As anybody who’s ever been to an “all you can eat” sushi buffet can tell you, bigger isn’t always better, and if “more” is mediocre, sometimes you’d rather have less. The same applies when it comes to property management companies. Management firms come in all shapes and sizes, and offer different items on their service menus. When negotiating (or renegotiating) your building’s management contract, determining the type of company that is the best fit for your particular community is an important decision, and one that deserves a great deal of careful consideration and critical thinking.

Big or Small?

There are pluses and minuses for both large and boutique management firms. A large firm may offer more services, but be slower to give client communities much hands-on, face-to-face attention from individual agents. A small management company might have the personal touch, but get stretched too thin if it takes on more clients than it can handle. Although most management companies would like to think they can offer their clients the best of both, it’s still up to boards to figure out what size company works best for them and then explore the best management company for their needs.

“The most important thing for a board of directors is to decide what they want and what they need. While both large and small firms offer the same and some unique services, most important are who the firm’s principal players are,” says Robin Habacht, president of Monticello Management, Inc. in Matawan, which operates in both New York and New Jersey. “Much like any potential employee to be hired, a company should be reviewed like a resume for the skill-sets it offers in terms of its personnel—not just the amount of personnel it has.”

Going Large

As president of Wentworth Management Group, which handles over 250,000 units in 12 states (including New York and New Jersey), Michael Mendillo is in a position to explain the pros of using one of the big guys to manage your building or association.

“A larger company can bring more depth and resources to the table for a client,” he says. “Also, if you’re [working with] a company that’s run properly, with a culture that reinvests in recruiting better-skilled people and training, it can be a big advantage.”

Small Talk

While larger companies are quick to extol their breadth of services and multiple ranks of administrative backup, smaller companies tout their personal touch.

“A small company knows all of the owners, tenants and building issues. They do not have to open a file to get an answer,” says Scott Lerman, vice president of Manhattan-based Rialto Management Corp., which handles 30 properties. “Small companies usually have a better relationship with the tenants. They are more accessible and more hands-on.”

Plus, there’s a sense that with a smaller, more tight-knit management company, clients don’t feel like they are ever lost in the shuffle.

Having grown to 2,000 units in 26 buildings, Vintage Real Estate Services, Ltd. in Manhattan, is a larger small firm, but company president Jeff Friedman still believes in a boutique-style approach.

“We’re very hands-on because we all do a lot of the work around here. You deal with a principal or long-standing person,” Friedman says. “Even if I don’t personally handle a property, I am fairly familiar with it. I am part of an e-mail list and know what’s going on. I know who the people are, I’m involved in the intake of the property to the building and I go to the first couple of board meetings so I get a flavor of what’s going on.”

He doesn’t turn down new clients, but he doesn’t want to turn into a large firm that might not have the same personal touch.

Things to Ponder

When looking at what’s best for a building or HOA, the board should make a list of all its needs and expectations and see what sort of management company will best serve those needs and meet those expectations. They should take into account their own size and resident demographics and get a general feeling about what the residents are looking for.

They should also make a list of questions that they will need to ask the management company to see who is right for them.

“Meet your potential property manager, and make sure the chemistry is there,” Habacht advises. “Don’t be afraid to ask for that meeting and ask that person questions, such as what they would do under certain circumstances.”

Habacht also recommends asking who your building’s liaison will actually be (are you going to see your salesperson/pitch person again).

Another aspect of choosing between a large and small firm is their ability to provide your building an on-site manager versus offering a manager who just visits the property periodically. On- versus off-site depends not just on your building’s needs, but on its resources.

“If you have someone on-site, someone who can act as your general manager, community manager or executive director, and is there Monday through Friday from 9-to-5, [that person] is likely going to be more of a pro,” says Mendillo. “But a con is that not all communities are able to afford an arrangement like that, or it isn’t cost effective for them.”

For the portfolio manager who manages four or five communities and balances them with monthly inspections, dealing with larger projects and so forth, there can still be some pluses. The resources and service may be greater and the jobs may get done quicker and cheaper, since they deal with contractors on a regular basis.

For those considering moving from a large to small management company, Lerman thinks it’s important to really balance the two.

“An [association] should consider how important personal service is to them. If they are looking for a ‘hands-on’ company, it may benefit them to go with a small company,” he says. “They should meet with the agent and make sure they can work with him or her. They should meet with the staff and look around the office to see the type of operation it is, and if they are comfortable with it.”

According to Young, one of the things associations should consider before choosing a management company, is the longevity with which they have managed other associations. If there’s a constant turnover, without reasonable explanation, he mentions it might be indicative of the company’s service.

Some associations have limited resources, which may restrict them to a smaller firm, but they should compare the level of service that is being offered. Ask the companies how their management style can control or reduce expenses. A smaller company or even a larger company may offer a reduced fee but at what cost? Also, they should consider whether they are getting a manager with limited experience, and is their manager also managing a portfolio of 10 or more properties?

And ultimately, when it comes time to make a transition, associations should be aware that things won’t be quickly in smoothly over night. “There’s always some difficulties in the transition, as smooth as you’d like to make it,” mentions Young.

Work Time

Depending on a given manager’s own professional style, there may be advantages for him or her in working for either a large or boutique company.

“A big firm is great for recruiting people,” says Mendillo. “It’s better for people who want to make this a long-term career and want an opportunity to grow in an organization that provides benefits. In a small firm, there may be less room to grow.”

Size can also come into play with a management firm’s corporate atmosphere, which can impact how its managers do their jobs and interact with client communities.

“The culture of any company impacts its employees from the receptionist to the regional manager,” says Habacht. “Support of our managers both from the office and in the field is paramount. They need to know that we are ready to provide them with any data or any contractor contact needed to fulfill their association’s needs.”

Whether your building is a six-story walkup condo or a sprawling co-op development, finding the management company that works best for you ultimately hinges on identifying a firm whose values, work ethic, and service menu squares up with your community’s needs and expectations. Once you’ve done that, you may find that both large and small can be just right.

Although New Jersey real estate has long been viewed as a male-dominated world, it's no longer just
 a boys-only club. Many women have carved their own paths to success in the industry, rising through the ranks as property managers, accountants and realtors.

Several of these professionals recently shared their personal experiences and unique perspectives on the industry with The New Jersey Cooperator. Although their career trajectories and areas of expertise differ, these women do share an entrepreneurial spirit, business acumen and strong personal drive in common. They all love what they do and are thriving in their own businesses. Here's how—and why—they got to where they are today.

Robin Habacht

Robin Habacht, a property manager with Monticello Management, Inc., in Leonia, N.J., has been working in the service industry since the early 1980s, although property management is a more recent venture.

"As Bob Dylan said, 'You're gonna have to serve somebody.' Well, it's true and if you're lucky, you'll make a living at it and it will bring you a great sense of fulfillment," says Habacht. "I have been in and enjoyed the service industry for as long as I can remember. I started out in the early 1980s on Wall Street, working in accounting via stock loans back when E.F. Hutton spoke, not only did people listen, they knew who E.F. Hutton was. I rode the wave of incredible interest rates with best of them, watched the market crash, enjoyed the IPO craze as a chief financial officer. But after having been one of those ironically—'off on September 11 people'—I decided to take some time off from New York City."

Her time away from the city led to a new career for Habacht. "They say that timing is everything. At the same time that I decided to retire from New York City, a New Jersey management company came up for sale. At the same time, Paul DePetro agreed to join the company, bringing with him 25 years of New York City property management and engineering experience. Going into the business did not even look like an option, it was an amazing opportunity."

Keeping It in the Family

Although she was starting over in New Jersey, she was no stranger to real estate. Habacht, who was born in New York City, comes from a family of New York City real estate and property management professionals. "Because my family has been in New York City real estate and property management for 50 years, it seemed that going into the business was just keeping it in the family. I'm on [the New Jersey] side of the Hudson and they are on the other."

Monticello Management offers its services throughout New Jersey and has offices in Bergen, Hudson, Monmouth and Ocean Counties. The company specializes in property and realty management; residential, commercial, rental and cooperative management; accounting and reporting; and cash management and collection.

Thriving in Her Own Right

Habacht believes that her years of experience and unique background have helped her thrive in the industry, and she has never felt at a disadvantage as a woman in a male-dominated line of work. "If I've been discriminated against as a woman, I've been too busy to notice," says Habacht. "I have always felt that I have a distinct advantage in the field. I hold a master's degree in accounting and several licenses in property management. I have a background that includes construction and engineering and have surrounded myself with the caliber of personnel that strive to achieve the best possible end result for the communities we serve."

