Can Apartment Owners’ Associations be run professionally?

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“In Mexico an air conditioner is called a politician because it makes a lot of noise but doesn’t work very well.” – Len Deighton (English writer, b. 1929)

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Lack of participation and involvement, personality clashes, petty politics taking precedence over real issues and an inability to come together to address pressing problems effectively. Sounds like the Indian Parliament or State Legislative Assembly? Guess again. This could be a lot closer to you than you think. Apartment Owners Associations are statutory bodies comprising all the owners of apartments in a particular building / complex, and tasked with running the day to day operations of the building, as well as implementing long-term strategies for the residents benefit. However, in many cases, inter-personal and other issues come in the way of an effective managing committee, unfortunately at the cost of Residents.

Apartment Owner Associations are statutory bodies comprising all the owners of apartments in a particular building / complex, and tasked with running the day to day operations of the building, as well as implementing long-term strategies for the residents benefit. However, in many cases, inter-personal and other issues come in the way of an effective managing committee, unfortunately at the cost of Residents.

With apartment buildings, and that too, high-rise buildings, part of multi-building complexes, mushrooming all over Bangalore, living in apartments is now the norm, rather than the exception that it used to be. And consequently, Bangaloreans are getting an experience in living together in a close community that shares resources significantly and requires a formal body to manage these shared resources.

All apartment buildings / complexes are run by the Apartment Owners Associations – formal bodies, registered with the Karnataka Registrar of Societies and comprising as members, the individual apartment owners. The Association is a full-fledged organisation that manages and operates all common resources and facilities including electricity, water, general maintenance, garden, etc. It usually employs a few people as staff and has a full-time manager. The Association is run by the ‘Managing Committee’ (MC), made up of members elected to this role on (usually) an annual basis.

An Association has significant funds at its command, made up of the contribution of maintenance charges from all members. It is the MC that decides how to use these funds, both for operational expenses as well as long-term capital expenses. It is imperative, therefore, that the Association have a smoothly functioning, effective MC that makes optimal use of the funds for the residents’ benefit.

Unfortunately, people will be people, and in a real world, many irrelevant and petty issues come in the way of an effectively functioning MC. The causes for this are many, including some listed below.

‘Volunteers cannot be professional’: In my opinion, the one biggest cause of such issues is the mindset that running an association is ‘volunteer work’ and therefore, cannot be done professionally. This is nothing but an excuse, and that too, a pretty bad one. Extending this argument would mean that the multitude of charities and other volunteer-based organisations we have today cannot be run professionally and therefore go against the reality that a lot of these organisations are actually run more efficiently than corporates.

The point is that we have to clearly demarcate between the responsibilities attached to a role and the manner in which a person comes to take up the role – as long as the person taking up the role on her own, knows all the associated responsibilities fully well. Once a person takes up a role, the manner in which she took it up is irrelevant, be it by volunteering or by being appointed on a paid salary. She should discharge all the responsibilities associated with the role to her fullest ability, and if for whatever reason, she finds herself unable to do so, she should highlight the same to all stakeholders and seek the best way forward.

Expectation and stakeholder management: This is an area, unfortunately, that we Indians seem to be particularly bad at. I work in the IT sector with a lot of customers overseas, and the single common refrain from them is that our folks are technically brilliant but severely challenged when it comes to communicating accurately and precisely.

This spills over in all aspects of our life in India – be it suddenly changed traffic conditions (Bangalore excels at this, with two-way roads turning into one-ways overnight, or one-ways turning into reverse-direction one-ways), any interaction with a government body or even our personal interactions with private / non-government bodies, where rules change suddenly and without any notice. The key to proper stakeholder management is constant and accurate communication, an area in which both the committee members and residents can do much to improve in.

So what can both the committee members and the resident body do to solve some of these issues?

Profile of Committee Members: Any apartment building will have it’s distribution of residents across the age spectrum. Normally, one tends to find a larger percentage of younger / middle-aged residents in the newer constructions, whereas older buildings (in core city areas), conversely, have older residents. It is great to have a balance of both older and younger committee members as the advantages of both can be then leveraged for the benefit of the Association. Older members, for example, tend to have more time (most are retired) to devote to committee matters, a resource that younger, employed members are woefully short of.

