Advocating for Residents Organizations Go to Bat for Shareholders/Owners

Successfully running a condominium, cooperative, or homeowners’ association is no small task. A board and/or management must consider the interests of its residents when making sweeping decisions to benefit the property and those who call it home. On top of that, the association must keep abreast of codes, laws, regulations, and rules at local, state and federal levels that may impact how they conduct their business, maintain their buildings, and screen potential applicants – just to name a few important factors. Taking into account that a board is likely made up of volunteers, some or all of whom have full-time jobs that have nothing at all to do with real estate or finance, it seems like a tall order.

Fortunately, there are organizations operating from the national level on down that focus solely on advocating for issues pertinent to multifamily residential associations. When caught in a bind, an owner, shareholder, board member, or even a professional manager can reach out to one of these organizations – many of which are not-for-profit – to, at the very least, receive some guidance on where they can turn to solve their problem.

The Chicagoland Cooperator spoke with several leaders of organizations in various markets to discuss their histories, missions, current initiatives, and how interested parties can better get involved with working on behalf of broader condo/co-op/HOA interests.

One Nation, Indivisible?

Codes, regulations, business practices, and even the terminology that shape how associations are run may vary by locale. But when it comes to co-ops in particular, certain overarching issues affect cooperative living nationwide. Those are the issues that the Washington D.C.-based National Association of Housing Cooperatives (NAHC), under the leadership of its president, Greg Carlson, looks to address.

THE CHICAGOLAND COOPERATOR: What would you say that the NAHC offers residents who are having problems with their association?

GREG CARLSON: “Well, if it's a legal problem, that can get tricky, as we don't always have lawyers on staff who can offer professional consultation. But we're starting a whole network whereby someone can call the organization and then – along with a disclaimer that we are not attorneys – we can steer them toward an expert. That said, it's difficult to do certain things on the national level, as real estate laws and regulations are drilled down either locally or by state. It's hard for someone in Michigan to comment on matters that pertain to New York or Connecticut.”

But you guys can act as a hub and identify who can help people?

GC: “That's what we're really starting to do now, yes. But mainly NAHC serves to educate. We have an annual meeting every October with 60-some seminars that cover co-op issues from soup to nuts. And by that I mean financial considerations, governance and ethical issues, marketing, operations, legal and legislation. We also provide a management certification program called Registered in Cooperative Management.

“Our next big move is to advocate for issues that co-ops face on the national level – because the cooperative mode of housing has been discriminated against in Washington since the dawn of time. We have a government relations specialist who works on our behalf, in coordination with the Community Associations Institute (CAI), to confront a common problem: that Federal Emergency Management Agency (FEMA) grant money is unavailable for common areas of co-ops, condos, or HOAs.”

How do they expect people to renovate in the wake of an emergency? Empty the coffers?

GC: “That, or a small business loan. We've been fighting to address this via legislation, as FEMA digs in its heels. We've a couple of bills floating around in Congress. Republican-sponsored bills, which is what's needed right now, to get something passed.”

How would you recommend someone with the desire to take up cooperative housing issues go about it?

GC: “Whatever market they happen to be in, find a local organization and volunteer for things. CAI is a good resource. Basically every group I encounter is always looking for people.”

Are there any other pertinent cooperative issues that you guys are working to address?

GC: “Reverse mortgages and the veterans' guarantee program. Co-ops cannot use either of those programs, even though they're available to any other type of housing. That's what I'm working on now.”

Windy C(ity)AI

As Carlson asserted, the CAI is doing work on behalf of community associations all over the country on both the national and local levels. (The institute also offers a handy directory of credentialed professionals that offer an array of condo and co-op services, including managers, attorneys and insurance brokers). Cheryl Murphy, Executive Director of CAI's Illinois chapter, discussed the organization in greater depth.

THE CHICAGOLAND COOPERATOR: What is the main aim of CAI in Illinois, and how does it function?

Cheryl Murphy: The Community Associations Institute is dedicated to political advocacy on behalf of its members. CAI-Illinois elects a group of members for the Illinois Legislative Action Committee (ILAC), which represents the interests of CAI-Illinois Chapter members with respect to federal, state and local legislation and regulatory activities. Condominiums and other community associations are significantly affected by statutory changes. State and local legislation can either solve current problems or significantly and adversely affect the operations and governance of community associations. It is crucial that CAI-Illinois's position be considered by those that make our laws in Illinois. ILAC contracts with a lobbyist to assure that ILAC is the primary voice for community associations in the Illinois legislature and municipal governments.

Can you delve further into ILAC, its mission and the execution thereof?

CM: ILAC actively interacts with other organizations to achieve common goals. The committee is non-partisan, and serves only to further the interests of the community associations constituency.

ILAC serves three important functions for the chapter and its members:

ILAC takes a proactive role and develops legislation for introduction in the Illinois legislature and reviews, monitors, supports or opposes pending federal, state and local legislation or regulations. It collectively takes 'a position' on each bill, which is then conveyed to elected officials in Washington or Springfield. ILAC also enrolls the efforts of the chapter membership in influencing the course of proposed legislation through letter-writing campaigns.

ILAC provides educational services to the chapter membership, conducting legal forums to update chapter members on legal and legislative developments affecting community associations, and ILAC members contribute articles to Common Interest magazine.

ILAC  monitors growing trends and develops strategies to protect community associations and promotes, communicates and implements CAI public policy at the state level.

A Garden State of Affairs

While helping those who share a common interest is the desired end of many a cooperative organization, things aren't always sunshine and rainbows. When the opposition gets fierce, an organizational leader needs to be ready for a fight. And Ellen Vastola, President of the Common-Interest Homeowners Coalition (C-IHC) in New Jersey, is not one to back down.

