President & CEO,
The Ferrara Management Group
Speak Frankly During the Board Interview
Setting the Scene
When we are being interviewed by a board, we are also “interviewing” the board. An example of this is when we were being interviewed by a Brooklyn cooperative that had more than 400 violations. This high number worried us because it meant trouble in so many areas. For example, if they were not removed, the co-op’s mortgage refinancing agreement would automatically raise the mortgage’s interest rate from 3.75 to 12.5 percent, a dramatic and unsustainable increase.
Following the Action
During our interview, we spoke frankly. We told the board that, in order for us to manage their building, the board needed to trust our advice. The members then gave us a commitment that they would let us work to help them cure those violations and ensure that others did not occur in the future.
As soon as we were hired, one of our account executives got heavily involved in the problem and worked with the city to remove violations. We also turned to an amnesty program run by the New York City Department of Finance, which ultimately saved the co-op thousands of dollars in penalties and interest. In addition, we ended up working with some of the residents. There were HPD violations on two of the sponsor’s apartments, for instance. The account executive made contact with tenants, and he brought in the city’s Department of Social Services to help with one of them, who was a hoarder.
Doing It Right
The lesson is that when a board interviews us, we’re also assessing the board and the property. If its members are not willing to run their building professionally, it will create a greater hardship. And they’ll have trouble getting dedicated professional managers to help guide their property.