Further, I’ve also noticed that older members tend to do things exactly by the book and don’t take any questionable shortcuts, as opposed to the younger lot who’re not averse to ‘quickie’ fixes, even if they’re not entirely legal / ethical – probably as a result of the paucity of time on their hands.

On the flip side, the older generation can be extremely rigid and inflexible in certain areas, making implementation of new projects, for example, a very difficult matter. Further, elders tend to obsess with the cost aspect of operations and in many cases, cannot appreciate expenses for what they deem as ‘non-essentials’ (e.g. activities related to aesthetics, supporting the environment, etc.).

Needless to say, these are generalisations and there are always exceptions to the rules – I’ve known elder members who have been stalwarts in taking the plunge with innovative ideas and have not been bogged down by cost factors. They are, however, in a minority.

Formalise the election / selection of members to the Managing Committee. If your Association is like mine, the entire process of selecting members to the MC is a sub-optimal one. True, the incumbent committee follows the bye-laws to a T, by inviting nominations and holding elections, but in a large building (my building has 190 apartments), there’s a good chance that most of those voting have no clue on who the candidates are. Instead, a more formal election process should be constituted in which

1. Number of committee members should be restricted to a manageable number. My Association, for example, has a 14 member committee for 195 apartments (a representation of about 7%). However, keep in mind that with an increasing number of people, the number of opinions and potential for serious disagreements increases exponentially, thus putting at serious risk the chance of getting constructive done work in a speedy manner. I would say, that for an Association of my size (195 members), a committee of 5 is adequate to run day-to-day affairs. Of course, this raises the issue of lack of adequate representability – a 5 member MC would have only a representation of 2.5%. This can be countered by putting in place an effective system to communicate and seek feedback from the larger Association general body.

Alternatively, the Association can have a MC made up of dual roles – a smaller core team expected to actually run the affairs and a wider team that provides only feedback and serves to represent the larger Resident body.

2. Expectations from Committee members should be stated explicitly at the time of seeking nominations. This could be in terms of attendance in meetings and / or time required to be spent on Association affairs. This is to dissuade those persons who want to be part of the committee just for the sake of having a title, but are unwilling or unable to devote adequate time for their roles.

3. The nominees / candidates should be given a chance to communicate to the larger resident body on why they want to be part of the MC and what specific agendas, if any, they will drive.

4. Roles and responsibilities of the office bearers should be documented clearly and unambiguously, and understood by the nominees before they nominate themselves. The bye-laws of my Association, for example, mention that the President “shall be the Chief Executive Officer of the Association and of the Committee and shall have all the general powers and duties which are usually vested in the office of the President of an Association”. Unfortunately, it does not elaborate further what these duties, which “usually vest in the office of the President of an Association”, are.

Communication: The number one problem is lack of participation by the general body of Association members. In most societies, there is a vicious cycle of lack of communication and participation – a lack of constant and timely communication on the part of office-bearers results in the residents distancing themselves from the workings of the Association, which in turn, fuels further lack of communication. The onus is on the committee to try to break this by institutionalising a methodical and formal system of communication, which is, most importantly transparent to the larger Association General Body. Some suggestions are:

1. Publish the complete list of MC members, with photographs and contact details on physical and online notice boards, with clear guidelines for whom to contact in what situation. Include escalation routes, as well.

2. Publish both the attendance register of the MC members and the minutes of the MC meetings to the larger general body.

3. Establish a simple and effective system for two-way communication with the residents. Online mailing groups, for example, are the norm nowadays, but the number of responses generated is limited. More often than not, residents tend to use them to post advertisements for flats on sale / rent.

4. Periodically publish newsletters which provide status updates on key issues and highlight concerns affecting the residents.

