Oftentimes, co-op shareholders forget that their building is not only a home, but also a business. And while running a home is a big responsibility in itself, with financial, legal, and managerial elements, running a cooperative corporation is even tougher. With most board members acting as volunteer directors who may or may not have inside knowledge of the day-to-day concerns facing their home/business, it's vital that every board has a team of skilled, competent professionals to help when things get complicated - and to try and avoid complication in the first place. Choosing such professionals to help guide your building is a tall order, but if you know what to look for, what questions to ask, and what you can and should expect from your hired pros, the task is a little less daunting.

Regardless of whether you're seeking an accountant, an attorney, or an architect, it's absolutely non-negotiable that your chosen pro have substantial experience specifically with co-ops and condos. The laws affecting these kinds of communities require special knowledge and experience. "Use someone well-known in the field," advises Richard Smolin, CPA, of Smolin & Yavel, an accounting firm based in Brooklyn. "The general practitioner approach doesn't seem to work."

A good place to start might be trade organizations like the Federation of New York Housing Cooperatives and Condominiums (FNYHC), or the Council of New York Cooperatives and Condominiums (CNYC). The latter, Smolin says, "[is] the largest nonprofit institution lobbying for New York City co-ops and condos. They have no vested interest in anyone - they serve the community." Smolin also adds that asking your building's attorney for an accounting firm reference isn't a bad idea, but stresses that the responsibility for finding an accountant falls squarely with the board.

This is somewhat different from hiring a construction contractor to overhaul your building's lobby, says Smolin. In that situation, your managing agent is the point man between vendors and the board. But with accountants, "A board should receive sealed bids for choosing professionals, just as it would for any major capital expenditure. As the board's advocate, an accounting firm should keep a healthy distance from the managing agent, because it might be tough for a firm chosen by the managing agent to bite the hand that's feeding it."

Smolin believes the prospective candidate should meet with as many board members as possible. "At least the president, treasurer and the managing agent (with the managing agent playing only an advisory role). Ask who will be in charge of the assignment - a partner or someone on staff? Will they be available for meetings?"

While some accounting firms bill by the hour, others charge a flat fee that breaks down to about $100 to $150 per hour, depending on the property's size and building problems. "I think a flat fee is best for both the board and the firm, as everyone knows the price in advance. If there's a special project over and above what's in the engagement letter, that's another story," says Smolin. "Find out in advance which services are covered; ask whether there are charges for telephone conferences and if a certain number of meetings are covered. Some firms might put you on the clock for every item." Issues related to refinancing will usually be extra, as will handling audits brought by outside agencies, such as tax authorities.

"Make sure the firm will customize its reports to your property's needs," says Marc Taub, a partner at ERE LLP, an accounting firm in Manhattan. "Many firms use the "˜cookie cutter approach' - they have only one way of printing out a financial statement and don't take into consideration how your building operates."

No more than two or three people are necessary to interview the accounting firm representatives, believes Taub. "Otherwise, decision-making gets too complicated." He estimates a firm's average fees for a 100-unit co-op to be $5,000, but adds that, depending on the property and its size, fees can reach $15,000.

When choosing someone to represent your building, the necessity for choosing someone well grounded in co-op and condo law becomes even more pronounced. "You want someone who has a good understanding of co-op/condo dynamics," says Phyllis Weisberg, a partner at Kurzman Karelsen & Frank, a law firm in Manhattan. "It's not like making corporate decisions that affect GM's shareholders. You're affecting people's homes."

Weisberg believes there should be positive chemistry between a board and its counsel. "Different personalities work with different people," she notes. "We recommend the board choose one person to be our contact. That person should be at the interview, which is a give-and-take process. Tell the lawyer about the building, and its problems - check his or her reaction."

As for questions to ask during the interview, Weisberg recommends presenting a problem to see how practical an answer you get. "Some boards feel their prior counsel neglected litigation, so check what [an attorney's] responsiveness to problems will be." Other board-attorney problems Weisberg has heard of include "overworking matters and charging too much to write intellectual memos."

