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Finding common ground with shareowners.

Finding common ground with shareowners

Sponsors! Co-op/Condo shareowners are your business partners, like it or not. In slumping markets, resident boards may direct real or imagined grievances against the sponsor/developer, holders of unsold units, or outside investors. Shareowner litigation, complaints to the Attorney General, and microscopic scrutiny of all sponsor-developer actions appear from nowhere. Each media headline about foreclosure, defaults and auctions heightens resident shareholder unrest about sponsors, banks, and outside investors.

You and your experienced professionals are your own best public relations persons to allay fear, and unwarranted criticism from resident owners. You must, with help of your professionals, take affirmative action. Following is my personal list of favorite Do's and Don'ts for today's skittish marketplace.

* DO remember shareowners are partners. As such they have legal rights too.

* DO remember a well-run coop/condo runs on communication and meetings. Talk. Write. Meet.

* DO encourage resident shareholders to serve on the board.

* DO open your co-op/condo books wide!

* DO remember that what you stonewall today will come back to haunt you tomorrow.

* DO remember that the Attorney General's office has a computer memory.

* DO remember, if you want to sell your interests, first call should be to the board. The law looks more kindly on residential owners groups.

* DON'T forget resident shareholders have equal access to the same legal and accounting advice you do!

* DON'T forget that in defaults and foreclosures co-op/condos get first call on monies.

* DON'T forget resident shareholders are the media favorites.

* DON'T forget when the workout specialists are gone you must still live with the resident owners.

* DON'T favor your interests over the co-ops if you can help it!

* DON'T play favorites among shareholders. Remember you are a fiduciary.

* DON'T let the most junior remember of your staff or family be liaison with the board. In times of stress resident shareholders are looking to be comforted by "Big Daddy".

* DON'T continue to control the board if possible. This demonstrates that you and your professionals have not done their job in educating shareholders about governance.

* DON'T allow management or sales to play lawyer, or vice versa. Mistakes here can cost and cost some more.
COPYRIGHT 1991 Hagedorn Publication
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Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Insider Outlook
Author:Apfelberg, Alvin I.
Publication:Real Estate Weekly
Article Type:column
Date:Jun 5, 1991
Previous Article:What came first? Architect or the egg.
Next Article:Garibaldi Group brokers CIBA-GEIGY division move.

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