eager to please. But lately, you’ve been having doubts about him. When a new director questions him about bidding procedures, he offers what seems to be double-talk. When other board members criticize his performance, he appears to get defensive and nervous. At one point, a director says that he will take on some of the tasks the agent formerly handled because, as he puts it, “I can’t trust you to get it done.”
Scenario 2, The Manager. You’ve worked with this particular board for a number of years and it always seemed like an agreeable, if slightly disorganized, group of people. Although you are handling five other fairly large buildings, you always find the time to return the phone calls of board members the same day, even if you know that the questions from many of them may be about trivial matters. You try to tell yourself that nothing is trivial (although there are only so many ways you can explain that there is nothing you can do about getting the doorman to smile more). It’s hard not to get a little testy, however, when, about an hour-and-a-half into the board meeting – at 9:30 – you are asked to present a management report and, then, are asked why you didn’t get five bids when you were only asked to get three. “I’ll get them,” says that one board director who is constantly insulting you. “You obviously can’t get it done.”
Does your managing agent return phone calls? Is he or she a “take-charge” person who knows how to get a meeting on track? Or is your manager someone who offers weak excuses when an assigned task isn’t completed?
And what about you? Does your board engage in meandering meetings with a loose (or non-existent) agenda? Do you give orders to the staff? Do all your board members contact the agent with the same question?
Who’s to blame when precious little gets accomplished?
In the Japanese film Rashomon, director Akira Kurosawa explored the nature of truth by telling the same story from four different perspectives, with the tale changing depending on whose point-of-view was being expressed. Boards of directors and managing agents live through their own versions of Rashomon every day, with boards complaining about unresponsive managers and managers griping about micromanaging boards.
In running a cooperative or condominium properly, understanding the other person’s point of view is key. Herewith, then, a Habitat guide to the “he said/she said” of the management-board relationship, with our own attempts to get at the nature of the truth in each scenario.
The Manager Never Responds Fast Enough
The Board’s View. A common complaint is that the manager is not as responsive as he could be. “With some of our past agents, we have found we had to be a bit more hands-on than we would like,” says George Karpodinis, president of the 234 unit co-op at 720-730 Fort Washington Avenue. “That’s because of a lack of responsiveness. Residents are supposed to call the super first, then the manager, then the board. We found we were getting too many calls, which showed a lack of responsiveness from the property manager, which forced us to get involved.”
The Manager’s View.
The board often makes demands that are unreasonable, considering the manager’s workload and his low salary level. “The ideal client is somebody who’s really a business person with business acumen and who has realistic expectations that the service which they will receive will be commensurate with what they’re paying,” says Neil Davidowitz, president of Orsid Realty. “We provide labor, time, and expertise, and we have to decide on how manpower is allocated based on the compensation.”
The Truth. Many managers are not as responsive as boards would like. But that is partly because of the nature of the industry. Many management firms admit they try to keep their fees unreasonably low because boards often go for price over performance. This results in a catch-22. Because managers are paid less, they must do more with their agents: assign them more buildings, insist on longer hours, give them more responsibilities. As a result, the agent gets stretched thin.
Observes Karpodinis: “Giving the manager multiple buildings to manage creates a prioritizing problem for him, and the squeaky wheel gets the grease. The agent responds quickest to the building that makes the most noise, so you really have to spend time putting pressure on your property manager to do his job for you.”
On the other hand, management firms have, to some extent, made their own beds. If more of them would hold the line on realistic fees – as some companies started to do a number of years ago – boards might have more realistic expectations about what their dollar can buy.
The Manager Gets Testy
The Board’s View. Many times, different directors from the same board query managers between meetings via e-mail or on the phone. The agent seems to get testy or confused.
The Manager’s View. A number of different board members call with the same question. “There are some clients who don’t understand the chain of command – which would be giving us direction and letting us go ahead and effectuate their decisions. Instead, we are often getting different directions from different board members,” complains Davidowitz.
The Truth. Many well-run boards designate a liaison to interact with the manager. This could be the president for all major issues, or committee chairs for specific issues. What they want to avoid is what happens all too often with less-than-stellar boards: overwhelming a busy agent with seven calls from seven members on the same topic. It gets even worse when each board member has a slightly different take on the question at hand so the manager does not know what is actually being asked.
“Although it is a board of multiple people, it should be giving us direction in one voice,” observes Davidowitz. “A chain of command is important. And although technology is a positive tool, it can also be used as a negative, specifically e-mail. It’s not a very effective use of your time when there are 50 e-mails flying in every day on an issue that doesn’t warrant it.”
The Meetings and
The Board’s View. For some buildings, the meetings go on for three hours. The board always seems to have a lot to talk about but doesn’t get as much done as it would like.
