Page 1 - CooperatorNews New York January 2022
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January 2022                        COOPERATORNEWS.COM  being said, “items that should be included and should be standard in-  clude, but are not limited to: the fee, whether the fee may change and   when, and by what fee schedule the client is to be charged for services   outside of what the contract specifies. It’s also important to define   when the contract ends, whether it’s cancelable with or without cause,   and what the potential penalties for doing so might be.”    Ellen Shapiro, an attorney with Marcus, Errico, Emmer & Brooks   in Boston, adds that once finalized, “management contracts are of-  NEW YORK  THE CO-OP & CONDO RESOURCE  COOPERATORNEWS  205 Lexington Avenue, NY, NY 10016 • CHANGE SERVICE REQUESTED  There are elements of board service that can vex even the most committed, most intrepid   volunteer—and negotiating a building’s management contract is probably at the top of that   list. Vexing or not, however, the extent and quality of services available to your building   community hinges on what’s in that contract; managers and management companies are   obligated to provide what’s agreed upon in it—nothing more, nothing less. That’s why secur-  ing the appropriate terms for the appropriate price is an essential component of maintaining   a sound, properly functioning building.  The Nuts & Bolts  “Management agreements are the basis from which managing agents assist and help op-  erate properties on a day-to-day basis,” says Mark Hakim, an attorney with Manhattan-  based law firm Schwartz Sladkus Reich Greenberg Atlas. “A management agreement is in-  tended to be ‘soup to nuts,’ providing a roadmap of the agent’s duties and responsibilities,   including administrative and financial matters. The agent is intended to be the arm of the   board, generally handling all matters during the term of the agreement, while the board   continues to make the actual material decisions. Some ministerial decisions, like purchasing   of supplies and so forth, are delegated to the managing agent so the board can focus on the   bigger-picture items.”   And while “management agreements for co-ops and condominiums contain many boil-  erplate provisions,” points out Dennis Greenstein, an attorney with the New York office of   global law firm Seyfarth Shaw, “the devil is in the details. There may be unique physical,   financial, and staffing considerations that should be considered and provided in the agree-  ment to cover them.”     And while there are certain elements that are pretty much universal from one contract to   the next, “it’s not a standard real estate contract—every management company has its own   form,” says Scott Piekarsky, an attorney with Phillips Nizer in Hackensack, New Jersey. That   continued on page 12   Like just about every other occupation   on the planet, property management has   been profoundly altered by the coronavirus   pandemic and the changes it’s brought to   society at large, with many of the challenges   and stressors we’ve all had to face hitting resi-  dential management industry professionals   especially hard. Despite the proliferation of   apps and other innovations that have enabled   many tasks to be handled remotely, the fact   remains that for everything from physical   plant maintenance to apartment inspections   to resolving resident conflicts, property man-  agement remains a hands-on job. Adjusting   to the “new normal” of periodic lockdowns,   remote meetings, social distancing, and the   ubiquitous threat of a deadly virus has cer-  tainly taken its toll on everyone in the busi-  ness. But it’s also led to some silver linings   and unexpected bright spots along the way.  Going Remote, for Better or Worse  Depending on the industry—and who   you ask—remote work, virtual everything,   and the technology used to make it all pos-  sible have been either a blessing or a curse (or   a fair bit of both). On the one hand, many can   skip the commute and work in their PJs, and   companies can save on the overhead expens-  es that go with a brick-and-mortar office. On   the other hand, many employees miss out on   friendly water cooler chat and the ability to   conduct business with colleagues in person.   Across  the  country,  property  managers   express the same duality in their experience,   finding that while platforms like Zoom and   Skype have enabled them to continue serving   their client communities and keep things op-  erating despite restrictions on indoor gath-  erings and other face-to-face interactions,   there really is no substitute—and in many   cases, managers consider an in-person, on-  the-ground approach to be among their best   professional assets.   Management Contracts 101  Negotiating Your Community’s Most Important Contract  BY A. J. SIDRANSKY  The State of the   Management Nation  How 2 Years of COVID Have   Changed the Profession  BY DARCEY GERSTEIN  What Size   Management   Company Is Best?  A Question of Service    and Scale  BY A.J. SIDRANSKY   continued on page 13   Co-op and condo communities come in   all shapes, sizes, and configurations. They   range from three-unit, wood-frame houses   to high-rise apartment buildings containing   hundreds of units, to sprawling townhouse   communities in park-like settings. Like these   communities, firms specializing in their   management and operation can be large or   small, generalist or boutique. The question   for boards, shareholders, and owners is, what   type of firm is right for you and your com-  munity?  Big vs. Small, General vs. Boutique  There are management firms that em-  ploy literally thousands of professionals in all   sorts of specializations, and small firms that   employ just a handful of specialists. Size does   not dictate approach, however. Some firms   are more geared for the efficient and effec-  tive execution of basic, daily management   tasks—let’s call them generalists—and some   take a more tailored approach to provide   each client with exactly the experience they   are seeking. This dichotomy between gener-  alists and boutique firms has much more to   do with a company’s professional approach   than with how many people it employs.  “Large firms offer more redundancy in   terms of both services and personnel,” says   Stephen DiNocco, owner of Affinity Realty   and Property Management, based in Boston.   “Some clients view this as more availability,   in that there’s always someone there to cover   their property’s needs. That’s not to say that   smaller, more specialized companies can’t do   that, too, but in general, larger firms have a   larger client base, so it makes sense to offer   more services. They may have an accounting   arm, an insurance arm, etc. In some mar-  kets, they can also offer a slightly better pric-  ing structure.” However, he adds that bigger   companies are often more bureaucratic and   less flexible. DiNocco says that “clients also   may be obligated to engage with the ancillary   services the management firm provides. You   will get ‘sold’ on their in-house service pro-  viders, and may feel you have to use them for   those services.”   Though usually smaller in terms of overall   staff than big generalist management firms,   continued on page 15 


































































































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