Holiday Lights without Casualties in your Condo or HOA

In many families, the December holidays call for decorating houses and yards with bright lights. In some neighborhoods, the homeowners compete in creating showcases of lighting effects that draw a nightly parade of slow-moving cars, filled with people who appropriately "ooh" and "aah" at what they see. 

What may not make the news is the fact that each year about 12,500 people show up in hospital emergency rooms for falls from ladders or cuts and shocks related to the holiday lights and decorations.

Here are some tips for keeping you and your family members off the emergency room registration lists:

• When you purchase indoor or outdoor lights, use only those that have been safety-tested by a recognized testing laboratory. The accompanying tag or label indicates that the lights conform with safety standards.
• Use only lights that have fused plugs.
• When you pull your family lights out of the storage boxes, check each set (even the new ones), for broken or cracked sockets, frayed or bare wires or loose connections. Throw out the damaged sets. A new set of lights will cost less than your emergency room treatment.
• Always replace burned-out bulbs promptly with the same wattage bulbs.
• Use no more than three standard-sized sets of lights per single extension cord. Make sure the extension cord is rated for the intended use (indoor or outdoor).
• Never use electric lights on a metallic tree. The tree can become charged with electricity from faulty lights; any person touching a branch could be electrocuted.
• Before using holiday lights outdoors, check the labels to make sure they have been certified for outdoor use.
• When stringing up the lights on your house or on trees and shrubs, stay away from power or feeder lines that lead from utility poles into older homes.
• Fasten outdoor lights securely to trees, house walls or other firm supports. This will protect the lights from wind damage. Use only insulated staples---not nails or tacks--- to hold strings in place. You can also choose to run strings of lights through hooks (available at your neighborhood hardware store.)
• Turn off all holiday lights when you go to bed or when you leave the house. The lights could short out and start a fire while you're sleeping or while you're away from the house.
• When it's time to remove the lights, never pull or tug on them. They could unravel and inadvertently wrap themselves around power lines.

Outdoor electric lights and decorations should be plugged into circuits that are protected by ground fault circuit interrupters (GFCIs). Portable outdoor GFCIs can be purchased where electrical supplies are sold. They can be installed permanently to household circuits by a qualified electrician.

Article by Kent Crook, President of Wiremasters Electric, Inc.

3 More Reasons to Volunteer for Your Community Association

We share our CommunityLINK Blog posts with several groups on LinkedIn. Our most recent post, Top 10 Reasons to Volunteer for your Community Association, received an incredible response. One of the comments included the readers own reasons to volunteer for your Community Association. We enjoyed reading his comments so much, we thought it would be great to share them with the rest of our Blog readers.

1. To create a community spirit! - My own HOA all came together and picked up garbage, debris and raked leaves. It saved everyone money and avoided a higher assessment for the forthcoming hear. This will be a bi-monthly event. We had a blast and got to know each other even more.

2. To save postage and exercise! - Posting mailings on each door rather than mailing can save the community on postage and is also great exercise!

3. To protect the community! - Law enforcement can't be everywhere all the time. We all look out for each other, by creating a Neighborhood Watch it is nothing short of a win-win.

Although these may not be the "normal" reasons homeowners volunteer for their Board of Directors, they are certainly some great reasons. Whatever your reason may be, contact your Board of Directors or Management Company and volunteer to give back to your community. Willing volunteers are always needed and appreciated.

So we ask you, what's your reason for volunteering for your Community Association? We look forward to your response and comments.

Top 10 Reasons to Volunteer for your Community Association

There are many reasons why homeowners volunteer to be a part of their Condominium or Homeowners Association Board. Below we've listed the Top 10 Reasons to Volunteer for your Community Association Board of Directors. The Condo's and HOA's we represent throughout Miami Dade, Broward, and Monroe Counties are constantly looking for dedicated and talented homeowners to join their Board of Directors. Give it a shot!

Why volunteer to be on the Board?

1. To protect you property values and maintain the quality of life you expect in your community.

2. To correct a problem within your community. Perhaps parking is an issue, or maintenance has been neglected.

3. To give back to your community and neighbors.

4. To be sociable, meet your neighbors, and make friends.

5. To advance your career and build your personal resume by including your leadership capacity and community volunteer service.

6. To have fun accomplishing things around your community together with your neighbors. Being on the Board doesn’t always have to be negative.

7. To get educated on the many facets of running a community association such as; the many laws and regulations, maintenance and repair, and understanding financials.

8. To express yourself and be creative while offering your opinion on solutions to your communities day to day problems.

9. To earn recognition from your peers for your contributions to the community.

10. To advance the ‘givers gain’ mentality of improving society as a whole while assisting your neighbors throughout the community.

As you can see, joining your Community Association Board of Directors can be rewarding in many ways. We enjoy working with our Board Members in our South Florida Condo and HOA Communities and we encourage you to give it a try!

Modified from Community Association Institute

Think Long Term for Condo and HOA Planning

Association's and their Board's sometimes seem to have ADD (Attention Deficit Disorder), and we really mean no offense by that. However, we notice more and more everyday that Association's tend to spend a lot of time juggling a number of projects. This tactic not only makes it more difficult for projects to be completed, but are also signs of a disorganized Board and Manager. This makes both homeowners and board members frustrated. A good Property Manager knows just how to overcome this ADD syndrome.

Board of Directors need to not only have a plan, but they need to work their plan through their manager every single day.

The plan must primarily include major capital expenditures, such as roof replacement, painting, and pavement resurfacing. Without a Capital Improvement Plan most Associations will have no choice but to defer major maintenance issues which will most certainly cost more in the end. Board Members should work with their Property Manager to develop a long term Capital Improvement Plan for adequate reserve funding.

