Community Association Management

Most of the conversations I have with professional colleagues indicate a shared belief that turn over is one of the biggest challenges the community association industry has to address. It is a complicated and difficult problem that starts with the fact that board members are volunteers who serve for a short term and then often leave. Even with staggered terms, it is hard to find a board with a member who has served more than 2 or 3 terms and often, the governing documents precludes it.

Yes, board members can abuse their power, especially if they have been on the board for some time. Yet the chances of that possibility, if the rest of the team is strong and involved, balanced against having really knowledgeable and effective members, is a discussion worth having.

Managing association communities is a complex business yet we are dependent on volunteers to do it. What we don’t consider is the value of history and historical practices; board decisions with regard to rules enforcement and architectural requests are just a couple of examples.

I have many friends who live in or own condominiums (for the sake of conversation, I am including all PUDs in this term). What I find is that, in general, people don’t understand:

a. the difference in types of condos and PUDs; often confusing construction with the legal description
b. what the association is responsible for
c. what they – the homeowner, is responsible for
d. what their dues pay for
e. why their dues are “so high”
f. the difference between operating funds and reserve funds
g. the role of the board
h. the role of the manager
i. that consistency is key to saving money
j. that enforcing the rules has a direct impact on the value of their property
k. that long term relationships can help save everyone time, energy and money!

These and other important concepts have to be part of the conversation during board meetings. There is a place for Roberts Rules of Order and even within that framework there can be time on the agenda for discussion around every decision. What if every discussion is an opportunity to learn, to teach and to ask important questions? Is everyone on the same page – or at least reading the same book? What have prior boards decided? What actions were taken in the past?

In an industry where the average property manager (or management company) is on board for less than 5 years (often with 2-4 individual managers even within the same company), and board member turnover is mandated, history often resides in paper files, boxes in storage areas, in board members basements/attics, or tossed out or lost as the revolving people door dictates. Every association needs history. Every board member and manager needs to be able to speak to the basic differences in their association(s) and understand the impact of their decisions. They need to be able to see what has gone on before them.

In today’s technological world, databases are the key to many of these questions. I know that my board members are grateful when I give them a print out of all the rule enforcement actions against a unit when a complaint is received; or a history of approvals (or disapprovals) when an architectural request is reviewed. Whether you use a commercial database such as CAMPro (www.campro.us) or one of the others available, or whether you create your own history in access or excel, having history is one of the first tools in educating both board members, managers and your membership. Without it, you can find yourself paddling willy-nilly upstream, subject to complaints of favoritism, abuse of power and setting precedents that future boards have to live with in perpetuity.

Yet, how to address these issues? Do we create legislation that requires board members to attend training before serving (as recently proposed in California)? I believe the job truly falls to managers and managers have to be trained not only in legislative issues, but also how to train their boards, how to manage and direct teams, and how to use the vast wealth of information they are privy to in a positive and effective way with their boards.

In order to do all this, we have to be able to reduce the burn out that many managers experience. Lessen workloads, use technology wisely, provide more cross-team training and back up; mentor each other and reduce the competitiveness prevalent in the industry. There is no scarcity of clients and the “pool” grows every year.

If we can diminish our contribution to the “revolving door” syndrome, perhaps we can help empower ourselves and our board members more effectively.

Gayle J. Hasley,
Community Association Manager
Community Association Homeowner
gayle@campro.us
www.campro.us

Julie Adamen (who incidentally I respect and admire greatly) recently wrote an article celebrating one of the things about our industry as our being “recession proof”. While I agree that it is a constantly growing industry from the management company perspective, I am not at all sure that the association communities themselves are as lucky.

My friends in the collection business can’t keep up with the delinquencies referred to the collection process. Management colleagues are distressed about even being able to pay their association’s bills.

In my own association, 2007 was a year of great difficulty for many of our homeowners caught in the subprime market collapse. The affect on the association has been equally as devastating. We began 2006 with $4,734 in delinquent assessments. That amount grew to $17,536 by 12/31/06. On 12/31/07 our delinquent assessments hit $52, 171.

Prices have collapsed and we have 10 or more units (out of 116) in various stages of foreclosure or sale. And the worst isn’t over yet. We see further reduction in prices as banks sell units just to move them, and as foreclosures are bought at auction for literally half their value of just a year or two ago.

One vendor reported one of his clients cancelled their contract as the association went into receivership. The trustee came in, ousted the entire board, fired all the contractors and took over the association. How many more of these are out there?