At one Upper West Side co-op, three-hour meetings are the rule. A lot of time is taken up with esoteric debate among the financial professionals in the room and the treasurer. Then there are the 20 minutes spent discussing a doorman, a resident, and a car service. “Our manager is there, and I’m thinking, ‘He will get involved in this,’” recalls one director. “But he seems intimidated by the board; he is just not equipped. I’ve gotten more involved in finances because the manager has been sidelined.”
The Manager’s View. The long meetings seem interminable. The manager dreads going to them because the directors see it as a social occasion, often getting off-topic, rarely resolving anything, and then blaming the manager for not getting anything done.
“You want a board that sticks to an agenda and is time-sensitive,” says Lynn Whiting, director of management at Argo. “Some boards have no structure to their meetings – they segue away from one topic to another. You need a strong president to keep a topic on the table ‘til its conclusion.”
The Truth. For most effective co-ops, the board meeting should run from 90 minutes to two hours, tops (unless there is a major project or legal issue being discussed). Managers often complain about the poorly run nature of many meetings: they are often scheduled to follow dinner, at 8:00, when people are relaxed and in a socializing mood (as opposed to before dinner when they are hungry and want to get home and eat). The meetings are not treated as a business, with the agenda distributed in advance, discussion is controlled, and issues resolved.
“You should be there to run a corporation, but some are there to socialize,” explains Anita Sapirman, president of Saparn Realty. “The [extensive] socializing has no place in a board room.”
To some extent, however, the manager is to blame for such situations. A strong agent will educate the board about its role, ask for earlier meetings, insist that the agenda be distributed a day or two before the meeting so people can comment on and think about it, and help the president keep the actual meeting on track. He will not be shy of reminding them that a co-op/condo is a business.
Constructive or Abusive?
The Board’s View. The manager seems evasive and defensive when board members offer what they consider to be constructive criticism or ask questions.
One Upper West Side co-op asked the agent to get three bids for a capital job. He had no explanation for why one bid was half the price of each of the other two. “He couldn’t explain it,” says a board member. At the meeting, he was rebuked by another director, who asked him if he employed uniform bid forms. “That’s a very good idea,” said the agent, who offered various reasons why he hadn’t thought of that before. The board member insisted on taking over the bidding process in the future because, as he put it to the agent, “You, quite obviously, can’t handle it.”
The Manager’s View. Through overwork or exhaustion (and sometimes lack of experience), managers can make mistakes. But at the end of a very long day, the last thing a weary, overworked agent needs is verbal abuse. “You need a board that treats an agent as a valuable part of the team and who is treated with respect, as opposed to being treated like a punching bag or a flunky,” Whiting says.
The Truth. Boards have to work in partnership with managers. Demeaning them is a way to demoralize them and take away their incentive to do better. “If people put confidence in their property manager or treat him with respect as a valuable member of the team, people will often live up to expectations,” says Whiting. “Respect empowers the property manager and makes him want to go above and beyond. Some board members are hypercritical. If something good has been done, that gets glossed over in about five seconds. If something is bad, they just keep talking about it. That just weighs the person down.”
If a manager is constantly being criticized, the first question to ask is “why?” Is he really incompetent or is what you are asking unreasonable? Then look at other factors. Is it his personal chemistry with the board? If so, would a new site agent be better? Or, do you need a new firm altogether?
Sometimes the agent is good, but the back office is inadequate, or vice versa. “We had several managing agents,” recalls Jerry Sherwin, president of the 116-unit co-op at 181 East 73rd Street. “The unfortunate thing, although some of the back office service areas are pretty good, the people covering the building were sloppy.” Adds Karpodinis: “Our agent is good, but the back office is mediocre.”
Then, of course, the problem may not be the agent but the board itself or a particular board member. Ira Meister, president of Matthew Adam Properties, recalls a board that kept burning out managers because “the president was impossible to deal with. He gave us orders one day and denied he had given them the next. So we started to keep a detailed record of everything he did, and the books didn’t lie. We ultimately resigned the account.”
Dan Wurtzel, chief operating officer at Cooper Square Realty, says boards and managers should analyze such problems together. “What we try to do when we have a so-called abusive board member is try to find a reason why the board member is attacking the agent. Everyone has a different threshold for frustration. If you can peel away that and get to the root of the problem then you can start fixing it. You can’t just tell someone to calm down and expect them to calm down immediately. Maybe there have been follow-up problems, or deadlines that have come and gone and things have not been done. The manager should be coming back to the board to say, ‘We recognize the problem and this is what we’re doing to address it.’” If he doesn’t, frustration and abuse can be the result.
The Board’s View. Some boards feel they can’t entirely trust their manager. They feel that he doesn’t give them the whole story.