THE CHICAGOLAND COOPERATOR: How did you get involved in advocating for cooperative residents?

ELLEN VASTOLA: “Toward the beginning of the millennium, after having lived in a condo for many years while holding down a full-time job, I'd developed a trust in the association leadership. I'd just wanted to come home feeling safe and taken care of. Cut to one day when I did something wrong inadvertently, thinking that I'd had good reason, and the board came after me relentlessly.

“Basically, I put up a storm door identical to that of a neighbor who'd had one for years. The board insisted I take it down; that there was only one type of storm door approved for use. I did my research to see when they'd voted on this, when the decision had been published, when it had been announced, and so forth, but they'd no records to back up their claim. Now, I'm a trained biologist with experience working in compliance and regulations. So I asked them to show me the receipts. They tried to fine me, but I dodged three attempts, as I know how to read governing documents. They even sent two sheriffs to my door to serve me with a lawsuit, at which point I contacted my attorney, outlining for them the pertinent parts of the Condo Act. And the board never even offered alternate dispute resolution (ADR), which is required by the Condo Act in cases where you fine someone or find them in violation.

“So most boards are clueless. They listen to the property manager, or they make things up. And in the latter case, the property manager goes along, because the board is from where the money comes. You wouldn't believe the horror stories I've heard about what boards do to owners. The people who are making money want to keep making more money.”

What are issues are currently on the C-IHC docket?

EV: “I'm writing about how board members need state-approved training. Not necessarily given by the state – although I wish. But I would pay an extra few dollars in my state taxes to have the protection inherent in mandated training. There are over a million people living in common interest communities in New Jersey. If the Department of Community Affairs - Bureau of Homeowner Protection was given just $1 million per year, think about what they could to to improve our situation. But the state chapter of CAI has fought against it every step of the way, hammering down on it being a 'tax,' which gets seniors in age-restricted communities up in arms. Everyone hates the word 'taxes,' so this goes up in flames.”

What would you say to anyone out there who may want to get involved in their cooperative communities, or advocate for cooperative communities on a wider stage?

EV: “That we have to be rational and take the high road. I won't sink to name-calling or subversive tactics – although, oftentimes, the boards will. I'll use the law, do my research, circulate a petition, and then bring that back to the board.

“Nobody should be treated differently within our communities. We're legislatively-created bodies and we need to learn to get along with each other, which is where being human comes in. All of these different personalities; how do we make it work? Which is why I think that we need state-approved board member training with a syllabus.

“Everyone needs to remember that our communities are a grassroots governance; they're democracies. And as we see with the nation as a whole, if we don't participate in a democracy, it all goes to hell. We have to speak up, because our silence is consent.”

The Big Apple, Baby

New York City is still a hub for cooperative living, and the Council of New York Co-ops and Condominiums (CNYC) is out here navigating the labyrinth of rules and regulations with which buildings and associations must grapple. Mary Ann Rothman, CNYC’s corporate secretary, waxes about the organization and her experience within it.

THE CHICAGOLAND COOPERATOR: Where would you steer people who want to familiarize themselves with the CNYC?

MARY ANN ROTHMAN: “Start with our website, and those of our affiliated organizations [that include the NAHC], see what specifics interest you, and then come to a meeting. We also offer a few classes per month in the evenings. Some are ad-hoc and confront issues as they come up, while others are workshops designed to – for just one example – better inform treasurers on how to conduct the financial business of an association. But they're all free-flowing, and the people who show up really set the agenda. We try not to leave until everyone has had their questions answered.”

We've found that in many associations, any individual officer can end up being whoever is available and willing in the moment.

MAR: “To serve on a co-op board, you just have to prove a functional and prudent person. You don't need an advanced degree in finance, but you certainly need as much help as you suspect you might. There's no such thing as a stupid question to ask an accountant or a managing agent or whomever. A willingness to admit that you don’t know something is a good first step.

“And we also have one big all-day conference every November, on the Sunday 11 days before Thanksgiving. The theory is that, by that time, people have already planned any upcoming vacations but have yet to start cooking for the holiday, so they'll be around.”

How would you describe the mission of the CNYC?

MAR: “To provide information, education and advocacy for co-ops, condos and their residents, and about co-ops to lawmakers and government entities.”

How did you personally get involved?

MAR: “Some time ago, my then-husband and I bought into a co-op, when the wave of conversions from rental to co-op was just getting started in New York City. Soon thereafter, it became evident to a lot of people in co-ops that buying in does not necessarily confer knowledge as to how a building should be managed.

“So the story of the CNYC goes that a woman who lived on Central Park West called together about a dozen friends who, when we'd see each other at cocktail parties and such, would all lament about how our co-ops were making mistakes. They decided to stop re-inventing the wheel and join forces. I missed that inaugural meeting, but a man from my building attended, and we soon found ourselves among the charter members of what became the CNYC. This was way back in 1974!”

What else should we know about the CNYC?

MAR: “We're always happy to have more members, and we're very collaborative with other similar organizations.

“It's important to note that fully half of the co-ops in the nation are in New York, so it's not surprising that there are myriad organizations here focused on cooperative living. In NYC, you have local organizations like the Association of Riverdale Cooperatives and Condominiums, and the Queens Borough President's Council. Then there are organizations that adhere to a specific type of co-op. The Urban Homesteading Assistance Board, for example, has created thousands of units of affordable housing – mostly from abandoned buildings. The UHAB also trains prospective shareholders as to how to run buildings as co-ops. And there's the Coordinating Council of Cooperatives, which brings together a lot of the big union-built cooperatives in a lot of different parts of the city.”        

Mike Odenthal is a staff writer/reporter for The Chicagoland Cooperator.

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