Good Board, Bad Board Do's & Don'ts for Board Success

Good Board, Bad Board

 It doesn’t matter if you are managing a towering high-rise or a sprawling suburban  association, co-op and condo boards usually have their fair share of problems  to be solved and emergencies to be defused. Talk to enough people who have  dealt with these situations and they can tell you that it’s no picnic—at times quarrels between neighbors can get ugly, and elected administrators  sometimes act selfishly instead of for the greater good.  

 So how should a board conduct itself? Perhaps a better question to ask is how a  board should not conduct itself. With these tips, conflicts and long, drawn-out  battles can be avoided to create a more enjoyable, functional living atmosphere  for all.  

 Simple Things

 The mistakes often start with the easiest things to handle. According to the  pros, keeping things organized is key.  

 “Boards need to create structure and an environment that allows for a proper  governing body,” says Paul Santoriello, PCAM, CMCA, AMS, the president and director of property  management at Taylor Management Company in Whippany. Santoriello believes the  keys to a well-functioning board are an open dialogue, the ability to agree to  disagree, respect between board members and healthy relationships with  management staff.  

 “You have to put policy and structure into place to communicate properly,” he says, urging boards to find a happy medium during conflicts so that things  can flow smoothly. “When the board doesn’t agree, it’s impossible to sell the unit owners on anything.”  

 He suggests that the board set up long-term and medium-term objectives and plans  for the association so that everyone can be on the same page. This includes an  analysis of assets, including physical, like timely maintenance of utilities or  financial, he says.  

 Nancy Hastings, president and CEO of MAMCO, Inc., a property management company in Mt. Laurel, agrees, saying that that board members should avail themselves of  any educational opportunity they can. “Most board volunteers aren’t skilled in this industry,” she says. “ You can’t just get skilled from participating. I hate to see [board members] not get  educated and have to make a rule out of one problem.”  

 For example, Hastings says she has seen many elections badly run and  subsequently disputed because the board didn’t follow procedures. “The residents contested the elections, and instead of taking care of business  the board had to go back and take care of their mishap,” she says.  

 She urges that board members review their own governing documents to know what  the procedures and protocols are for their particular community.  

 Santoriello adds that board members should learn how to enforce the rules and  regulations fairly and compassionately. “It’s hard to enforce the rules and maintain harmony at the same time,” he says. “Boards have to sit down and lay out rules that support everybody and then listen  to any concerns that may arise.”  

 He says that unit owners that end up fighting over these issues with the board  wastes time and energy, and could in some cases cost the building money. “It’s all about the unit owner,” he continues. “Board members start to have this mentality of unit owners not being worthy of  their time and attention, or a ‘why are you bothering me?’ state of mind." This attitude invariably leads to conflict, he says, “and conflicts cost the community.”  

 Be Open

 Santoriello says that his company's greatest emphasis goes toward encouraging  board members and unit owners getting along, adding that board members  sometimes forget the greater good when they get elected—and that slippage eventually erodes respect on both sides of the equation.  

 “One of the things I see often happen is that the board does all this work to  make decisions and get ready to approve [some measure], and then at the last  minute they hold the required public meeting without holding a preliminary  meeting to explain the issue to the community,” he says. “That gives no respect to the unit owners.”  

 Ronald L. Perl, a partner and an attorney with the Princeton-based law firm Hill  Wallack LLP agrees, citing that he’s seen many boards violate open meetings laws and practically make their  decisions about issues such as which contractors to hire, for example, in what  amount to secret sessions.  

 According to Perl, there are three different types of meetings—work sessions, open meetings and executive sessions. Legally, executive sessions  are the only ones that are closed to the public as matters of personnel, budget  and legal actions are discussed. Votes can be taken only on matters that fall  within those categories. Work sessions are used to review reports, discuss  management and go over documents. Work sessions and open meetings are both open  to the public, but final decisions have to be made and voted on in the open  meetings.  

 “Some boards have what I call 'rehearsal meetings,' which creates distrust,” says Perl, referring to the situations where board members essentially make  their decisions in the work sessions and then hold a public meeting including  residents largely as a formality after the fact. “All the members get is a rehearsed motion," he says. "Decisions have to be made  in public.”  

 In an article by attorney Eric Frizzell of the law firm Buckalew Frizzell & Crevina, LLP in Glen Rock that appeared in The Bergen Recordin January 2008, “New Jersey law mandates that all open meetings must be held at a location within  the development, or, if there is no ‘suitable’ meeting room there, elsewhere in the municipality in which the development is  located or in an adjoining municipality.” The meeting space has to accommodate a “reasonable” number of unit owners.  

 According to Frizzell, although unit owners have the right to attend the  meeting, they do not have the right to speak. However, “boards, usually due to an emergency or unfamiliarity with the law, sometimes  will vote in closed session, or by phone or email, on a matter that the law  requires be considered in open session, and subsequently will be challenged by  a unit owner who asserts that the vote was 'illegal'."  

 Perl agrees, saying that even though residents can contest an illegal vote, the  only consequence boards face is the hassle and expense of having to re-do the  vote during an open meeting.  

 “There are no real serious repercussions,” he points out. “If votes are being taken in closed meetings, the result could be challenged, but  it’s easy enough for the board to ratify them at a later meeting. Either way, these  actions go against the spirit and intent of the law.”  

 “If the decisions are made too quickly and the audience sees that, they know  something has been going on,” Perl points out. “These decisions have to be made in public. Owners should be seeing the process  take place.” For the most part, he attributes boards' sometimes-tactless approach to  ignorance of the rules governing how meetings must be held. “What some board members don’t understand is that just because the meetings are open doesn’t mean everyone can talk,” he says. “If everyone could speak it would create chaos. That is why there is a deliberate  body for the discussions.”  

 You’re Not The Expert

 Many boards end up fumbling because they disregard or reject the advice of their  own hired professionals and take complex issues upon themselves. For example,  says Hastings, some board members don’t address big capital repairs with the accountants, architects, engineers or  attorneys they've hired to navigate those very things. She cites one example  where a board needed to address a pavement project in the community. An expert  was recommended but the board decided to work without one.  

 “Within three months, $80,000 was spent,” says Hastings, pointing out that an additional $25,000 was added to that cost  due to the lack of an engineer’s specifications. “It ultimately affects the funds."  

 Because the job had been done incorrectly, Hastings said the residents were  inconvenienced a second time for the corrective work.  

 “I certainly feel like having an engineer could have prevented the situation,” she says, adding that hiring an engineer would have probably cost a third of  what the project ended up costing.  

 Santoriello says that it all goes back to organization. “For large projects, it’s important for the boards to ask themselves what the plan is, how they’ll accumulate funds, etc.,” he says.  

 Communication is Everything

 As the famous proverb goes, the key to any healthy relationship is  communication. While many boards do run smoothly on a day-to-day basis, there  are going to be the inevitable problems and the best thing to do is to just  remain persistent and open to suggestions. “We’ve all seen examples of members losing patience,” says Perl.  

 But, in the instances where a board member can get out of hand, it is up to the  rest of the board to keep tabs on what happens in their buildings and  accurately assess the role of their board members. Doing so will not only  create a happy working environment for the board members but a happy living  environment for the residents, which is what it’s all about.                  

 Bernadette Marciniak is a freelance writer living in New Jersey and a frequent  contributor to The New Jersey Cooperator.

 

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