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.

May is Electric Safety Month - Is Your Home or Condo Safe From Electrical Hazards?

May is national Electrical Safety Month, a good time to remind everyone of ways to be safe around and electricity and to treat electricity with respect. We all take electricity for granted because we use it everyday in our homes, businesses, etc. We surely could not be writing this blog, nor could you be reading it without electricity. It’s just simply become a way of life for us, and like many other things, we take electricity for granted. Electric Safety Month is dedicated to educating people on the dangers of electricity.

By being careless in our use of it in our homes and at the work-site we can cause serious injury, possible death, and fires. The majority of electrical accidents and injuries caused by electricity come from unsafe equipment or installation, an unsafe environment, or unsafe work practices. 

Electrical Safety at Home:

• Use only appliances and equipment approved by Underwriters Laboratories. (Look for the UL listing on the label). 
• Keep all radios, hair dryers and other appliances secured or out of bathrooms. Hair dryers should never be used near water-filled tubs and sinks. Teach your children that electricity and water don't mix.
• Don't overload electrical outlets. If your TV picture shrinks or flickers when major appliances are turned on, or if you notice that fuses or circuit breakers blow out frequently, then you should have your circuits and wiring checked.
• Never unplug or carry an appliance by its cord. Don't run cords under carpets or furniture. The cords can overheat and/or become frayed.
• Teach your children not to poke things into electrical outlets, toasters, or any other appliance, whether they're on or off.

Electrical Safety Outdoors:

  

• Keep all ladders and tools at least ten feet away from any power lines. Put up ladders only when you have work to do. Make sure that if the ladder were to fall, it would not contact any power lines or electrical equipment.
• Any outdoor outlets should be on a circuit that is protected by a ground fault circuit interrupter (GFCI). These are required in newer homes in bathrooms, garages, outdoors and near sinks. GFCIs can be added as a temporary plug-in adapter, added as a replacement outlet or installed as a circuit breaker. Check with your electrician for options.
• Teach your children not to fly kites near power lines or around electrical substations.
• Teach your children not to climb or play in trees if there are power lines nearby or lines touching or growing through the branches.

Electrical Safety at Work:

  

• Train all employees to make them thoroughly familiar with safety procedures for their jobs. 
• Use insulating protective equipment.
• Properly maintain tools that help protect workers against electric hazards. When a defect is found in a tool, it should be removed from service and tagged so that no one will use it until it has been repaired or replaced.
• Where extension cords are used, make sure that they are factory-assembled, 3-wire type cord sets.
• Do not remove cords from receptacles by pulling on the cords themselves.
• Use double-insulated tools and equipment that are distinctively marked.
• Visually inspect all electrical equipment before use. Remove from service tools with frayed cords, missing ground prongs, cracked tool casings, etc.

Although Electrical Safety Month only comes once a year, it's important for you to pay attention to the basic safety rules all year long. Your life depends on it.

4 Steps to an Effective Board Meeting - Before and After You Leave The Meeting Room

We often hear Board Members and homeowners gripe about ineffective community meetings where nothing get's done. In response to these complaints we've developed a simple process we use to train our Board Members on holding effective and decision focused community meetings. We outlined this process in our recent Blog titled Decision Making at Board Meetings.

However, we also often find that although Board Members may hold successful meetings where many decisions are made, there is very little follow up that occurs after the meeting. Our manager's are held responsible for leading community meetings, keeping the Board focused on agenda items throughout the meeting, and carrying out the wishes of the Board after the meeting. We've developed a simple 4 step process to running effective Board Meetings - before and after you leave the meeting room.

Through our simple 4 step process we are certain your Board of Directors will get more accomplished not only during your regular Board Meetings, but once you walk away from the meeting room.

Here are the 4 steps your Board can take to ensure your meetings come to a productive close and result in effective action after you leave the meeting room. The list is short and simple because the process is simple.

1. Action Plan. Your Board should always create an Action Plan before every meeting. The plan should include key decisions to be made at the meeting, follow up steps after the meeting, identify responsibility for each task, and provide completion dates or deadlines. Your Action Plan should be kept to one page or less. Usually the President or Vice President will prepare the Action Plan.
2. Communicate quickly. Many times a Board will not communicate for weeks after a board meeting. This is not very efficient and causes everyone to lose momentum on accomplishing their assigned tasks. We suggest you get an e-mail out to meeting participants within 24 hours after the meeting, to ensure momentum is not dissipated. The e-mail can include meeting minutes or a simple summary of your Action Plan that reiterates the Board's goals and realistic deadlines.
3. Follow up. Your Board should assign a specific Board Member with the duty of following up. As deadlines approach this persons responsibility is to send out reminders to make sure everyone is on track. By following up your Board remains informed on the status of a project and whether or not the deadlines will be met. This will also help you prepare for future Action Plans and in setting realistic achievable goals in the future.
4. Inform. Once all the tasks have been accomplished or are nearing completion, inform the group of the status of each item. E-mail all Board Members the Action Plan for the following meeting and outline any further steps necessary, if any.

By making these 4 Steps to an Effective Board Meeting - Before and After You Leave The Meeting Room a part of every community meeting your association holds you will never again be accused of wasting people’s time, nor will you yourself have to sit through hour long meetings to accomplish very little.

We take pride in holding effective Board Meeting for our clients and in preparing our Board Members to do the same. Should you have any questions or if you would like additional information, please contact us!

5 Tips to Green Your Home

Four Points Property Management wishes you a Happy Earth Day! Yes, we know, Earth Day was days ago... We're sorry for the late post, but in keeping with our commitment to Green Communities, we've decided to prepare a list of 5 easy ways to green your home.

Over two years ago we began the “Green Our Office” initiative. Through equipment upgrades, paper recycling, using recycled and earth-friendly print/copy ink, and by making lighting improvements we have reduced our total energy consumption and our office is officially Green. However, we are constantly looking for ways to become more energy efficient and we enjoy passing these green ideas to the residents of our community associations.

In our efforts to provide residents with tips and ideas on how to better green their homes and reduce their energy consumption, we’ve compiled 5 green tips for making your home more eco-friendly.

1. Turn off your home office equipment when not in use. This can reduce energy by 25 percent. Turning off televisions and entertainment equipment can save an additional 50 percent.
2. Tightly turn off all faucets, one drop per second wastes 10,000 liters per year.
3. Need new home or office furniture? See if your existing furniture can be refurbished which saves waste and money.
4. Use a Smart Strip power cord that can sense when a device is turned off and cut their “phantom power” (the power that electronics use even when they’re turned off). The savings provided are huge!
5. Efficiency heating and cooling saves the earth and money. Have a technician repair and test leaks, and check regularly for faulty filters, coils, compressor fans, and drains throughout your home.

For more eco-friendly ideas feel free to contact us. We are always interested in learning from you and sharing valuable information. You can reach us online at www.FourPointsProperty.com or at 305-403-0575. 

Our commitment to Green Communities continues....

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.