Your plan should also include regular property maintenance from your Associations operating budget. These regular maintenance items include lamp replacement, tree trimming , or elevator upgrades. Repair items should be built into your monthly operating budget in order to avoid costly emergency repairs and to preserve the condition of the property. By performing regular repairs on a monthly basis and avoiding emergency repairs your Association will save in the long term. 

Board Meeeting

The Associations plan should also have a time frame built into it which sets expectations for the Property Manager, the Board, and homeowners as to when items should be paid for and completed. This keeps everyone on track and avoids the unnecessary juggling of uncompleted projects. 

In closing, a Board should always think Long Term. "What's here today is gone tomorrow" is not necessarily true for Community Associations because what's here today will only be a bigger more expensive problem tomorrow.

Our Property Managers in South Florida work closely with Board Members to develop property maintenance plans that focus on long term repairs that help increase property values in the association communities we serve throughout Miami Dade and Broward Counties.

5 Ways to Cut Your Condo or HOA Budget

It's September and before you know it the new year is upon us. Now is the time for your Condominium Association or Homeowners Association to begin working on it's Annual Budget for 2012. As always, Community Associations are looking for ways to reduce their operating budget without affecting Association services. In order to assist you through this process we've created our list of 5 Ways To Cut Your Condo or HOA Budget. 

There are many ways to effectively reduce a Community Associations Budget, however, we've had to narrow our list down to only five (we can't share all of our secrets with you!!). We hope you enjoy this post and if after reading it you have any additional suggestions, please feel free to share those with us and our readers in the comments section of our Blog.

Here are our five ideas for reducing your Community Association costs:

1)   Monitor your utilities... Utilities such as water and electricity are usually an Associations second largest expense item, after insurance. You'd be surprised what you'll find by just monitoring these utility bills on a monthly basis. Unexpected hikes in usage can be a great indicator that there's a leak somewhere and, believe it or not, catching it early may allow you to request an adjustment or credit from your utility provider. Our Property Manager's and Accounting Staff are trained to monitor these types of occurrences.

Switching to light bulbs that use less electricity have also shown to be very effective for Associations looking to reduce their expenses. Although they may be more expensive, their longer useful life coupled with the energy savings you'll see is certainly worth it!

2)   Focus on necessities... Although this may seem like an obvious one, it's a very important one. Many Association Boards have been able to reduce a lot of expenses by focusing only on the communities needs, rather than the wants. By doing so, you can plan accordingly for future items and put aside a few extra dollar's for those unexpected emergencies. For example, in the past, many communities would redecorate their lobby's and common area's on a more frequent basis. By extending the amount of time between upgrades you can really cut back on a lot of truly unnecessary expenses.

3)   Talk to your Insurance Agent... Insurance is an Association's largest expense, but likely it's most important expense and certainly not an area you want to play with. However, it's important that your Board communicate with your Insurance Agent more often than just once a year at renewal time. By opening the lines of communication your Insurance Agent will have your Association in mind when new markets open up or when insurance companies provide special service offerings or programs. You should be honest with your Insurance Agent and let them know that your Community Association is looking to tighten its belt, they may have some suggestions for you.

4)   Don't throw your money in the trash... Did you know that waste service for many communities has increased over 15% for the past 5 years? That's a huge increase when you do the math! Our suggestion is to deal directly with a waste service broker. A broker is able to provide your community the same or better service at wholesale prices, probably even through your current provider. A waste broker can provide an analysis of your service needs to make sure that you're container size is neither too large, nor too small, and that your service days fit your needs. Our clients have experienced savings of up to 25% in the first year. No one likes to throw their money in the trash!

5)    Negotiate... Now is the time to get started on negotiating all of your Associations vendor contracts. This should become an annual routine. If your community has been working with the same gate contractor or landscaper, let them know that you're interested in continuing to do work with them through the coming year, but would like to inquire about possible price reductions. You'd be surprised that many of them would be understanding. You may also want to bid out a lot of the work being done around the community to similar vendors. Competition is tough out there and there is always someone looking to offer the same or better service for a better price!

There is more to it than just these five tips, however. We provide our clients with an annual assessment of their service needs prior to assisting them with budget preparations. This keeps monthly assessments low, service offerings high, and residents smiling!

Cash vs. Accrual Accounting For Community Associations

A Manager's Perspective...

There are two basic general accounting methods. However, there always seems to be some confusion when it comes to these methods and how or when to use them. Each method has its own advantages and disadvantages. But overall, the main difference between the two systems would be the timing of the transactions and when they are recorded. We will provide a brief review of each accounting method in this article.

Cash Accounting

When using the cash accounting method you record income when it is received by the association and you record expenses at the time you write a check to a vendor.

The disadvantage with the cash method is that the Board or Management is unable to see the amount of assessments that were still owed to the association or the amount of outstanding bills or debt that the association has. Other problems would be if there are quarterly assessments or prepaid assessments, the cash method would typically overstate the income for that month. In cases of quarterly income, it overstates the association’s income by 2 months. Cash accounting does not distinguish between current cash or prepaid cash.

The advantage of this method is that it more accurately represents the amount of cash the association has at that point in time.

Accrual Accounting

When using the accrual accounting method you record the income when it is billed to the owners, regardless of when the income (receivables) is actually received or paid. Expenses are recorded when you receive the goods or services (payables or invoice) even though you may pay at a later date.

