Page 6 - New England Condominium January 2019

6 NEW ENGLAND CONDOMINIUM - JANUARY 2019 NEWENGLANDCONDO.COM M ost of the time, when a problem arises in a multifamily building or community association, the go-to solution is to get management on the phone (or text, or email). The refrain usual- ly goes something like: “Management will take care of it!” “They’ve seen this a million times!” “What can’t they handle?!” This isn’t a bad thing, of course; the vast majority of association managers are thoroughly-experienced professionals with the know-how to solve just about any problem. But what happens when management is the problem? What hap- pens when the association manager just hasn’t been performing? To whom can a building or association turn when its trusted adviser has lost that trust? Bet- ter yet, how can all of this be avoided entirely? Breaking Bad In order to identify and attempt to rectify management problems, it helps if the both the terms of a manager’s role and the board’s expectations are laid out explicitly from the outset. The more the manager’s job is precisely defined, the easier it is to say with certainty that something has gone off track – and the easier it will be to right the ship. And a hands-on board should be able to deftly spot when it is not receiving the service it’s paying for. “The relationship between a board and its manager is one of the single most important relationships which an asso- ciation must maintain,” says Michael G. Kreibich, a Principal at the law firm of Kovitz Shifrin Nesbit, which has offices in Illinois. “If that relationship breaks down, it can have lasting and widespread ramifications for the community. How- ever, because of the regular turnover of board members, this often gets over- looked. Management is counted on to guide the voluntary board on nearly all aspects of association governance, and the manager is entrusted with a great deal of sensitive association information and matters. Therefore, regular and on- going stock should be taken about the performance of an association’s manager. Communication about that performance, whether positive or negative, is necessary to manage the expectations of the board. And those expectations should be dis- cussed regularly and shared with man- agement in a constructive way, allowing management to address any issues before they drive a wedge between the associa- tion and the management company.” Of course there are some crystal clear signs that the relationship between as- sociation and management has soured, such as if the manager absconds with the association’s reserve funds, or if the man- ager assaults a resident or board mem- ber. But in many cases, the relationship erodes slowly over time, and the board needs to be more attentive to pick up on the signs of trouble. “It’s hard to identify any one factor when things go bad with management,” notes Stewart Wurtzel, a partner with the New York-based law firm Tane Water- man & Wurtzel, P.C. “It can sometimes start as a slower response to issues, or monthly reports come later and later or not at all, or the board increasingly re- ceives complaints from unit owners and vendors that management is not respon- sive. Perhaps you see late fees on invoices from vendors that you were not antici- pating. “The most important thing to do when questioning the quality of your manage- ment services,” he continues, “is to have a heart-to-heart with your agent and, if need be, a discussion with upper man- agement or the owners. Boards should regularly review management perfor- mance; there is no minimum period that a board should have to suffer with sub- par performance. If the board finds itself doing things that it pays management to do, that is certainly an indication that the agent may be underperforming. “If things don’t start to correct after a few conversations or meetings with up- per management, it’s time to start docu- menting problems and issues via written communications. When something is not done right, don’t just call to complain; send an email or a letter documenting the problem. When you start to write, al- ways include the agent’s boss and head of the agency on the copy.” Embrace the Review A board should neither shy away from conducting a thorough, honest and open performance review of its management agent – nor should it be afraid to increase the frequency of reviews should man- agement underwhelm. Confrontation is never easy, but the association is a client of the managing agent, and as such can set the terms. “For the first year of a contract, quar- terly reviews are important,” says Stella Munro, a property manager with Barkan Management Company, Inc., in Bris- tol, Rhode Island. “Thereafter, every six months should be adequate, unless there are specific concerns. Both parties need to understand the terms of the contract and expectations of the board. “In my opinion,” Munro continues, “if there is any kind of unhappiness with site management, it should be addressed as soon as possible. This allows the man- ager to address any concerns. From a board standpoint, it should be worried if day-to-day items are not being taken Addressing Management Problems Communication, Mediation, Cooperation BY MIKE ODENTHAL ISTOCKPHOTO.COM MANAGEMENT