When Idle Rumor Isn’t


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YOU’VE HEARD THEM, AS WE HAVE. They’re rumors that take flight like dandelion seeds seeking a fertile place to take root then grow and regenerate ― rumors that may but frequently do not have any relationship to truth.

In the property management arena an onsite manager usually isn’t privy to rumor involving him/ her, the management firm or the property being managed. Even when aware, most rumors typically seem trivial, nonsensical, inconsequential or ridiculous to the degree of blatant improbability. So why bother with them? Aren’t there far more important things needing attention?

Actually, such reactions can be shortsighted. Whether factual or not, we’ve found a persistent rumor is similar to a persistent trickle of water against a building foundation … it has power to undermine. And while residents are apt to lack fondness for paying rent, they should recognize the management team as being competent, professional and ethical. Yet, an unchecked rumor circulating among residents that negatively affects property management may seriously damage that recognition even when the rumor is totally unfounded.

Case in point: A troubled residential cooperative we knew did not have a professional management firm to handle day-to-day matters. Instead the co-op board of directors seemed to inappropriately tolerate its president making unauthorized, unilateral, often inconsistent or confusing, operational decisions evidently based on little understanding of property management. Compounding that situation were infrequent, irregular and poorly advertised board meetings.  It was a setting ripe for rumors … and fly they did. But the two most prevalent ones pointed to the board as either secretly planning to sell the co-op’s real property to a third-party, or allowing the president and/or one or more board members to secretly arrange their purchase of the property.

How those two rumors started is anyone’s guess. Each was outrageously false because the co-op bylaws required all co-op shareholders to vote on a sale of co-op property in an open shareholder meeting. Inasmuch as a quick read of the relevant bylaws section would easily debunk both rumors the board simply laughed them off in the belief the absolute lack of truth would cause the rumors to die.

But they did not die. They persisted. They caused private worries of shareholders to evolve into shared concerns between neighbors then to morph into grumblings too loud for the board to ignore. By the time the board decided to react it was too late. Even the bylaws could not seem to dispel the entrenched misunderstanding, eventually leading to shareholders forcing a meeting with the consequence of the president being removed and several board members being replaced. Unfortunately the unrest ensnared two of the hardest working board members who probably should have been retained. Worse, the new board seemed unable to rectify the tailspin the rumors caused, which, among other things, eventually collapsed the cooperative.

What should have been done? In a nutshell: Competent professional management should have been retained; co-op business and decisions should have been conducted and made in as transparent a manner as possible, with the board conducting regular meetings under proper advance notice that provided time for shareholders to express their concerns; regular accurate communication should have been distributed to shareholders (for example, a newsletter); and rumors should have been promptly, straightforwardly and respectfully addressed.

Bottom line: Establish procedures to help prevent destructive rumors and don’t ignore them if they arise nonetheless.


Need consulting, coaching or problem troubleshooting regarding other single-family or multi-family housing issues? We’ll be pleased to help you. Visit us at the Inhouse Corporation website or contact us at inhouseco@aol.com


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 this blog is not a substitute for the advice of a qualified professional and each action 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. Statements and/or opinions of guest authors may or may not reflect those of Inhouse Corporation.

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