She views her work as more than just a job. "I have the privilege of being in charge in my business," says Habacht. "This privilege has allowed me to take the best of every professional experience I have had over the years and recommendations from clients, and build my company's policies and procedures around them. I have the privilege and reward of giving my customers and employees the best of the best, and exceeding their expectations."

Stephanie Mannino is a freelance writer living in Pennsylvania and a frequent contributor to the New Jersey Cooperator.

A group of Garden State legal and management professionals gathered in The New Jersey
Cooperator’soffices in Midtown Manhattan for a casual breakfast and some informal conversation about the rewards and challenges of their work in the condo and HOA industry at the first-ever New Jersey roundtable forum.

Attendees included Michael and Susan Cervelli of Cervelli Management in North Bergen, Paul DePetro and Robin Habacht of Monticello Management in Matawan, Rumson-based HOA attorney Thomas Vincent Giaimo, John Kwasnik of Metuchen-based law firm Mezzacca & Kwasnik, Ronald L. Perl of Hill Wallack LLP in Princeton, and Elaine Warga-Murray of The Regency Management Group LLC in Howell.

Discussion at the forum ranged from horror stories of irrational board members and association residents to more mundane issues like managers’ workloads. Two key themes emerged over the course of the morning’s discussion, however: the extent of associations’ responsibility when it comes to looking after and advocating on behalf of elderly or disabled HOA residents, and the skills and characteristics that make for an outstanding association manager or legal representative.

Who’s Role is It?

As the Baby Boomer generation ages, questions about care and day-to-day support for less able senior association members are becoming more urgent all the time.

“How about the resident with Alzheimer’s Disease who doesn’t have any relatives nearby or anybody taking care of him?” Habacht began. “We’re not trained to handle that. If we have work to do, it’s to interface with agencies that will be supportive of us when we need it. Managers may not think the lady with Alzheimer’s in a co-op or condo is their normal clientele, but they have to be educated, because that person needs social services and associations are not social service agencies.”

“We had fire in a unit because at nine o’clock one night, an 87-year-old resident was baking a pie and left her oven mitt in the oven with the pie,” said Warga-Murray. “Again, it was a person who was not necessarily aware, and not [being] helped. And that’s one of the things that we’re concerned with that has to be addressed. How do you help people who are not able to live in a responsible way?”

“In one of the apartments we manage, we had a woman who was mentally unstable, and let her apartment go to the point that it was reeking—a horrible smell,” added Susan Cervelli. “She had no relatives, so the board called the board of health, who had the police come down to work with her. She paid for cleaning up her unit, but we as the association were almost the guardians taking care of this woman. Now the board and the woman are working together on a monthly basis to make sure that…her house is somewhat sanitary, and make sure there are no more odors. So that was a success story.”

Sometimes it’s not just the elderly and infirm who need help in a association community—malicious neighbors are not unheard of, and can spread problems throughout even the most placid HOA.

“I remember a board member having hot oil poured all over her car,” one panelist said to another, “and I remember you drafted a resolution where the board reimbursed her for the paint job.”

“You have people that are not well out there,” agreed Kwasnik, “but we have to deal with them because our type of housing is just so popular these days and getting more and more so. We can’t be everything to everybody—although sometimes our residents want us to be. We really need to enlist the aid of social service agencies that have mental health professionals and police officers and people that know what to do.”

“I don’t know that managers are going to have to be able to provide social assistance,” added Michael Cervelli. “I think there has to be much more cooperation between the social environment outside the community and the health department and social services for managers.”

Mindset Makes the Manager

The conversation around the table then moved on to the age-old question: What set of character and personality traits makes for the best property manager, or HOA’s legal counsel?

“The best trait is to listen,” said Habacht. “The ability to listen, and to hear. One of the things we train our managers is that the first thing you say to someone [who comes to you] is ‘Thank you, and I understand.’ It’s about being able not to just hear, but to listen to what is being said.”

“Property managers used to make sure that the lawn got cut and things got weeded,” added Perl, “but nowadays it’s about building community—and you build community by serving the owners. I believe that the number-one trait for an association attorney is being a problem solver… Association lawyers need to be problem solvers and help the managers solve the practical problems. You’re dealing with people and trying to get everybody to coexist in the same space—that’s what this is about. A litigator is not going to be successful at making it work. All that person is going to do is spend a lot of their client’s money litigating, and solving nothing. Problem solving means understanding the dynamics of the association, understanding how people work, and what they need to be happy.”

“ I think there has to be a focus on more than one right answer to a question or problem,” said Susan Cervelli.

The best managers, claimed Habacht, are all that and more. They have to listen, problem-solve, and play the role of psychologist when the need arises. She went on to say that she agreed wholeheartedly with Warga-Murray about the importance of offering options to both clients and management associates that would allow them some creative latitude in problem-solving.

“We started doing something interesting with our residents,” Habacht continued. “Most residents feel that their property management company works for the board. We took a new approach when a resident would call our office, where I’ll say to the owner, ‘Can you give me permission to act as your advocate? If you give me permission I would like to represent you to the board. I would like to argue your case with the board.’ And it changes everything. You feel the homeowner’s whole attitude change, and suddenly we’re not the enemy, we work for them. ‘Whatever your argument is, I will take it to the board.’ As a property manager, it’s very important to really like people and really want to help them.”

“Speaking from a legal perspective,” said Giaimo, “I think there are four really important traits: responsiveness, objectivity, honesty, and professionalism. Quite often when we find ourselves in committee or association meetings, dealing with unreasonableness, or with individuals who are not comporting themselves as they should be in a meeting setting. We deal with rudeness, we deal with irrationality. And I think it’s very important that the attorney or manager conducts him or herself with the utmost in professionalism despite that unreasonableness. Because to do so, you are lending respect and creditability to the board that you represent, as well as to all the other professionals employed by the community association.”

Susan Cervelli agreed, saying that “under any circumstance, the attorney and professionals have to stay focused.”

Perl suggested a tried-and-true method. “I’ve found that the nastier and more obnoxious an owner gets, the nicer you get—and it works every time.”

“Honesty and objectivity are so important,” Giaimo continued, “because truly good lawyers cannot always tell their client what they want to hear. So many times I see attorneys placate, knowing what the board would want to do—but in order to do your job for your board and your community, you have to be honest with them. Tell them the good and the bad. That’s a core trait necessary in representing an association.”

Tabled—Until Next Time

One constant throughout each and every roundtable forum The Cooperator has hosted over the years has been the feeling on the participants’ part that they only just scratched the surface of all the issues and ideas they could discuss with each other. Indeed, there were plenty of talking points on the morning’s informal agenda that the group never got to explore because there simply wasn’t enough time to delve into them.

Rest assured however, that the first New Jersey roundtable forum was definitely not the last. Just as we’ve assembled groups of New York-based professionals working in the co-op, condo, and HOA field over the years to discuss hot-button issues affecting them and their clients, we’ll do the same for the New Jersey market as well.

If you are a professional serving New Jersey’s HOA, condo or co-op community and would like to participate in the next New Jersey roundtable event, please contact Debbie Estock, managing editor, at 212-683-5700 x364, or e-mail her at debbie@cooperator.com.

Hannah Fons and Brendan J. Flaherty are associate editorsof The New Jersey Cooperator.

Conflict and disagreement among neighbors is something we all must face, whatever the living situation. As long as people have different viewpoints and varied lifestyles, they will argue and bicker and call each other names. And, add to that the extremely close living quarters of some New Jersey co-ops or condominiums, and the problems get even worse.

What are the most common types of neighbor disputes? And when should boards or management intervene in the affairs of their residents? What specific methods can boards or management use to alleviate problems among neighbors, especially those instances where police might be called in or, worse, huge lawsuits ensue?

Could You Keep It Down?

The three most common complaints residents make, according to Scott Piekarsky, an attorney with Piekarsky & Schettino in Hackensack, are "Noise, dogs, and cars."

Jeremy Kilar, property manager for Robins Oak Management in Hoboken agrees that issues related to noise levels and to pets are common problems among residents. He also says that people tend to have differing opinions on how to dispose of and/or store trash and refuse.

"One time stands out in my mind where the daughter of a tenant was accused by the tenant below of dropping all sorts of trash, including cigarette butts, used condoms, beer bottles, and candle wax down onto the stoop of the unit below," Kilar recounts. "That was a sticky situation as there was no definite proof—no camera footage or actual eye witness accounts—that could be used as leverage in trying to handle the situation from the management side."

