Why Management Transitions Fail — and How to Avoid Disaster

If you’re thinking about switching management companies, buckle up. You might be preparing to sabotage your new management relationship without even realizing it, particularly if you leave important details about the state of your building unsaid. In this roundtable discussion, Stuart Halper of Impact Real Estate Management, Howard Mandel of TKR Property Services, and Anes Radoncic of Venture New York Property Management share why the first thirty days can determine success or failure and the critical questions boards should always ask. This episode offers hard-won wisdom about setting realistic expectations, navigating difficult conversations, and why transparency matters more than you think. Habitat’s Carol Ott leads the discussion.

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

Transcript

Carol:

Welcome to Habitat's Management series where we have gathered leading New York City property management executives to discuss the challenges their companies and clients face as they navigate the complex world of co-op and condo operations. One of the complexities is when a board of directors decides to transition to a new property management company. Sounds like a simple process, but it isn't. And the reason for the transition usually is discontent, which is not a great place to start a new relationship. I'd like to introduce our distinguished panel today. We have Stuart Halper, vice president and co-owner of Impact Real Estate Management, Howard Mandel, owner TKR Property Services and Anes Radoncic, managing Partner Venture, New York Property Management. Before we discuss transition challenges in detail, I'd like to go around the table and ask each of you to call out the toughest part of establishing a new management relationship from the viewpoint of your company and what you imagine a boards experience. Anes, let's start with you.

Anes Radoncic:

So typically when a building or board transitions over to a new management company, it's usually one of two reasons. You could be doing a fantastic job and you simply have a board turnover that just wants brand new flavor. Or on the other side you have discontent where maybe the ball was dropped and essentially the client is dissatisfied and they just want to go in a different direction.

Carol:

And the toughest part then when you've taken on a new client, give me one word, is what?

Anes Radoncic:

The toughest is probably. I mean I don't know if they can put it into one word, but it's compliance.

Carol:

Okay. Stuart, let's turn to you.

Stuart Halper:

Understanding the board members themselves and where they're coming from, understanding and getting to know them.

Carol:

Howard.

Howard Mandel:

I think the toughest part is getting open issues of all their exact reasons why they're leaving and making sure that we can address them.

Carol:

All right. So in broad terms, when you take on a new client, as many of you said, I'm presuming you're not finding a happy camper, and they may not even have shared the whole story with you. Anes, in a conversation we had about this topic, you told me about a new client who hadn't revealed everything to you. And when you took them on, as you said, it was like finding out your new partner had nine kids, three houses and they were going through a divorce. This may not be a typical transition, but it probably illustrates a number of common issues. So tell us what happened there.

Anes Radoncic:

So yes, very well summarized. Thank you, Carol. So when a property management company is kind of starting from the beginning when they propose a cost for services for management, you're assuming that everything that they're telling you is going to be valid and there're essentially going to be little to no surprises. You're always prepared for a little, but you're not prepared for a whole storm. In one specific instance, this specific client had well over half a million dollars in compliance and oath violations in relation to pretty much every local law that you can think of. 30% of the building was in arrears. Board members are getting sued, shareholders are getting sued. It was just the perfect storm of everything. And then when you take into consideration the legwork and the amount of investment that you have to input with respect to kind of staff management, it takes its toll at least for the first couple of months.

Carol:

And let me just ask, when they came to you, did they tell you about all this?

Anes Radoncic:

No, it was sunshine and roses we're simply dissatisfied. We want to go in a different direction and we've been with said company for a couple of years and we want to try something different.

Carol:

And so you priced their property management based on a normal building coming over to your firm. When you found out it wasn't a normal building, are you stuck with that pricing? Are you stuck? What do you do?

Anes Radoncic:

So with respect to the client, naturally you have to stand your ground. So you have to stand true to the proposal that you submit and then you become almost... you turn into a committed relationship. So it's a little bit of sacrifice in the beginning, but once you kind of clear those hurdles, what it does is it establishes a more concrete relationship with said client. So then you can manage them longer. Does it suck In the beginning? Yes, but once the rain drops, the sun comes out.

