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Habitat Magazine Business of Management 2021

HABITAT

BOARD OPERATIONS

HOW CO-OP/CONDO BOARDS OPERATE

Ask Mary: How Can Boards Get Owners to Pony Up?

Mary Federico in Board Operations on August 30, 2021

New York City

Co-op and condo boards, repairs, owner payments, persuasion, elevator repairs.
Aug. 30, 2021

Dear Mary: Our board has a hard time convincing owners to spend money. Even when we present a good case, we can’t seem to get approval. We’re missing out on fixes that could prevent future costs and on improvements that could benefit everyone. What are we doing wrong? – Unpersuasive in Union Square

Dear Unpersuasive: You’re hardly alone, and there’s no simple answer. A lot of things have to line up to get owner agreement on anything. It’s even trickier if you’re planning an assessment. Here’s one way to improve your chances: examine the assumption that you have a “good case.” Are you sure?

A good case must answer a series of questions for owners. Rate your case on how well it answers the questions below – if at all. Note that we’re focusing here only on the content of a good case. There’s more to the story: messenger, method and timing also make a difference. But if the content isn’t solid, you’re unlikely to prevail.

“Why do we have to do anything? What’s wrong with the status quo?” Show that it’s serious. Don’t just describe what will happen if you do take action; also describe what will happen if you don’t. Frame the “no action” choice as a loss: We need to levy an assessment so we can modernize our elevators. We’ve been having more frequent outages, and they’re lasting longer. It’s going to get worse if we don’t deal with it now.

“Do we have to act now? Can’t it wait?” Spending money now is an immediate and negative event. Benefits are positive – but in the future and not guaranteed. It’s human nature to kick the can down the road and hope the problem goes away. List the consequences of waiting. Again, try to frame these as a loss: Our elevators are 35 years old and wearing out. Our elevator parts aren’t getting any younger, and the manufacturer no longer makes replacement parts for this model. It’s only a matter of time before we lose an elevator for a month ... or even longer. 

“Aren’t we already doing something about this?” Is there something in the works that owners might mistakenly see as a solution to this problem? If so, bring it up, and explain why it’s not sufficient: We’ve been sourcing parts on the secondary market, and that’s helped for a while. But that supply will dry up eventually. It’s not a sustainable solution. 

“Why this particular solution? How about [cheaper option]?” Assuming there are other options, list them and explain why you aren’t pursuing them: We could keep doing what we’re doing for a while longer. But there’s a risk that we’ll have a sudden emergency, with a longer outage time and higher cost. 

“Will this work?” Two issues here: 1) whether the proposed solution solves the problem; and 2) whether you have the wherewithal to do it right. Owners might need reassurance on both: The solution is straightforward, and we have a list of viable vendors. Our very experienced elevator consultant will guide us through the procurement and construction processes. 

“Will it be worth it?” Describe the benefits – financial and otherwise. Help owners conclude that they can expect a good return on their money: When we’re done, we’ll have fewer outages and a shorter wait time for elevators. And with the new technology, many city-mandated upgrades will be faster and less expensive. 

A final note: Do your bylaws allow you to spend money for urgent and immediate life-safety issues – without owner approval? If not, you need to consider dealing with that ASAP.

Mary Federico serves on the board of her 240-unit Upper West Side condominium. Through her consultancy, Organizational Behavior Strategies, she helps leaders use behavioral science to improve their organizations.

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