Anyone who has spent time serving on the board of his or her co-op or condo knows that it is a job that no one can do alone. Even if you have the most conscientious group of board members, the job is too time-consuming for a group of volunteers to do in their spare time. That's where your management team comes in; the professionals hired by the board to help in the day-to-day and long-term operations of your community. But even if your board has hired the best management firm, the best attorney, the best accountant and so on, the team is only as good as its coach. And in the case of a co-op or condo, the board has to act as the coach: organizing meetings, making sure the various team members are working together, facilitating communications and working out strategies.
The main three members of your professional team are the managing agent, the accountant and the attorney. In addition to these three, many developments will retain an architect or engineer on an ongoing basis and a construction manager or designer for particular projects. Your insurance broker, mortgage broker and financial adviser will also play important roles, although their expertise will only be required on a periodic basis. This group of professionals is the team that the board will rely on for advice, expertise and hands-on contributions to maintain the co-op or condo's daily operations.
Of course, in some ways, referring to this group of professionals as a team is a misnomer. They are a team insofar as they must be able to work together in order to accomplish the common goals of the board, but they are not a team in that they must act independently of one another and each must serve as a check and balance against the others to ensure that they are providing proper service to the association or community at large. Thus, it is imperative that the board knows exactly what to expect from each professional so that it can oversee the development's operations as effectively as possible.
Who Does What?
The managing agent, together with the firm's back office staff, is responsible for collecting maintenance or common charges, keeping the physical plant operating, managing the association's in-house staff, enforcing policies, solving problems of residents and hiring contractors. He or she must also see to it that repairs are made, violations are cured, bills are paid, proposals are assembled and board meetings are organized. The attorney's function is to offer legal advice, as well as spot any problems in building policy that could result in litigation down the road. The accountant is needed to see to it that all financial transactions conducted by the association's board have been handled properly. Your insurance broker should be called on at least once a year to analyze the development's coverage and check around for lower premium opportunities. If you live in a co-op, your mortgage broker may be called upon when the underlying mortgage comes due and refinancing is needed to pay for some major capital improvements. The board should have a financial adviser, broker or reserve study specialist who will offer advice on where to invest the reserve fund for maximum return and safety. And whenever a major contracting job is being considered, the board should consult a licensed architect or engineer to analyze the scope of the job, write the specs, review the bids and oversee the job. The services of a construction manager and/or interior designer may also be required in these situations.
Assembling the Team
The first step in assembling an effective team of professionals is to evaluate the needs of the community and the strengths and weaknesses of the existing professionals. Most cooperatives and condominiums have some or all of their professional advisers in place, either left over from the initial transitional phase or from a prior board. Perhaps the most frequent reason why boards change professionals is a basic distrust by the majority of the board of the impartiality of one or more of the professionals. Belief that the professional is allied with the sponsor or a group or faction on the board or within the association can all be reasons for wanting to switch. Additional grounds for dissatisfaction can include lack of responsiveness to the board's needs, inability to resolve problems, taking an arbitrary position without consulting the board, or, in the case of management, improper handling of finances.