Despite the negative cash flow, we ended the year with our reserves fully funded, we took on the major renovation of the even side pool, the second of our three courts resurfaced; and all planned and emergency maintenance completed. Over the last thirteen years, dues have been increased 7 times, usually less than 3-4 %. The board has worked hard to keep dues as affordable as possible and the last 6 years, we have been under budget or within $2,500 of our $385,000 annual budget. So far, we’ve been able to weather the storm because of it.

That all sounds great however there is a big difference between the accrual method of accounting and understanding CASH FLOW! That was the main topic at our annual meeting in March. Although we were $3,260 “under budget” this year, using the accrual method, we had to look at that liability of $52,171 in unpaid assessments. Of that, about $30,000 is current arrears and in the collection process.

The other $22,000 or so is owed by foreclosed homeowners who have lost their homes and have few resources to pay their debt to the association - even assuming we can
a) find them
b) serve them
c) get a judgment against them, and
d) collect on the judgment.

So, how much does the association invest in going after these homeowners? What is our actual cash in the bank? What happens when we run out of cash? Some associations are passing special assessments to make up for delinquencies. Others are borrowing from reserves. Each has consequences.

Boards HAVE to pay attention to these issues and understand the financial statements they are provided. That means it is critical that managers understand them and to help guide the board through the morass of questions or help them find the professionals who can. How often this is true, and more importantly, how often the vital attention required is paid to them, is unclear.

We’ve tightened our belts and although my association has budgeted for regular maintenance, the decision was to do only what is required to keep up the appearance (and value) of the association until we can see how this year shapes up. Last week, Bernanke finally acknowledged that we could be “headed” for recession; we could have told him that months ago.

Gayle J. Hasley,
Community Association Manager
Community Association Homeowner
gayle@campro.us
www.campro.us

Many years ago, a well-respected reserve preparer told me that reserve studies were not management tools, rather they were ‘savings plans’. While I might agree in principal, I couldn’t disagree more when it comes to managing associations. I believe reserve studies are one of the most important tools associations have in terms of budgeting and planning long term repair and replacement of their most important assets and it is critical that managers not only understand these studies, but also have a way to make the data useful to their association(s).

In California, physical inspection and update of reserve components is required every 3 years. Yet there is NO requirement for boards to use that data! Often times, reserve studies are completed and accepted without any type of formal board review and the “study” goes onto the shelf. That’s like fixing the budget then never looking to see if you are over or under expenditures.

Part of the problem is the way reserve studies are computed and presented. There is seldom a single line item for “painting”. Yet from the study, one can get an idea that the complex will need painting in about 3 years. We group those major components together and enter the ones that need to be addressed in the next 3 years into our working database (www.campro.us) as “Scheduled Maintenance”. That way, between studies, we have a way to remind the board that painting or roofing or siding is due to be inspected and/or bid.

We track completed maintenance so when the next reserve study is due, we can provide the reserve preparer with a report on all the work that has been completed on reserve components over the interim 3 years and at what cost. These components represent the biggest expenses the association incurs, yet many boards don’t even understand the basic methods available for funding them.

Full Funding means the association wishes to have the full amount of money on hand in the reserves equal to the amount of money as outlined by the reserve study at any given point in time.

Threshold Funding: The association wishes to ensure that the balances on hand in the fund over some number of future years (usually 30 or 40 years) remains above some threshold to allow some safety for estimate variations.

Baseline Funding: The association wishes to maintain positive balances in the fund over the next thirty years. In essence, a threshold of zero.

Each type of funding has the potential for impact on the association. Too much funding (is there such an animal any more?) and dues can be extremely high… too little and special assessments become the norm.

Several years ago, when laws were looser, my company assisted in preparing a couple of reserve studies using our qualified contractors and vendors to conduct the physical inspection of the components. The list of components had originally been provided by the developer and updated using qualified reserve preparers over the years. Yet, when I coordinated the study, we found many “missing” components. Amongst them was all the copper plumbing and electrical in the pool areas, the coping stone and the concrete decking. We spent $50,000 replacing one of our 2 pools last year because the copper pipes had rusted out and were leaking, the electrical conduit had disintegrated and the concrete deck had heaved so badly we were in danger of having the health department close the pool.

Since these pools were built in 1965, they did not meet existing code, so when we pulled the permits, we had to meet all the existing code for any public facility including dual drains, new fencing, etc. The project cost a total of $70,000 (with fencing) and took 2 months to complete. Fortunately, we had started funding this project over 4 years ago so no special assessment was required.