Carol:

All right, Howard, you had a similar issue. You got a client through a referral from a lawyer that you had met at a closing a year ago, but before taking them on, you had one of your admins check them out in New York's DOB Now's website and her advice to you was, "You don't want this building." They had fines galore including $200,000 of just local law, 11 fines, but you didn't run and you took them on even though this new business came with I assume lots of headaches. Tell me what happened, what did you ask of the board? Why did you take them on?

Howard Mandel:

So what we always do is environment right now with local laws are crazy and there's a lot of stuff with every local law imaginable, which is like Anes says, it's crazy what's going on right now, but we gave them a full printout of everything that they were responsible for and they had no idea that they didn't file their Local Law 11 for the last four cycles. It was crazy. And so we just put it all in front of them and I said, "We'll walk you through this, but you need to be committed to hiring an architect, doing the work, funding it and paying for it." And they were like, "Well, we don't know if we're going to have the money."

And I was like, "Well if you're not going to do it, I'm not going to manage the building for you. It's too much of a liability." So I just laid it down for them and basically said, "These are obligations you have to do. I can't take you on if you're not going to do it." So as much as like their previous manager probably looked the other way, the board and at some point must have known what was going on. So I just laid it out to them and I said, "It's going to be tough, but you guys have to be committed to doing this and if you don't do it, I can't manage the building."

Carol:

You mentioned liability and I want to ask all of you about that liability. So, Howard, the client you were talking about and a little bit about your client too, Anas, they clearly weren't governing their co-op or condo in the manner that one would expect. That liability, how does it translate to you or where are you liable for their I would say mismanagement?

Anes Radoncic:

Very good question. Oh sorry Howard, that's all you., Howard.

Howard Mandel:

Our management contract is I think really good on both sides, but on some cases like this, we just had our attorney even draft something even stronger to put there, but really the liability should be on the co-op board, but I don't want them to come back and say that we didn't inform them that we didn't tell them to have any potential liability on them, but I guess it really comes back to that management agreement. I was more concerned with liability for getting new clients or referrals and having people think that we manage a building that is a blank show and when we try to get references we'd like to say, and I was honest with them, I said, "I'd like to use you as a reference and say down the road you had all these problems, we help you." It's like Anas said, you help them navigate all this stuff and then you have an easy client and maybe I could use you as a reference or we could say, "Hey, this is how we navigated," and go from there.

Stuart Halper:

I would join in Howard's assessment. I don't believe there's any liability to the management company. As an attorney myself, the contract is very clear. We're only responsible for our own negligence. The building is responsible for their negligence, so there is separation right there. However, one's reputation is at stake. You have to be confident when you take on a board and a property like that, that it's a partnership, it is a marriage and they need to be committed into straightening the ship. It doesn't happen as we all know right away. It's a process and we tell people you really can't evaluate it after two months. You can't evaluate it even after a year sometimes.

Sometimes you need to look down the road two years, it may take first lining of financing to do the work. That alone could take six months to a year, all depending upon what the financial records are when you take on the property. If they're in disarray on the violation side, more than likely they're having terrible financial issues and their reporting is not proper. Many times we come in and I know this is always one of the topics I spoke about is that the bookkeeping practices and the prior accounting was insufficient and we have to start from scratch having to do a compilation for the prior work with the auditor and then having then to do a year later a certified audit once we have good numbers.

It's all a matter of having good numbers and we can't rely upon the old numbers. We weren't there, more than likely the board wasn't there. So a process could take some time before you straighten the ship out and you have to have confidence. And the biggest issue today is, is the board willing to raise maintenance. It's all about money, every twist and turn we face reluctance by everybody not wanting to raise the maintenance and as you know, there's been pressure on all of the co-ops condominiums and HOAs with insurance costs going up exponentially, water, sewer going up. And these are things beyond the control of boards. There has to be a commitment and it's not just to work with, they've got to fund it, biggest issue.

Carol:

I'm curious if you take on a building where the records are not straight, they haven't followed the law, they haven't filed their various filings for the variety of laws, don't the shareholders or the unit owners have a sense that their building's a mess?

