A Co-Op Nightmare: When Conflict Rules, Part 1

Conflict, many persons

Conflict: When a cooperative divides.

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WHENEVER WE’RE ASKED TO ASSIST WITH RESOLVING RESIDENTIAL COOPERATIVE complaints and instances of noncooperation we generally see fingers pointing in all directions: From shareholders towards their board of directors and property managers; from the board or manager towards shareholders; and/or from one group of shareholders to another.

How can this be? With the very term “cooperative” suggesting folks will cooperate, what causes the breakdown? Unfortunately there may be many factors at play, meaning identification of the culprits can be a tricky undertaking. An organizational division can stem from almost anything if not properly handled and even then it may still occur. Examples are: A seemingly inconsequential two-neighbor spat that grows to encompass the community; the effect of no regular purposeful interaction between the board as an entity and shareholders as individuals; board members or officers who are not properly trained to perform their tasks; or shareholders who aren’t taught ways they may participate in and monitor cooperative operations.

Since complaints against a board appear more commonplace, though not always deserved, we’ll begin with that aspect here. In other writings we’ll look at problems some boards have with shareholders as well as problems that occur when shareholders take sides.

Overall, if a cooperative board does not conduct its affairs openly (except for executive session items), if it doesn’t endeavor to generate shareholder interest in and contributions to operational matters (interaction), and if it isn’t aggressive in assuring a steady flow of accurate communication with shareholders, there is little, if any, transparency of cooperative business. Since shareholders are generally entitled to have this information, lack of transparency should be expected to cause  negative speculation (gossip) that likely translates into suspicion which, in turn, could ignite a slow-burning distrust that incubates just under the surface, covertly evolving into shareholder noncooperation, and complaints to the board as well as to governmental authorities. Moreover, distrust can flare into serious disruptions of cooperative business that may seem to have no basis, though usually do, or it may explode into lawsuits.

Naturally, none of the foregoing dismisses the possibility of legitimate grounds for a complaint. The problem is taking the time to find it objectively and avoid jumping to premature conclusions, especially when its embedded in misperception or distortion. Taking action on wrong information can make the situation worse, perhaps much worse, but not seeking to resolve it in a deliberate and timely manner may lead to other consequences. For these reasons the process can be painstaking but if conducted properly, implementing findings that are produced can offer an opportunity to restore and improve cooperative relationships and efficiency … provided, of course, all parties are genuinely willing to accept indicated reform. If the matter polarized or became encrusted in spite, bias or personality conflict it becomes increasingly involved and may be more difficult to correct, though the prospect of a fruitful outcome should make the effort worthwhile.

So what can be done to help avoid such occurrences in the first place? We’ll discuss this next time in part 2 of this article.

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Blog Terms of Use and Disclaimer: The purpose of this blog is to promote awareness and general discussion of the presented topic. Use of this blog shall be the reader’s agreement that at no time will the reader rely upon or act upon anything contained or implied in this blog and that any and all actions that may be taken shall be under the specific guidance and oversight and/or performance of a professional qualified in the subject matter. If you have a question or want assistance with a featured or related matter please contact us at InhouseCo@aol.com (include the blog article title on the subject line). Links, references and credits in this blog are for convenience only and are not endorsements by the author or Inhouse Corporation.

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