Page 1 - CooperatorNews New York January 2022

January 2022 COOPERATORNEWS.COM being said, “items that should be included and should be standard in- clude, but are not limited to: the fee, whether the fee may change and when, and by what fee schedule the client is to be charged for services outside of what the contract specifies. It’s also important to define when the contract ends, whether it’s cancelable with or without cause, and what the potential penalties for doing so might be.” Ellen Shapiro, an attorney with Marcus, Errico, Emmer & Brooks in Boston, adds that once finalized, “management contracts are of- NEW YORK THE CO-OP & CONDO RESOURCE COOPERATORNEWS 205 Lexington Avenue, NY, NY 10016 • CHANGE SERVICE REQUESTED There are elements of board service that can vex even the most committed, most intrepid volunteer—and negotiating a building’s management contract is probably at the top of that list. Vexing or not, however, the extent and quality of services available to your building community hinges on what’s in that contract; managers and management companies are obligated to provide what’s agreed upon in it—nothing more, nothing less. That’s why secur- ing the appropriate terms for the appropriate price is an essential component of maintaining a sound, properly functioning building. The Nuts & Bolts “Management agreements are the basis from which managing agents assist and help op- erate properties on a day-to-day basis,” says Mark Hakim, an attorney with Manhattan- based law firm Schwartz Sladkus Reich Greenberg Atlas. “A management agreement is in- tended to be ‘soup to nuts,’ providing a roadmap of the agent’s duties and responsibilities, including administrative and financial matters. The agent is intended to be the arm of the board, generally handling all matters during the term of the agreement, while the board continues to make the actual material decisions. Some ministerial decisions, like purchasing of supplies and so forth, are delegated to the managing agent so the board can focus on the bigger-picture items.” And while “management agreements for co-ops and condominiums contain many boil- erplate provisions,” points out Dennis Greenstein, an attorney with the New York office of global law firm Seyfarth Shaw, “the devil is in the details. There may be unique physical, financial, and staffing considerations that should be considered and provided in the agree- ment to cover them.” And while there are certain elements that are pretty much universal from one contract to the next, “it’s not a standard real estate contract—every management company has its own form,” says Scott Piekarsky, an attorney with Phillips Nizer in Hackensack, New Jersey. That continued on page 12 Like just about every other occupation on the planet, property management has been profoundly altered by the coronavirus pandemic and the changes it’s brought to society at large, with many of the challenges and stressors we’ve all had to face hitting resi- dential management industry professionals especially hard. Despite the proliferation of apps and other innovations that have enabled many tasks to be handled remotely, the fact remains that for everything from physical plant maintenance to apartment inspections to resolving resident conflicts, property man- agement remains a hands-on job. Adjusting to the “new normal” of periodic lockdowns, remote meetings, social distancing, and the ubiquitous threat of a deadly virus has cer- tainly taken its toll on everyone in the busi- ness. But it’s also led to some silver linings and unexpected bright spots along the way. Going Remote, for Better or Worse Depending on the industry—and who you ask—remote work, virtual everything, and the technology used to make it all pos- sible have been either a blessing or a curse (or a fair bit of both). On the one hand, many can skip the commute and work in their PJs, and companies can save on the overhead expens- es that go with a brick-and-mortar office. On the other hand, many employees miss out on friendly water cooler chat and the ability to conduct business with colleagues in person. Across the country, property managers express the same duality in their experience, finding that while platforms like Zoom and Skype have enabled them to continue serving their client communities and keep things op- erating despite restrictions on indoor gath- erings and other face-to-face interactions, there really is no substitute—and in many cases, managers consider an in-person, on- the-ground approach to be among their best professional assets. Management Contracts 101 Negotiating Your Community’s Most Important Contract BY A. J. SIDRANSKY The State of the Management Nation How 2 Years of COVID Have Changed the Profession BY DARCEY GERSTEIN What Size Management Company Is Best? A Question of Service and Scale BY A.J. SIDRANSKY continued on page 13 Co-op and condo communities come in all shapes, sizes, and configurations. They range from three-unit, wood-frame houses to high-rise apartment buildings containing hundreds of units, to sprawling townhouse communities in park-like settings. Like these communities, firms specializing in their management and operation can be large or small, generalist or boutique. The question for boards, shareholders, and owners is, what type of firm is right for you and your com- munity? Big vs. Small, General vs. Boutique There are management firms that em- ploy literally thousands of professionals in all sorts of specializations, and small firms that employ just a handful of specialists. Size does not dictate approach, however. Some firms are more geared for the efficient and effec- tive execution of basic, daily management tasks—let’s call them generalists—and some take a more tailored approach to provide each client with exactly the experience they are seeking. This dichotomy between gener- alists and boutique firms has much more to do with a company’s professional approach than with how many people it employs. “Large firms offer more redundancy in terms of both services and personnel,” says Stephen DiNocco, owner of Affinity Realty and Property Management, based in Boston. “Some clients view this as more availability, in that there’s always someone there to cover their property’s needs. That’s not to say that smaller, more specialized companies can’t do that, too, but in general, larger firms have a larger client base, so it makes sense to offer more services. They may have an accounting arm, an insurance arm, etc. In some mar- kets, they can also offer a slightly better pric- ing structure.” However, he adds that bigger companies are often more bureaucratic and less flexible. DiNocco says that “clients also may be obligated to engage with the ancillary services the management firm provides. You will get ‘sold’ on their in-house service pro- viders, and may feel you have to use them for those services.” Though usually smaller in terms of overall staff than big generalist management firms, continued on page 15