The disadvantage with the accrual method, especially when an association is facing a large amount of delinquent units and foreclosures, is that your assessment income (which is recorded at the time it is billed) is overstated and you never quite have a handle on when you may get paid for past due assessments. Therefore with the accrual method there are balance sheet report items that record and account for these amounts that are owed or remain unpaid.

The advantage of this method is that it more accurately reflects the overall financial health of the association from month to month. Income and expenses are matched for that reporting period, thus producing an accurate Net Income or Loss report.

So which method should we use? 

Chapter 718 (Condominium Associations), in most cases, requires accrual based accounting, whereby Chapter 720 (Homeowners Associations) does not specify a required method. Both Chapter 718 and 720 require that financials statements be prepared in accordance with generally accepted accounting principles.

Should you have further questions about the two accounting methods do not hesitate to contact us, or speak to a Certified Public Accountant (CPA) who is familiar with Community Association accounting practices to best assist you.

How to start a Neighborhood Crime Watch

Many of you have mentioned incidents in your neighborhood that could have been prevented if you had a Crime Watch group. Here is a simple step by step process on how to establish a Crime Watch Group in your neighborhood.

1. When a resident calls the Citizens Crime Watch office at 305-470-1670, a request for service is created listing to all their information and concerns so that it can be forwarded to the appropriate law enforcement department.
2. An initial meeting, which last about an hour, is scheduled for a weeknight at 7 p.m. — a good time for people to be home from work.
3. The meeting preferably is held in the neighborhood at someone's home. This way people can just walk to the meeting. This has been found across the country to be much more effective since the objective is to meet and get to know your neighbors. In some areas, this part may not be possible due to crime issues, so we try to find a safe location nearby for the meeting — a church, a clubhouse or in some cases, in the middle of the street. For those who live in apartment buildings, we have held meetings in parking lots too.
4. Once a meeting date has been established with the police officer and the host, a flier and brochure are provided to be distributed to all neighbors. English, Spanish and Haitian Creole versions are available. This is to inform everyone of the meeting; the brochure speaks to the implementation of a Neighborhood Crime Watch.
5. The night of the meeting, the police officer and someone from the Citizens Crime Watch office will attend. The officer provides information regarding crime trends, crime statistics, the police departments role in the community and what their department is doing to assist the community.
6. The officer also discusses alarm issues as well as how and when to call the police. The officer teaches residents what information is needed when calling police about a suspicious person or vehicle. The officer also answers questions.
7. The Citizens Crime Watch coordinator explains how to set up a phone chain — a collection of phone numbers, addresses and special needs or information pertinent to each home in the neighborhood. When the phone chain is completed, it is shared with all neighbors participating in the crime watch. 

Creating a phone chain is the most crucial part of Neighborhood Watch because it's how everyone stays in touch, as you witnessed from last week's article. Once the above is completed and the Neighborhood Watch is organized, the Citizens Crime Watch and Police Department then provide Crime Watch signs, house stickers and T-shirts. All of this is paid for with your tax dollars.

Implementing a Neighborhood Watch is not easy. It takes dedication and "sweat equity", but as the thousands already involved will say, it's the best thing that can happen to a neighborhood.

The above steps may differ for some municipalities that implement their own programs. If they don't have a Neighborhood Watch program, contact the Citizens Crime Watch office and they will be happy to supply you with some crime prevention materials.

Credit to Carmen Caldwell, executive director of Citizens’ Crime Watch of Miami-Dade for article content. She may be contacted at 305-470-1670 or carmen@citizenscrimewatch.org.

Decision Making at Board Meetings

It is easy at times for Board Members and Managers alike to lose sight of the Associations goals in between board meetings. This may occur for many reasons, including too few or too frequent meetings, lack of preparation between meetings, etc. It’s important to remember that the board meeting is the end of the decision making process for the board and not the beginning. The Board needs to be prepared to make decisions at every meeting.

Below are some tips that will assist your board and manager in preparing for effective decision making during your board meetings:

o       Schedule your board meetings in advance for the entire year. Notify your association members, board members, and management to note their calendars. Schedule them around holidays to guarantee high attendance and involvement.

o       Schedule your board meetings in accordance with your community by-laws. However, be sure to schedule them often enough to allow for timely attention to association issues, projects, improvements, and any other matter requiring management or board member action or decision. Some boards hold meetings monthly, others hold them quarterly. We believe these to be good meeting strategies.

o       Prepare and distribute your meeting agenda at least 3 to 5 days prior to the scheduled meeting. The agenda should be detailed and provide a time limit for each item. This will allow your manager and board to better prepare for the meeting and the decision making process.

o       Make room on the agenda to involve and invite members to join or start committees. Provide sufficient time for committee volunteers to provide their reports and suggestions to the board.

o       Once the agenda has been prepared, distribute any supporting documents such as meeting minutes, proposals, written requests, etc. prior to the meeting. This will allow board members to read each document, prepare questions, and attend the meeting ready to make decisions.

o       Train and educate board members to attend meetings prepared and ready to make decisions.

Now, we know your board may not hold frequent meetings, or may not even be used to preparing for meetings, but we are certain that by following these simple steps your community will run effectively, decisions will be made wisely, and homeowners will be happy to see the Board and Management taking timely action to the items that concern them.

New FHA Guidelines and Approval Process for Community Associations

On December 7^th, 2010 the Federal Housing Administration (FHA) announced the NEW expiration dates of their Condominium/Homeowners Associations Project Approvals and Re-Certifications. These new expiration dates will affect Community Associations and Unit Owners throughout the country.

It is recommended that all Community Associations wishing to obtain FHA Certification begin the lengthy application process as soon as possible.

