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Dance of Dysfunction: Is Your Managing Agent Your Partner or Your Employee?

Tom Soter in Board Operations on September 19, 2013

New York City

Illustration by Danny Hellman
Sept. 19, 2013

The situations she encounters with condo and co-op boards are mind-blowing: She's repped a board where the president wanted to challenge the lease of a restaurant because he didn't like the food; another where a woman complained about keeping her parking space — even though she no longer lived in the building (but still served on the board); and yet another where a board member threatened the manager with an AK-47 because he didn't like the answer the agent gave him.

Bully Judgment Rule

"I honestly believe that most of these actions come out of the protections offered by the Business Judgment Rule and D&O [directors and officers] liability coverage," she said. "Boards would be more responsible if they couldn't hide behind them."

Hard to say if that's true. Still, this veteran property manager is not alone in her complaints. One longtime management exec claimed to me that many co-op and condo board members feel they're doing right by the building, and don't see the difference between their interests and building interests.

Boards would be more

responsible if they couldn't

hide behind the Business

Judgment Rule and D&O

liability coverage.

"They should try to imagine what it would be like if they weren't on the board. Are they truly looking out for the building or are they looking out for themselves?" the executive said. If they could see it through the manager's eyes, would that make a difference?

From the board members' perspective, it's a different picture. "I've been on the board in my building for over 15 years. We're on our fourth management company," notes a frustrated board member on Habitat's "Board Talk" forum. "After about 20 agents, three or four were worth the money. The rest had trouble writing a decent letter, doing a weekly walkthrough of the building, staying on top of the required inspections, filings, etc."

Another blogger adds: "Why do I need to explain to the managing agent various building code issues? Why do I need to remind him the elevators need to be inspected?"

Why indeed? If managers are to be seen as professionals, isn't it up to them to be professional, and rather than bellyache about their clients, clean up their acts instead?

How Do They Manage?

Managers have (sometimes valid) reasons for these problems, naturally. They point out that city, state and federal rules have been increasing; competition from lowballing, fly-by-night firms has sometimes kept management fees lower than they should be; and good managers are hard to get — and train — in an industry that offers relatively low pay for long hours. Between visiting buildings during the day and attending board meetings at night, managers often complain that they are stretched to the breaking point.

Is the answer more empathy and less griping on both sides? Or are boards correct in saying, "This isn't a partnership, it's an employee situation. If it isn't working, you're out"? The problem is that too many boards (and managers) don't try to find an answer that could possibly make the "marriage" work. A good manager is more than an employee, just as a good board is more than an employer. For better or worse, it's a partnership. And if it's a dance of dysfunction, everyone suffers. 


Illustration by Danny Hellman. Click to enlarge.

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