Another perennial complaint people make in co-ops and condominiums is that their fellow residents are too noisy. Shared walls and cramped spaces contribute to the problem and can make ordinarily sanguine neighbors into rabid enemies in very short order.

"In high-density, multifamily housing units, we find that noise disturbances are the greatest cause for disagreements," reports Robin Habacht, president of Monticello Management, Inc., in Leonia. "And in co-op and condo situations, ownership plays a key role. Owners feel that they cannot move as easily and are entitled to a certain quality of life, so disagreements with neighbors may become more heated [than in a rental situation]."

Also, Habacht says that since large portions of co-op or condo buildings are owned in common by all residents, other dilemmas may crop up. For instance, the common area of the hallway directly outside a resident's door may seem like the perfect spot to store a bicycle, a baby stroller, or garbage bags waiting to go downstairs. But this storage of items is sometimes not acceptable to all residents, who have to walk past all the stuff.

"In rental situations, this is often less of an issue as the common space belongs to none of the tenants, and is 'governed' by the rules set forth by the landlord/management," explains Kilar. "In a condo building, all of the unit owners own this space, and the rules are set forth by the condo board."

In many cases, owners are apathetic and don't attend the condo association meetings, which is not only where they would learn what the house rules are for the common areas, but also have a chance to weigh in on what those rules should be.

"You'd be surprised at how difficult it can be to organize a meeting with enough unit owners to vote on issues related to the building," says Kilar. "This apathy often creates a certain amount of tension when a person is issued a fine for breaking the rules—which invariably the offender claims to have had no prior knowledge of."

When Should We Intervene?

According to Piekarsky, under New Jersey state law, if a condo association is aware of a dispute—either between residents or between a resident and the association itself—then the association must offer what is called alternative dispute resolution (ADR). This could come in the form of a resident committee, a judiciary committee, a covenants committee, or an outside mediator.

"In New Jersey and in other states, the Community Associations Institute trade organization has an ADR program," says Piekarsky. "Lawyers, managers, and others volunteer for the program so that associations can submit disputes to that. Basically, under Jersey law and the Condo Act, you really must get involved if a housing-related dispute is brought to your attention."

Additionally, management will probably need to step into the middle of a dispute if the disagreement involves the breaking of any of the association's rules.

"For instance, say unit owner A argues with unit owner B about excessive noise from above," explains Habacht. "The association had implemented rules where carpeting must be laid on the floors as noise dampeners, so management can intervene based on a breach of the association rules. They find that unit owner B had no carpeting on its floor and thus was in noncompliance of the carpeting rules. This resolves the disagreement."

An Unenviable Role

It's inevitable that, as long as people live alongside other people, disagreements will arise. This is why we hire property management for our buildings or associations—partly so we have an objective third party to put some of these grievances into perspective. But what should property managers do to solve problems among residents?

"First, listen to each party separately," advises Habacht. "And then try to bring them together in a neutral environment where we can negotiate a solution."

Habacht says that if a problem gets to the point of police being brought in, her management company would step back and let the trained professionals handle the situation. And, in the case of a lawsuit, "our position as a management company has been to stand down. Our role is to facilitate the operations of the association, and involvement in legal proceedings between individual owners is not conducive to association operations."

Easy Does It

Piekarsky recommends that, when tempers first flare, managers try the personal touch of a personal phone call, an in-person meeting, or a letter. If the residents continue to battle to where it gets to the point of alternative dispute resolution, he suggests possibly having the association's attorney write a letter.

"Most associations try to do it casually, informally," he says. "And if that doesn't work, you go to the higher level of the formal procedure."

And Piekarsky agrees with his colleagues about police matters, saying that if police are called in, "Most associations and boards take the position that police and municipal matters are out of our hands."

"I've seen disputes [that are] both in municipal court, and then it does become filed as a grievance with the association, so sometimes it's handled on both levels," he explains. "But we always prefer to let people handle these things privately so that we don't have to get involved."

As far as private lawsuits, Piekarsky is on same page as Habacht. "If it's a private matter amongst unit owners—let them and their counsel work it out," he says. "But there are times the association does get subpoenaed for a deposition or a trial and they don't have a choice."

Moreover, in any sort of problems between neighbors, the best course of action for management is to have a set of procedures written and published so that residents know it's available. Beyond that, managers should make it a habit to use this protocol for any disputes that might crop up.

Another suggestion for property managers is to institute fines for breaking the rules set forth by the condo association or board.

"Often problems between neighbors are difficult for anyone to truly resolve," Kilar says. "Condo boards that institute fines have an easier time resolving disagreements about such things as noise levels, pet-related issues, or trash issues. People respect rules when breaking them results in a lighter wallet."

Conflict Costs

If a co-op or condo association sees too many of these disputes, might it be possible to see a decrease in property values? After all, who wants to live among people who just can't get along? Many people would consider having such a dismal neighbor situation as a property defect that could negatively affect property value.

"In general, any long-term conflict has a negative cultural impact on a community," says Habacht. "It may not affect the value of the property, but it will affect the quality of living for those directly involved in the conflict and those living around it."

According to Piekarsky, conflicts like this "bring up a very interesting and academic legal question on issues of disclosure. Under New Jersey case law, you have a pretty awesome responsibility to disclose defects and problems and off-site conditions. So it brings up a good question: when it comes to resale, if you've got a major problem with a neighbor above or below, do you have to disclose it?"

For now, that question remains academic—but with buyers paying premiums for property and our society increasingly litigious, endless conflicts within an HOA may cost residents more than just peace of mind. In the short-term however, harmony among neighbors is a goal any good board should strive for.

Domini Hedderman is a freelance writer and a frequent contributor to The New Jersey Cooperator.

What makes an association manager really successful? Is it hands-on attention to each association in their portfolio, or their ability to point wayward boards in the right direction to solve their own problems? Do great managers have to know the name of every board member in every association they handle? Since each association community has its own personality and culture, maybe it's most instructive to ask managers themselves what they think separates the great from the merely good.

A Combination of Skills

Without clear lines of communication between board, management, and residents, even the most capable manager's abilities will be wasted.

According to Tom Garver, CEO of Condominium Management Services in Lindenwold, "A great manager's mission should be to provide the best service that they can to their clients, and for the residents to enjoy living in their communities as much as possible. Our responsibility is to work directly with the board of trustees, because they are responsible for the decision-making and maintaining of [the community.]"

But it doesn't stop with just being able to communicate with the people you serve. Robin Habacht, president of Monticello Management in Matawan/Leonia says that one-on-one attention, a hands-on approach, and excellent communication skills "all make for a great manager—but they must be combined with a genuine love for the interaction with people. He or she will educate owners, help them solve problems, and listen to them when they speak. His or her satisfaction at the end of the day is derived from knowing that he or she helped someone and made a difference."

Maintaining Relationships

Part of that love for the job and appreciation of people in general is ability to build and maintain positive, productive relationships—with board members, residents, and with the service providers who supply the association with everything from janitorial supplies to snow removal. More often than not, board members are unpaid volunteers who come to the job relatively green, and who may not know who to call when a major repair needs to be made, or when a disagreement between two residents escalates into a community-wide problem. That's where a good manager's knowledge and expertise comes into play and makes things easier.

"We have to be both reliable and accountable," adds Habacht. "Boards want agents that deliver of their promises. They want the show, not the tell."

Professional Development

A manager must also pay strict attention to detail and be able to draw upon his or her past experience.

According to Habacht, many of a manager's skills and qualities can be mapped back to their parent company. "First and foremost," she says, "management companies must strive to treat their people as they want their people to treat their customers—with respect and care. Then we can lead by example."

For Habacht's company, that has meant helping out in ways that are sometimes beyond the normal scope of management duties. "We've lent a hand to help rebuild after fires, and raised funds for the family and children. I don't know if that's an 'above and beyond' so much as a call to help a fellow family in distress. We're just glad as a company to be available and be able to give."

A Matter of Scale

One of the biggest indicators of a manager's talents may be their ability to deal with communities of vastly varying sizes. A good manager should be able to switch gears between larger and smaller associations, and avoid taking a one-size-fits-all approach to managing them. The needs and concerns of a small, intimate association can differ greatly from those of a sprawling development - and vice versa.

The main goal, regardless of an association's size, is smooth operation and continuity, says Habacht. "I think the telltale sign that a property manager is doing a good job is continuity through board turnovers."

"The major difference [between larger and smaller communities] is the fact that the problems can be similar, but in a larger community, just in terms of sheer numbers, you'll be dealing with many more people who may have many more problems," Garver explains. "You're dealing with a lot more diverse personalities."