In recent weeks we have received many questions about the FHA Certification process. A majority of the questions we receive have been regarding the length of time that it will take to get a community project approved by the FHA. We have also received a number of questions on the possible pros and cons to FHA Certification, as well as concerns on the differences between the FHA new project approval and the project re-certification process.

The FHA has set the following deadlines for community project approvals. Due to the large number of communities nationally, it is important to remember that time is of the essence in order to avoid the potential delays in application processing. 

Initial Project Approval Date	New FHA Expiration Date
1972 - 1985	December 31, 2010
1986 – 1990	May 31, 2011
1991 - 1995	July 31, 2011
1996 – 2000	August 31, 2011
2001 - 2005	September 30, 2011

Although it may seem simple, a very common question we get asked is why go though the process and why get certified? The answer is quite simple. It is estimated that approximately 40% of all new loans will be insured by the FHA. The FHA has the most aggressive loan programs in the market and without them the owners of the properties within the association would be at an EXTREME disadvantage when it comes to selling and/or refinancing their homes. Not being FHA approved would obviously drive property values down in your neighborhood. 

Community Board Members are encouraged to begin the approval or recertification process as early as possible, as it is still uncertain if any further extensions for project approvals will be granted.

Fortunately, we have been helping Condominium Association communities get FHA approvals since the new guidelines have been in effect. We’ve successfully helped many Associations obtain FHA Recertification or FHA New Project Approvals and we recommend that all Associations begin the process or recertification immediately. 

Do not hesitate to contact us with any questions about these deadlines or the FHA application process. We look forward to the opportunity of getting your Community Association approved by the FHA.

8 Tips for Communicating with Your Community Association

How you view a condominium or homeowners association is going to depend on what you have heard and what you believe. Some people think that community associations are the best form of residential living because the association is responsible to provide services that you would normally have to do yourself. On the contrary, some people believe that homeowner's associations are not a good idea because the people who make up the board and management have a reputation for being power hungry and that they usually do not care about the general upkeep of the property.

In order to assist you in communicating and dealing with the common misconceptions of community association living we’ve prepared our 8 Tips for Communicating with Your Community Association.

Tip #1:
You need to communicate with the board and management. If you do not communicate, you are never going to have a good relationship with them, nor will your opinion ever be heard. Never hesitate to ask questions or to question what the board is doing, but you do need to remember that in order for your opinion to be heard you must maintain a courteous and positive communication level.

Tip #2:
Get involved with the association and participate. In order to maintain a positive relationship with your association you are going to need to get involved with the board. This can be as simple as attending membership meetings and voting when necessary. You can also attend the monthly board meetings, join or form a committee, or even become a board member. There are many ways to get involved with your association which can help you maintain a positive relationship with the association and management.

Tip #3:
Never assume that the board or management does not care. It’s important to remember that the board and management will always consider any circumstances that affect property maintenance, violations, or anything else that can negatively affect the community. However, unfortunately, there are always matters out of their control that may be cause for delay. Additionally, the board and management may not always have a realistic understanding of the urgency of some items, therefore, it’s important that you maintain constant communication with them about what is going on so that they can work with you on the issue.

Tip #4:
In order to fully understand what the association is and what they do you need to take the time to learn about them. There are numerous things that you can do to learn about an associations including reading books, attending board meetings, and attending educational seminars. By learning about the associations, you will find out that although some can be power hungry, most associations work hard to make their community a great place to live.

Tip #5:
Always expect the best out of your association. Remember that the board is made up of your own neighbors, who want the best for their community. Since you are paying for the services you should expect the best, if things aren't going as expected make it a point to talk to your board or manager to see if things can be changed, but be prepared to provide specific issues and examples that can be addressed.

Tip #6:
If you have something that you want to take up with the board or management be sure to plan ahead. The reason for this is that time is needed to research and to respond to your requests and questions. By giving plenty of notice, they can provide you with the best answers and assistance.

Tip #7:
Learn to appreciate your board. The board members are there to help you resolve problems and to fix things for the best of the entire community. Board members do not get paid for their positions, they simply volunteer what time they have to serve the community.

Tip #8:
If you do not like how things are going then you need to do something to help change it. By running for a position on the board you can start making the changes that you feel are necessary. You can also begin to make your board or management aware of what you think is needed to make positive changes. In order to better serve the community, they are always welcoming feedback and input on what is going on throughout the community.

Steps to Take When Changing Management Companies - A Brief Look at How We Do It

If your community is like most others, you will at some point be faced with the tough decision of changing management companies. A majority of our business comes from dissatisfied Board of Directors who are looking to take their communities management in a new direction. When that time comes, it is helpful to the community and the outgoing and incoming managers if the Association has taken the necessary steps to insure a smooth transition. We have substantive experience in handling these transitions and in this article we have detailed some necessary steps that all Boards should be sure to take when changing management companies.

Pursuant to the Florida Administrative Code, a Community Association Manager or management company is required to provide all original books, records, accounts, funds and all other property of the Association within 20 business days of such request or termination. This time frame gives the existing management company sufficient time to compile all of the records which it must provide to the Association.

Financial Records:

Perhaps of most importance during the transition process is the smooth turnover of the Association’s finances and official records. This is particularly true when talking about Associations where the management company accepts direct payment of assessments from the owners and where the management company performs the day to day banking and accounting for the Association.

Although it may be overwhelming, there are steps the Association can take to minimize the risk of an assessment check going missing, or a vendor not being paid in a timely manner. These types of situations are common when changing managers and can be avoided with some careful planning by the Board. Your incoming manager should be able to assist in providing assistance.

