Don't Be Parochial and Amateur: One Board's Successful Businesslike Method
Dec. 3, 2013 — Hank Haynes bought an apartment at 240 East 46th Street in 1990, four years after the building was converted from a rental to a condominium. It didn't take him long to realize he'd bought into a world of woe. Phone calls were not returned, problems were left to fester and rancor was the rule of the day.
"When I moved in, there was a tremendous amount of animosity between the sponsor and the people who had bought apartments," recalls Haynes, 67. "People were unhappy with the management company, which was owned by the sponsor." To further increase the discontent of the unit-owners: The property manager and the accountant also worked for the sponsor. Times were tough at the 100-unit building.
It got worse. At the time, the sponsor controlled six of the nine seats on the board, thanks to his ongoing ownership of numerous apartments. Many unit-owners saw this as a conflict of interest. (The sponsor currently owns seven apartments, are 44 are occupied by renters.)
Strategy Change
After two years of problems, Haynes, a sales executive, decided to run for the building's board. "I wanted to bring a business perspective to the board," says Haynes, who was elected secretary. (Six board members are elected and three are appointed by the sponsor.) "By treating it as a business, you keep the building desirable to move into. That's how you increase value."
This one simple rule also meant that "you have to define your goals and get people to buy into them — board members as well as unit-owners."
Haynes's views on a businesslike approach were shared by board president Panos C. Adamopoulos, a manufacturer of exercise equipment who had moved into the building in 1979. He bought his apartment during the conversion, and won election to the board in 1988.
It's not that they don't
have opinions, but they're
not confrontational.
The two men agreed that the first order of business was cleaning up the messy arrangement with the sponsor's management company and accountant. In what was arguably the most important decision this board would ever make, its members set out to find the right management company. After whittling the field down to four finalists, the board hired Andrea Bunis, president of Andrea Bunis Management, which handles some 70 properties in the city.
Benefiting from Bunis' 30 years of experience in the industry, the board soon made sweeping changes: it replaced its accountant and lawyer, and began cleaning up the messy financial and legal matters the sponsor's firms had left behind.
Long-Sighted Approach
The condo board also hired an engineer and, following its "business perspective" approach, asked him to inspect the building and devise a long-range plan for repairs. Like any good business team, the board wanted to take the initiative and not be buffeted by the winds of fate: the 40-year-old building was beginning to show its age, and Haynes and Adamopoulos planned to stay on top of the situation.
This willingness to look at the long term and do repairs properly, instead of in a patchwork fashion, would prove to be key to the building's success. "There were certain things that we knew were going to have to be done," Haynes says. "So we [asked] the engineer to give us a time frame for the things that were going to have to be replaced. We found out when these items were going to reach the point when it wouldn't make sense to repair them."
The board members were also savvy in how they approached the annual meetings, often a time for residents to unload pent-up frustrations with how their building is being run. They managed to avoid such rancor by attempting to not get bogged down in petty controversies or ax-grinding.
In Bunis' experience with both condo and co-op boards, such an approach is noteworthy and reflects the board's business philosophy. "It's not that they don't have opinions, but they're not confrontational. If there's a conflict, we table it and come back to it later. The biggest controversy we've had has been changing the company that maintains the laundry room."
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Photo by Jennifer Wu.