This year, we have discovered that our hot water re-circulating lines are failing and will need to be replaced, yet “plumbing” is not included in our reserves. We are in the process of assessing the lines and getting estimates so we can start planning the replacement process.

I know that many professionals will say that these are the kinds of items that are covered under the “contingency” portion of reserves. What I also know is that many associations are not funding reserves adequately and the “contingency” is one of the first items to be reduced or eliminated altogether.

Do you have a current reserve study? When was it last updated? How do you fund your reserves? Has your association had to pass special assessments for major repair or replacement of components that are part of this study? How (and when) does your board use the information in the study? I believe fiscal management requires us as board members and managers alike to be able to answer these and other reserve related questions. Our role as custodians of our physical assets, demands it.

Gayle J. Hasley,
Community Association Manager
Community Association Homeowner
gayle@campro.us
www.campro.us

For whatever reason, it seems that in every association there is someone you just can’t please. (I think it’s the old marketing “80/20” rule in action!) They “bad mouth” you to other residents, are abusive on the phone and no matter what you do, they just aren’t happy.

Fortunately, I only have a couple of those, one of whom is the topic for today. Now this is a person that over the years has been ejected from board meetings, and, due to verbal abuse, has been told she is only to communicate in writing to the office.

She recently called the office to talk about a leak she has in the bathroom. It was a most pleasant conversation! She said she remembered articles in our newsletters referencing common maintenance issues and thought I might be able to help her figure out the source of the leak. After she described it, I gave her a couple of suggestions (replacing the cartridge in her shower and checking the caulking around her tub spigot and overflow) and she thanked me. She even said, she “knew I could help her!” A couple of weeks later, she called about a different problem and in her message, she thanked me for my “wise advice” since they had determined it was, in fact, the caulking around the overflow device that was the source of the leak.

What this proves is that it truly is never about you. When people are angry and abusive, they usually have an issue in their lives that is driving their behavior. Whether their anger is “justified” or not, it is important to keep your personal boundaries and to insist on respectful conversations. Sometimes, you have to really just stop it. I have a little green cheeked conure [parrot] named Jimmy who says “stop it, now…stop it, Jimmy, right now! It’s like having a 2 year old repeating your worst phrases back to you!

Of course, we have to be a bit more diplomatic than that on the phone. My assistant, Carol, has a marvelous way of doing that by simply saying “I’m sorry to stop you…however I will have to close the phone now. Please put your concerns in writing.” and then she hangs up. She knows she has my complete backing, and more importantly, we document every call in the call log association management software (see www.campro.us) so there is never any confusion about who called when, how many times, and about what. It is an invaluable tool that allows her to see immediate history including phone calls, emails and past requests so she can be professional and responsive to residents and their concerns.

Living in the association as I do, I am often stopped by residents who want to vent or report an issue because they just happened to see me. Often, I know what is coming simply by who is approaching me. It isn’t always easy but I have learned how to say “please stop hollering and I will be happy to listen to you”, or “I’m sorry, I’m on my way out and I don’t have time to talk right now.” Setting boundaries isn’t always easy however with consistent, clear messages, it can be done.

Of course, the old adage is true, you can’t please everyone 100% of the time, but you can try!

Gayle J. Hasley,
Community Association Manager
Community Association Homeowner
gayle@campro.us
www.campro.us

It seems forever since I wrote my last blog… indeed, I’ve been in Phoenix for over 2 weeks now supporting my sister who had major surgery 15 days ago and I am not scheduled to return for another 10 days. My assistant Carol, my right hand and a truly incredible, responsible, lovely person, has been looking after the associations while I am away. How can I be gone so long and still know that my properties are well cared for? Obviously, a GREAT assistant is key and technology is the other vital key.

Carol has worked for me for almost 2 years; however her true understanding of the business of running an association is quite limited. She does know and understand the software we use very well so that provides both the context and the capability for us to work in team, even long distance.

Carol normally checks and returns all messages received during the day. She records them in our CALL LOG which she sends me at the end of the day. Calls are noted as Completed/FollowUp or To Do so it is easy for me to review and respond to my To Do’s and any related questions she has.

She runs the Rules Violation Report and the Outstanding WO report each week for review. While I am gone, she is doing the walk throughs (using the blank walk through report generated by CAM*Pro. She sent me a list of the items she noted and I sent her directions for additional letters to be generated using the database. These included 2 violations that had been completed and could be closed, an Administrative Chargeback letter, 4 Rules Violation Letters and 2 Architectural Compliance letters and a couple of items for follow up on my return. She sent me copies of the letters she generated for review prior to sending them out.

