By Ira Meister, president and CEO, Matthew Adam Properties, Inc
It is generally held that an effective, smoothly functioning board of directors of a condominium or co-op can make for a well-run building, and perhaps an increase in the unit values. That’s not surprising. Board actions and reputations have an impact. An organized board focusing on the best interests of the building and residents can facilitate approvals of qualified buyers, seek innovative ways to improve the physical plant and services and have a long-range vision.
In New York’s changing economic environment, the question arises of whether a board reflects the buildings population or is comprised of long-time residents when the majority of the apartments are owned by fairly recent buyers.
With all the variables and the impact a board can have on the building and the quality of life of the residents, it’s helpful to explore what makes for an effective board and what skills and traits board members should have.
The members’ primary concern should be the interests of the building and its residents. They should understand the needs of the property and shareholders/owners and their expectations. Secondly, the board members should understand what serving on the board entails and the time commitment involved. It’s great to have enthusiasm and dedication, but one must have the time. Learning about the various issues and being prepared for meetings and votes requires homework.
There are many demands on the board members from working with the other members and the property manager to develop the annual budget, maintain the desired level of services, explore improvements, have a long-term plan and handle residents’ comments and complaints.
Serving on a board requires being part politician and part psychologist in working with others with opposing views and finding a compromise and in dealing with the residents. Being a good listener is a valuable trait.
A board also benefits if, periodically, new members join who bring a fresh perspective to the deliberations and decisions. A diverse board with different viewpoints is valuable.
With the various issues that come before a board including financial, construction, staffing, adhering to new city, state and federal regulations, lawsuits and dealing with unhappy residents, an effective board should have persons with differing skills and expertise. A board overloaded with attorneys or financial professionals will have a narrower focus than one that is diverse, in age, experience and talents.
Boards with a variety of legal, financial, engineering, architecture and corporate experience find they have a balance to rely on the board member’s expertise while looking at issues with different viewpoints.
Board members have considerable impact on the lives of fellow residents in addition to approving buyers in co-ops. Does the building permit pets, and if so, are there restrictions such as size or type of pet? Does the building allow sublets, and if so, what are the time limits and number of times a unit may be sublet? Does the co-op limit sales only to primary residents? These issues have an impact on the culture and quality of life in the building. Those that limit sublets and approve sales only to primary residents are seeking a more community and family-oriented building.
Decisions are needed on improvements. For example, should the building redo the lobby and hallways? The property manager will make recommendations, but it’s up to the board to accept and fund them, and determine whether the expense should come out of operating funds, the reserve fund or borrowing. Each option impacts on the monthly charges.
In formulating the budget and the monthly charges, boards often consider whether to defer preventive maintenance to keep the monthly charges lower and kick the can down the road when actual costs will be higher. Or, they can create and adhere to an ongoing plan to upgrade mechanical systems. And, in today’s world, there’s the question of what technology would benefit the building and the cost.
Over the years I’ve worked with hundreds of board members. Most are dedicated people who want to do the best for the building and residents and take their responsibilities seriously, and in return get great satisfaction in serving.
President and CEO
Matthew Adam Properties, Inc.
375 Pearl Street – 14th Floor
New York, NY 10038