So the board went shopping for a new management company. It had plenty of experience — good and bad — to guide it through the process.
"The first thing we looked for was geographical proximity," Fox says. "If the company has no clients in the neighborhood, they're not as likely to come around. Another factor was the company's reputation, and how many buildings they manage, and how many of those are co-ops."
By way of checking references, the board members talked with boards at other buildings managed by the potential companies, then visited the properties to inspect their physical condition. They whittled down the list to three finalists, then visited the companies' offices. A couple were "tired-looking." One, Kaled Management, was "progressive and businesslike." The board went with Kaled.
The transition was "smooth," according to Fox, and the board didn't have to get too deeply involved in the process, which took about two months. One thing the board insisted on was that the co-op's name be added to the management company's name on the management account. "There were concerns about who owns the money," Fox says, "so we insisted on having our name added to that account."
A cross-section of property managers agrees that a key to a smooth transition is a collegial relationship between the outgoing and incoming management companies. Boards can help foster such a relationship.
Of course, one way to avoid the perils of a management transition is to hire the right management company in the first place. That's hard, to be sure, but it is doable. "To me," Fox, the president, says, "one of the major aspects is how industrious the new manager is, how much they concern themselves with running the property. Our manager, Julia Kodis, is very detail-oriented, the best manager I've had experience with. And Peter Lehr [director of management at Kaled] came to our board meetings for the first year, along with Julia. We were favorably impressed that they were taking an interest. Peter wanted to know how the board functions, and he gave us advice. It confirmed that we made a good decision. You don't always know what you've got until you've got it."
Adapted from "Smooth Transitions" by Bill Morris (Habitat, April 2015).
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