Coop/Condo Boards - Share the Workload
As anyone who has volunteered to serve on a Cooperative or Condominium Board of Directors or Managers has quickly learned, the complexities of supervising the operation of a multi-million dollar real estate business are many.
Putting aside that it is generally a thankless task that requires many hours of work, Boards are well-advised to recruit other owners to assist in the multiple areas that may require special expertise. Most by-laws permit Boards to create special committees that report to the Board, and in the case of Cooperatives, there is a specific statute that authorizes it. These committees can be called “Executive,” but the key fact is that they report to the Board for decisions. At least one Board member should serve on each committee.
Here are a few committees that are useful to have:
- “Decorating” - if there is a lobby renovation, hallway renovation, or the like, this committee can solicit recommendations for furniture, wallpaper, carpeting, and the like. A good way to get input from decorators that may also be owners and have contacts in the industry.
- “Legal” - to review the status of litigation or pending issues and to report to the Board and perhaps current counsel to the Board, or to recommend retaining other counsel, changes to rules and regulations, by-laws, Proprietary lease, to name a few.
- “Management/Financial” - to evaluate reports of the managing agent, financial statements by accountants, and assist in determining an annual budget and need for borrowing, assessments, and increase in maintenance or common charges, and updating insurance needs.
- “Capital Projects” - to consider the need for major capital improvements to the building, elevators, façade, lobby, heating, a/c system, and the like.
- “Executive” - this can be made up of a few Board members to deal with some confidential issues that the entire Board does not have to address together, and can be more efficient to get work done, i.e. difficulties with a particular Board member, staff, or vendors retained by the Board, or particularly complex litigation.
As is apparent, there are many significant issues that can be more efficiently researched and evaluated by a committee that then reports to the full Board for a decision. This is a practical tool that can enable a Board to perform its substantial responsibilities to all the owners on a number of issues simultaneously.