The Association should first arrange a specific and mutually agreed upon date for the turn over of financial records. The Association should avoid having two management companies maintaining two separate financial books and records. This should be separate and apart from the reconciliation of the final month’s accounting by the existing management company which should be provided to the Association on the date determined in the existing management contract, or a date agreed upon by the parties. The new management company will need the current year’s finances as early as possible to have their accounting system up and running by the date of the transfer of services.

A list of all Association vendors should also be made available to the new management company as soon as possible. This will insure that vendors are properly informed by the new management company of the change and helps avoid having any lost or misplaced invoices or bills during turn over. This process is important because if not handled correctly the Association could be subject to unnecessary late fees and charges from its vendors.

A list and current status of all collections files should be prepared prior to the transfer. The report should detail whether an account has been forwarded to counsel for collections or foreclosure efforts. Considering the financial state of many communities, particularly those looking for new management, it is imperative that any possible delay in the processing of delinquent accounts or collections matters be prevented.

Collection of Maintenance/Assessments:

Although, this may seem obvious, you’d be surprised how often it is overlooked. The first step the new management company should take is to send an introductory letter to all the members of the Association advising them of the change of management. This step should take place well before the start of new management. Association members must be advised where their current assessment payments should be sent and new coupon booklets, if any, should be distributed. This is critical or your community will not receive very many monthly assessment payments on the first month of management change. This can greatly affect your communities’ financial position and also risk the credibility of the Board among Association members, not to mention the credibility of the new management company.

Correspondence and Service of Process:

Arrangements must be made with the existing (prior) management company to make sure that they forward any correspondence they may receive for the Association to the new management company in a timely manner. Correspondence received by them should be forwarded to the Association, or picked up at their management office at least once a week during the first month after transfer. This will make sure that all correspondence is received, that bills do not go unpaid, and that the payments of any unit owners still sending their payment to the prior management company get processed.

The new management company should also update the Associations corporate record with the Department of Corporations and the Division of Condominiums to be certain that the existing (prior) management company is not listed as the Associations registered agent. If so, the new management company should submit a change of corporate record as soon as possible to be certain that the Association is made aware of any and all legal matters.

Other Official Records:

The transfer of the official records of the Association may also be a troublesome process when changing management. This is particularly so when an Association has had its existing (prior) manager for many years prior to the transfer. In those circumstances, the composition of the board of directors may have changed a number of times between the time in which the existing (prior) manager first began servicing the community and the time of the transfer to the new management company. In these instances it become difficult for the board of directors to determine what records were initially given to the manager to maintain, and what records the manager has been maintaining since he began servicing the community. It is also important to note that management companies usually do not always keep records in a uniform way, only making it more difficult to really know what they have and what they are expected to turn over.

The Florida Statutes, Chapters 718.111 and 720.303, attempt to facilitate the turn over of Association records by providing an official list of all of the records of the Association which must be maintained and/or kept for at least a period of seven (7) years. Even if your Association is not considering a change in management in the near future, it should always maintain a list based on the official records listed in Chapters 718.111 and 720.303, identifying where those records are kept, and to whom they have been entrusted, even if they have all been entrusted to the management company. The most difficult time for the Association to try to make this determination is during a transfer of control between management companies. This will lead to confusion, and possibly lost or missing records.

With an updated list of the Associations official records, the Association (or the new management company) should inventory the records provided by the existing (prior) management company at the end of their services. This inventory should be kept as part of the official records of the Association. Thereafter, should the Association wish to again change its management, an inventory will exist of all the records the manager received. The official records inventory list benefits both the Association and the management company by providing peace of mind for all.

Conclusion:

Ultimately, should problems arise in the transfer of management services the Association should always consult its legal counsel for advice. However, a professional management company with experience, specialization, and a proven system for the transfer and turn over of management companies should be able to provide invaluable input and assurance during this important time for the Association and the Board.

Should your Association be considering (or is in the middle of) a transfer of management companies, please do not hesitate to contact us so that we can assist you by answering any questions or concerns you may have.

A Condo Association’s Board Responsibilities Defined

A condo association is a miniature form of representative government. The board members are elected by the condominium unit owners (the membership) to run the association and to manage the condominium property. In most cases the board will need to hire a professionally licensed manager to assist in managing the Associations day to day activities. Condominium unit owners rely on the board to resolve community problems ranging from building maintenance to unruly residents.

Rules and Covenants

The first priority for a condo board of directors is to carry out its duties in accordance with state law and the governing documents of the condo association. Directors are also responsible for enforcing the governing documents, the community rules, and doing so uniformly and fairly, including obeying the same rules themselves. This responsibility requires the directors to review complaints, reports from management, and decide if the rules have been violated. The Board (or a committee appointed by the Board) may choose to impose fines on owners who have broken the rules. In the course of business, it may also become necessary to change or revise the association rules, doing so is also the board's responsibility. Beyond the requirements specifically written into the law and the governing documents, directors also have a fiduciary responsibility to the Association and its membership. The board is obligated to always act in the best interests of the association.

Maintenance

Condo owners handle repairs on their own units, but it's the board's job to fix problems with the common areas, this includes the building's exterior, the hallways and amenities such as a pool or tennis court. The board must arrange for regular inspections and maintenance of such elements and, if major repairs or upgrades are necessary, the directors must set priorities for which problem needs fixing first. In most cases, the board will need to put projects out to bid, at which time the directors must review the bids and select the best one. Many associations hire a manager to deal with such issues.

