Just as the world is populated with both good and bad people, New York City is populated by some excellently run and well-organized co-op and condo boards, and some not so efficient. Making unpopular decisions doesn't necessarily mean a board is incompetent - virtually every decision made is going to have its detractors - but making popular decisions just to avoid controversy may not be in the best interests of the shareholders and the cooperative corporation either.
Like any relationship, communication is key. Shareholders want to know that their concerns are being addressed. Since board members are the faces of the building, so to speak, it's up to them to keep residents informed of where to bring their comments, complaints and suggestions.
Some residents may not be aware of this, but most of the time, the board probably isn't the best place for them to start with questions or grievances about their building. That said, however, the board is responsible for establishing a policy for shareholder communications and keeping the building's population aware of the policy. A lack of communication, or putting off shareholder concerns, can lead to problems in the long run.
One common mistake many shareholders make is that they believe their board members are experts in building matters, and are therefore the first people to contact with suggestions or questions. In reality, board members are residents who take in information and options from managers or managing agents to vote on issues at meetings.
So most of the time, the best route for a shareholder to take in asking questions is to bring them to the appropriate member of the building's staff - the superintendent is clearly the best person to answer a basic maintenance question, while the building manager or agent is the one to go to with a billing issue.
According to David Khazzam, a managing agent with PRC Management in Manhattan, "The tenant or shareholder should contact the board only if they're not getting an appropriate response using their first channel of communication. That would first be the building staff if they have a maintenance issue, then if the building staff does not respond, the shareholder should go to the manager, or the management company itself. If it's an administrative question, they would go right to the management company."
According to Khazzam, a shareholder's question should receive an initial response within two to three days. This does not mean the problem has been solved - but it lets the shareholder know it's under consideration or will be brought up at the next meeting.
Even if a manager doesn't respond to a question initially, it may not be time to get the board involved. Managing companies have hierarchies and if you have an unresponsive manager, a shareholder should consider contacting the manager's supervisor at the managing company before going to the board members.
"Once all of that has been exhausted, then I think a shareholder or tenant should contact the board," Khazzam says. "Ninety-nine percent of the questions a shareholder or tenant might have should be able to be answered through the prior channels mentioned."
Steven Greenbaum, director of property management for Mark Greenberg Real Estate in Lake Success, says his agency has a system that guarantees a written response to shareholder questions.
"We have an across-the-board policy that if anyone wants to communicate with the board members, they can do so via our office in writing, and we guarantee them a response in writing," Greenbaum says. "We want people to feel open to communicate with their board."
Different boards have different ways they want to communicate with residents but for the most part, putting things in writing is a universal recommendation. It allows shareholders to express themselves, gives one board member a written communication that can be shared with other members and the managing agent, and acts as a record of the communication. Using e-mail (if board members provide an address) often results in faster results.
One thing shareholders shouldn't do is stop board members whenever and wherever they see them and start peppering them with questions and grievances, says Andrew Hoffman of Hoffman Management in Manhattan. "The building is home for the board members as well, and that should be respected. It's inappropriate to stop a board member in the lobby of your building with a personal issue unless you're not getting resolution through written channels. It happens all the time, but it's confrontational."
"Board members are usually all volunteers," Khazzam adds. "They have enough of their personal time vested in dealing with the management company and running the operations of the building."
"I think the movement over the years is to not stop board members in the hallway or the elevator when they're on their way out to dinner or bombard them when they're walking the dog," Greenbaum says. "I find that saves board member burnout."
But still, people can contact board members at bad times, not out of anger or frustration, but because they simply don't know the proper protocol and they don't always realize that board members aren't always experts on running buildings.
"The perfect example is when the boiler goes out at 11 o'clock at night, and instead of calling the super or manager, shareholders call a board member," Greenbaum says. "He could be sleeping, and it's not his responsibility - but I've heard things like that a million times."
To avoid midnight calls to board members about boilers or noise, Greenbaum suggests that board send out a protocol letter that informs residents who to contact in various situations.
For many general questions, working with a property manager as a go-between usually works best because managers have knowledge of building operations that most board members don't. Also, managers are in touch with board members on a regular basis and are able to bring shareholder concerns and questions to them quite promptly.
"If it's a matter that needs urgent board attention, I am generally in daily or weekly contact with other board members," Khazzam says. "Today with e-mail it's even easier. I can probably get a same-day response, or at least get it to them right away for consideration."