References can come from the lawyers themselves. Get the phone numbers of three or four of their clients with buildings similar to yours. Find out what services are provided and whether the firm charges on an hourly or retainer basis. Kurzman Karelsen & Frank charges an hourly fee for their services that varies depending on whether an associate or a partner is on the job, finding that to be fairer to both the firm and their clients. "We're called on an as-needed basis and have replaced law firms that were on a retainer. The boards claimed the firms did nothing through the retainer; making everything an "˜extra charge' - particularly anything remotely related to litigation. We try to head off problems before they occur to keep our clients out of litigation, but we will litigate."

Other services rendered by a good legal counsel include handling zoning and tax issues; reviewing, amending or preparing leases, bylaws, or construction contracts; resolving shareholder disputes like noise problems, nonpayment issues, and breach of leases or bylaws; and attending board meetings, if requested. "It's not necessary to have us at every board meeting," says Weisberg. "We can review a copy of the minutes to check for problem areas." They also handle issues relating to corporate governance. "If there's going to be a contested election we'll usually help smooth the process so people know it will be fair, whatever the outcome."

According to Aaron Danzig, an associate with the New York law firm of Baer Marks & Upham, LLP, the two grievance complaints filed most often against lawyers are for not returning phone calls and not keeping the client current on matters the lawyer is handling. Keep this in mind while interviewing, and inquire about the firm's responsiveness to status inquiries.

Danzig concurs with Weisberg on the matter of board meetings. "It may be too expensive for attorneys to be present at all board meetings. If something comes up where you need your lawyer, call him, or postpone the meeting until you get a legal opinion."

Other services your legal counsel will perform for your building might include overseeing the sale of apartments, preparing documents for new tenants, stock issuances, drafting corporate resolutions, and dealing with vendor complaints. "Litigation is the last thing you want," says Danzig. "It's much too costly. Personal contact with the vendor usually gets you to a settlement."

To choose a law firm, Danzig recommends that the board meet with at least three firms, but he also believes in attorney/client chemistry. "If you interview one guy and can relate to him well and feel you can trust him, don't go any further." Danzig also points out that "It's not a bad idea to find out the lawyer's schooling. An Ivy League law school is a point in an attorney's favor. Ask if they've done any writing in the field and where it's been published," he adds.

As important and indispensable as accountants and attorneys are, the bottom line is that they don't really get called on to interact with board members and building residents every day. The professional who has perhaps the most hands-on, day-to-day contact with everyone in your building community from board members to custodial staff to Mrs. Smith in apartment 12D is your property manager. For that reason, managing agents are possibly the most difficult professionals for a condo or co-op to choose. Personal rapport and chemistry are so important in the relationship between board and manager that many buildings go through several managers before landing one they like. According to Rosemary Paparo, director of management for Buchbinder & Warren, a management firm in Manhattan, "Boards always look at the bottom line"“they think they can save money by having managing agents negotiate against each other, but there comes a point where it doesn't pay for the managing agent."

Paparo suggests looking at a firm's experience, its track record in the industry, and its integrity - good advice for choosing any kind of pro, but especially important when considering candidates for such an involved relationship. Paparo recommends asking whether the firm is experienced with your type of building and its problems. "How many other properties does the agent manage? Is he overloaded? We're not interested in situations where our agents are going to burn out."

And just like you would if you were interviewing a childcare professional or a housekeeper, it's important - if not vital - to ask for a managing agent's references, and then check them.

Individual portfolios and interviews aside, however, "A board must recognize they are hiring a company and not an individual managing agent," counsels Ronni Lynn Arougheti, president of Heron Ltd., a management firm in Manhattan. "Managing agents come and go, but a good company can stay with your building forever. Look at all the talents the company as a whole brings to the table." She adds, "It's important that a firm have professionals in the house - an architect, engineer, or attorney. There's a lot that must be analyzed in terms of liability and other issues."