One board’s experience is a case in point: the agent advised the directors not to pursue a J-51 tax abatement. “He thought that the cost of clearing the building code violations [in the process of applying for the J-51] would be greater than any benefit we would receive,” recalls the board president of the Manhattan co-op. “That didn’t sound right to me – and, anyway, we’d have to clear up the violations sooner or later, so why not now?” The president looked into it and found that the cleanup would cost $15,000 and the J-51 windfall would be $90,000.
“They don’t know as much as you think they know or else they’re trying to make their job simpler,” says the president. “I feel, if you’re going to be a responsible board member, you have to double check on advice; they don’t like it, but you don’t have to tell them that unless they’re wrong.”
The Manager’s View. Managers often complain that boards don’t take advantage of their knowledge, trying to invent the wheel anew for each problem. “A good board is involved, but not over-involved,” says Meister. “They should utilize the expertise of management rather than trying to be know-it-alls.”
“A building will go through a major capital improvement project like an elevator or roof replacement once in the lifetime of the board,” adds Wurtzel. “A manager can say, ‘I’ve been through that dozens of time, let me give you some help.’ Some boards, instead of turning to listen to what the manager can bring to the table in terms of experiences, try to do it all themselves.”
The Truth. Accepting everything an agent says without question is never a good idea, as those burned by the management kickback scandals of the 1990s can attest. In major financial matters or on legal questions, a good agent will insist that you trust but verify. Get opinions from other professionals, because an informed board is an effective board.
On the other hand, your manager is – or should be – an experienced veteran in management matters. As a board, you should be knowledgeable enough to ask educated questions and discern informed answers. There should be no need to micromanage.
Wurtzel says that a manager should be prepared to be cross-examined. “Anything the managing agent proposes should be questioned,” he notes. “The more questions they ask and get answered, the more comfortable the board gets in making a decision. If you go to the board and say, ‘You have to raise maintenance by ten percent this year,’ and you give them a bunch of numbers as to why, you have to be able to explain those numbers. The less you explain, the more the board will think you are unprepared.”
A good agent will not insult your intelligence with double-talk; if he doesn’t know something, he will say so and insist on getting back to you with answers before, or at, the next meeting. “Like anything else in business, you give your clients good and bad news,” says Sherwin, the board president. “If you have a project that was supposed to be finished in a month, and you find it slipping behind, maybe a week or two, our manager will give reasons for it. That’s about all you’d expect: responsiveness and clarity.”
The Board’s View. The manager, say many boards, often doesn’t know how to write a diplomatic letter and he infuriates residents with his aggressive manner. The board must often pinch-hit for him.
The Manager’s View. The board, say many managers, avoids the chain-of-command, insisting on writing letters itself and even communicating directly with the owners.
The Truth. Communication is a crucial element in running a co-op or condo. Proper communication – through letters or newsletters – keeps rumors from flying and the tenancy well-informed. A good manager should have good people skills. That means, knowing how to talk to and handle the difficult, as well as the easygoing, residents. Since this is an essential component of management, if the board doesn’t have confidence that he can do this, it should probably look for a new manager.
Micromanaging your manager – writing letters, talking to owners yourself – defeats the purpose of having a manager. The manager is supposed to provide a buffer between the board and the rest of the building; the board sets policy, and the manager executes it. By bypassing the chain-of-command, confusion (among the owners and the employees) and discontent (by the manager) may be the ultimate result.
“The worst thing is a meddlesome board,” admits Karpodinis, the president. “If the board tries to act as a defacto property manager, the manager is just not allowed to do what he has to do.”
Karpodinis’s board has sought to counter this by building a “partnership” with its manager. “We are not a big building,” he admits. “We can’t afford to pay $20,000 a month to get an exclusive manager. We knew we had to share him, but we worked out a partnership. I would not take away any of his authority; he knows I’m not trying to play property manager but that I’m just trying to help him.”
As an example, Karpodinis points to an emergency gas valve shutdown of his building by Con Ed when a leak was discovered in September. Before the gas was turned back on some weeks later, part of the deal was that the manager had to supervise the installation of new equipment in each apartment. To help the agent, Karpodinis accepted keys from the shareholders and also took a day off from work to go to each apartment with the contractor who was installing the equipment.
“That’s a helluva job but I did it to assist him,” he says. “This is where you partner up and share the workload, but you have to have that kind of synergy where he understands you’re not trying to be the property manager, you’re just trying to help, to take some of the load off.”
“A successful relationship between a board and a manager really all starts with attitude and one’s outlook on things,” observes Alvin Wasserman, director of Fairfield Property Services. “If you’ve got people who sincerely have the interest of the community in mind, in getting things accomplished, and in working as a team in a friendly way, then everything falls into place. If board members have a sense of the whole community, that makes for a very harmonious situation.”
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