Working in groups can be a challenge. Working in groups when people’s homes—and possibly their life savings—are involved can be a far greater challenge. It’s one faced every day by those brave souls who volunteer to serve on their co-op or condo board. While there is no sure-fire recipe for building a board that is 100 percent successful day in and day out, there are definitely traits and tactics that the most well-run and effective boards share.
Don’t Get Personal
One of the biggest components to success is ensuring that those individuals who are elected to the board do not come to their new duties with a personal mission. It's important to make sure that no one looking to join is saying, “they have some kind of agenda. They're on the co-op or condo board because they don't like somebody, or because they have a personal pet-peeve about an owner's dog, or an owner in general. So, if they have issues that aren't for the best overall, it’s best not to bring them to the table, says Joseph Balzamo, president of Alliance Property Management LLC, in Morristown.
Board-member aspirants need to keep in mind that the job is to serve the entire building, and act in the interest of the association as a whole. Criterion number one should be that “it's your property, it's your money. You have a vested interested in making sure the building is being properly managed,” he says.
It's also very important to have a proper understanding of what a board wants from you as a member. Whether it's your legal expertise, your deep pockets, or your time, you should know from the start what they're looking for, and what the job entails. “A sound, good, and reasonable board should actively recruit sound, good, and reasonable members from the association to volunteer on a committee, attend meetings, or join as an alternate member so that they understand how things work before joining,” says Brian Weaver, director of business development at the Mahwah-based Wilkin Management Group.
To have a board member with, say, financial or legal acumen, can be a potential cost saver. Also, a board that has a makeup of diverse backgrounds and experiences can be a plus. But, if your board is seeking out a new candidate for a particular reason, it's important you are upfront about it with the candidate. If your association self-manages its property, a board with a range of professional experience can be a great asset.
On the other side of the spectrum, if your building hires professional help, you may not want to seek people out simply for their expertise. “There is no expectation in terms of what your professional background is. Your only necessary requirement is that you're a homeowner. It's good if you have something to offer, but it's not the most important,” says Balzamo. Balzamo says part of a property manager's job is to teach board members more about the role of managers and guide them through certain decision-making processes. While an attorney or an accountant can have helpful skills for the hard decisions, board members who are simply open to learning and listening to expert advice can be just as valuable.
Problems can arise when board members have issues with not getting their own way. If you are a member of a five-person board and three people vote opposite of you, it's important that you respect the decision. Otherwise, the board may not operate with trust and mutual respect—which is to say, a board that is dysfunctional and potentially headed for disaster.
For most owners and shareholders, the dynamic of their board is not something they give too much time or thought to, unless a problem arises or rumors of dissent begin circulating. The way a board gets along and functions, though, can be a key component in the health and well-being of the building or community.
Whether your board is stacked with a group of veterans, or a bunch of rookies, every member should value competence and hard work. That means a willingness to devote time not just to meetings and events, but also to understanding the bylaws and responsibilities that comes with board membership. Boards that don't take the time to review their own rules end up making decisions that do not comply with their organization’s declaration or bylaws.
Finding the Right Path
The most successful boards also find a way to avoid getting comfortable with the status quo. If a routine develops over time, boards can get complacent and lose sight of what they're approving for the property. The best boards, says Balzamo, “address problems proactively. Knowing for example your roof has a ten-year shelf life—at that point, start to make a budget that will contribute to that, as opposed to waiting ten years, and saying, 'Oh, everybody we need a roof,' or the boards that say, 'I'm not going to be here in ten years, that's not my problem,'” he says. Weaver agrees.
Balzamo also recommends that boards put a high value on efficiency. One way to do that is getting a reserve study, or a capital improvement study, both of which help boards keep their finances in order by incorporating large-scale expenses into the budget before they even take place. Every board wants to save as much money as they can, but using funds intelligently will end up saving more cash than going for the lowest bid, whether it be a capital project or a management contract. “The telltale signs that a board is showing good leadership is when they focus on being financially-healthy, as well as proper short and long term planning for recurring tasks and upcoming projects,” says Weaver.