Good Management, Better Communities

In a nutshell, a good managing agent is there to see to things so that boards don't have to. A top-shelf manager will allow a board to do its job—which is to handle issues of community-wide policy and procedure—and swing into action when the time comes to put the board's decisions to use, and that means interacting reasonably and equitably with board and residents alike.

Many residents see their managing agent as a conduit for expressing their needs and complaints to the board, and expect the agent to act as intermediary between them and their directors. A good manager respects those expectations, and recognizes that even though not everyone in an association can sit on the board, all of them are members of the association, with a vested interest—both financial and emotional—in their community.

Hannah Fons is Associate Editor of The New Jersey Cooperator. Additional reporting by freelance writer Keith Loria.

No matter what the profession or position, it’s difficult to work where you live. For condo and HOA board members, that can certainly be the case. These volunteers must make decisions that impact not only the bottom line, but their friends and neighbors as well. That reality makes matters of ethics and etiquette even more important for board members as they strive to be fair and smart representatives of their community at large.

Part of the Greater Good

First and foremost, according to the experts, it is important to remember one key point: whether in a co-op or condo, a board member is a representative of the people. Too often, “Shareholders or unit owners will run for the board with a specific agenda—something personal,” says Rosemary Paparo, director of management for Buchbinder & Warren, a property management firm based in Manhattan. “They’ll think, ‘I want to do this with my apartment, or ‘I have this issue.’ And it’s not even a broad issue, but something in which they alone are interested. They can’t do that.”

Board members are elected to serve the entire association and make decisions based on what’s best for the community. The decisions they make should function for the greater good, and not succumb to the “tyranny of the majority,” as one manager interviewed put it.

Board members also have to remember their fiduciary responsibility to the building. “They have to ask, ‘What’s in the best interest of the co-op or condo? Will the decision I’m making hold up five or 10 years down the road?’” Paparo says. For example, “raising a fee might not help my building right now, but will it prevent shortfalls later? Will it help the association in the longer term?”

Going hand-in-hand with the idea of working for the greater good comes the basic rule that board members cannot fly solo, meaning they should only act with the authority of the entire board behind them and in the best interest of their residential constituents. Individual board members must remember that their decision isn’t the end-all.

“Decisions that create additional financial burdens on neighbors require special care,” says Robin L. Habacht, property manager with Monticello Management in Matawan, New Jersey. “Ideally, the board as a whole would start an information campaign leading up to the deadline. Keep residents informed, advised and participating so that there is a sense that the decision is not being made by a single entity, the board, but rather that the owners were party to the decision.”

Speaking out of turn and making promises they don’t have the authority to fulfill can also backfire on board members quickly and oftentimes messily.

No Playing Favorites

“Who doesn’t want to help a friend, especially in today’s economy, by giving them a shot at a small or big job,” states Habacht. “But as board members you’re not only held to a higher standard but should something go wrong, fingers will be pointed squarely at you. Remember, as a board member, you are responsible for the welfare of 40 or 400 residents. Their home is the single largest investment they will ever make.”

Anything that involves an exchange of money or favors between the board members and the prospective vendor is also a huge ethical no-no, says Paparo, “I’ve had people ask, ‘If I give someone a referral, can I get a fee?’ I say, ‘No, that’s called a kickback.’ There should be no fees, no freebies, no new free kitchen cabinets.”

Knowing the Rules

Many ethical “gray areas” can be avoided if the board simply knows the rules and parameters of their position. It’s important for boards to know their roles—it’s also just the polite thing to do, saving time and energy at busy board meetings.

“An old lawyer friend once gave me the rule of thumb: ‘If you have to ask then its probably an issue. Keep walking’,” advises Habacht. “Steer clear of gray areas and if you’re not sure, seek the advice of the association’s counsel.”

Talk is Cheap—Except When it Costs

As they used to say in World War II, “loose lips sink ships.” Too much talking between board members and residents might not bring down Europe, but saying the wrong thing to the wrong person at the wrong time can cause more than enough headaches for all involved.

“That is not to say that boards should never utter a peep to their fellow residents. Boards need to keep the channels of information and conversation open to inform owners of issues which affect daily operations.”

While Habacht encourages the use of various forms of new technological and media innovation for communication, she advises board members to refrain from divulging any questionable content. “Anything that isn’t in the minutes should not be discussed,” she says. “After all, how do you determine what is confidential?”

Keeping the Proper Attitude

In most instances, board members will avoid trouble simply by approaching their job with the proper attitude and perspective.

Letting management do the job for which they were hired and act as guides and expert advisors can free board members from stress and also give them the time to do what they were elected to do: lead and make decisions. Letting management do their job, whether dealing with residents or vendors helps make a building or association a better place to live overall.

Working in concert with management and understanding the rules and their respective roles, board members can avoid ethical pitfalls and problems—something that will go a long way toward building an idyllic residential oasis for themselves and for their fellow residents.

Liz Lent is a freelance writer and a frequent contributor to The New Jersey Cooperator. Melissa Swinea provided additional research for this article.

We've all heard stories—harrowing tales of crazy lawsuits, mishandled misunderstandings, shady dealings, outright fraud. From loony shareholders or unit owners, corrupt staffers or belligerent neighbors, the legal imbroglios residential buildings get involved in make for good reading—as long as they don't involve you.

The New Jersey Cooperator recently spoke with Scott Piekarsky, an attorney with Piekarsky Schettino in Hackensack; David Byrne, an attorney with Stark & Stark in Lawrenceville; and Robin Habacht, a property manager with Monticello Management in Leonia, and asked them for their juiciest tales of legal woe. We added a few from our own personal experiences, and present them to you now. The stories are like something from an off-Broadway play, or a dime novel, or a B-grade horror movie—imagine the taglines!

"Walk the Walk"

Byrne tells the story of a pastoral condo development down the Jersey shore where a vocal and somewhat erratic resident created tension amongst his neighbors and board during meetings. He'd scowl at people, and get right in the faces of anybody who dared cross him. He even boasted that he had a number of guns, and wouldn't mind using them.

At this point, the board went to chancery court and got a restraining order against the truculent resident. When he showed up to testify, the gentleman was as brash and belligerent as he'd been at board meetings (though to be fair, he didn't threaten to shoot up the place). The judge, threatening jail, barred him from attending any more association meetings. Eventually—and mercifully—the surly fellow sold his condo and moved…but not before thoroughly undermining his HOA's sense of peace and tranquility.

"The Squatter"

According to Byrne, an older man renting an apartment in a high-rise condo building in Jersey City died. The unit owner was looking forward to renovating the place and putting it on the market for the first time in decades. But who should materialize out of the woodwork but the late tenant's ne'er-do-well son, who proceeded to squat in the apartment, like Butch and Sundance in the house where they made their last stand.

In the Wild West, of course, deputies could storm the place guns a-blazing and oust the interloper, but New Jersey hasn't been the Wild West since the Burr-Hamilton duel. Now it's the lawyers who do the storming—and at press time, attorneys for the unit owner are still working on it: the squatter is still holed up in his late father's rented apartment.

"The Secret of my Success"

Piekarsky recalls the story of the owner of a condo in a suburban complex who decided to run his business from home. That's well and good if your business is that of say, a freelance real estate writer. When your company is located in a residentially-zoned cul-de-sac however, and there are employees, UPS guys, and various vendors descending on the place at all hours, it's probably time to look at renting legitimate commercial space.

When the neighbors' complaints and reproaches from the board became too much of a distraction from the at-home businessman's bottom line—or perhaps when he expanded into the Asian markets—the audacious entrepreneur sold his unit and moved.

"The Bikini Diaries"

Habacht recalls a situation in Wayne, where a woman lived in a ground-floor unit near her condo complex's swimming pool. Seemingly apropos of nothing, she decided to make war on the pool company. She made repeated, bizarre requests—like demanding that the pool temperature be set near maximum, even on the hottest summer days. When the company complained about her behavior, she filed a sexual harassment claim, alleging that pool lifeguards routinely peered into her windows.

Feeling that the woman was more of a headache than the job was worth, the pool company threatened to walk off the job—but this was the middle of July in a crowded condo complex, so leaving was not really an option. The association board barred the woman from the pool; she then promptly filed suit against the board for punitive damages.

This sort of thing usually gets settled long before seeing the inside of a courtroom, Habacht says. With the ADR law, most internecine battles do. But in this case, the board didn't wish to settle. It took almost three years, but the association got everything dismissed, and the judge threw out the resident's punitive damages claim as well.

