When Business Becomes Personal

Popularity (defined as the “state or condition of being liked, admired, or supported by many people”) is a funny thing. It can be the result of legitimate virtues or the byproduct of shrewd self-promotion. When it comes to hiring, firing, and promoting staff, co-op and condo boards need to know how to tell the difference.

“If somebody is popular, it’s usually for one of two reasons,” says Steve Greenbaum, director of property management at Mark Greenberg Real Estate. “Either he’s reliable, or he does people special favors. There are a million little things staff people can do. Boards need to ask: is he popular for the right reasons, or is he just a schmoozer?”

It’s not a theoretical question, either. The board at a 110-unit Brooklyn co-op learned the hard way that letting popular sentiment trump hard logic can have dire consequences. When this co-op’s longtime doorman was let go after years of sloppy work, the porter, with 10 years of experience in the building and a high level of respect from the shareholders, put in a bid for the doorman’s job.

“It clearly was a popularity contest,” says a board member who spoke on condition of anonymity, noting that she considered the porter’s shaky English skills inadequate for the job of doorman. “Who should get the job,” she went on, “someone who’s been in the building for years, or someone who’s qualified for the job?”

A group of “unruly” shareholders sprang into action, getting one-third of the building to sign a petition in favor of hiring the veteran porter as a doorman. “What they did was an invitation to chaos,” the board member notes. “It’s not up to the shareholders at large to make these decisions. It’s up to the board, with the managing agent’s advice.”

But the board wound up bowing to popular sentiment and hiring the porter as doorman on a 60-day trial basis. “No disasters yet,” says the board member, “but it hasn’t been 100 percent satisfactory.” In one instance, the new doorman was unable to understand the word “perishable” on a box that was delivered to the building, and the contents wound up spoiling.

Did the board member learn a lesson from the experience? “We should have had our candidate in place before the shareholders got their petition drive going.”

Boards need to remember that they have the legal authority to make decisions on hiring and firing staffers, and smart boards rely on internal debate and the advice of their property managers – not on the sentiments of fellow shareholders and unit-owners.

Bram Fierstein, president of Gramatan Management, says: “If a staffer is terminated or doesn’t get promoted and residents ask questions, we tell them that personnel issues are the board’s job, and we don’t discuss them. The board and the managing agent should know who’s efficient and who’s not.”

The manager advises boards that it’s often the “right political move” to interview current staffers when a vacancy opens in the building – even if the board is looking on Craigslist or elsewhere for outside applicants.

Takeover

While such popularity contests can indeed invite chaos, they pale in comparison to what can happen when a staffer’s popularity serves as a wedge to buy into a building and, in some extreme cases, gain control of the board of directors.

Greenbaum, the property manager, saw such a scenario unfold several years ago at a co-op he handles in Freeport, in Long Island. The live-in super bought two apartments and eventually won election to the five-member board, where he and two cronies gained control of the building.

“It played out horribly,” Greenbaum says. “He had his own faction that had its own agenda – catering to investors, not residents. Everything that could go wrong went wrong. The landscaper he recommended was horrific. Some repairs got done, others didn’t. As a managing agent, how do you discipline an employee who’s also your client?”

The experience, and several similarly grim ones, has driven Greenbaum to give a piece of advice to all the boards he works with: “Don’t let your staff buy apartments. If you do, stipulate that they can’t run for the board.”

Abbey Goldstein, a partner in the law firm of Goldstein & Greenlaw, agrees. “A person shouldn’t be both employer and employee,” he says. “Mixing the two roles is untenable. I can’t say it’s illegal, but it’s an abuse. The abuse of having an employee on the board is that he’s judge, jury, and executioner. He does favors and builds up a lot of loyalty. I’ve seen supers become owners of one or many units, collect all the proxies, and eventually control the board. You can get rid of him in his capacity as super, but he still lives in the building and he may be a bitter individual who can cause problems. The conflict is quite obvious.”

Tara Snow, a partner in the law firm of Novitt, Sahr & Snow, which represents some 50 co-ops and condos in the city, agrees with Greenbaum and Goldstein that allowing staffers to buy apartments and serve on boards is a “horrific” idea. She adds that boards need to remember that it’s unwise to underestimate the importance of a staffer’s popularity. This came home at a co-op Snow represents in Jackson Heights, Queens. The board terminated the super’s contract shortly before an annual meeting – and promptly got blindsided.

“We thought nothing of it,” Snow says. “We went to the annual meeting – and it was full of irate shareholders who felt they should have been consulted. They loved their super. We explained to the shareholders that the board makes these kinds of decisions. It’s not for the shareholders to decide. But people were very, very unhappy.”

Promoting the Professional

Then there’s the board of directors at the 78-unit Yonkers co-op who needed to replace the super. The logical choice was the building’s longtime porter, who knew the quirks of the 1920s vintage building and was highly popular with the shareholders. Only trouble was that English was the porter’s second language. And he was not very fluent at it, either.

“It’s really hard to find a good super,” says Dariusz Walec, the current president of the board. “We knew our porter, Jorge, could do all the jobs around the building. He’s very handy, and he works long hours. But his English wasn’t very good, and it was hard to communicate with him.”

Since communication skills are more vital to a superintendent than to a porter – and since knowledgeable, hardworking, and well-regarded employees are at a premium – the board found itself in a bind. The members decided to straddle the fence.

“The board agreed to promote the porter to super – provided he worked on improving his English,” says Walec. “Jorge bought some tapes, he studied, he got some help. It was slow but steady improvement, and, after a while, there were no more problems with communications. We have no regrets. Everyone loves Jorge.”

“I’m always trying to groom staffers for promotions, urging them to take courses in heating and air conditioning, plastering, electrical,” adds the building’s property manager, Fierstein, of Gramatan. “We gave Jorge the job on the condition that he improve his English. And he did it. And now he’s one of my best supers.”

But that happy ending was the beginning of another story that didn’t play out quite so tidily. Once Jorge had been promoted, the building had to hire a new porter, and this one proved to be a disaster. He was, simply put, lazy. But since the building’s two staffers are members of Local 32BJ of the Service Employees International Union, certain procedures had to be followed before the board could terminate the new porter.

“It’s not that easy to push someone out in a union building,” Walec says. “You have to document the employee’s performance. If he’s drinking on the job or committing crimes, that’s one thing; but if he’s lazy, it’s harder to push him out. It took us three years – we gave him a second and a third chance. Union guys came to the building to check his performance. Finally, they decided he wasn’t doing the job, and they agreed to let us push him out of the building.”

Which brings us back to the desirability of sticking with the professional over the popular. After all, boards should remember those famous words: when dealing with staff, it’s not personal, it’s strictly business.