Stuart Halper:

No. Sometimes, a lot of times boards are run by dictatorial individuals. They're not forthcoming, but the big issue is when was the last time they raised their maintenance and that pacification, if it goes for 10 years that they haven't raised maintenance, a lot of shareholders can live with that. They're happy about that. They think the board's doing a great job and then at a certain point the chickens come home to roost and it's a house of cards and it starts falling apart When they start experiencing water leaks through the roof because the roof has aged out and there's no fix because there's no money, because there's no reserve. They've been eating through their reserves to fund deficits. It happens all the time.

Howard Mandel:

Stuart, that building I was talking about, they're doing a 25% maintenance increase and NCB is giving them a loan and not only did we say, "We said you have to guarantee at minimum 3% increase every year regardless." So like you said, you're a hundred percent right. The money is the biggest issue right now.

Anes Radoncic:

Sorry Stuart it's all you.

Stuart Halper:

I mean I was at an annual meeting last night, typical situation, we've been there for three years and we've been coming off bad numbers. Great accounting firm and even for us, we finally got to the point where on an annual basis they're breaking even. However, it's not making up for the $300,000 shortfall that as I told the shareholders last night, I'm putting fingers into the holes in the dyke. We've got to come up with $220,000 next week to pay ConEd and we're reaching out for political help and essentially June one, we're doing a $300,000 assessment and it's a 200 unit cooperative and this is the real world. Either they were going to commit to it or I had to leave.

Carol:

Do you actually say that to them?

Stuart Halper:

That I'm going to leave? No.

Carol:

But in your heart you would.

Stuart Halper:

Well look, that's harsh reality. Do I want to be there when the power's turned off? As managers and everyone will agree to this, we can only lead the horse to the water. We can't make them drink and we only have one app and that's to leave.

Anes Radoncic:

Yeah.

Carol:

So let me ask you, you've described buildings that have kind of been a wreck that you've taken on and I'm assuming you've been reactive to their problems and maybe not proactive know. A very well-run building is looking at things they can do to reduce costs and they're all over the place.

Stuart Halper:

First you've got to shore up the old, the current and then you look to the future. Very difficult in a building that has a shortfall of $300,000 in cashflow and they're breaking even moving forward. That's great. Can I add any meat to the bones in terms of a reserve? Yeah. Instead of raising 12%, they'd have to raise their maintenance by 18% this coming year. And we achieved a balanced budget moving forward the prior year. However, there's a factor or we're tied up with the number of estates and the cashflow as much as the $300,000 assessment really is to raise $240,000 immediately because we know X amount are not going to pay. It's great. We want to be proactive moving forward, but you got to deal with the harsh realities of where you're at first.

Carol:

Can you give me a sense of what type of buildings that you've just described and it's hard for me to come to grips with those kind of buildings. I mean I certainly understand communities where there just isn't money where people really... and are fighting, they don't want to spend money or they don't have the money to spend.

Stuart Halper:

Exactly.

Carol:

What kind of percentage of your portfolio or how many of these buildings are you seeing?

Stuart Halper:

I'd say of our portfolio, which we probably manage 98 properties right now, I'd say about 10% are in difficult situations and they've more recent properties that have come on board and we've been brought in to clean it up and to straighten it out.

Carol:

Howard, how about in your portfolio?

Howard Mandel:

Well, maybe like 15%. We definitely have a few that, like Stuart said, they're hard conversations and what we've told people is you have a mortgage, your bank is going to look at your numbers and you need to do this before your bank says they're going to force you to do a maintenance increase. We've had times where I had another building we no longer manage where we actually told NCB, we were like, "Are you not looking at their management reports that we're giving you?" We're sending them to NCB and we're telling the board and the building's attorneys and the boards are not listening to us. And finally we ratted on them.

We told NCB, we were like, "Guys, they're not listening to us. They need an increase. You need to now tell them." And NCB stepped in and it was a whole... so they're tough conversations, but we tell all of them that they have to really, especially now with everything going up, right? Like Stuart said, buildings that have not had increases for a few years, it just compounds and it's very difficult. They need to always have maintenance increases every year. And by not having maintenance increases, it sets them up for even if they have a zero balance budget when they have capital needs or emergencies. I feel like now we have a harder environment than 10 or 15 years ago where every building, we've had such huge increases and we've just told them, "80% of your budget's fixed the city compliance, utilities, insurance. You got to do it."