"The Letter Writer"

A man owned several units in a co-op building in Fort Lee. According to Byrne, for reasons clear only to himself, he was constantly feuding with the board. In a vain attempt to curry the sympathy of his neighbors, he would write and distribute long treatises explaining in exquisite detail just how certain board members were doing him wrong. The letter writer himself became every bit the nuisance he claimed the board to be.

The situation took a turn for the worse when the resident began filing lawsuits against the board and co-op. Calling and emailing one of the board members at all hours to vent his grievances, he claimed that hairs from people's cats were getting on his infant's clothes via the washing machine, to name just one example. Eventually, the board was forced to get a restraining order, which he generally ignored. (It did, however, get him booted from the annual holiday party.)

As a result of all this, a sizable chunk of the co-op's budget went to legal fees. At the board meeting that year, the incorrigible resident began berating the board for spending so much money on attorneys, demanding to know how and why the money had been allocated.

"The legal fees," the board president calmly explained, "were incurred because you kept harassing the board members and filing frivolous lawsuits."

The shareholder didn't understand this at all - but eventually, and to the great relief of the board, he sold all of his units and moved out of the building.

"The Drunken Master"

A man is his early sixties lived in a condo on the second floor of a four-story brownstone in Hoboken. His mobility was in decline, and if he lost his footing and fell, it was impossible for him to get up. Unfortunately, he was also a heavy drinker, so he tended to fall quite often. He would drink enough to throw off his balance, tumble over on the way to the bathroom, unable to get back up.

The first time he managed to crawl to the telephone and call 911. Calling the ambulance and EMT proved expensive, however. So the next time he fell, he didn't call. He just lay there on the floor, and hours—sometimes days—would pass.

The sanitary ramifications of the situation aren't hard to imagine. Eventually, the hallway and stairwell outside the man's apartment became sickeningly unpleasant. Fearing the worst, the resident's neighbors forcibly entered the apartment and found him, naked but for a tattered bathrobe. They helped him to his feet and into the bathroom, but he refused to let them call an ambulance. Over the next year or so, neighbors found the man in a similar predicament four or five times, each time worse than the last.

Residents also feared he would start a fire when smoking his pipe. Over the same year, the fire department was summoned twice to put out small fires in the man's apartment.

Because the building was a condo, there was not much that could be done, legally. There weren't enough units to absorb the cost of hiring an attorney to evict the man, and there was concern over where he would go if he were ejected from the building. When he was sober, clean, and suitably attired, the man was a charming fellow—but still, neighbors felt that he was a ticking time bomb. It was only a matter of time before he burned the building down, or worse.

(Being one of the neighbors—one who'd helped him on several occasions—this reporter sold his apartment rather than wait for the inevitable. I'm told that he died without taking any of his fellow unit owners with him.)

Recourse in a Bad Situation

There is always recourse when these situations crop up. Communication is key, especially in the early stages, before things get blown out of proportion. Being nice can go a long way.

"You get a lot more with sugar than vinegar," Piekarsky says. "Approach civilly. Let management do it. If it can't be resolved, then give it to legal counseling."

Alternative dispute resolution (ADR) is required in New Jersey before any sort of HOA-related dispute or grievance is allowed to go to trial.

"[ADR] usually works," Byrne says, "or has a good chance of working. You don't see a whole lot blowing up into a major thing. Management handles a lot of problems."

Sometimes, though, the best way to resolve a problem is for the rabble-rouser to find a new address. "Sometimes," Piekarksy says, "the biggest problems move on."

Greg Olear is a freelance writer and a frequent contributor to The New Jersey Cooperator.

They are the ones who maintain elevators, lay traps for rodents, re-tar the roof, mow the lawn, and rewire the lights in the association clubhouse. If a water main bursts, they repair the leak. You can find them under the boilers, in the flowerbeds, and around the swimming pool. They are the vendors who provide services for your co-op or condominium.

Whether your homeowners association is self-managed or employs a management company, the board of directors will at some point have to make decisions about how and from whom the association gets its supplies and services. Indeed, building and maintaining efficacious relationships with vendors is essential to your association's financial and physical well-being.

The vendor process involves finding and vetting the vendors, deciding which ones to hire, negotiating for the best rates, and, most importantly, establishing and maintaining good working relationships. In a perfect world, all a board has to do is maintain its existing relationships. In case yours is not a perfect world, here's a look at the process, from soup to nuts.

Decisions, Decisions

Who determines which contractors should be used for which jobs? As with most major decisions, the choice of which vendor to hire is generally a joint effort between the board and the managing agent.

"Vendor choices are generally made by the board in conjunction with the managing agent," says Robin Habacht of Monticello Management, which has offices in Leonia and Matawan. "The agent will, at the request of the board, refer vendors for interviews."

Managing agents tend to have more experience with vendors than do board members, so their recommendations should not be taken lightly.

"I would never call someone out of the blue who I didn't know," says Larry Silverman, owner and president of Atlantic Management in Union City. "Everyone on our list is either someone we know directly, or through other people."

Most managing agents have been in the business for long enough to have compiled an overstuffed Rolodex of potential vendors or contractors for just about any need. In Silverman's case, he keeps two or three plumbers, electricians, roofers, and so forth on hand—a list he's whittled down through the years.

"We had to go through ten people to get those three," he says.

Habacht agrees. "Agents like to make recommendations based on prior actual experiences dealing with vendors," she says.

"Reference checking processes vary from HOA to HOA," she adds. "Some associations have committees who will check references, while most prefer to have the agent perform the reference check as part of the management function."

"HOAs have access to service provider information from a variety of public and private sources," says Habacht, "such as The Cooperator, CAI, the Internet and [contacts] within their community."

Often, homeowners associations already have longstanding relationships with really good vendors—relationships that need only be maintained. And managing agents are not above taking recommendations from boards.

"It's a hybrid," says Silverman of the vetting process. "If the board has people they like, we use them."

Time is Money —But More Valuable

There is no free lunch, and you get what you pay for—both are true enough. But there are ways to trim costs when dealing with vendors.

"Board have several options when it comes to negotiating a reduction in lower vendor costs," says Habacht. "Some options include negotiating longer contracts, re-evaluating contracts to ensure all contracted items are necessary, combining services such as landscaping and snow-removal contracts, and negotiating an up-front discount for pre-payment of contracts."

A good time to potentially save money is to when contracts with service provider are about to expire.

"We recommend that associations always remain open to meeting new vendors and remain current with what the market is offering in terms of services," Habacht says. "Remaining aware of current market trends does not necessarily mean there is a need to change vendors; rather, it may stand to assure an association that the current services from their vendors are appropriate, timely and priced properly."

Another way is to tell them exactly what you want, which can be easier said than done.

"Every homeowners association is different," says Dave McKiernan, the Bound Brook branch manager of The Brickman Group, a nationwide landscape contracting company with seven offices in New Jersey. "And some work requests can be very gray, very generic. It's best to have a detailed set of specs for how you want the work to be done."

This saves money by saving time.

While it is possible, and certainly advisable, to negotiate deals with certain vendors, time, in most cases, is more valuable than money.

"We're more interested in service than rates," Silverman says. "I'm more interested in a plumber who will stay a little later to take our job than in saving a few dollars."

He has found that it's best to be up-front with vendors, rather than trying to nickel-and-dime them. For one thing, the latter is not a good way to build a trusting relationship. For another—and more pragmatically—vendors can combat nickel-and-diming by simply asking for more to begin with.

"I tell them to give me a good rate," Silverman says. "They know they're bidding against other people. If it's too much, they won't get the job."

"If you treat them well, they'll give you a good rate," he continues. "And they'll be sure your job gets done."

Be People People

By putting a higher premium on service than on money, Silverman is using basic psychology—who would you do a better job for, a nice guy who treats you with respect, or a cheapskate who regards you as disposable?

There are two keys to building lasting relationships with vendors. One of them Aretha Franklin sang a song about.

"If you have a good vendor, respect that person," Silverman says. "Work with them, treat them as a professional. Treat them as if they're wearing a suit, even if they're crawling under a boiler or working on a roof. Trust their opinion."

A lot of people are naturally suspicious, afraid of getting taken to the proverbial cleaners by opportunistic plumbers, electricians, and so forth. This instinct can sometimes get in the way.

"There should always be a healthy skepticism," Silverman says. "But these are the better vendors, who provide you an important service, and they should be respected."

Communication is the second component.

"The better property managers are the better communicators," says McKiernan. "They are the go-between. And it's all about communication. "This goes beyond open dialogue between the board and the vendors, McKiernan notes; for the relationship to work best, the board must also keep the homeowners in the loop.

