Co-op, condo and HOA communities are a property manager’s bread and butter. Ensuring that their client buildings and associations run smoothly everyday provides managers with both purpose and pay. Therefore, it stands to reason that a dedicated manager might bend over backwards in order to satisfy his or her client – even if that client’s requests border on the outlandish.
But that very term ‘borderline’ implies that there is in fact a line that can be crossed, and that an association can generate enough headaches for its management to make continuing to serve that community feel like a losing proposition. In these instances, it may be prudent for a manager to end that professional relationship and rather focus on clients who aren’t a 24/7 source of anxiety.
Keep It Together
Before cutting ties with an association, a manager should conduct a thorough cost-benefit analysis. Can the relationship be salvaged? Is there someone else in the management company who might be better suited for this client? A lot of time and money is at stake, so any parting of ways must be well worth it.
It’s also a matter of corporate culture and philosophy as well. Some management companies prefer to fight it out until the bitter end, rather than terminate a relationship with an association. “We have never given a building back due to board members who could not work together,” says Joe Kanner, Owner of Quantum Property Management in Elmsford, New York. “When an issue does arise, we will sit down with the board and try to work out any differences, whether between members, or with us. We would make this an official agenda item for a board meeting so it could be discussed openly, and action taken. I honestly see no reason why we would ever quit working with a client.”
Over time, a good manager develops the instincts necessary to read a board, and to tell the difference between a minor breach that can be repaired, versus a sign that things are beyond salvation. “We all work so hard to get clients, that it can be challenging to accept the notion that sometimes it’s best to just let go,” says Thomas Wood, CEO of J A Wood Management in Lexington, Massachusetts. “I used to think that it was a failure on our part for not being able to work through something. But the truth is, if someone is paying for advice [and] then disregarding that advice, then things aren’t working.”
Most disagreements can be settled through negotiation, communication and compromise, rather than a complete dissolution of the management/board relationship. “I have had a few accounts where board members were disrespectful at best, and downright rude at worst instances,” says Hugh Shaffer, General Manager of Harbor Towers Condominium via Barkan Management in Boston. “After numerous attempts to alter that behavior, I’ve had to severe ties. But in other instances, the problem boiled down to a personality conflict where I needed to swap out one manager with another simply because of a misunderstanding. Most of the time, this type of exchange was all that was needed in order to transform a bad environment into a healthy one.”
“The boards we work for consist of dedicated volunteers. But as with all volunteers, they require leadership and guidance,” Wood adds. “While this can come from our team, we find it works best with a peer leader who can act as an intermediary, thus taking the manager out of any personality clashes. But when that doesn’t work, we might have to consider ending the relationship. In the past, we’ve found ourselves sticking with a client even if that client was putting us into a liability situation via bad decision-making – which in hindsight is crazy.”
Breaking up with a board is a tough decision, but one that a manager must be equipped to make. “You have to assess whether working for an association is profitable enough to warrant any elevated stress,” says Ellen Kornfeld, Vice President of the Lovett Group of Companies, a real estate management company in New York City. “You’re dealing with individuals with their own issues and their own egos.”
Calling It Quits
Despite their best efforts, more than a few property managers have experienced relationships with boards that have deteriorated to a breaking point. Fortunately, all of those surveyed have survived to tell the tale.
“We just parted ways with a client that wanted to see ‘more violations,’” says Christopher R. Berg of Independent Association Managers in Naperville, Illinois. “Personally, I felt that not having unresolved compliance matters was a sign of good management,” Berg continues, but apparently the board president felt differently. “When the president, in an open meeting, took to repeatedly attacking and demeaning me personally while simultaneously patting themselves on the back for their record-low delinquencies, I left with the intention to cancel the contract. Over the next few days, the sting of the emotional abuse faded, and I looked for new ground from which we could work. But soon thereafter, I was greatly relieved to receive a cancellation notice from them.”
Some management/board dynamics implode before things even have a chance to get going. “In the worst case we’ve had to date, we were told by an association – after being hired only two weeks prior – that we would probably be sued by one of the owners,” says Wood. “The board had apparently missed many compliance issues over time, but had brushed everything off, assuming that the board was correct and would thus prevail. We quickly advised them of the severity of the issue, but they ignored our counsel as well.
“Cut to us in court,” Wood continues, “with the owner suing us as management and the board as trustees. I thought that this would be easy because the board, as trustees, had directed us not to provide something to this owner, and as we were under their employ, the issue should be between the owner and the board. But 10 months, five court appearances, and a lot of money later, the judge instead repeatedly ordered us to give the complainant things which, when we complied, had the trustees threatening to fight us. It was nuts. Finally, the last court hearing featured a different judge who finally understood our role in the whole debacle and promptly dismissed us from the suit. At that point we resigned. But it didn’t end there: the board ignored our resignation for months, so it took an additional legal battle just to quit.”
Occasionally, it’s the relationship between the board members themselves that can render a situation untenable for a manager. “A nine-member board was plagued with factional infighting, with one in-group representing the younger members and the other, the older ones,” says Steven Greenbaum, Director of Property Management for Mark Greenberg Real Estate in Long Island City, New York. “Two entirely different mindsets where everything one group wanted to do, the other adamantly refused – and vice-versa.
“For example, the younger group wanted new amenities, and to embrace the latest technology and services. The older group preferred to add nothing, and keep maintenance charges stable. Whenever the younger group would win a close vote 5-4, and we’d implement whatever their decision was, the losers would get apoplectic, asking, ‘Who told you to do this?!’ or ‘How dare you do that?!’ And we’d have to explain to them the significance of the voting process. We could never make that board happy. We spent so much time at meetings playing referee and dealing with nonsense politics, that the whole atmosphere became unconducive to getting things done. The groups would rally shareholders against one another, write slanderous letters, screaming matches would carry out into the halls... Nothing we did seemed to mitigate any of this.”
While dealing with an unreasonable board or association may feel like having teeth pulled at the time, a manager will ideally come out of the experience with a better idea of what is and is not acceptable in regard to professional conduct, and will have greater insight about which associations might be a good fit going forward.
“If an association is hindering you from focusing on other business, taking too much of your time, or is simply not profitable, it’s probably in your best interest to leave,” says Kornfeld. “Given the extremely long hours we put in – longer than many other business of which I’m aware – and the amount of effort this takes, it’s just sometimes not worth it to deal with an association that is running you ragged for little return.”
At the end of the day, what price should a manager put on maintaining a healthy work environment? Mileage varies based on the individual. But if someone who has managed many associations over the course of many years is dreading going to work, that’s a good sign that a professional relationship may be unhealthy and is worth a reevaluation.
Mike Odenthal is a staff writer/reporter with New England Condominium.