Page 19 - The NY Cooperator September 2019

COOPERATOR.COM THE COOPERATOR — SEPTEMBER 2019 19 Since 1958, out clients have been assured of excellence in building management. Policies are implemented with an even hand, maintenance is on schedule, bills are paid timely, and we have someone to take that emergency call - even over that holiday weekend. You can depend on us. At Buchbinder & Warren, we understand your apartment is not just an investment...it’s a home. Please call us to learn more about our services. One Union Square West • New York, NY 10003 212.243.6722 RELIABLE www.buchbinderwarren.com Ad for Yates Restora on, February 2015 RESTORATION GROUP, LTD. Phone: 718.993.5700 info@yatesrestoration.com www.yatesrestoration.com Yates Restoration has set the standard in the restoration and maintenance of New York CIty’s most notable properties. Our unsurpassed expertise and team of artisans, technicians and project managers, means your project gets done right and on schedule. Call or visit us at our website. Restoring the City of New York for over 90 years • Facade Restoration • Roofing and Waterproofing • Terrace and Plaza Restoration • Balcony Restoration and Repair • Structural Stabilization • Steel Work • Ornamental Sheet Metal • Local Law 11 are on the same page, so the manager can be less-than-smooth succession. productive and not focus on tasks in which the incoming board has no interest. Manage- ment is also encouraged to bring up any pre- viously presented recommendations or goals says Gruen. “They wanted to change every- where no action was taken, to make sure that thing, and had no concern for the feelings of the new board is up-do-date on any matters the rest of the board. They willfully sowed that the management company believes to dissent, going behind the board’s back, send- be important.” Square One When a building is being converted to having caught wind as to what these two a condo or co-op, or has been newly con- structed explicitly as a condo or co-op the rest of the association. The two rogue property, operations are initially under the board members failed in their attempted control of the owner or developer, and are coup, but they were still re-elected, along eventually passed along to a board of own- ers or shareholders after a certain percentage So now you have this contentious board in of units have been sold. According to attor- ney David Berkey of New York City law firm done for a year. Eventually we had to bring Gallet Dreyer & Berkey: “Once a sponsor no in our attorney to help navigate the situation, longer has majority ownership of a building, and now I’m relieved to say that those two it is obliged to give up majority control of the members are no longer on the board.” board. Usually they will wait until the next annual meeting. “When a shareholder- or ownership-ma- jority board is in place, it must first deal with board members are elected to replace those several immediate practical issues,” Berkey who were at least perceived as being ‘bad,’ continues. “The first is whether to retain management. In most buildings, the sponsor will have a relationship with a management com- pany, so it’s often a good idea for the association board to get an indepen- dent management organization to take over managing the building. This must be done via majority vote of the board, and ment, Edie Davis, Senior Property Manager that’s a process that has to be shepherded of Maine Properties in Portland, Maine, ad- over, because all of the corporate books and vises they consult former board members records and bank accounts must be trans- ferred to the new management. “Then the board has to decide whether to nity Associations Institute (CAI). “While, take a forensic examination of the books and to some degree, an incoming board should records of the entity to see whether the spon- sor, while it held control, had been above- board and had only spent condo or co-op vis says. monies for appropriate repairs, rather than solely for upgrades or repairs to sponsored nutiae is rarely codified in an association’s units. “Finally,” adds Berkey, “the board has to newly-configured board to figure out its own obtain independent counsel to represent way. While all of the above is a great primer \[the\] interests of the resident owners, be- cause in many areas there could be conflicts business for the first time, there will almost between the sponsor/sponsor’s representa- tives and the condo or co-op.” Challenging Transfers Of course, achieving a seamless transition duciary duty will most likely find its footing from one board to the next isn’t as simple and go on to govern well. as staggering terms and catching up with a property manager. Complications can and often will ensue, so board members both old and new should be prepared to navigate a “I had an upheaval a few years ago where- in two members of a nine-member board attempted to take over the entire operation,” ing out unapproved notices, scheduling se- cret meetings. The other board members, members were up to, sent out a rebuttal to with the rest of the board, for another term. place that can’t get along, and nothing gets Unsurprisingly, communication and pa- tience are crucial when a board is trying to restructure after a problematic run. “If new it is critical for the incoming board to come to an agree- ment on goals and objectives,” says Renzi. “Sometimes seeking owner in- put on what the residents in general believe goals should be can be helpful.” Should a rela- tively green board desire guidance from outside sources other than manage- – but not the problematic ones – as well as professional resources like the Commu- absolutely be ‘guided,’ every new board will find its own direction, energy and ideas,” Da- Because specific transition-oriented mi- governing documents, it likely falls on a for those embarking on official association certainly be trial-and-error elements at play. But a new board that trusts in its elders and outside advisers while remembering its fi- n Mike Odenthal is a staff writer/reporter for The Cooperator. “Unless there’s major upheaval – usually as a result of some type of scandal – at least a few board members will be holdovers from the previous administration.”