"Let's say Mrs. Smith on 10 Oak Tree Lane calls in," he says, "and requests that her rhododendrons get cut below the line of her window. The communication needs to work both ways. The contractors need to say when they'll get the job done, and the manager needs to tell the tenants what to expect."

Too often, Mrs. Smith will not be told that the landscapers won't trim the bushes until next Tuesday. That's the day when they do routine jobs around the association grounds, but unless she knows that, Mrs. Smith might get annoyed at the board, the manager, and the vendor at what she perceives as an unnecessary delay.

McKiernan suggests that communication should be in writing, rather than verbal. "It's better to have every work order documented," he says.

There are times, unfortunately, when respect and communication are not enough.

"A lot of vendors are just not that good," Silverman says—they're late, unreliable, or just plain incompetent. "It's something you have to constantly monitor."

Building solid relationships takes trust, time, communication, mutual respect, and luck. Those elements that can be controlled—everything but luck—should be developed to get the most out of your relationships with vendors.

Greg Olear is a freelance writer and a frequent contributor to The New Jersey Cooperator.

Your property management company is the custodian of your development. It is the job of your managing agent to handle your HOA's finances, keep track of contractors and vendors, and pay bills. But what happens if the company you hired to do this important work turns out to be a dud?

A board might find they have a number of reasons to consider changing management companies, or even just a particular agent within a company: fraud, financial mismanagement, substandard attention, resident concerns, negligence, or just simple personality conflicts. When the time comes to change companies, boards have a lot of variables to consider—but above all, they should realize that who runs their building is ultimately their decision.

Reasons to Switch

There comes a time for many boards when they decide that their management company is not working out. But why?

"The most common reasons are lack of service, mismanagement of funds, a change of directors, or just financial reasons," says Robin L. Habacht, president of Monticello Management, Inc. or "they may just be looking for a better deal."

Habacht goes on to maintain that many associations don't switch management companies when they should. They may be unhappy with the way the company is handling their property, but they are afraid of change.

"Change is difficult even with the best-intentioned boards," she says. "Many times an association would rather remain with what they have, as unsatisfied as they are, than move on to an uncertain future."

One of the most common concerns is that the board feels as if the management company isn't paying enough attention to them. Calls go unreturned, e-mails unanswered, and thus problems are not addressed. The board begins to feel as if they're paying good money just to be ignored.

"What frequently happens is they will feel as if their management agency is not paying attention to them or not communicating on a timely basis," explains Larry Silverman, president of Atlantic Management in Union City. "This leads them to believe that the management company is not very interested in their association."

Other times, the board might welcome a new director who has his own agenda: to replace the management company. For whatever reason, this board member may not have liked the old company and sees his newly elected status as his opportunity to make changes to how the development is run.

Sometimes, it can all come down to personality conflict. When that's the case, the board might want to consider sticking with the same management company, but simply asking for a change of managing agent. If the board is generally happy with the way things are run, but feels there's a wrinkle in their relationship with the individual working with their association, then maybe the company can re-assign another agent.

"Depending on what each building needs, a company could move agents from building to building in order to utilize specific skills needed for a property or project," says Michael Brower, of Michael Brower Realty Co. in Hackensack.

Initial Considerations

It's always a good idea to thoroughly consider significant changes—such as the management company you hire. Keep in mind that this process, although an important one, does not have to take much longer than a couple of weeks. If you can keep the transition time brief, then your swap may actually be smoother.

"We've done it the same day, which is the best idea," states Silverman. "But, generally speaking, you should allow a month, only because that gives the other manager a chance to back off and the new person to fully come on."

Usually your management contract will dictate what kind of notice the outgoing management company will require if you decide to go with someone else. Most times it will say 30 days or 60 days—but the pros say the timeframe varies widely depending on circumstances. According to Silverman, if the contract doesn't specify a time period, it's good business etiquette to give the outgoing company at least a 30-day notice.

"At least three months' notice is helpful, which usually happens before the contract is up for renewal, provided gross negligence is not involved that has or would jeopardize the building or its shareholders," says Brower. "I usually suggest that the change happen upon the new fiscal year so that only one company is responsible and accountable for the books and records for that year, to avoid finger-pointing for information that is missing."

If you are only changing the agent but maintaining the same company, the process should not take long at all. The new manager would simply have to review the newsletter, review minutes of the meetings, talk to the current manager about any issues that might exist, walk the property with one of the board members, and talk to the board about what they might expect, says Holland.

If you are changing companies, however, you should do a little more research. Habacht suggests making certain that the new management firm is part of the Community Associations Institute (CAI), "[Which means that] they are participating in the industry as a regulated registrant."

"I recommend that boards do their research, ask about the background of the management firm, and make sure that the person they meet during the interview will be the actual managing agent and is not just a 'sales guy,'" Habacht adds. "You should meet the property manager and get his or her resume, as well as find out who will be handling your financial reports. And don't be afraid to ask questions."

Understand that your managing company should employ a range of personalities that work together to manage their clients' developments in the best manner possible.

Spreading the Word

The new management company will be responsible for notifying vendors, contractors, and homeowners about the change. They will contact all of the people who have dealings with the associations, either via phone or letter, within a couple of weeks. Utility companies generally require written notice along with a copy of the management contract.

"You're going to want at least a 10-day jump to make sure that the vendors and utility companies start billing the new management company," suggests Silverman. "This is so that, in that first month, you're not searching for bills—trying to pay the water bill that you haven't yet received."

In addition to correspondence, the new management company will immediately enter all the association's information into their property management software: this includes information about the members of the association, delinquency lists, lists of homeowners who might be involved in the foreclosure process for nonpayment, billing information for vendors, and so forth.

The process of entering the association's data might take a day or two, and is important in making the transition as seamless as possible, says Silverman.

"For instance, if somebody owes $100 to the association and you take over, you show that," he says. "There's no gap."

The outgoing management company will give the new company boxes of information to aid in this transition process. In one regard, this hand-over of materials is as simple as the old company saying to the incoming company, 'pick up the box at the front desk.' However, the hand-off of the boxes can become trickier when the new company tries to sift through information and realizes that the filing system is shoddy or some information is missing.

"We've seen some management companies that don't file correspondence into various folders," explains Holland. "Instead, they've got this one big folder that says 'correspondence.' But then, if there's a problem, you'd go to the file folder and—guess what—you can't find the letter. So, when something like this happens, we have someone in our office sift through the correspondence and re-file it."

According to Brower, the outgoing agent will generally provide a list of transfer materials and the incoming will sign off on it. "This should be done with the billing info at least two weeks prior to the change, and all books, records and files no later than the last day of the agents' contract."

In addition to phone calls and mailings, the new management company might opt to meet personally with contractors to see what the status of any ongoing project is.

One of the reasons for switching management companies might be that a board suspects mismanagement of their finances. Because of this, a board might want to be sure that the new property manager changes confidential banking information as diligently as a new homeowner would change her locks.

"Some boards prefer the old agents to close the account and transfer money to the new agent's account so there is no confusion about the ending balances," says Brower. "This goes hand-in-hand with changing agents at the end of the building's fiscal accounting year."

"We had one recent example where the old manager had been accused of dipping into the bank account, so we made a big point of switching banks so he couldn't get anywhere near it," says Silverman.

"If the association had the managing agent as a signer on the account, depending on the banking agent, they may do one of two things: 1) fill out new banking resolutions which includes new signers and eliminates the old manager; or 2) just fill out a new signature card without the old manager," recommends Habacht.

In two weeks, the new company should have a good grasp of how well your association is running and may now have ideas for improvement. Because any reputable, established management company will have a tried-and-true management system already in place and know specifically what to look for when navigating the transition between firms, switching management companies doesn't need to keep your board members up at night. With some cooperation and a solid game plan, it can be done smoothly and with minimal headaches.

Domini Hedderman is a freelance writer living in Pennsylvania.

(Photo: Jason Fulford)

Close your eyes and picture Broadway between 23rd and 30th Streets. There’s a good chance you’re either drawing a blank or you’re envisioning a long strip of wholesale perfume retailers, luggage liquidators, and stores that specialize in human-hair wigs. This is not the most picturesque area in the city, nor the most easily romanticized. Instead, it is famously the neighborhood, south of Herald Square, north of Flatiron, and east of Chelsea, that, on the classic New York taxi maps, stood alone as officially nameless. It was simply an unlabeled rectangle. And brown.

Now close your eyes and picture NoMad.

