Page 10 - Nevada Cooperator Winter 2020

10 THE NEVADA COOPERATOR — WINTER 2020 NEVADACOOPERATOR.COM Nick Ruccolo, a vice president with Crowninshield, a real estate management FSResidential in Las Vegas, Nevada recounts properly, and he filed a wage claim against firm in Massachusetts, also sees financial her experiences at a very high-end association them. \[The board\] refused to listen to any mismanagement as the underlying cause with multi-million-dollar homes and wealthy of our advice, and we left shortly thereaf- of distress for condominium communities. owners, who she says fought constantly over ter because the situation became untenable. “The problem we most typically run across,” the smallest things. The residents were li- he says, “especially with new accounts, is de- ferred maintenance. Many items that should tion—or each other. The sniping at board and firms carry errors and omission insurance, have been done have been deferred, or passed resident meetings was so persistent that at there’s still liability, and most firms will part along. They didn’t start as emergency items, one point she felt she had to lay out a series of company with a truly dysfunctional board but over time they became emergency items. rules for decorum. She also found that board before they become liable for the board’s mis- Typically then, a large assessment will have members would vote on items like individual management. to be put in place to take care of it. We had a architectural requests based on their relation- situation like this where all the roofs—and the ship with the homeowner making the request. er in a situation like those described above can common roads—of a community were so ne- glected, they had to be done at the same time.” Even without an emergency rearing its to reject the same request from someone out- head, buildings age, and mechanical systems side their circle. and equipment become obsolete. It’s a fact of life for property owners and managers and can be predicted to a certain degree if com- munity administrators understand the con- cept of depreciation and earmark funds ac- cordingly. It is the responsibility of a co-op or maintenance and reserve funding required to and to handle the board. I attend board meet- condo board and its management to properly operate a solvent, functional association. prepare for the necessary maintenance and ultimate replacement of building systems. A erty where the majority of owners were not board needs to buy into it for the resolution of board that consistently defers regular main- tenance or opts for a cheap fix rather than a from California. The property was neglected; more long-term solution will ultimately land roof and asphalt problems, swimming pool that the management business can be stressful the property in distress. Like a bridge that issues, etc. The board had been in place for a enough as it is—managing even one chroni- hasn’t been properly maintained, the overall long time, and refused to raise maintenance cally distressed property can add to that stress physical plant could come close to collapse, to keep up with reserve requirements and and can take time away from other proper- literally and figuratively. Halper explains that the key to avoiding erties to fund proper reserve accounts based that only handle distressed properties,” says such a problem is to limit the number of sub- tenants in the property, which can help keep annually to get the board to increase the re- shareholders committed to their investment. serves and monthly assessments, but they re- He says it’s also advisable to contact your lend- er in the event a serious financial or cash-flow While ‘firing’ a recalcitrant board and their properties is riddled with problems, lurching problem presents itself to head off a default constituents might sound extreme, the fact is from one crisis to the next. “It’s a small busi- and foreclosure action. The last thing the bank that long-term involvement with these types ness, and everyone knows each other,” he says. wants is the property. Interpersonal Conflict While perhaps less obvious at first than fi- nancial or physical breakdowns, a breakdown in interpersonal cohesiveness, often char- acterized by conflict between individuals or groups within the community, can be just as and corrected early enough, before the dol- detrimental to the health of a co-op or condo. lar amounts involved creep too high for the The inability for a board to make decisions individual shareholders or owners to handle. due to conflict or constant infighting among “Completing a regularly scheduled reserve different factions within their community can study, and maintaining both the reserves re- grind the effective operations and manage- ment to a halt. “Interpersonal problems between resi- dents and the board, between board mem- bers, and between groups of residents hap- pens all the time,” says Ruccolo. “You have to keep up with both financial and maintenance play the role of conciliator, to get the opposing needs. Raise maintenance annually to keep sides to reach compromise. It’s not unlike the up with increases in operating expenses and politics of today. You have to find common other costs. Cheapness is at the heart of the ground, and that’s really hard to do.” Halper mentions situations wherein an in- dividual person can get control of the board unwillingness—to handle its business forces and will try to run the building or association their management company to cut ties and like their own personal fiefdom. That kind of leave the community to its own devices. To inappropriate, self-serving control can lead illustrate his point, Halper relates a real-life to a complete breakdown in communication, crisis from a former client community. “We which in turn can make a manager’s job near- ly impossible. Barbara Holland, a regional manager with “Eventually they fired him, but