Between the database and email, communications flow effortlessly between us regardless of physical location and there is a comprehensive history of every action taken.

Imagine having someone go out on vacation or an emergency and any one being able to step in and get the full picture of what is going on for the associations in their care. The key to having this option is the power of computing today matched with clear data entry standards and processing. More about this in my next blog!

Gayle J. Hasley
Community Association Manager
Community Association Homeowner
www.campro.us
gayle@campro.us

It seems forever since I wrote my last blog… indeed, I’ve been in Phoenix for over 2 weeks now supporting my sister who had major surgery 15 days ago and I am not scheduled to return for another 10 days. My assistant Carol, my right hand and a truly incredible, responsible, lovely person, has been looking after the associations while I am away. How can I be gone so long and still know that my properties are well cared for? Obviously, a GREAT assistant is key and technology is the other vital key.

Carol has worked for me for almost 2 years; however her true understanding of the business of running an association is quite limited. She does know and understand the software we use very well so that provides both the context and the capability for us to work in team, even long distance.

Carol normally checks and returns all messages received during the day. She records them in our CALL LOG which she sends me at the end of the day. Calls are noted as Completed/FollowUp or To Do so it is easy for me to review and respond to my To Do’s and any related questions she has.

She runs the Rules Violation Report and the Outstanding WO report each week for review. While I am gone, she is doing the walk throughs (using the blank walk through report generated by CAM*Pro. She sent me a list of the items she noted and I sent her directions for additional letters to be generated using the database. These included 2 violations that had been completed and could be closed, an Administrative Chargeback letter, 4 Rules Violation Letters and 2 Architectural Compliance letters and a couple of items for follow up on my return. She sent me copies of the letters she generated for review prior to sending them out.

Between the database and email, communications flow effortlessly between us regardless of physical location and there is a comprehensive history of every action taken.

Imagine having someone go out on vacation or an emergency and any one being able to step in and get the full picture of what is going on for the associations in their care. The key to having this option is the power of computing today matched with clear data entry standards and processing. More about this in my next blog!

Gayle J. Hasley
Community Association Manager
Community Association Homeowner
www.campro.us
gayle@campro.us

It seems forever since I wrote my last blog… indeed, I’ve been in Phoenix for over 2 weeks now supporting my sister who had major surgery 15 days ago and I am not scheduled to return for another 10 days. My assistant Carol, my right hand and a truly incredible, responsible, lovely person, has been looking after the associations while I am away. How can I be gone so long and still know that my properties are well cared for? Obviously, a GREAT assistant is key and technology is the other vital key.

Carol has worked for me for almost 2 years; however her true understanding of the business of running an association is quite limited. She does know and understand the software we use very well so that provides both the context and the capability for us to work in team, even long distance.

Carol normally checks and returns all messages received during the day. She records them in our CALL LOG which she sends me at the end of the day. Calls are noted as Completed/FollowUp or To Do so it is easy for me to review and respond to my To Do’s and any related questions she has.

She runs the Rules Violation Report and the Outstanding WO report each week for review. While I am gone, she is doing the walk throughs (using the blank walk through report generated by CAM*Pro. She sent me a list of the items she noted and I sent her directions for additional letters to be generated using the database. These included 2 violations that had been completed and could be closed, an Administrative Chargeback letter, 4 Rules Violation Letters and 2 Architectural Compliance letters and a couple of items for follow up on my return. She sent me copies of the letters she generated for review prior to sending them out.

Between the database and email, communications flow effortlessly between us regardless of physical location and there is a comprehensive history of every action taken.

Imagine having someone go out on vacation or an emergency and any one being able to step in and get the full picture of what is going on for the associations in their care. The key to having this option is the power of computing today matched with clear data entry standards and processing. More about this in my next blog!

Gayle J. Hasley
Community Association Manager
Community Association Homeowner
www.campro.us
gayle@campro.us

It seems forever since I wrote my last blog… indeed, I’ve been in Phoenix for over 2 weeks now supporting my sister who had major surgery 15 days ago and I am not scheduled to return for another 10 days. My assistant Carol, my right hand and a truly incredible, responsible, lovely person, has been looking after the associations while I am away. How can I be gone so long and still know that my properties are well cared for? Obviously, a GREAT assistant is key and technology is the other vital key.

