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Effective Property Management Tips

Cooperative housing corporations and condominium associations in New York State are created pursuant to State law and are required to provide owners with documents that describe their rights and responsibilities. The Boards of Directors and Boards of Managers elected to govern housing cooperatives and condominiums take on a fiduciary responsibility to act in the best interests of their cooperative or condominium, using their best judgment and acting in concert as a board.

Shareholders and unit owners have the ability to keep board members in office by reelecting them at subsequent annual meetings, to remove them by failing to reelect them or by procedures designed for fast removal. This workshop provides performance standards to help shareholders and unit owners determine if theirs is a good board and offers the following guidelines for board members in upholding high standards of board performance.

First, boards need to know and obey the rules of running their cooperative or condominium. This includes knowledge of local, state and federal laws, as well as the documents of the building. When an issue arises that can be resolved by language in the proprietary lease or the declaration of condominium, the by-laws, house rules and any procedures pamphlets that the building may have, the board should know where to look. New board members should read their buildings’ documents, not necessarily to memorize them, but to familiarize themselves and know where items can be found.

Boards that do not follow their documents can easily run afoul of the rules and may even be brought to court by shareholders or unit owners. An example is the so called “flip tax” or transfer fee, which is not a tax at all but an amount some cooperatives charge sellers upon the sale of their units. Boards need to know that they cannot amend the governing documents of the co-op to institute a flip tax without a vote of the shareholders.

Conversely, boards may be able to institute other changes, such as the addition of or changes to sublet fees, without a shareholder vote. A knowledge of the law and of the building’s governing documents will help clarify these issues.

As far as laws are concerned, the board and its managing agent must keep on top of all regulations and amendments that apply to the building. For example, Local Law 10 regarding facade inspections has been amended by Local Law 11 of 1998, which requires more invasive examinations and more specific reports written by licensed architects and engineers.

Boards must make sure they have a good working relationship with their property managers. Concentrate on keeping lines of communication open, so that the board is kept informed of new laws and other developments. Your Einsidler Management property manager is trained to help keep you informed, and to listen to board needs and concerns.

Good communications between boards and owners is key to a well-run cooperative or condominium. Owners are interested in any information that could affect their lifestyles or the value of their apartments. For example, information regarding board policy in matters such as subletting and pets, as well as plans for building improvements like lobby renovations and facade work, should be regularly communicated to owners.

Brief newsletters distributed on a regular basis are an excellent source of information. Correspondence to owners from the managing agent can also be useful.

On major issues, such as expensive building-wide renovations, boards should not be reluctant to call special shareholder meetings, especially where owners may be anxious or upset about the work.

Effective communications among board members is also crucial. Personal agendas of individual members must be swept aside so that all can focus on the building.

It is your fiduciary duty to use your talents, intelligence, energy and effort for the good of the building. Don’t get involved with “he said/she said” arguments or ego battles on the board. Instead, try to set a good example for everyone else. You’ll be surprised how fast an average board can become a good board, and a good board can become an excellent board.

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