A co-op or condo board’s primary responsibility is to look after the operations and financial well-being of the building and make decisions on behalf of the building’s owners, with a crucial component being to protect, maintain, and enhance property values.
- Each board member has a fiduciary dutyThey must act in the best interest of their fellow building owners, particularly when it comes to financial matters. Some decisions are difficult to make because they involve issues board members may have little or no prior knowledge about and they often cost money. Those costs are passed on to the shareholders as part of their maintenance fees or assessments, so board members must exercise their fiduciary responsibility. While major decisions can be difficult and costly, the risk of not acting may be much greater, as indecision can lead to devastating consequences.
- Board members are unpaid volunteersUnless the bylaws state otherwise, the board makes decisions on behalf of the entire building. Apartment owners are limited to voting for the handful of neighbors who get to make those decisions. Some buildings have a maximum dollar amount the board can approve without requiring a vote from the owners. But many bylaws do not address a maximum spending limit at all, which translates to a board with significant power to impact owners’ finances.
- The board does not need to do everything itselfMany different vendors specialize in various aspects of operating, maintaining, and repairing a building.There are professionals who help run the building and implement various projects. Aside from the regular day-to-day operations, building operators must adhere to a long list of building codes that exist to protect residents, staff, workers, and the community. And for many buildings, unions complicate building operations further.
- Bylaws
- House rules
- Staff manuals
- Service provider agreements
- Capital improvement contracts
Bylaws
House rules
Staff manuals
Service provider agreements
Capital improvement contracts
- Building code compliance
- Safety laws
- Corresponds with counsel
Building code compliance
Safety laws
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Corresponds with counsel
- Collections and arrears
- Payments
- Financing (mortgages and capital projects)
- Budget (setting maintenance increases and determining needed assessments)
Collections and arrears
Payments
Financing (mortgages and capital projects)
Budget (setting maintenance increases and determining needed assessments)
Oversees and reviews:
- Property management
- Staff
- Service providers
- Communicates with residents (memos and newsletters)
- Works with the committees
- Plans resident social gatherings