Rather than focus on the price of a property management contract, boards should weigh what specific services a management company is offering, and their reputation among other buildings. Balzamo recommends “getting more informed about what actually goes into the management of your property. You know, a lot of times, especially when I'm bidding on a job that I don't have a lot of information on the work, sometimes boards are just looking at the cheapest price. That might not be the best thing to look at if you're trying to get the most out of management.”
That ability to work well with management is another key component of success. “Generally, the easiest board members to work with are those that are professional, have an understanding of how business and politics work, focus on the important things that make a community successful, and have a true understanding of the value we as managers bring,” says Weaver.
The best boards get a consensus before they makes any major decisions. “A board member is tasked with making decisions. However, a board member that shows true leadership is one that gets the 'buy in' of his or her fellow board members on important decisions that need to be made,” says Weaver.
Boards also need to have an eye for the future. If boards do not rotate personnel on a regular basis, or become too reliant on just a few players, they will be prone to lapses in leadership and accountability. “A board needs to be constantly recruiting and building its own team so that they are not caught sleeping at an election, only to find out that one of their seats was lost to the renegade owner who garnished the support of unknowing neighbors. Unfortunately, it happens,” says Weaver.
Making it Better
What if a board is facing some difficulties and realizes that the way they work is not working well? There is hope. To help board members become more efficient and effective leaders, there are consultants that can help a leadership team get back on track. Some firms will conduct a full review of the HOA or co-op, and will examine the declaration, bylaws, minutes, budget and any other documents that will help tell the story of the building or community. Then, after a three- or four-week analysis, the review can come back to the board with details about what they can do improve their effectiveness.
Also, for buildings that self-manage, an outside consulting firm can provide guidance on building processes that will make the board function more smoothly and with less pain on the part of everyone involved. Adhering to those processes can become second nature for the board, allowing them to move on to tackling bigger and more involved issues in the long-term.
Board members also can turn to each other for help. Getting focused and working towards a common goal can help refresh a tired board or motivate a new board that perhaps feels overwhelmed by the magnitude of their charge.
A properly-vetted management firm can make all the difference. “Boards need to do their homework and they have to see what management companies say they do, and what they actually do,” says Balzamo.
Become Better Educated
Unlike realtors, plumbers and electricians, there is no specific license required for someone to call themselves a property manager. New Jersey has no licensing requirement for management personnel, although several organizations offer accreditation and training.
Boards and managers can hone their skills by becoming involved with organizations like the Institute of Real Estate Management (IREM) or the New Jersey chapter of Community Associations Institute (CAI-NJ), both of which training and education for board members and homeowners. Courses for board members—and the managers they work with—are available throughout the year, and with the popularity of the Internet, helpful information is available at every board member’s fingertips.
Board members and managers can become more effective and efficient leaders by taking courses and attending seminars and trade shows. The New Jersey Cooperator’s Condo, HOA & Co-op Expo, is now in its 6th year of serving board members, managers and real estate professionals in the Garden State. The 2013 show will be held at the Meadowlands Expo Center on May 1, 2013 from 10 a.m. to 4:30 p.m.
In its introductory online course, “Fundamentals of Community Volunteer Leadership,” CAI, a nationwide advocacy organization, notes that “the effectiveness of a board depends on the effectiveness of its individual members, so it’s important to start with competent, intelligent, mature people who are willing to work hard and make sacrifices. The association is neither a civic league nor a social club. Running it requires making hard decisions and being involved almost on a daily basis.”
That, it seems, is the definition of a successful board in a nutshell. So with effort, training, education, commitment and good relationships with management, owners and shareholders, a board can make its own very heavy burden lighter and turn the experience of leading their community into a rewarding one, both for themselves and those they serve. And soon, a good board will be on its way to becoming a great board.
Liz Lent is a freelance writer and frequent contributor to The New Jersey Cooperator. Editorial Assistant Tom Lisi contributed to this article.