Even with a good manager on the job, some boards take communication with shareholders seriously, and others can be lazy in that area.
"You run the gamut," says Hoffman. "There are some buildings where you don't hear anything for a year and everybody learns what's happening at the annual meeting - other than that, there's no communication. Then you have buildings that want a very high level of communication, with monthly meetings and newsletters."
Having almost no communication except for annual meetings may sound like a recipe for disaster, but Hoffman says there are some buildings where shareholders don't care because things are running smoothly.
In most cases, though, that isn't going to work. So what leads to boards being unresponsive?
"Sometimes politics comes into play more than anything else," Khazzam says. "[A few months before the annual meeting] you might have combative shareholders or tenants posing questions just for political reasons: "˜Why isn't this being done?' "˜Why isn't that being done?' So board members become cautious in how they answer questions."
Boards often can be hesitant to give answers to questions that aren't going to be well received.
"I don't agree with that approach," Khazzam says. "I think that's a bad-board policy. Everything needs to be responded to, even if it's a recurring question from a chronically disgruntled shareholder. You have to follow proper business protocol, whether or not you like the question - or the person asking it."
But as with phone calls in the dead of night, there are limits to what a board should be expected to deal with. If someone keeps asking the same question, even after getting the same answer two or three times, Khazzam says it's OK to firmly - but professionally - let the shareholder know that the issue is settled.
"If he's just asking again because he doesn't like the first answer," says Khazzam, "you can simply say, "˜Please refer to the managing agent, because we've answered the question. Although you may not like the answer, it is what it is for now, and these are the reasons.'"
Boards also have options in deciding how to communicate with residents.
"What we recommend to a good, functioning board is a newsletter," Khazzam says. "To either have an individual or a committee within the board that proactively submits news to its constituents." Khazzam also suggests sending out a newsletter after the annual meeting informing residents of who the board is, and the correct protocol in getting their concerns and issues addressed.
Some boards like to have one or two representatives who are the primary handlers of shareholder concerns. Usually, it ends up being the president or vice president. But sometimes, specific members may be assigned to handle different areas of resident concern. If there's a lawyer on the board, he or a she might handle legal questions, an accountant may answer budget concerns.
Bad feelings often arise when boards ignore residential concerns.
"That results in a slowly but surely rising sentiment that the board is not responsive - or is even hiding something," Hoffman says. "Constituents start to not trust the board. And come the annual elections, you have turmoil because everyone comes to the annual meeting looking for answers, and they already have a mistrustful feeling toward the board."
"But if you've been communicative throughout the year," adds Khazzam, "you're not going to have disgruntled shareholders at the meeting because everyone's questions have been answered as they came up, and you can just run your meeting. There'll be people for and against the board, but if you've been communicating, people can vote based on what the board has done. You don't want to go into the annual meeting having completely blocked yourself from the shareholder population and have it become the one forum where intricate and not-so intricate questions are asked."
Khazzam cites as an example a building that had heating problems because of renovation to the heating plant. The board hadn't communicated what it was doing to its shareholders, so the annual meeting became dominated by questions and complaints about the heating situation.
"The board felt it was so engrossed with actually correcting the heating problems that it did not properly communicate its message and plans to the shareholders," says Khazzam. "Ninety percent of the meeting was spent answering to a very loud and threatening group of shareholders - to the point where the meeting had to be adjourned. Had the board been more communicative and answered questions all along, that wouldn't have happened. We would have still had shareholders with opinions, but they could have been properly addressed via a vote."
A good managing agent knows the ins and outs of running a building and how to present information to a board. Greenbaum says it's also incumbent on the managing agent to let a board know when it isn't doing things well - including when it isn't responsive to the wants and needs of its shareholders.
"The managing agent's primary responsibility is to bring to the board's attention its options, it's choices, and the knowledge with which to make a properly informed decision. So if we feel the board is not communicating enough, it is our responsibility to make sure the board realizes that."
But ultimately, the board will decide whether or not to follow that advice, which is a good thing, according to Hoffman, because the building benefits from a board that thinks for itself - and ideally, a board that isn't satisfying its residents will be changed by voting at the annual election.
"Clearly, we work for the board," Khazzam says. "But we can only suggest - we can't impose."