NoMad isn’t a neighborhood, not yet. In fact, there’s not really much to NoMad so far, except a few scattered restaurants, a handful of rental buildings, and, of course, the Ace Hotel, that humming new hotel–restaurant–bar–coffee shop–sandwich emporium–fancy clothing boutique that stands, like a planted flag, at Broadway and 29th Street. From the street, at night, in a downpour, you might peek through the steamed-up windows of the Ace and get a dreamy glimpse of the people inside, lit by lamplight, perched on armrests, cradling drinks. A clipboard-equipped doorman, studiously scruffy, might then helpfully redirect you away from the entrance for Hotel Guests Only, toward the Stumptown coffee, to an interior door, which will be locked. A barista, wearing cat’s-eye glasses, will regard you, not without pity, and say, “We’re at maximum capacity.”

How do you make a neighborhood? Can you conjure one out of thin air? If the crowds at the Ace are any evidence, then yes, you can, sort of, at least for a moment. The Ace opened officially one year ago, and it’s now the heart of the district called NoMad (North of Madison Square Park), insofar as any such neighborhood exists. Like never-never land, NoMad is a place that can only be visited if you believe in it hard enough.

In 1963, Chester Rapkin, a University of Pennsylvania professor and urban-planning expert, sat down with a map of New York. He was preparing a study for the city government on an area of downtown Manhattan that was full of landmark architecture but faced widespread demolition, since much of its former industrial life had drained away. Rapkin hoped to persuade the city to save the area as an urban incubator, where small and mid-size businesses might thrive. On his map, the area in question was marked SOUTH HOUSTON INDUSTRIAL AREA; Rapkin shortened this to Soho and used this nickname in his report. And in this one act of graceful (and ultimately successful) preservation, Rapkin not only helped save the area; he loosed the viral idea that in New York City you can essentially call a neighborhood into existence with sheer will, imagination, and a catchy acronym.

Of course, Rapkin had lots of help on the ground—the artists, for example, who colonized the area’s cheap lofts; the galleries that followed the artists; the restaurants that followed the galleries; the resultant boutiques, and so on, in the cycle of urban regeneration now so familiar to New York. This cycle repeated itself in Tribeca (Triangle Below Canal), a name that was coined in the seventies and later took on the luster of a brand—literally, in the case of the 2006 car model named the Subaru Tribeca. Since the coining of Soho, dozens of Balkanized slivers of Manhattan and Brooklyn have been diced up, claimed, and either renamed (Nolita, Noho, Soha) or simply reimagined (the meatpacking district, Williamsburg, Park Slope). Three years ago, on How I Met Your Mother, a sitcom set in New York, two characters bought into the trendy and up-and-coming DoWiSeTrePla neighborhood, only to find out later that it stood for “Down Wind of Sewage Treatment Plant.”

The nameless neighborhood in that brown taxi-map rectangle—roughly bordered by Madison Square Park to the south, 34th Street to the north, Broadway to the west, and Second Avenue to the east—has always resisted such neighborhoodification, despite boom times and persistent attempts. Back in 1996, some plucky Silicon Alley entrepreneurs tried to christen the area Soma, partly meaning “South of Macy’s” and partly in homage to San Francisco’s neighborhood of the same name. (No mention of Aldous Huxley.) The name didn’t stick. Then in 1999, the Times ran an article titled “The Trendy Discover NoMad Land, and Move In,” picking up on a popular coinage that seems to have appeared that year. That one didn’t stick either. By 2001, this magazine declared that NoMad “has fallen out of use,” with Leonard Steinberg of Corcoran explaining, “The connotation was bad, like you’re in no-man’s-land.” (It didn’t help that Madison Square Park, the area’s jewel amenity, was not fully revitalized until 2001.) In 2007, Times theater critic Charles Isherwood, who lives on Madison Avenue, wrote an essay in which he called his neighborhood simply “the Brown Zone” and lamented the “shaming fact of its namelessness.” NoMad, both the name and the neighborhood, lay dormant. Then Andrew Zobler took a taxi ride downtown.

Zobler, the 48-year-old CEO of GFI Development, recalls riding down Broadway late nights from his office in midtown to his home in the West Village, and as he passed through the Brown Zone, he often wondered: Why are the buildings on Broadway so stately but the storefronts so ticky-tacky? In 2007, GFI acquired a run-down hotel on 29th, the Breslin, named for its original proprietor, James Breslin, who opened it in 1904. The company formed a partnership with the Ace Hotel Group, a successful venture in Seattle and Portland, and agreed to bring a branch of the Ace here. GFI also purchased the Johnston Building, at 28th and Broadway, to develop into a separate hotel, which Zobler decided to call the NoMad.

He’d seen a Times article referring to the neighborhood as Soma but he hated that name. “We didn’t think of ourselves intellectually as south of Macy’s,” he says. “We think of ourselves as extending, if you will, the Zeitgeist of Madison Square Park north.” Zobler claims that GFI came up with the name NoMad, and when I suggest it had a brief previous life, he says, “I didn’t know that. If it has a history, even better.” Either way, when GFI unveiled plans for its NoMad Hotel in 2008, it announced that the hotel would be located in “the newly established NoMad district,” which “consists of upscale residences, retail shops, creative agencies and renowned restaurants.” The only wrinkle was that, at the time, there was no such place as the NoMad district. If it was newly established, it’s because GFI established it. Typically, someone discovers a happening new neighborhood and decides to give it a name. NoMad was a name in search of a neighborhood.

It’s not impossible, of course, to create a neighborhood from scratch. David Walentas famously did it in Dumbo. “But Dumbo was unique,” he says, “totally different from other neighborhoods that have gone through transformation and gentrification in the last 30 years.”

Walentas, who is 71, started Two Trees Development in 1968. He bought buildings in Soho in the early seventies and Noho shortly after. Then Walentas asked his staff, “Soho, Noho, what’s next?” Someone told him “Dumbo.” Walentas said, “Where the fuck is Dumbo?” He decided to pay it a visit.

What he found was a largely vacant district of warehouses and factories on the Brooklyn waterfront, zoned for industrial use. He bought eight buildings, 2 million square feet, for $12 million, in 1981. “I got lucky. No one else wanted it. I bought the whole neighborhood.” It took seventeen years for him to persuade the city to rezone the area. After that, he assumed the role of “benevolent dictator,” as he says, “with a vision for the whole neighborhood.” He lured stores like Jacques Torres Chocolate and West Elm by offering them a few years’ worth of free rent. “That way, we created the neighborhood. We could give space away because we had so much, it didn’t matter. And it made my other properties more valuable. If you only owned one building, you would never do that. If you own one building, you take care of one building.”

It was a rare experiment in SimCity-style neighborhood building, but it worked, right down to the goofy name. Most people assume Walentas invented the acronym Dumbo (Down Under Manhattan Bridge Overpass), but it predates him. “I loved it, but my lawyers and consultants said, ‘What are you, crazy? No one will ever want to go there.’ So they came up with ‘Fulton Landing.’ I said, ‘Fulton Landing? That sounds like it’s on the Ohio River. That could be fucking anywhere.’ ”

An area like the Brown Zone—or, as it’s often called, the wholesale district—has been resistant to transformation in part because it’s not a blank slate like Dumbo. Everyone who owns one building there is only taking care of that one building. The lack of amenities like cafés and shops discourages residential development, which in turn discourages new cafés and shops. The area itself feels dingy and inhospitable—an online commenter once suggested it be called “DoNeNo,” for Down Near Nothing. When Bar Breton, a new venture from Michelin-star-earning chef Cyril Renaud, opened at Fifth Avenue and 28th Street, a reviewer located it in “a grungy zone between Koreatown and the Flatiron district that’s quiet in a decaying, rather than leafy and cloistered, kind of way.” Of course, other less-than-picturesque neighborhoods have been remade; Smith Street in Brooklyn in the nineties was not exactly the West Village. But cheap rents encouraged restaurateurs to take a risk there. There are no cheap rents in midtown Manhattan.

So to change a neighborhood like that, “you need one landlord who’s willing to cut a deal for a new kind of tenant,” says Faith Hope Consolo, chairman of retail real estate at Prudential Douglas Elliman. “If you can find someone who owns more than one building, you have a much better chance.” Otherwise, when the blocks are dominated by fast-food outlets and stores selling perfume, jewelry, and wigs, there’s not much incentive to open anything other than a fast-food outlet or a perfume, jewelry, or wig store.

In fact, the only way to jump-start that kind of neighborhood is to (a) buy up as much real estate as possible, in a kind of mini-Dumbo-fication; (b) bring in a business that can serve, like a mall, as an all-in-one destination to attract outsiders; (c) undertake a campaign to remake the image of the neighborhood in the minds of the public; or (d), as is the case with GFI in NoMad, all of the above.