it wasn’t done tigious, and many were suing the associa- If they were friends, the board member would easily become the victim of burnout. “It’s not vote to approve the request—but might vote fun,” she says. “You want to like to go to work.” The Reality of Distressed Management Holland also cites an example of a proper- ty that became distressed due to malfeasance will be facing, because it’s intense. Superiors on the part of management, as well as board should give support. I work with my manag- members who routinely ignored the annual ers in these situations to help produce budgets “In one instance,” she says, “we had a prop- resident homeowners—they were investors the problem to be successful.” maintenance. Nevada law requires all prop- on a reserve study or a funding plan. We tried Ruccolo. Partly for the reasons already men- fused. Eventually we had to cut them loose.” be known as the company whose portfolio of of properties can damage a managing agent’s “You have to be careful of your reputation.” reputation, and may even lead to potential li- ability and litigation. Avoiding Trouble—and When to Walk Away A financial pitfall can be dodged if caught quired therein and completing the work re- quired as scheduled, will avoid the possibil- ity of the property becoming distressed,” says Ruccolo. Halper agrees, and adds that “The key is to problem.” And sometimes, a board’s inability—or had a situation where a board employed a non-union super at a very low wage,” he says. We didn’t want to face possible liability with them.” Halper says that while management Holland points out that an on-site manag- Burnout occurs most typically when the on- site manager doesn’t get the support needed from upper management. “You need to let the manager know what kind of issues they ings with them to help keep the process mov- ing. There needs to be a general plan, and the Both Ruccolo and Halper also point out ties in one’s portfolio. “You don’t find firms tioned, but furthermore, Halper continues, it’s a matter of reputation. Nobody wants to n AJ Sidransky is a staff writer/reporter with The Nevada Cooperator, and a published novelist. THE CHALLENGES... continued from page 1 isn’t a criticism, but we now communicate 24 hours per day, 365 days per year. Email has substantially changed my life. Where we were virtually dead during the summer, now people fire off emails while sitting at the pool sipping a pina colada. People can contact you all the time from wherever they are.” Jeanne Tarantino, a community manager with 30 years in the industry, is with Associa, a national management company. She man- ages communities in Reno, Nevada and says that in short, “The effect of email is horrible! You used to have three days or a week, even 10 days to respond to people. Now it’s imme- diate, no down time. I get over 100 emails a day. It’s very hard to keep up with that.” Scott Wolf, a managing partner with Brigs, LLC, a New England-based real estate management firm, concurs. “I’d like to get rid of email,” he says. “Everyone’s expectation is an instant answer—but there’s something to be said for actually picking up a phone and speaking with people. With direct contact it may be easier to resolve an issue a little faster and more easily.” “The internet has changed the focus of how we communicate with people,” says Wollman. “Fewer people use the phone or talk face-to-face. Where I used to get 10 calls, I now get 30 emails. The thing is that in our business, there are many times when a prob- lem is better handled in a more personal way than email provides for.” There’s an App for That While advances in communication tech- nologies have changed the way managers work and allot their time, they do see benefits in it as well. “With the advent of the internet and online communications, one can ac- complish things more quickly, even though more people are contacting you,” says Woll- man. “It’s also less stressful. You don’t have people angry at you all the time,” he adds, with a chuckle. “It’s also easier to deliver bad news!” While email does offer some remove from direct confrontation, it can also make some feel entitled to be much harsher than they might be face-to-face—and it can often flatten out nuance and tone, which makes misunderstandings and accidental offense not uncommon. Wolf says, “Ultimately, electronic com- munication provides you with more time to do other things, which means that you do get more done, but you also work more, because of the actual time involved in answering email. There’s always more email.” In the end, electronic communication may be a mixed bag for managers, but one they will continue to use even if it means more hours in front of the computer screen or on their smartphones. And speaking of smartphones...the next logical step in elec- tronic communications may not sit so well with management. Many pros feel that text messaging, while perhaps more immediate and in-real-time than even email, is simply too much of a distraction from the other functions a manager has to perform, and can be too intrusive. Rare is the property man- ager (or any professional, for that matter) who’d want literally hundreds of clients or customers to have their private smartphone number—even if they have a separate one just for work. Younger owners—particularly millenni- als—show a strong preference for text over pretty much any other type of communica- tion. Wolf mentions that in light of this trend, his company has purchased technology that masks private phone numbers and enables managers to respond by text from desktop computers and landlines. While one could certainly argue that apps, texts, and other electronic communications have a way of dehumanizing what in the past was very much an interpersonal business, Wolf says that “Apps for direct management are great, and have really improved our abil- THE EVOLUTION... continued from page 1