New York's Cooperative and Condominium Community
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Keep your relationship with shareholders simple and straightforward.
President, Townsend Mews Owners Corp.
329-337 W. 85th St., Upper West Side
5 brownstones, 33 units
What he does full time: Real estate attorney
Length of board service: 25 years
Our board has a two-pronged philosophy, the first part being: Keep it simple. We capitalize on the fact that we’re a small co-op and govern by keeping our communication with shareholders pretty informal. It’s all about making people feel comfortable asking questions. For instance, a new shareholder wanted to put an air conditioner unit in her window, which had old-fashioned iron security bars on it. This was not a complex, need-to-get-an-alteration-agreement kind of situation, so we arranged to modify the bars at the shareholder’s expense, and it got done within a week. The building didn’t get in the way of something that was a reasonable request that had a simple, common-sense solution. If someone wants to sell their apartment, we want them to talk to us before going to a broker; that way, the broker won’t bring in a buyer who’s looking for a pied-à-terre, which we don’t allow. A quick conversation can save a lot of headaches.
The other part of our motto is: Keep it affordable. We have people from a variety of backgrounds, including newer, more affluent shareholders and older ones on fixed incomes, so we’re sensitive to managing expenses effectively. Fortunately, we haven’t had any major capital projects of late, and our expenditures have stayed steady. But we’re diligent about socking away some of our maintenance to continue to build up the reserve fund. Our flip tax used to be on a sliding scale of 1% to 3%, depending on how long the shareholder had been in the building, but we changed that to a flat 3%. As a result, we haven’t had assessments or maintenance hikes for six years. We’re now getting ready to start crunching numbers to determine whether we should refinance our mortgage, which is with National Cooperative Bank. Since interest rates are very attractive now, it might be worth incurring a prepayment penalty in order to refinance a little bit ahead of schedule.
We also don’t fix what isn’t broken. I’ve been president for more than 20 years, and the other directors have also served for a long time. We invite people to join, but shareholders are happy the way things are, so there’s no need to complicate things by setting term limits or staggering the board.
As a real estate attorney I counsel other co-op boards, and what I’ve seen is that disputes usually center around the issue of unfairness, whether it’s actual or perceived, and there’s a clash between one person’s interest and those of the building as a whole. We try to instill a sense of community and congeniality. There has been the rare occasion where disputes had to go to court, but for the most part we’ve been drama- and problem-free.
This interview was edited for clarity and length.
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