Red Flags and Rescue Plans: When and How to Change Your Building's Management

Changing property managers for your co-op or condo can feel like performing surgery while the patient is awake — everything needs to keep running smoothly while you make the switch. Stephen Wilson, vice president of Blue Woods Management, shares with Habitat's Emily Myers how one building nearly lost its tax abatement during a transition, highlighting why meticulous handovers are crucial.

Key takeaways for board directors:

* Create a transition checklist covering everything from vendor contracts and insurance policies to tax filings and building compliance documents. A systematic approach ensures critical items don't fall through the cracks during management changes.

* While transitions can happen any time of year, success hinges on thorough documentation and verification. Proactive follow-up is essential.

* Digital tools like cloud storage and BuildingLink have revolutionized document management, making it easier for boards to maintain historical records and access important information about past decisions and policies.

How To Run Your Building: For Co-ops and Condos

Transcript

Emily Myers: Welcome to Inside Track, a conversation with New York's leading property managers. I'm Emily Myers with Habitat Magazine, and my guest today is Stephen Wilson, vice president of Blue Woods Management. Finding the right management for your building can be challenging, and once you've committed to a new direction, ensuring a smooth transition isn't always easy, Steven, you've developed a master list or Bible with dozens of to-dos to help those who are transitioning to your management company. We'll get into the specific points on the master lists in a minute, but perhaps you can share what prompted you to come up with this list. 

Stephen Wilson: Thank you and good morning. What prompted us was during a typical transition we were assured by the outgoing agent that certain timely critical tax filings were filed.

This was happening right around the time we were taking over. We took their word for it. And a couple of months later we received a notice in the mail that the building did not file this abatement and they were in danger of losing it. That is a small example of things that sometimes slipped through the cracks.

Because a lot of times when you give an outgoing agent there walking papers, what little service you did have goes to zero. So part of the idea of the master checklist was to make sure, leaving no stone unturned and making sure every document was produced and then categorized and filed on our end.

Emily Myers: So you mentioned a lost abatement. What are some of the other risks with transitioning to a new management company? 

Stephen Wilson: The basic ones are not updating vendor billing addresses. And then you start to fall behind on paying monthly invoices. Things that can be routine quickly become big problems if you don't get the proper process set up early on.

Emily Myers: So what specific items are included on your transition checklist and why are they important? 

Stephen Wilson: So it's basic things like your insurance policy, any current maintenance contracts with vendors. More critically, ConEd account numbers. And then larger ones, like the aforementioned abatement filing that we have to do every year with the city.

So they range from big to small. But like I said, they can all become big problems if you don't get them in place. 

Emily Myers: Is there a time of year that is easier for transitions to take place? I'm thinking around tax filing time is probably not the best time to be transitioning to a new management company.

Stephen Wilson: Yeah, look, we've taken on buildings every month of the year. That's not necessarily a problem. It's just making sure the outgoing agent produces what they need to produce. And if they can't, which is often the case we have to make sure we know they aren't. And so we're doing something about it so you don't miss a time sensitive deadline.

Emily Myers: So how do you go about getting the information you need? 

Stephen Wilson: Sometimes the board does have the information, but we try to make sure they're as hands off as possible and we really facilitate this for them.

And like I said, it's really just hounding down every piece of information you're looking for. Fortunately we have a lot of existing relationships with vendors that probably service the building that we know. So we usually ask for a financial statement. That can tell us a lot of information about who they're paying bills to on a monthly basis.

So make sure the month to month billing does not get interrupted.

Emily Myers: There's been a big shift to online admin. Does that make it easier? You're not dealing with paperwork, I imagine, and there must be some benefits from that. 

Stephen Wilson: Yeah, there are. And actually what part of the checklist allows us is to get the board to build out their own internal file system, whether it be online or hard copies.

But as you say, a lot more people are transitioning to online or cloud storage. And as boards change over, it's helpful for a board to be able to look back and say, oh, what did we talk about in regards to renovation procedures three years ago?

They can go back and easily check that, especially if they've had a recent transition and management wasn't always good about keeping files.

Emily Myers: So there are benefits then of having, perhaps something like a cloud storage? Some buildings must be more complex than others, and boards obviously come in all shapes and sizes. Some have long serving members, others have frequent turnover. Do these nuances make a difference when it comes to transitions?

Stephen Wilson: Yeah, definitely. And not only that, but it doesn't have to be just to the board it can really benefit the greater building. A lot of people have taken the opportunity to leverage the online technology and post these things on BuildingLink whether they are maintenance reports or annual meeting minutes.

And as boards changed too it's really gotten a lot more important to keep people updated. 

Emily Myers: Can you explain a bit more about the value of BuildingLink? 

Stephen Wilson: It's a very quick way to get information out. It's a good hub of information for residents and boards as well.

And other services are similar too, where it just allows boards and shareholders to be able to get information, process service requests, post it for sale. But yeah, it's been great. It's been great for boards and, housing information as well.

Emily Myers: And can you elaborate a little bit more on this list then that you developed. I think you mentioned there are dozens of items on this list. 

Stephen Wilson: Yeah, I think we're up to high sixties or low seventies in terms of item count.

But , again, it's any maintenance or service contract. It's alternate addresses for people who don't claim the apartment as their primary residence. Laundry contracts, insurance policies, historical compliance filings, Local Law 11, Local Law 87, 1 33, the list goes on.

It's quite a long list and some things just won't be applicable. If they don't have an outdoor pool, there will be no pool maintenance contract. But we want everything that would be applicable because you need everything to manage the building. 

Emily Myers: Management changes do happen then.

But what's your advice for a board then, to get ahead of this? 

Stephen Wilson: If you think you're having a problem you should address that with your manager head on. If you think the relationship or the service doesn't improve then you should look elsewhere. The thing is that this is your home and people need to understand that you can't slow walk a problem.

Problems don't age well. So it's better you have the right person managing your home than ignoring the problem. 

Emily Myers: And what do you find are the biggest sources of sort of transition? What are the drivers of people changing their management? 

Stephen Wilson: I think if certain managers take on too many buildings, they get spread too thin.

They can't devote the time needed. You need to keep a slim, manageable portfolio of buildings to be able to give all of your accounts the same high level of service. 

Emily Myers: Great. Stephen, is there anything else you wanna share? 

Stephen Wilson: No. I think that's it. Thank you very much for your time.

Emily Myers: Stephen Wilson, vice president of Blue Woods Management. Thank you so much. 

Stephen Wilson: Thank you.