Finance

It's up to the board of directors to handle the condo association's money. Every member of an association is assessed a fee which funds the associations’ day to day operations, such as maintenance, repairs, and administration. It's the directors' job to review and approve the annual budget and reserve schedule for the association. The directors must also take action against owners who don't pay their portion of the assessments; if an owner continues to refuse, the directors have an obligation to the other association members to take legal action against the non-paying unit owner.

As you can see, being on the board of directors of any condominium association takes a lot of hard work, dedication, and responsibility. The hiring of a professional manager will assist your board with many of the day to day activities of the association.

The anatomy of a Great Manager

All communities and Board Members want a “great manager”, because they know that a Community Association Manager can make or break an entire community. However, what differentiates a bad manager from an average manager? And what seperates an average manager from a great manager? What does it mean to be great in Community Association Management?
Over the years, in speaking with Board Members and industry leaders we’ve identified key areas and traits that make a great manager. The below should act as a Code of Conduct for any great manager.

1. Great managers understand the power of effective communication
2. Great managers are effective communicators
3. Great managers present themselves professionally
4. Great managers are organized
5. Great managers follow through, always
6. Great managers do not procrastinate
7. Great managers never give information they aren’t sure of, or hearsay
8. Great managers understand the value of their relationship with vendors
9. Great managers admit mistakes, take responsibility, and then fix them
10. Great managers maintain professional detachment
11. Great managers stay current with their industry and with business in general
12. Great managers deal with change well
13. Great managers have a sense of humor
14. Great managers value their integrity and creditability above all

Top 10 Things to Consider When Hiring a Property Management Company for Your Community.

1) Licensing: Is the property management company licensed in the State of Florida? Unfortunately, many management companies do not have the necessary licensing required by the State and say they do.

2) References: Has the property management company you are thinking of hiring provided you with references? Call current clients and ask – “do they have a good response time, do they provide timely reports, do they provide the service they promised?”

3) Experience: What types of properties do they manage? Are they specialized in any aspect of the industry, or do they do it all (sales, rentals, mortgages, etc.)? They may not be focused or attentive to the services you need.

4) Services: What property management services do they provide? 24 hour emergency service? Collections? Monthly reports? Financial Management? Attendance at all meetings?

5) Response time: What kind of response time can they guarantee, during business hours and emergencies? Do they answer their phones 24 hours a day? Are their emails answered throughout the day?

6) Fees: What kind of fee structure do they have in place? Are fees all inclusive? Do they charge for office supplies? What tracking system is in place for additional fees? Do they nickel and dime you? Sometimes the lower priced companies have add-ons or kickbacks. Ask.

7) Certifications: What organizations are they a part of? Is the property manager an active member of any of the national property management associations, such as CAI (Community Association Institute) or any local chambers of commerce or business organizations?

8) Delinquent Owners: How will delinquent owners’ accounts be handled? Will they charge late fees? Will they send out monthly late notices and demand letters? Do they have a separate Accounts Receivables Department? Will they maintain an open line of communication with the Associations attorney if needed?

9) Violations: How will violations be handled? Will they send violation notices? Will they impose fines? Will digital pictures be taken as evidence? Will they maintain an open line of communication with the Associations attorney if needed?

10) Property Inspections: How often will they personally inspect your property? Weekly? Quarterly? Do they have trained and licensed managers visiting their properties? This can be very important and if not attended to frequently can lead to many disgruntled residents.

The information above was prepared by Marc Rodriguez, a Licensed Community Association Manager and President of Four Points Property Management, Inc., a property management firm specializing in community association management and consulting services throughout South Florida.

This publication was created as a guide to assist members of the Board of Directors when choosing a management company for their community. Mr. Rodriguez can be contacted at mrodriguez@fourpointsproperty.com or you can visit www.FourPointsProperty.com for more information about the company.

Governing Documents

We are frequently asked by Boards which laws or rules govern Associations. Many Board Members are unaware that there is a hierarchy of what laws and rules govern their community.

In this hierarchy, federal and state laws always take priority. However, every community association also has governing documents that are meant to enhance the federal and state laws and are more specific about how the community is to be run.

Below is a list of governing documents most community associations have. The documents have been listed in order of the one with the most authority to the one with the least authority.

The primary document is often called a “Declaration” for Condominium Associations or “CC&Rs” (Covenants, Conditions, and Restrictions) for Homeowners Associations. The Declaration is kind of like an operating agreement for a business; it lists the details of the property included in the development and contains restrictions on use of the individual units or homes. It specifies what authority the association has and how it can or must do certain things, like maintain the common areas. It also defines the rights and obligations of the individual owners and the Association, like paying their maintenance fees.

The next document in the hierarchy of Association governance is the Bylaws. The Bylaws are intended to cover the procedural aspects of how an association is run. For instance, this document will include information on electing a Board of Directors, association meetings, voting procedures, budgeting procedures and guidelines, and much more. The Bylaws should be your property manager’s number one reference tool.

The Rules and Regulations are the next set of governing documents. Every Community Association should have a set of Rules and Regulations. Although some associations do not, we recommend that if your association does not have rules and regulations that the board should consider adopting a set of rules and regulations for living in your community. Rules and Regulations are usually adopted by the Board of Directors and are meant as a management tool to further clarify the rights and obligations of owners and their guests.

The final governing documents, which not every community association has is the Boards Policies and Resolutions. These are voted on by the Board of Directors and are meant to keep consistency among different Boards and management companies through the years. There may also be Amendments to your association’s Declaration or CC&Rs, which can change the terms of the original document.

It’s important to remember that the Declaration is above everything else besides the federal, state, or city laws, so any provisions in your Bylaws, Rules and Regulations, or other documents that conflict with the declaration are probably invalid.