Stuart Halper:

And the reality is the government comes out with CPI numbers, consumer price index. With us, that is our guideline to go to the boards and say, "I know your numbers look good right now, but you're facing two to 3% inflation." Putting aside what happened during COVID where we had one year of 22% CPI, which was utterly ridiculous and getting beyond that. But if you listen to what we're saying and you raise by that 3% and maybe even a little bit more to develop the cushion, we'll be in a much better place in the long run. But sometimes you're dealing with five, seven or nine different politicians within a community and one of the reasons why they're there is to not raise maintenance and they in their minds believe they're heroes, but yet in the long run it doesn't work.

Carol:

I want to ask about a transition for a building. Somebody has their email on. Okay. I'm let Howard go double-check. Anes, you've quit your email?

Anes Radoncic:

I got everything closed.

Carol:

Okay, so it must be in Howard's.

Anes Radoncic:

Yeah. I want to add on to Stuart and Howard's conversation piece.

Carol:

Go ahead.

Anes Radoncic:

Oh, we're good?

Carol:

Yeah.

Anes Radoncic:

So the biggest takeaway, I mean I'm sure the gentlemen can attest, it comes down to realistic expectations and that's really the biggest takeaway here. And a lot of the issues with the buildings that are having financial issues or financial trouble really comes from the individuals that may have purchased these units 15, 20, 25 years ago when there were maybe a hundred thousand or $200,000 and they were able to afford it. Fast-forward 10, 15, 20 years later, now your apartment's worth $500,000, a million dollars, your maintenance has gone up tenfold, but they're still bringing in the same income that they've had from 15, 20 years ago. So naturally they're going to be reluctant for any increases.

Those are the type of individuals the building can crumble as long as there's no increase, you won't hear a peep out of them, but as soon as there's any sort of increase or an assessment, they come out with pitchforks and knives. But ultimately to Stuart's point, you can't put yourself in a negligent or liable situation where you're letting the building essentially crumble and drop into quicksand. We have to take action and ultimately you bring the horse to water. If the horse doesn't want to drink, you have to come to some sort of ultimatum and figure out exactly what's what. Because the reality is 80 to 90% of the co-op's budgets are fixed. You can't do anything about it, right? And then the other 10% is essentially taking into account some light repairs, some miscellaneous compliance, things of that sort. But now when you toss in the last five years, all of these new compliance requirements, which is absolutely absurd.

I think in the last five years we've had more compliance regulation than we've probably had in the last 20 to 25 years. The city or the state will come up with anything and everything to implement some sort of application fee, a recurring annual fee or some sort of fee in which they can kind of bring in additional stream of revenue outside of their already inflated taxes. You take that into consideration along with the four to 5% increase per year that we've been averaging on utilities, 8% to 12% on taxes. Insurance, which is absolutely astronomical between 15 to a hundred percent in some cases, these buildings, 2, 3, 4, 5% is not going to justify it. In the last two years I would say we've had a large volume of properties and these are good properties and good financial standings, they've had to implement between 15 to 25% increases, not because of negligence or because of anything like that, all strictly due to insurance taxes and utilities, point-blank.

In some cases their insurance will go up from 50,000 to a $100,00 dollars, that's a $50,000 hit to the budget. Utilities will go up 15,000, $20,000, so on and so forth. When you tabulate all of that into consideration with respect to the money that they're bringing in, you have to implement 10, 15% increases. And now with the economic climate, we don't know what way it's going to go. So it's really a shell game, if you will. But ultimately, going back to what I initially said, it comes down to realistic expectations, right? And if we're able to translate that into a way where they can understand, then the relationship will remain fluid. But if we're unable to connect to that level, it just turns into a liability.

