New England Condominium February 2021

Board Style and Management Hands-on vs. Hands-off BY COOPER SMITH FEBRUARY 2021 NEWENGLANDCONDO.COM Bryan Hughes, president for New England for FirstService Residential, says, “This can be difficult to generalize as each community, and each board, has a different flavor. They are made up of people, so each situation is different.” He divides his boards into three categories: too engaged, appropriately en- gaged, and disengaged. “For management, disengaged boards may be easier to deal 205 Lexington Avenue, NY, NY 10016 • CHANGE SERVICE REQUESTED continued on page 6 THE CONDO, HOA & CO-OP RESOURCE CONDOMINIUM NEW ENGLAND While residents generally like the idea of community that living in a condomin- ium or co-op provides (that’s why many opt for this type of ownership), few are as excited about the idea of serving on their community’s governing board, or on any of the various committees their board may set up to oversee special proj- ects. As important as long-term supervi- sion of many specific aspects of commu- nity life may be, it’s often very difficult to find volunteers willing to do their part. Among the factors that influence volunteering for board service are the time commitment (real or perceived), discomfort with potentially being the fo- cus of resident anger and antipathy, and plain old apathy. On the other hand, for those who overcome those obstacles and hesita- tions, board service can provide a feel- ing of accomplishment, a level of pres- tige within the community, and a way to have a personal hand in maintaining the security and safety of what is likely their biggest financial investment. The Value of Time Board service is completely volun- tary, and the most common reason both co-op shareholders and condominium owners cite for not volunteering is lack of time. It’s not hard to understand why this is; board and resident meetings are generally held in the evening, and while those meetings could (and should) be run in a quick, efficient way and be done within an hour or so, they very often run longer—sometimes much longer. Most residents work long hours and aren’t es- pecially keen to add multiple additional hours to the end of their day. Additional- ly, board members who agree to serve as Condos and co-ops are unique in their management structure, of which there are two levels: the board of the association or corporation, which governs the community on behalf of the unit owners or shareholders, and a hired management agent, who conducts the day-to-day affairs of the property. Of course, some communities go their own way and choose to self-manage, but they are the exception to the rule—particu- larly in communities larger than 20 units. The question is, in professionally managed multifamily communities, how much responsibility and authority does a board delegate to outside management, and how does that affect how a given community functions? The Spectrum While each and every board is different and has their own style, managers report there is a ‘spectrum’ to board styles that ranges from minutely to barely involved. “There are two kinds of boards,” says Dan Wollman, CEO of management firm Gum- ley Haft. “They can be autocratic and dictatorial, or collaborative. In my experience, more are autocratic—and that has to do with the fact that most owners are ambivalent and apathetic. They don’t actually want to be on the board, which effectively leaves one or two active, engaged people on the board to run the building. This is very com- mon. It’s simply the more pervasive style. Personally, I prefer a collaborative board, one that wants to be there. Collaboration allows for everyone to give an opinion and make a consensus decision, even if it’s not the one I personally recommend. I also like a ‘big-picture’ board—one that’s involved, but not bogged down with minutia. A board should never spend an hour discussing what type of cut flowers should be placed in the lobby. I want them to see where we are spending their money for a big project. It’s important that they see and feel where the money is spent. It gives them a far better perspective when they talk to shareholders—and that’s extremely valuable.” Overcoming Apathy Getting Residents Interested in Board Service BY COOPER SMITH A Look at Board Powers What a Condo or Co-op Board Is … and Isn’t BY A J SIDRANSKY continued on page 7 When one buys a private single-family home, it’s clear who the king or queen of the castle is: the homeowner. When it comes to condominiums and cooperative apartments, however, the relationship be- tween owner and property is a little more complex. While the shareholder or unit owner rules within the walls of their unit, everything beyond the drywall—from the wiring and pipes in the walls to the shared common areas like laundry and fitness rooms, to the exterior elements that hold the building together and protect it from the elements—is governed by the commu- nity’s board under the aegis of its govern- ing documents, which contain the rules and regulations that cover a far-ranging variety of issues and give the board au- thority over different aspects of how the building or association is run. Governing documents are themselves regulated by individual state laws and statutes, and at times even local ordinances. The hybrid nature of ownership pre- sented by condominium and cooperative homes gives many owners and sharehold- ers a skewed or incomplete—and often in- correct—understanding of who is respon- sible for what in their community. This is partly because few purchasers of condo- minium and cooperative units ever re- ally read the governing documents of the community they’re moving into, and also partly because many are coming from a rental environment and wrongly see the association or corporation board as their landlord—which it most certainly is not. Condos vs. Co-ops; Who’s in Charge Here? To understand the role and powers of the board, it’s important to understand the difference between condo and co-op ownership versus single-family home- ownership, as well as the difference be- tween condos and co-ops themselves. Single-family homeownership is very simple: You buy a home and the land un- derneath it. There may be some interface with local governmental authorities for provision of such necessary infrastructure as utilities, roads, and basic services such continued on page 9