Here’s the scenario: the sponsor of your co-op, who owns enough units to throw his weight around, hires a managing agent who plays fast and loose with the municipal tax codes. So much so in fact, that he winds up in jail—and your building winds up owing some significant back taxes. The sponsor then brings in a new, wet-behind-the-ears managing agent, who pays the tax bill with an unmarked—and untraceable—starter check, which the city cashes…without crediting the proper account. It’s like a parking meter ate your quarter, but instead of 25 cents, your building just lost $90 grand.
Eileen Hartmann, the board president of her Upper West Side co-op, found herself in exactly this position five years ago, taking scissors to all that municipal red tape. It was neither glamorous nor lucrative work—to the contrary, it was painstaking and beyond tedious—but it’s all part of the compensation-free job of a conscientious board member. After an uphill battle against the city’s manifold bureaucracies, after title search upon title search, after interminable time spent on hold to no avail—and after hiring a new firm to manage the property—Hartmann finally untangled her building’s snarled finances.
“It took five years to correct that,” she recalls. “The escrow was $83,000. I refused to let them take that much money.”
Most people view serving on their building’s board in one of two ways: either as a thankless chore with more headaches than rewards, or as an opportunity to influence—and hopefully improve—the quality of life in their co-op or condo community. The reality, underscored by Hartmann’s experience, lies somewhere in between the two poles. There are benefits and there are drawbacks: the good and the bad. There are also challenges—the ugly—which highlight the positive and negative aspects of the job.
Contrary to popular belief, there are plenty of benefits to serving on a board—after all, why else would sane individuals serve on boards for decades at a stretch? For one thing, board members are similar to officers within a corporation in that they are taking an active role in managing what represents, for most people, a substantial chunk of their finances.
“You’re helping improve your investment,” says Hartmann, “and you’re having a say in what it will be.” In her case, her diligence saved her co-op and all its shareholders a boatload of money.
But it’s not all financial. How could it be, when board members are not compensated beyond the occasional coffee and donut? A lot of the benefit comes from—cliché as it might sound—satisfaction with a job well done.
“The benefit is being able to have a strategic plan and see it go from a planning stage to an implementation stage to be finished,” says Larry Kinitsky, the longtime president of Windsor Park in Bayside, an enormous co-op of 1,835 units in Queens. “It’s gratifying to see the accomplishments we’ve made over the years.” Another benefit? “Being able to help people,” says Kinitsky. “There’s 1,800 units, 5,000 people—that’s a lot of families to help.”
If your heart and your pocketbook are not motivators, your brain certainly might be. Madhu Maron, a career coach, found that in her tenure as treasurer at a co-op on Sedgwick Avenue in the Bronx, the biggest selling point was knowledge. “To me, the interesting part was learning the role of the managing agent,” she says. “I didn’t understand their role and what they did.”
Indeed, there is much to learn in the co-op world. Cooperatives, after all, are corporate entities, not so different from any other corporation. And practical, personal concerns aside, it can be downright interesting to figure out how something as big as a cooperative functions.
Benefits and satisfaction aside, serving on the board of a residential building can be—hard, thankless work—and it has a way of eating into your free time.
“One of the biggest misconceptions is that people don’t put in an inordinate amount of time working on the board,” says Kinitsky. “People think you go to a meeting every month or two and that’s it.” This is not the case. “I put in 15 hours a week in my spare time,” he says. “It just takes a lot, especially when you have a big property.”
It can take a lot when you have a small property, too. It’s just the nature of the job. And this can be daunting, especially to new board members.
“People who join a board tend to be idealistic,” Maron says. “When you get in there, you realize it’s not really like that. It’s extremely tedious. Going through a budget line by line is a tedious job,” and it involves overseeing the entire property—not just your own corner of the proprietary lease.
“A lot of new board members come and in and don’t realize it’s not about their apartment, it’s about the building,” Hartmann says.
The Biggest Downside?
“People’s personalities,” Hartmann says. “There are people who respect the building, and people who don’t. There are people who care, and people who don’t.”
Of the latter category, Hartmann recalls one tenant—an illegal sublettor of an illegal sublettor—who treated the apartment with such egregious disregard, he didn’t bother to turn off the gas on the stove. For 10 days.
“The building could have blown up,” she says.
The Ugly (the Challenges)
In his Farewell Address, George Washington warned about the horrors of political parties, but even housing communities are often caught between two or more competing factions. The key challenge, then: “Trying to keep a happy medium between [them],” Hartmann says.
These factions can split along many fault-lines, but the most common divide is money—with sides forming based on residents’ relative income levels. Certainly not always, but often, longtime residents are lower-income individuals and families who bought into their building at conversion-level prices, while newer arrivals often occupy higher tax brackets. A major challenge is managing the expectations of the two factions, Hartmann says—toeing the line between doing improvements on the property while keeping maintenance changes as low as possible. It’s hard work, especially in the current economic climate.
“Even if two percent of your residents aren’t on board with what you’re doing, that’s still a lot of people to deal with,” says Kinitsky.
There will always be naysayers, and people who grouse no matter what you do. That, too, is part of the territory. At the end of the day, board members are running a business, and they must yield to their fiduciary responsibility to the co-op, rather than cave to the strident demands of a few squeaky wheels.
There are occasions, unfortunately, where personal agendas become so ingrained in the culture of a board, it becomes impossible to run the business dispassionately. Case in point: In Maron’s building, there are 140 units but only 35 parking spaces—most of which have been in the possession of their current owners for decades. Maron, as the treasurer, suggested that the price of $75 a month for the parking spot was too low. The board should conduct a survey, she said, to see what other buildings charge. Exposing the parking spaces to the free market would generate more revenue, and would also probably create more turnover, so newer owners might be able to enjoy a place. Her board refused to even discuss the matter.
“It’s become personal,” Maron says. “They’re not really interested in what’s good for the building.” So personal, in fact, that she was accosted in the hallway by an angry parking space-holder. She says he told her, “ ‘If you try to threaten my parking space, I’ll sue you.’”
This experience was so negative that she resigned from the board.
Most co-ops are not this ossified, of course, but that is a danger. And tensions can run hot, especially as the job market cools. And there are other bottom-line factors that pose challenges to board members season after season as well.
“A lot of the challenges are economic,” Kinitsky says. “Real estate taxes going up, and water [fees], and trying to figure out where oil prices will be next week, or a year from now. Every board faces that same challenge every year.”
In the end, taking the good with the bad, and being mindful of the challenges, there is one aphorism that lends itself perfectly to describing serving on a board: It’s a tough job but somebody’s got to do it.
Greg Olear is a freelance writer, novelist and a frequent contributor to The Cooperator.