Residentially, the NoMad area has always been a nondescript no-man’s-land. As president of the Rose Hill Neighborhood Association, Gerard Schriffen led a long effort to officially name the neighborhood “Rose Hill,” after an eighteenth-century farm, but those efforts have flagged of late. “A lot of young people have moved in,” he says of the neighborhood’s changes. “They work so hard to afford Manhattan that they don’t get involved in the community the same way family people would.” Cheap rents lured a postcollegiate cohort down from Murray Hill, causing the neighborhood to swell, with mixed results: For example, it’s led to a mini-boom in the kind of nightlife you might expect to find in Murray Hill. Along Broadway, the historic architecture is more interesting, but few of the blocks are zoned residential. It’s not unusual to hear of people renting apartments in the area only to come home to find a notice from the city informing them they’re illegally living in a commercial building. A few condo developments have clustered around the park; when a 60-story luxury tower at One Madison Park was announced in 2008, it seemed like a glamour magnet. Now that building looms forlorn, like a giant glass filing cabinet, and is headed toward foreclosure.

The neighborhood itself exerts a weak pull. One long-timer, now moving out, told me his reason for doing so was simple: “It doesn’t feel like a neighborhood. It has no charm.” A real-estate broker who recently moved into NoMad told me he loves it—though what he loves most is how close it is to other areas. “You’re in the Village in five minutes or you’re in the Fifties in five minutes.” Then he adds, “Truthfully, I wanted to be further south. Gramercy is ideally where I’d want to be.” Thomas Gensemer, a managing partner at Blue State Digital, bought in the area in September. “When people would say, ‘Where did you buy?’ I’d struggle,” he says. “It’s definitely a community longing for an identity.” When I asked Charles Isherwood if he or any other locals actually call the area “NoMad,” he said, “I’m practically the only local I know.”

Unlike Williamsburg or Park Slope—neighborhoods that are ultimately defined by the character of their residents, often to the point of cartoonish cliché—NoMad isn’t defined at all by NoMadders. As of now, NoMad is defined, appropriately, by its nonresidents; specifically, its hotels. There’s not only the Ace and the NoMad but a clutch of nearby boutique hotels: the MAve, the Carlton, the Hotel Roger Williams, the Gansevoort going up at 29th and Park. Many of the area’s hotels advertise themselves as being in either the Flatiron district or Chelsea. (The promotional material for the new Eventi hotel and rental complex, which will take up a whole block of Sixth Avenue between 29th and 30th, currently places it in Chelsea, though “Penn Station Heights” might be more accurate.) The folks behind the Ace and the NoMad, however, had no interest in stretching the boundaries of some attractive adjacent neighborhood. They decided to create a new one all their own.

Normally, it would take years for one neighborhood to develop such a diversity of attractions. But the Ace Hotel is like a hot-neighborhood starter kit.

Despite all the destination hotels, GFI is careful to explain that NoMad won’t become another meatpacking district—a tourist-choked amusement-park parody of a neighborhood. “We want NoMad to be a neighborhood for New Yorkers. And we want the Ace to become a ‘living room’ for the neighborhood,” Zobler says, and even at 8:30 a.m. on a weekday, there is a lot of living going on. The Breslin, the in-house restaurant, with its hunting-lodge-and-tartan vibe, is filling up with a local breakfast crowd. (It opens at 7 a.m.) It’s run by Ken Friedman and April Bloomfield, proprietors of the Spotted Pig in the West Village, which, like the Breslin, marries the unpretentiousness of a no-reservations policy with the quiet exclusivity of never actually being able to get a dinner table.

As a destination, the Breslin is crucial. The restaurant is always the catalyst. “First food, then fashion. Fashion always follows food,” Consolo explains. Retail wants to cluster near retail, but people will travel for a hot restaurant, whether to far-flung Vinegar Hill or Broadway south of Herald Square. And once they get there, they’ll also find, all under the Ace’s roof, a Stumptown coffee shop (for the morning crowd), the No. 7 Sub Shop (the lunch crowd), the Lobby Bar (the after-hours crowd), and a branch of the chic clothing store Opening Ceremony (the skinny-jeans-and-geometric-spectacles crowd). The Ace is negotiating to bring in an upscale nail-art salon, Valley. Normally it would take years for one hot neighborhood to develop that diversity of hip attractions. But with the Ace, the whole thing comes preassembled. It’s like a hot-neighborhood starter kit.

Joey Arak, senior editor of the real-estate blog Curbed.com, marvels at the genius of it. “It’s so much easier to kick-start something when it’s a hotel-driven development patch, because then restaurateurs and store owners have a built-in client base,” he says. “I can’t imagine Ken Friedman saying, ‘I’m going to cruise 29th and Broadway to see if there’s anywhere I can open a restaurant.’ But the Ace Hotel is its own entertainment multiplex. It’s a self-contained pleasure dome of fun.”

Last month, eleven years after the term’s debut, NoMad returned to the Times, in the headline “In NoMad, a Bar With a Pub Vibe,” about the scene at the Ace. The Guardian in London called NoMad “a hipster hub in midtown Manhattan.” Even David Walentas said of NoMad, “We’re looking at a building there. But we’ll be just another asshole.”

There are other dots to be connected as the rough borders of NoMad are sketched in: There’s Bar Breton; the Eventi; and Eataly, a 32,000-square-foot skyscraper–cum–Italian artisanal market going up at the southeast corner of Madison Square Park, which will feature an 8,000-square-foot rooftop garden and six (!) restaurants under the guidance of Mario Batali. There’s also, of course, Danny Meyer’s Shake Shack in the park, where I once stood in line while a homeless man jeered, “Look at you! You’ll wait 40 minutes to pay $8 for a cheeseburger!” I wanted to correct him: The double cheeseburger is only $7, and I’d been in line for an hour and a half.

If the Ace is a neighborhood starter kit, then massive projects like Eventi and Eataly are the same approach taken to a Vegas-level extreme. It’s like creating a whole new neighborhood—complete with residences, restaurants, bars, shops, and a steady flow of tourists—inside one towering building: the neighborhood-as-biosphere. Gone are the days when you might reimagine an underused industrial zone on a map, or stumble on a bunch of vacant warehouses on the waterfront, or find some funky frontier in which to rub two sticks together and hope to ignite something new. There are no new frontiers, save the ones you carve out or conjure yourself, starting with the right magic word. “We all might be saying NoMad sounds dumb now,” says Arak. “But if 10,000 people keep repeating it for five years, who knows?” He corrects himself. “Maybe not 10,000 people. Maybe 100 trendsetting Ace Hotel regulars.”

Eventually the name, and the neighborhood, and the idea of the neighborhood, will drift out into the city, and make its way into more headlines and tourist guides and maybe even taxicab maps—everywhere, it seems, except across the street, on 29th, where two shops stand side by side. One bears the enigmatic name City Group King Star, though a neon sign explicates further: BELT LIGHTER WALLET hat. Judging from the window display, they could add LED BOB MARLEY LIGHTER SKULL BONG SNOW IN A CAN.

Next door is M.K. Sterling & Watches. Inside, I ask a clerk how long they’ve been here and he laughs. “Here? We just moved. We used to be there—” and he points across the street to the corner of 29th and Broadway, which is now the prow of the Ace Hotel building and is currently covered in plywood, awaiting a new tenant. “We got kicked out,” he says. His name is Umang. His boss, the owner, also gives only his first name, Shappy. (To be fair, his business card uses only his first name; that’s how you do business in the wholesale district.) Shappy’s had a store in the neighborhood for 25 years. Recently, he’s seen other shops pick up for New Jersey or, in an odd echo of the Victorian mad wife stashed in the attic, move to the upper floors of the local skyscrapers when the storefronts got too expensive. Most of the storefronts on the east side of Broadway between 29th and 28th are now for rent. “Small people can’t survive no more,” Shappy says. He likes the Ace. They’re decent neighbors. They even put planters out in front of their bar to obscure revelers and appease a mosque on the block. “They’re busy,” Umang says. “They bring good crowds,” though few of those people wander over to shop for wholesale watches. “What we sell is inexpensive. They sell T-shirts for $150.” I think of Remington Guest (yes, his real name), a 21-year-old who lives in Hoboken and was written up in a Blackbook article on the Ace. “I mean, look at the area it’s in,” Guest said. “You walk outside and there’s some guy trying to sell you suitcases for five bucks.” Correction: The Ace used to be in that area. It’s in NoMad now.