Arougheti suggests boards ask management firms what criteria they use for hiring. "We require writing samples from prospective employees. If you can't communicate, you can't be an effective agent," she points out. "Visit the agent's office. Are papers piled to the ceiling? Their filing system and accounting department must be organized; see them in their natural habitat before you sign on the dotted line."

As far as what's a reasonable figure for retaining a managing agent's talents, the standard rule is to charge per unit, so depending on the borough, it can range from $250 to $450 a year per unit. Arougheti says to get references from lawyers and accountants. "Everyone asks for references from satisfied clients. Don't just rely on them; listen to the people who work with the property manager on a professional level."

As the former president of her 31-unit New York co-op's board, Arlene Gordon and her vice president took it upon themselves to screen managing agents when their building wanted a new one. "Our accounting firm gave us a list of managing agents and I got one name from a friend in a building I thought was well-managed. We went through all the material the management companies sent and ended up with four finalists who gave us a list of the buildings they managed so we could see if any of the properties were like ours. They also referred us to board members with whom they worked. We chose a small firm so we would get more personalized attention. We also liked the fact that they had legal, architectural, engineering and building management expertise"“one partner in the management company is a lawyer and one is an architect."

Another president of a 145-unit co-op on Manhattan's Upper West Side says his board interviewed at least 12 companies before settling on a management firm. "We tried to have as many board members present as possible at each interview," he remembers. "We did spreadsheets on all the firms, comparing their computer programs, their fees"¦" In all, the president reports, it took the board three months. "One of the most important things for us was the on-site manager. We only wanted one of the firm's principals, and that's what they gave us. We've been with them for five years."

Insurance brokers represent your building and board in the placement of policies, and also represent the insurance companies. Their job is to try to get your building the best policy terms and conditions, the broadest coverage, lowest premiums, and best claims handling, so choosing the right broker can mean the difference between the quick and painless settling of claims and a long, drawn-out legal wrangle, should someone file a claim against your building, or should your building have to file a claim of its own.

According to Robert E. Mackoul of Mackoul & Associates, an insurance brokerage firm in Lynnbrook, Long Island, it all comes down to "experience, experience, experience." For references, Mackoul recommends calling condo/co-op publications and getting the names of at least three brokers. He suggests that brokers come to board interviews with their credentials in hand, and be prepared to answer, "How many co-ops do they represent? Which insurance companies do they represent?"

He adds, "Every board should sit its insurance agent down once a year and ask two questions: Is there anything we're covered for that we don't need; and is there anything we need that we're not covered for? If the board is sued for something for which they're not covered, it will be a lot more expensive than the premium."

According to Arthur A. Schwartz, president of Masters Coverage Corp. in Manhattan, choosing an insurance broker is a process where your managing agent can be of great assistance."It's usually the managing agent that suggests the brokers," says Schwartz. The agent may also then conduct the bidding. "Certain managing agents are very protective and perceive it as part of their job," says Schwartz. "They have more experience in claims handling, and many have their own insurance department to analyze the policies. Our initial meetings are with the board only about 25 percent of the time."

Once the bids are made, the broker then presents the insurance companies' proposals that outline the coverage, premiums and terms and conditions of the policies. Bids aren't usually sealed. "Often the bottom line is which insurance company is willing to offer the best premium," says Schwartz. "There are few differences between the co-op/condo insurance carriers. You need to factor in the company's claim-paying history; their responsiveness, and defense procedures. Premiums vary by many factors including building size, modifications, and number of liability claims - essentially it's based on building value.

Brokers work on a commission paid by the insurance company out of the premiums. "Some managing agents are licensed insurance representatives and might share in a commission, but you're not talking about a lot of money," says Schwartz. "In my 40 years in the business I've never encountered a conflict problem along those lines."

Armed with all that information, you and your board should be in a better position to assemble a strong team of professionals to handle your property. As the pros themselves have pointed out, it's a good idea to start with industry trade organizations and work from their recommendations - but as long as you keep yourselves informed and ask savvy questions, the task of hiring an array of competent professionals needn't keep you up at night.