Impact Real Estate Management: Operations

THE BIG PICTURE

One of the toughest things to do when you are new to the board, or even a long-time director, is stand up to a neighbor who wants something, is doing something, or needs something that is not good for the building as a whole. Sometimes you just have to take the long view and say “I’m sorry, but we have to say no.” You may hurt neighbors’ feelings, but they’ll get over it.

BE SMART

In one of our buildings we had a shareholder who demolished his whole apartment and was getting ready to install new windows. Trouble was, he didn’t get board approval or apply for permits from the Department of Buildings (DOB). When management arrived, a DOB inspector was there, and violations were being issued.

So we shut down the project and told the owner he had to file drawings and get approved plans and work permits from the contractor. As you can imagine, he wasn’t happy about this. He contacted the board president and complained, and the president in turn contacted us, asking whether we could go light on this situation and let the owner finish the work. We told him we couldn’t, that once the DOB is involved and violations are issued, the problem is now the co-op’s, not the shareholder’s.

The board president persisted. “I know we’ve done this stuff before and looked the other way,” he said. “Can’t we do this now?” I explained the reasons why we couldn’t, which included the fact that if this problem weren’t solved, the co-op would have a difficult time when it wanted to refinance. Now was the time to force the shareholders to fix the problem, I said, because the DOB has stepped in as your enforcement partner.

It’s not a pleasant experience to upset your neighbors. But it’s important for boards to remember that their first allegiance is to what is important for the building as a whole, not one individual shareholder.