Term Limits and Staggered Elections: Democratic or Just Dumb?

Why? Because what starts out as a good notion — bringing in new faces, new ideas, new skills — can lead to management meltdown, with projects stalling, staff getting confused and frustrations occurring as the new directors try to get up to speed. How do you work through the potential problems involved? The experience at 9 East 96th Street may be instructive.

Ten years ago, this 48-unit, Manhattan co-op (below) instituted term limits and staggered elections. In its first incarnation, board members were allowed to serve a pair of two-year terms before having to step down for at least a year before running again. About five years ago, the board extended term limits to three two-year terms. Then the problem became one of finding people interested in running for the board, reports the president, Timir Karia. When the limits were first enacted, "my suspicion is that it was to remove a permanently entrenched board that ran the building as sort of a dictatorship. But those concerns have been mitigated. Now the discussion [of term limits] is framed around the lack of continuity" on the board.

The means the information flow from generation to generation gets interrupted. This is most evident in the area of budgeting, when a well-versed director has to step aside for someone new — there's a learning curve that can slow down work.

Another problem is that sometimes it be difficult to recruit people to run for office. Working with directors who want to serve, rather than those dragooned to it, is much easier for managing agents, notes Andrea Bunis, president of Andrea Bunis Management, because you can end up with people not really interested in being on the board.

"We don't promote [term limits]," says Eric Lash, director of management at Alexander Wolf & Co. His company recently took over management of a co-op in Howard Beach, Brooklyn, a few months after the nine-member board saw its president, vice president, secretary and treasurer all step down. "We had a gap on the board in terms of having people to serve and a vacuum in terms of leadership," Lash says. So far his worst fears have not come to pass — the building is operating smoothly — but because there is no treasurer, that position's responsibilities is adding work on the shoulders of the secretary.

My Co-op 'Tis of Thee

Morton Rosen, a partner in the law firm Rosen & Livingston, is particularly opposed to term limits, maintaining there are no reasons to have them "except for those ephemeral arguments that it produces more democratic results. And in my opinion, that's a lot of crap. Serving on a board is difficult enough; there are all kinds of risks for board members — being sued, giving up personal time, and accepting abuse for a voluntary job. If someone wants to serve in that position, they shouldn't be eliminated because of an artificial restriction."

Others aren't quite so extreme. With some boards, members can get complacent or authoritarian, asserts Alvin Wasserman, director of Fairfield Properties. Fairfield Properties. Sometimes even both. "[Y]ou have someone [on the board] who is a benevolent leader, and you'd like him to stay on forever, but there's a flip side," Wasserman says. "For instance, [you can have] a board that boasts about not having raised monthly charges for 10 years, and after 10 years they learn they are broke." So, at annual meeting time, instead of raising the maintenance two to three percent to make up for a shortfall, a board has to institute a 25 percent increase.

At Castle Village, a co-op at 182nd Street in Manhattan, the board briefly considered term limits, but took a different route — staggered terms, with a certain number of positions open to election in one part of the year, and others at another time. This helps ensure that several members are always be serving who have an institutional memory of what had happened in the co-op and why.

"Castle Village is a small city — it has 589 units and $8 or $9 million in operating funds — and governance requires knowledge of history. Without that you would have chaos," points out Jerry Fingerhut, the co-op's president and former treasurer.

There's no single answer — term limits and staggered elections are great for some buildings but not others. That doesn't mean some buildings are America and others are Iran. The trick is to not dismiss the notion out of hand, and to discuss the pros and cons as it affects your building specifically.

Adapted from Habitat April 2007. For the complete article and more, join our Archive >>

Illustration by Dave Bamundo