Stuart Halper:

Well, yeah, I wholeheartedly agree with this. The other ramification and which we found especially in buildings such as HDFCs and the older two thirteens is it becomes more of a socioeconomic issue where the elderly population, the older population, people who have been there since the beginning of these properties, especially the HDFCs can no longer afford it. And your heart goes out to these people and it's very difficult. We're professing what needs to be done, you understand where they're coming from. And the harsh reality is this is where people are being forced to leave New York. And it's part of the flight that we're seeing and you're seeing younger people come into the cooperatives who have the cashflow who can't afford it, and it starts pitting people against each other within the properties themselves, which is the next issue beyond that we have to deal with on a regular basis. And it makes it difficult from a manager's standpoint to really balance all of these equities when you know what you need to do in order for the business to break even and to do well and to thrive in this environment.

Carol:

So are you sort of saying those shareholders who may be bought in the late '70s and '80s really when New York City was crawling out of a financial hole who bought, maybe they spent $100,000 or whatever it is on their apartment and now their apartment to Anes's point is worth 500 million, whatever. They actually are going to be forced out because now they're older, obviously their income may be fixed. It's certainly not going to be raised. At the same time the city has a push to build so-called affordable housing. Is it because that housing is augmented by city-

Stuart Halper:

Tax abatements and other incentives that the cooperatives don't get. The mere New York City abatement program is meager. The SCRIE program, it's meager in the broad sense of affordability. And the city is leaving and the state is leaving a large constituency behind. Take into account also the threats to the two thirteens whose leases are expiring in 30 years and nobody knows what's going to happen with those properties. Equity is being wiped out, they can't even go into the commercial lending markets and borrow money. What bank is going to finance a building that the cooperative is going to expire in 30 years? Government has left this market behind and there's nothing on the horizon really to help them at this point.

Howard Mandel:

You're right. And you mentioned lending. I'm starting to see the commercial lenders for co-ops are-

Stuart Halper:

Dropping out.

Howard Mandel:

Yeah, they're all saying, "We don't want to lend anymore." There used to be so many people and so many options and now-

Stuart Halper:

You're down to NCB, you're down to flushing, and there's really not much else at this point.

Carol:

And why is that?

Anes Radoncic:

They're strengthening the terms of their agreements as well. They've never really before enforced any sort of legitimate fees, if you will. But recently what they've begun to do is if you don't submit audited financials, they're basically implementing large fees. They're no longer looking at just the standard violations. They're now digging in even deeper. They're looking into the HPD violations, they're looking into the ECB violations. So the violations which were only kind of surface level, now they're looking into it, which before you could have had a hundred thousand violations and they wouldn't care naturally outside of the large violations, but now they're looking into everything. It just becomes a carrying over liability if they're going to invest into the property, they want to ensure that the money that they're giving is not going to be utilized elsewhere versus maintaining the property itself, which, aka, their investment.

Carol:

And why are there fewer banks now willing to lend to co-ops?

Stuart Halper:

I think banks are starting to see the realities of how a lot of the cooperatives are run and also the choices. It's one of them also just the natural state of consolidation within the banking industry. Where you have a lender such as Astoria, they got bought by Sterling. Sterling got bought out by Webster, all of New York Community Bank, which was one of your major lenders got bought by Flagstar out of Texas. They're gone. You don't hear them. You're starting to hear of some smaller entities, but they just really don't exist.

And even banks now, we were discussing, and I have a phone call Thursday with Flushing Bank and now they're resorting to swap-type loans moving away from the conventional 10-year principal and no principal interest-only loans. Why? Because there's more pressure on the marketplace. And keep in mind too, for 10 years prior to 2022, your interest rates were between 2.5 and 4% that go into the market now and you're facing 6.5 to 7.5%. That's another major increase moving forward that nobody really anticipated and the increased cost behind the loans, it's more difficult.

Carol:

For buildings that are not in trouble that you have taken on and added to your portfolio that maybe have been able to keep up with their maintenance. What is the biggest challenge in transitioning to your company that you face?

Stuart Halper:

The biggest these days in well run is falling into the sink of what the board's expectations are, what we perceive their expectations to be, matching the right manager with the particular board and depending upon what their expectations are in terms of management and how the flow is, it all depends upon really where they're coming from, meaning well run. There's still a reason why they're changing and there's a shortfall somewhere. 99% of the time the biggest reason why they're leaving is about communication and falling into sync in how to communicate properly with them, which we think we do a really good job about communication. And that is the biggest reason why if there's malfeasance, we all understand and there's a load of companies out there that companies you've never heard of that just dropped the ball and we're picking up the pieces. But for well run cooperatives, it's simply when a board member calls picking up the phone. It's that simple.

