Generally, board directors in condos and HOAs are volunteers who live in the building and want to assist in protecting their investment. Often, however, new board members enter positions without knowing the full scope of expected responsibilities. This article will serve as a primer on what new presidents, vice presidents, secretaries, and treasurers should expect from these positions. 

First Steps

Although, at times, inner workings seem mysterious, boards do not operate in a vacuum. There’s a paper trail of almost everything the board does, dating back to establishment. While it may not read like a bestselling novel, the paper trail should tell a story. Learning this story is the first step a new board member should take. 

“If someone wants to understand the basic concept of being on the board, I think one of the best things that they can do is seek additional information by reviewing that past year’s minutes and the financial statements,” says Robert Ferrara, president and CEO of the Armonk, New York-based Ferrara Management Group. 

The financial statements provide a snapshot of the co-op or HOA’s economic health; someone with a background in bookkeeping can spot trouble areas and red flags. The minutes provide the context that fills in the blanks. “Most of the discussions and decisions do take place at meetings,” Ferrara explains. “There may be times when one or two board members aren’t as active as the others, so if they miss a board meeting they may request some information or contact another board member or the management company to ask some questions. But I feel that most boards that are working for the betterment of their properties do it at a meeting, it’s recorded in the minutes, and everything in above boards and on the table, in front of everyone.” In other words, if the board has been doing its job properly, the story is on record.

There are existential questions regarding a board’s purpose and individual roles. Though, plenty of variation exists in a city as densely populated and as diverse as New York. “It really varies building to building and board to board,” says Mark B. Levine, RAM, CAM, and a licensed real estate broker, principal and the executive vice president of Excel Bradshaw Management Group. LLC in Carle Place. “Some boards are so hands-on and involved in every single aspect of every single decision, and they weigh themselves down in a lot of the minutia. Boards that are professionally managed charge the property manager with handling a lot of the day-to-day.” 

Variations depend on the size of the building, among other factors; a Fort Greene brownstone requires less management than a tall tower in Co-op City. “In a perfect scenario,” Levine continues, “the board is essentially setting the guidelines, and they’re setting the policies, and the property managers are charged with enforcing those policies and ensuring that the house rules are followed, that all the aspects of the offering plan and the proprietary lease are followed to the letter of the law.” 

Role Play

Boards generally have four members: a president, vice president, secretary, and treasurer. 

President

As the name implies, the president is the chief executive officer. Typically, the president has served on the board in one of the lesser capacities before taking over the leading role. “Traditionally, the president is in charge of overseeing the meetings…in charge of the meetings,” Levine says. Also, the president creates the agenda for meetings although, in many professionally-managed buildings, property managers play an active role in that, as well. 

“Even though the bylaws may state that the president is supposed to put forth an agenda and then run the meeting accordingly, I’d say eight out of 10 times we’re actually creating the management agenda because the manager is the one that’s been deeply involved in the last month in all of the different projects and updates and proposals,” Levine says. “We’ll provide that to the board, and then either the property manager or the president will run the meeting based on the agenda.” 

Vice President

As in the federal government, the role of the vice president varies greatly depending on the situation. Some vice presidents are hands-on; others take more of a Henry A. Wallace approach (if you didn’t know that Wallace was FDR’s “veep” for most of the Second World War…case in point). 

“The vice-president’s duties depend on the building,” says Levine. “It’s an assistant to the president, but definitely more involved than just a non-officer board member, and, of course, when the president isn’t around to answer anything, just like in Washington D.C., the vice-president is next in line. They are very helpful in that sense, and a lot of the time, the president and vice-president will work together, sometimes as a unit, so that we’re always on the same page with everything and in the case when one person isn’t available it’s not a problem.”

Secretary

Traditionally, the secretary’s pen tends to be busy at meetings…although now laptops are the writing tool of choice. “The secretary, primarily, is a minutes-taker at the meetings, and also signs documents as they come in.,” says Levine. “A lot of the time, what I’ll do in my boards, I prefer to take the minutes to keep track of all the different projects, and then when a lawyer is coming in for due diligence on a sale or something…we have everything at our disposal. So I’ll ask the board if they’re comfortable with me acting as assistant secretary so that I can perform the functions that the board is granting me, and that includes the minutes-taking.”

Treasurer

The treasurer controls the treasure, literally…not that the building’s accounts are treasure, as such. “The actual duties and responsibilities depend on how hands-on and numbers-friendly that particular person is,” Levine explains. “There are a lot of finance-related people that really take control of a building’s finances, and that’s always a positive for the building, because you can rest assured that particular shareholder has the best interests of the building at heart, and they’re taking their education and all their years of experience in the field and putting it to good use in the building.” This is not always the case, however, especially in smaller buildings. “Sometimes a treasurer is just a name, and the board will rely on a law firm or a property management company or their accountant, or some combination thereof, to fit together all the numbers and the monthly statement and the budgets.”

Kernels of Wisdom

How should a new board member prepare for the gig? Here are some bits of wisdom proffered by our experts:

Have a Succession Plan

On-the-job training, when possible, helps enormously. “There should be a transitional period between the old board members and the new board members,” Ferrara says. “If it’s the treasurer that’s no longer going to serve, or was voted off, he should get together with the new treasurer, and they should go over past history, what they did, the process that was used between the management company and the board, as well as the accountant and the board.” 

Trust Your Professionals

The board enlists the aid of property managers, accountants, attorneys, and engineers for a reason: because they themselves are not experts. “If someone comes onto the board when there’s a major capital improvement,” Ferrara says, “they should probably have a meeting with the contractor, the engineer, and the management company, so they can be brought up to speed on the process…where they’ve been, where they are now, where they’re going, and what the ultimate goal is for the property; not only on the financial side, but also the aesthetics if it’s a lobby renovation, or the mechanical considerations if it’s a boiler replacement, or a gas conversion.”

Take Advantage of Resources

Many smart, capable people boards have existed for a long time in New York, and a wealth of information is available. “Attend any seminars that may interest you that are given by any professional organizations such as the Institute of Real Estate Management (IREM) or the Federation of New York Housing Cooperatives & Condominiums (FNYHC),” says Ferrara. This author also suggests getting a subscription to The Cooperator. 

Get in for the Right Reasons

The board does not exist to stroke your ego, or to redress a single issue you may have with the building. “It’s also important to make sure that you’re joining the board for the betterment of the property and the association as a whole,” says Ferrara. 

“The worst things I’ve seen are the members that get on for a personal purpose. It tends to cloud the judgment of that particular board member because they’re always relating things to how they will affect them. It could be from a maintenance increase to a repair, or getting a specific vendor involved in the building…whatever it may be, they have to leave that at the door, and they have to come in the thought that ‘okay, I’m going to be looking at this in terms of what’s best for all of the shareholders, or unit owners, or HOA members.’ They have to consider how a decision will affect everybody. Will it have a positive effect for all the members and potentially increase our value as a whole, even though it may hit me in the pocketbook? It’s all about having clear judgment and not having a personal stake in anything.”

Greg Olear is a freelance writer and a frequent contributor to The Cooperator.