Trustees/Managing agent Team – by Sean Smit

Defined Roles Help Avoid Conflict

 Much has been written recently about the management industry indictments, the role of the managing agent and how to monitor management. Little has been said, however, about what it takes to make a trustee/managing agent relationship work. The managing agent and board of trustees are a team working together to operate the building in the most efficient, yet highest quality manner possible. Like any team, they must rely on one another and know what the other needs and expects in order to work effectively.

The best time to establish a good working relationship with your management firm is at the very beginning. But it is never too late to delineate how the two groups intend to work together.

Put Expectations in Writing

Start by putting in writing what you expect of your managing agent and what is expected of the Trustees (NAMA contract), in order to avoid any future misunderstandings. By instituting a specific policy for how information will be gathered and passed on to the agent, as well as regular performance reviews and meetings, trustees can be sure they’re working with, not against, the agent they’ve chosen. Only by having clear written policies and procedures can the board expect the managing agent to effectively carry out their wishes.

While the management company has certain contractual responsibilities, the trustees, in turn, must have realistic expectations. The trustees should know the managing agent’s obligations as per the written contract. How many meetings will be attended? Who at the company will be the portfolio clerk, fielding owner complaints and queries and what is the policy and procedure for acting upon them?

Knowing the answers to these questions will give the trustees a better understanding of what can be expected from the managing agent. The answers should be put into writing and become part of the management contract when it is time to hire a new firm or renegotiate the existing contract. If the reality does not meet the written expectations, then managing agent needs to be told. It should also be noted that if the board of trustees is not doing its share, they’re only hurting themselves. Managing agents should not and cannot be expected to handle everything alone. With these considerations agreed upon, the board can have clear expectations and plan accordingly.

Develop an Action Plan

The trustee’s role is to set policy, make decisions and manage all onsite affairs (with input and guidance from the managing agent) and which in larger buildings normally involves the appointment of a building manager. You want to avoid unproductive trustees meetings, multiple calls to the managing agent office regarding the same complaint and conflicting information. In order to do so, trustees must end each meeting with a specific set of goals and action plans for tasks to be performed, deadlines for their completion, and a written list of who is responsible for what.

Deadlines must be realistic, taking into consideration the resources that are necessary, the time of year, and outside vendors that will be involved. Assignment of tasks must be realistic as well. Too often a particular person, be it a trustee or agent, commits to doing much more than can be reasonably accomplished in the given time period. Be sure to break big projects into smaller steps so that progress is made between meetings and pieces of the project can be assigned to different individuals.

With trustees that have their thoughts and concerns organized and written down, the managing agent will have a fuller grasp of what needs to be done to assist. Trustees can then take responsibility for projects that are realistic and communicate with the managing agent to assist them.

Productive Meetings

The importance of providing the managing agent with minutes of trustees meetings cannot be understated. The only way for management to stay current on building problems and advise the trustees if need be, is if regular meetings are conducted and communications remain open at all times. All members of the trustees/manager team can then hear the same progress reports and have a chance to give input into decisions.

And remember: the minutes of each meeting are part of the institutional memory of the organization. Minutes, which should include trustees policies and decisions, must be taken at every meeting and reviewed for accuracy at the next.

Trustee training should also be considered as a way to reduce time spent at trustee meetings and avoid reinventing the wheel every time there is a changeover of trustees. Many trustees discuss the same issues year in and year out with no resolution, or new trustees revisit old issues time and again.

Problem Resolution

When dissatisfaction surfaces, it’s important to have an in-house policy for handling conflict. Don’t let unhappiness stew under the surface and remain unresolved. Some schemes have complained about their managing agent for years without ever having a face-to-face meeting or shopping for a new agent. As with any relationship, the best approach is to speak or write directly to the person who can resolve the conflict; if the individual involved does not know there is a problem, there is not going to be a resolution. The discussion of complaints should not be hostile or accusatory, but rather a frank discussion about dissatisfaction and how it can be corrected.

The management company will need clear input on the problem and should be given the opportunity to resolve the situation. Don’t assume the trustees cannot solve a personality conflict with one agent. Management companies fight hard to get new business and they will be willing to accommodate the board’s needs if the requests are reasonable.

When it comes to handling problems and complaints within the building, decide who in the building and at the management firm will receive complaints and how they will be acted upon. Establish the system, try it out and make adjustments. In areas of high conflict, like pets or parking, trustees may need to create a special system or assign one individual to handle those complaints and resolve conflicts.

If the doorman, superintendent or concierge is the recipient of complaints, set up a system where they can pass the information along to the person responsible for solving the problem.

When problems arise, information should be gathered as to what the problem is exactly and how it can be solved. Make sure that a log of complaints is compiled and the person making the complaint knows what action is being taken.

Trustees and managing agents should look upon themselves as a team, working for the betterment of the building. With a clear understanding of their responsibilities and a positive strategy for dealing with each other, all members of the team can be assured they’re doing the best possible job for their building. A successful relationship between the trustees and managing agent is one that hinges on the active participation of both groups. Neither group should bear the full burden of responsibility; each should work towards creating a harmonious relationship.

Adapted from document by Mindy Eisenberg Stark, CPA, CFE

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