Carol:

Howard, would you chime in on that?

Howard Mandel:

I think setting realistic expectations. I wrote that down, which is huge. Communication, like Stuart said, is huge. And I also feel like nowadays my agents in our company, we're a therapist for them, we're a certified financial planner for them, we're their accountant, we're their financial. To me, I always say we're their therapist and we have to talk them down off a ledge and we have to tell them the right thing to do and tell them how to react to the other shareholders. And it's like family and some family you hate and you never want to see and other families you call all the time.

And like Stuart said, like my agents, they talk to their board presidents once a day, once every other day. Those buildings, like Stuart said, that are run well and communicate, I think it's because there's great communication and that if anything, they have too much info, but they know everything. Nowadays with technology, everybody wants immediate access, immediate response, and when we could do that, they're happy. It's also they're setting realistic expectations. If people sometimes don't get an email within an hour or you have to send a text message or email and someone... That's it, I think the communications, and if you're tight with them, it's good. And then once you start losing that, I think that's when-

Carol:

So let me ask, to take in a well run building, there is a transfer of records and finances and everything else. That process, how long does that take?

Anes Radoncic:

Depending on the situation, the ideal transition is 30 days. I mean, I'm pretty sure the gentleman can agree with me. Ideally you want to have a 30-day transition because you would have the end of the previous management company's billing cycle and then the transition to the new billing cycle with introduction packets, things of that sort to familiarize all of the shareholders to the new company, the structure, the payment portal or the payment process in which they would be collecting the monthly dues, so on and so forth.

Carol:

Within 30 days though, you can move all those relationships. It seems fast.

Stuart Halper:

In all honesty, 30 days from my perspective is the maximum. We've moved on seven days, we could get set up and we could run incredibly quickly in today's day and age, whether or not there's cooperation which we all expect, you need to be able to piece it together. There's so much information that's out there that the biggest issue, I need the tax ID number and I need your certificate of incorporation. Once I have that and I can get the bank account established and you have from your last management report the balance of your arrears and your maintenance schedule, we can get you up and running. It's that. And we know where to go to get everything. Whether or not there is cooperation, it makes it a little harder, but you can move quickly in today's day and age.

Howard Mandel:

[inaudible 00:36:03] you're a reputable company that you're coming from, they open up a OneDrive folder, a Dropbox, they give you everything. We've given up buildings or even lost buildings and go into a management company that's let's say advertises in the habitat, like a real management company. And there's a professional courtesy. You give everything, you drop it all in a folder and it's very simple. Like Stuart said, our back office, I'm sure everybody's here in the back office. 150, 200 unit building, we could get up in our accounting software literally in a day.

Carol:

So let me flip this. Now I'm a board director, you tell me, and I'm a board director who's moving to your company because I had discontent with another company. You tell me what my board can do to make this transition easier. Each of you please.

Anes Radoncic:

Carol, if I could just add one more thing to Stuart and Howard. So theoretically you could probably transition a building in 24 hours. If you have access to everything, you can transition in 24 hours. My viewpoint is transitioning a building in 24 hours versus having a smooth, conducive relationship with the shareholders, which essentially will take some time because what happens is people get a shock factor because 99% of the building typically don't know there's going to be a transition. So now it's establishing the welcome packets, the introductions, maybe a meet and greet on site. So ideally taking all that into consideration. 30 days, right? I wouldn't stretch it any less, any more, but transitioning strictly documents where you can actually have the building in your system up and running could be done probably 24 to 48 hours to Howard's point as a professional courtesy with your other companies that are willing to kind of drag and drop all of those files. But when you take into consideration the bigger picture to have a solid relationship from the get-go, you want to give some time. So I think 30 days.

Carol:

All right. I want to go back to my question. I'm a board director, I'm transitioning to your company. I want this to work. I was dissatisfied for whatever reason with my older company, what can I or my board do to make this transition better? Howard, let's start with you.