Understanding the contents of your association’s governing documents is an important step towards being an informed Board Member. All unit owners should have received a copy of all governing documents for the association at the time of purchase. If you have misplaced them, please contact our office and request a copy for your records.

If you have any questions or comments, please feel free to leave a comment or contact us.

The Special Assessment and Reserve Account Connection

Tim (fictional) lives in a 30+ year old association. Tim pays his assessments on time each and every month. The association needs to make a major renovation to repair exposed rebar, stucco repairs, and painting. The project will cost the association approximately $375,000 dollars. The association does not have an adequately funded reserve account and a special assessment is necessary. Each unit owner will be assessed between $8,000 and $10,000. Tim cannot afford the special assessment and the association is considering the foreclosure of Tim’s unit.

Does this hypothetical scenario sound familiar? Unfortunately, many older associations are faced with this issue. Special assessments are commonly used to pay for expenses outside of the budget, which can create hardships for both unit owners and associations.

The Florida Legislature has attempted to provide a solution to this issue by requiring Association to fund a reserve account and suggesting that Reserve Studies be performed regularly.

Has your association ever had a reserve study prepared and then adequately funded the association reserve account pursuant to the reserve study recommendations? If so, congratulations! If not, how should your association plan ahead for future repair and replacement projects without causing an additional burden to unit owners by having to adopt significant special assessments?

Step #1, hire a professional to conduct a reserve study. If you are lucky enough to have had a study prepared in recent years, have it updated to reflect the properties current condition. A properly completed reserve study will provide your association estimates and information about the remaining life of the physical components the association is required to maintain and the estimated replacement costs associated with the replacement of and major repairs to those components. A reserve study will significantly help your association in properly budgeting for future repairs so that adequate reserves can be funded, as well as reflect an accurate picture to unit owners of the associations condition, both physically and financially.

Step #2, understand your budget. An association that properly plans in advance should only need to make small increases to its regular monthly assessments in order to properly fund reserves. While the majority of unit owners will not be happy about increases to assessments, homeowners should be educated about the benefits of reserve funding and the possibility of a significant special assessment in the future for major repairs should a reserve fund not be maintained.

Step #3, your association may be able to obtain a loan to cover some or all of the costs associated with a repair or improvement. Although lending guidelines are stricter now than they have been in the past, this option is still available as long as your delinquencies are reasonable and below 7%. In order to obtain an association loan the association/management will need to provide the bank with important information, such as financials, cost estimates for the anticipated project, and collateral (an assignment of the right to future assessments).

Your association should stay ahead of the game and be able to fund significant repairs and replacement projects without the need for special assessments by updating its reserve study regularly, keeping delinquencies low, and creating a plan of attack for raising reserve funds.

We have successfully helped dozens of Associations by performing Reserve Studies, implementing a reserve funding policy, maintaining an adequately funded reserve account, and developing a plan of action for major repairs and necessary funding. For questions regarding this article or for assistance with creating a Reserve Study, please contact us at 305-403-0575 or send us an e-mail to info@fourpointsproperty.com.

2010 Legislative Update

We have some exciting news to share with you and your community members. This years Legislative Session turned out to be a very productive session that we believe has produced many positive changes to the Florida Statutes that govern Community Associations.

Earlier this year we provided a brief summary of the many changes being considered by Legislators in Tallahassee. Below we are happy to provide you with a summary of the Legislative changes that have fortunately (and finally) been signed into Law which will take effect July 1st, 2010. Please note that we have only summarized the changes we feel will be most valuable to our clients, not all changes or amendments have been included below.

For over a month we have been reviewing the 103 page Bill (SB 1196), as well as held meetings with Association Attorneys to familiarize ourselves as best as possible with the new Laws in order to best assist our client communities to take advantage of the new resources available to them.

Common Elements:
1. Common elements that serve only one (1) unit may be reclassified as Limited Common Elements by a vote of the membership to amend the Declaration.

Official Records:
1. An Association is clearly not responsible for the misuse of information provided to an owner or representative of an owner in compliance for their request for a records inspection.

2. Any person who intentionally harms, destroys, or who fails to create or maintain the Associations accounting records with the intent to cause harm to the Association, will be subject to a Civil Penalty.

3. The following records are not accessible to owners: personnel records of association employees (including payroll), e-mail addresses, telephone numbers, website passwords or property access codes, accounting software or backups.

Elections and Director Eligibility:
1. Co-owners are now permitted to serve on the Board where such co-owners own more then one (1) unit, or where there are not enough eligible candidates to fill the Board vacancies.

2. The director delinquency restriction has been expanded to include any director delinquent more than ninety (90) days in the payment of ANY monetary obligation. This includes fines, fees, regular and special assessments. Such owner will not be permitted to serve on the Board.

3. Each newly elected or appointed director must certify in writing within ninety (90) days of being elected/appointed that he or she has read the governing documents and that they will work to uphold those documents to the best of his or her ability. In lieu of providing such written certification, a director may submit a certificate of satisfactory completion of the educational curriculum provided by the Division. A Director not completing this certification will be suspended from service.

Collection of Assessments:
1. The liability of a Lender (First Mortgagee) that acquires title to a unit through foreclosure has increased from six (6) months to twelve (12) months of unpaid assessments. However, it remains constant that a Lender is only responsible for the lesser of twelve (12) months or one (1%) percent of the mortgage debt. We are of the opinion that most, if not all mortgage foreclosure cases will now receive the one (1%) percent value as opposed to the new twelve (12) month amendment.