5. Hold open houses, once a month, to stimulate interaction between the MC and the Resident body.

Using formal systems for tracking and monitoring progress: Again, if your Association is like mine, one of the key complaints you probably hear against it is that ‘things get discussed a lot, but never get done’. This is partly caused by a lack of accountability on the part of individual members, but largely because no proper, formal system for tracking commitments, actions and progress exists. This should be countered by:

1. Using a formal Action Items register to record all actions to be performed, and for each action, recording the person responsible and date by which it is to be completed. The first agenda item for any committee meeting should be reviewing the Action Items register, especially those items which are overdue. Overdue Items should have a valid reason (other than a member didn’t get time to do it) and capacity constraints of individual members should be handled by dynamically reallocating items to other members who have more capacity, at that point in time.

2. Use the ‘Balanced Scorecard’ approach to report on the achievements of the MC. At a regular frequency (and by this, I mean, once a month or so, not once a year during the AGM), prepare a single slide for each key area (e.g. Electrical, Plumbing, Cultural, etc.) which mentions key issues and current status, budget efficiency and future plans. This allows residents to easily figure out how effectively (or not) the committee is functioning.

Co-opting Volunteers from the larger resident body: This is an especially effective tactic, where the Association has to pursue the strategy of having a small core MC, as mentioned above. The MC can and should form small committees (size of committees to be kept intentionally small – 2/3 members only) to pursue specific long-lead time items. This will also give opportunity to members who can provide their time only for a certain duration, and not for the whole year, to contribute.

A healthy Association is one in which the MC functions smoothly with constant interaction and participation from the larger resident body. Though this may seem difficult to attain, given the current status of your Association, a little bit of hard work can help bring your Association closer to the ideal situation. The benefits, then, will be readily apparent to all members of the Association.

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5 Comments

  1. Quite a number of Professional teams have come up with software to manage all the apartment affairs recently. The fear amongst the Apartment owners are many…the most important are about the Financial matters and Details of owners available on the net in outsiders’ hands. It will be easy to any hacker to snoop around on the goings on in any complex which is definitely not in the interest of the Owners. There will be no secrecy or privacy on any issue.

  2. A very insightful article. Most importantly, it highlights the steps to be taken to avoid being in the same state again. Its a must read for everyone aspiring to be a part of the committee.
    Fortunately we have better communication solutions via technology that makes possible to reach owners beyond email. Unfortunately we still have to depend on the people to make the right decision to implement these suggestions.
    Mr.Prashant, thanks for a very precise solution to a very common problem.

    Cheers!
    Vikas Malpani
    Commonfloor.com
    Better Communities with Better Communication

  3. Excellent article, I must say. Having closely watched operations of one
    550 apt-sized complex for last 2 years and going through discussions on our
    yahoo groups, I can totally empathize with all the points mentioned in
    the article. However, unlike in the past, apartment associations can now
    leverage technology to make their lives easier. Portals like
    ApnaComplex significantly assist the
    associations in running their day to day operations effectively.

  4. Congratulations to Mr.Prashant who has hit the nail on the head. In my experience in running the association, I find personal likes, dislikes,hatred and other unwanted issues creep in while electing members for a MC.
    Thereafter you find only resignations and the MC shrinks to only few who also do not have any plans either to meet frequently or have any long term plans or face the day to day problems. It is proved every time that we Indians are individually brilliant but collectively foolish. As long as somebody is there to run the show others are there to relax and pass comments.
    Somehow the apartment complex runs thanks to an efficient manager. There is no introspection in any member whether one is in a committee or outside. There is utter lack of social responsibility in every owner and they talk of only their rights and do not think what they can do to the society.
    Now a serious problem has come in the form of Road Widening. There is no awakening amongst the residents and all the more from the MC inspite of giving inputs . A casual approach to this issue is going to affect the apartment complex in a very serious irretrievable manner.
    Thanks to Mr Prashant once again to his article which clearly exposes the state of affairs in many residential associations.

  5. Hello Mr.Prashant, thanks for these insights from running an Association. In addition, the Karnataka Legislatures must review the Acts of 1960 and 1972 for an upgrade, which the current-day Residential Associations have definitely outgrown.
    Looking forward to more from your Desk!
    Sangeeta
    ApartmentAdda.com

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