Howard Mandel:

I think the first thing is let's say they sign a management agreement and like Anes said, you the welcome package is important, but what the board could do is to me, I think a newsletter from a board is always a big deal with that welcome package. And I think the board needs to be honest why they're leaving and give a list of all of their issues. And I've seen boards, which I like is almost with that newsletter saying, we're going to a new manager, tell the board all of your issues and your problems and unresolved stuff to make the board talk to their shareholders.

The newsletter thing is really big lately and I think it really solves a lot. I think what the board could do is just be very open and communicative with the shareholders, why they're leaving, what the end results are going to be. And really, like Anes said, if you give a little bit of time for an intro letter on how they're going to do payments, how it's going to be switched over and come back to just communication. I think that the board should really be honest because if the board doesn't tell the shareholders that they're leaving and then they just get an intro package, the board gets ousted, the more info, the better.

Stuart Halper:

Stuart one word. It's all about board and the new management transparency. Transparency is everything. Who, what, where, when and why. As Anes said, putting together a meet and greet is very essential. That gives the shareholders the ability to vent what their frustrations are in addition to the board's frustration with the management company, you're there to listen. You're there to be their therapist and you're there to assure them that when you call, you're going to be there and you're going to pick up the phone and we're going to listen to you. And you know in 30 seconds at one of these meetings, who the tough shareholders are and where the difficulties are going to be.

And you're going to try and give them a plan right then and there essentially, can I come to your apartment now and see what you're talking about? And that's one of the points of coming out to the buildings where sometimes I'm just shocked. And it's some of the biggest management companies and nobody in this room that the manager is never present to the shareholders and they don't come to the buildings and the expectation. And we're very upfront that we are as an owner's expectation of my managers that we're going to be there once a week. And that if you want to meet with them, you're going to be able to talk to your manager, not only from a board's perspective, but from a shareholder's perspective or the owner of the condominium.

Carol:

Anes, do you have something to chime in with?

Anes Radoncic:

Yes. I kind of got absorbed in Howard and Stuart's conversation, so my mind started kind of getting... Yeah, can you repeat the question one more time for me, Carol?

Carol:

Yeah. I want to know, I'm a board director, I have been dissatisfied with my current company. I don't come from a building in disarray. I come from a decent well-run building. I come to your firm. What would be your advice to me as a board to make this transition smoother, faster, and better?

Anes Radoncic:

Transition, I say it's like getting married. So what happens within that honeymoon phase or what happens within that first month is going to be absolutely critical and crucial for the remainder of the relationship. And we take the transition very, very serious and sometimes it's a kind of all hands on deck type situation where we provide a little bit of overkill service. But ultimately the biggest takeaway is going to be giving them some sort of peace of mind and breaking everything down on what's to be expected on day one, on day five, on day seven, on day 15, on day 30th.

And then obviously going down, "Hey, now it's a brand new month, we've already transitioned, this is what to expect." So giving them an outline of what's to expect. It's kind of taking off that bandaid because now there's no more shock factor. The shock factor is on pen and paper or on email, and they can pretty much refer to that list on what to expect alongside giving an update to all of the residents on what to expect as well. So having that type of communication, that transparency goes a long way and that sets the tone for the remainder of the relationship and it just kind of binds it that much stronger.

Stuart Halper:

All right. But that also doesn't mean that you're going to get everything done immediately.

Anes Radoncic:

Correct. It doesn't it, but you're establishing a nice relationship from the get go in which you can get the ball rolling, but ultimately giving them a peace of mind and hoping that, "Hey, this new management company is good. Let's trust them to do their job." Because let's face it, none of us go to the doctor and tell the doctor what to do, right? We can self-diagnose and Google diagnose all we want, but ultimately the doctor is going to tell you, "Hey, be quiet. Let me do my job." Similar with the property management companies.

Carol:

Very good. Thank you very much. I very much appreciate your time and you've given our listeners a lot to ruminate on. Thanks so much.

Anes Radoncic:

Thanks for having me, Carol.

Stuart Halper:

You're very welcome. Thanks for having us.

Anes Radoncic:

Have a good one, gentleman.

Howard Mandel:

Stuart, take care.

Anes Radoncic:

Take care, Howard. Take care, Carol.