2. This change will take effect on all foreclosed units in which a lender acquires title after July 1st, 2010.

Collection of Rents:
1. If a unit is occupied by a tenant and the unit owner is delinquent in paying any monetary obligation to the Association, the Association may make a written demand that the tenant pay the future monetary obligations related to the unit to the Association, and the tenant must make such payment until the Association releases the tenant.

2. A tenant who acts in good faith in response to the Association's request will be immune from any legal claim from the unit owner (i.e. eviction, etc).

3. The tenant, like a unit owner, must be notified of any increases in monetary obligations.

4. The unit owner shall provide his or her tenant a credit for any rents or amounts paid directly to the Association.

5. Should the tenant fail to act in response to the Associations demand for payment, the Association may file for eviction under the Florida Residential Landlord and Tenant Act (FRLTA). However, the Association is in no way considered a Landlord under the FRLTA and has no obligations there under.

6. The tenant does not have any rights of a unit owner in any election or vote, and does not have any right to examine the books or records of the Association.

7. This new law does not supersede the appointment by any court of a Receiver.

Budgets and Financial Reporting:
1. The Division of Florida Condominiums, Timeshares, and Mobile Homes shall adopt a set of revised rules outlining the uniform accounting principles and the standards to be used by all Associations.

2. The revised rules must include standards for presenting a summary of Association reserves, including an estimate on the amount of reserves necessary to fully fund annual reserves per each reserve item.

3. A Condominium Association operating fewer than seventy five (75) units shall prepare a report of cash receipts and expenditures, as opposed to financial statements.

Fining:
1. Previously Associations were only able to issue fines if their declarations or by-laws granted the Association such right. The new statutory amendment now grants all Associations the right to issue fines pursuant to statute, regardless of what the declaration may state.

2. An Association may only levy a fine for failure to comply with provisions in the governing documents.

3. Previously the Condominium Act stated that fines should be levied "against a unit". The new changes expand the Associations fining ability by permitting fines to be levied against any individual that is authorized to be on the property and who fails to comply with the provisions of the governing documents, this shall include owners, invitees, licensees, and occupants.

4. Fines still may not exceed $100.00 per violation for a maximum of 10 days. Additionally, fines can only be properly levied at a properly noticed hearing of a non-board member committee of unit owners.

5. Unfortunately, non-payment of fines may not be collected through lien or foreclosure. Therefore, because collecting on a delinquent fine is somewhat difficult, this enforcement ability is not always practical.

Suspension of Use Rights:
1. Condominium Associations may now, in limited cases, suspend the use rights of unit owners, their invitees, licensees, and occupants, who are more than ninety (90) days in the payment of ANY monetary obligation.

2. The use rights that can be suspended include the right to use common areas, facilities, and other Association property. Use rights shall not be suspended for Limited Common Elements, common elements needed for unit access, parking spaces, elevators, or utility services provided to the unit. The statute is not clear as to whether cable and other bulk services are defined as "utilities", however, we believe that they may be, but this is yet to be determined.

3. A unit owners' voting rights may also be suspended, however, their unit shall still count towards the necessary quorum requirements for any meeting or amendment.

4. A use right suspension ends upon payment in full of all monetary obligations.

Property Insurance Requirements:
1. Unit owners are still responsible for insuring their personal property within the boundaries of their unit, including their limited common elements, and their floors, walls, ceiling coverings, electrical fixtures, appliances, water heaters, cabinets, window treatments, and all other items which are located within the boundaries of their unit and serve only such unit.

2. Condominium Associations are no longer required to obtain evidence of a unit owner’s insurance coverage for their personal property located within the unit.

3. Condominium Associations are no longer authorized to force place coverage on behalf of a unit owner for failure to provide proper proof of insurance.

4. Unit owners’ insurance policies are no longer required to name the Association as an additional insured and a loss payee. As such, unit owners are no longer required to obtain the Associations endorsement for payment they receive on an insurance claim on their policy.

Fire Prevention Code:
1. A condominium that is less than four (4) stories in height and has an exterior corridor providing a means of egress is exempt from the requirement to install a manual fire alarm system under the Life Safety Code adopted under the Florida Fire Prevention Code.

2. A Condominium Association may now vote to waive the requirement of retrofitting the common areas in a high rise building with a fire sprinkler system by recording such vote in the public records of the county. A high rise building is defined as a building greater than seventy five (75) feet in height.

3. Shall an Association not be able to obtain the necessary votes to waive the fire sprinkler retrofitting requirement; the deadline for retrofitting completion was extended to 2019.

Elevator Safety Code:
1. The Legislature has created a moratorium on the enforcement of amendments to the Safety Code for Existing Elevators and Escalators (ASME A17.1 and A17.3) requiring modifications to elevators in condominiums. Such retrofitting requirements cannot be enforce for five (5) years. However, shall a building require an elevator replacement or major modifications before the expiration of the five (5) year moratorium the building must meet the Elevator Modification requirements.

2. A Condominium Association may waive the requirement for installing alternate power sources for elevators upon an affirmative vote of a majority of the membership.

Distressed Condominium Relief Act:
1. In response to the downturn in the condominium market affecting the economy, developers, lenders, unit owners, and associations, the Legislature created the Distressed Condominium Relief Act (DCRA).

2. The DCRA establishes that a bulk buyer purchasing seven (7) units or more within a condominium association shall receive an assignment of some or all of the developers rights except those related to warranties, obligations to fund reserves, auditing requirements, and liability to issues or claims made prior to their assignment.

3. The DCRA creates a detailed process for the assignment of units within a condominium to a bulk buyer and the management of such association thereof.