Carol has worked for me for almost 2 years; however her true understanding of the business of running an association is quite limited. She does know and understand the software we use very well so that provides both the context and the capability for us to work in team, even long distance.

Carol normally checks and returns all messages received during the day. She records them in our CALL LOG which she sends me at the end of the day. Calls are noted as Completed/FollowUp or To Do so it is easy for me to review and respond to my To Do’s and any related questions she has.

She runs the Rules Violation Report and the Outstanding WO report each week for review. While I am gone, she is doing the walk throughs (using the blank walk through report generated by CAM*Pro. She sent me a list of the items she noted and I sent her directions for additional letters to be generated using the database. These included 2 violations that had been completed and could be closed, an Administrative Chargeback letter, 4 Rules Violation Letters and 2 Architectural Compliance letters and a couple of items for follow up on my return. She sent me copies of the letters she generated for review prior to sending them out.

Between the database and email, communications flow effortlessly between us regardless of physical location and there is a comprehensive history of every action taken.

Imagine having someone go out on vacation or an emergency and any one being able to step in and get the full picture of what is going on for the associations in their care. The key to having this option is the power of computing today matched with clear data entry standards and processing. More about this in my next blog!

Gayle J. Hasley
Community Association Manager
Community Association Homeowner
www.campro.us
gayle@campro.us

Everything you wanted to know about databases… well, ok, maybe, not everything. But I wanted to write just enough for a new user to understand what the difference is between a database and a software program and to help people who are looking for either to have a few more “tools” in their tool belt. There is tons of information available in Wikipedia to help people understand all of the aspects of databases and software programs so if this article tickles your interest that is a great place to find out more.

Simply put, a computer database is a structured collection of records or data that is stored in a computer system. The structure is achieved by organizing the data according to a model, the most common of which is the “relational” model (as opposed to a “”hierarchical” or “network” model).

A computer database relies upon software to organize the storage of data. This software is known as a database management system (DBMS) – the “engine” if you will, with the specific type of software program being the car that is built around it. You might have the same engine (Microsoft Access, Oracle, SQL or Filemaker are all popular engines) but the car could be a bus, van, Escort or Lexus. That is where the programming comes into play. Computer programmers are often referred to as architects because they are designing the body of the car using one of these engine products as the engine for their program. Yardi, CAM*Pro, CondoManager and Tops 2000 are all examples of HOA specialized software built with different capabilities and different “engines” powering them.

Just as an 8 cylinder engine differs from a 4 cyclinder engine in size, power and capability, there are differences in these DBMS “engines”. A great deal of the internal engineering of a DBMS, however, is independent of the data model, and is concerned with managing factors such as performance, concurrency, integrity, and recovery from hardware failures. There can be large differences between these basic “engines”.

Databases are used in many applications, spanning virtually the entire range of computer software. They are the preferred method of storage for large multiuser applications, where coordination between many users is needed. Even individual users find them convenient, and many of our electronic mail programs and personal organizers are based on standard database technology.

A software program using Microsoft Access as the engine, could be as simple as information related to vendors containing the data relating to each such as name, address, phone and email.

Software can be used for accounting (including large scale calculation abilities), or to manage associations (or a combination thereof). Software development is not cheap and (as long as the DBMS product used is sufficient for the task) the better the engineering (architecture) is on the front end, the fewer problems you have on the other end.

One of the most important aspects of database software is that it is only as good as what you can get OUT of it. This is called its “query ability”.

Querying is the process of requesting various information from different perspectives and combinations of factors. Examples: "How many of our units are rented?" “How much money did we spend on deck coating in 2007?” “What rules violations are outstanding right now?” “How many fines have we imposed on this one owner?” As long as you have the necessary fields completed, and a hefty reporting capability built into the programming, you can get that answer, especially if you have protocols in place to ensure the consistency of data at the time it is entered.

A database query language and report writer allows users to ask questions of the database, analyze its data and update it accordingly. It also controls the security of the database.
When programs are customized for each data entry and updating function, the software can also leave an audit trail of actions or provide the kinds of controls desired in a multi-user organization.

Understanding the basics and knowing what you need are the keys to getting the right software. If you are happy with your accounting software, or you outsource this function, perhaps all you need is the management capability. Until recently, there hasn’t been a specialized software for managers that was not built onto an accounting package. Now, CAM*Pro and a few others are filling that void.

As more software becomes available, knowing your needs can help you get the software you need at a cost you can afford. Creating a comparison chart will help you figure out what features each software has and also compare costs to some extent. Software varies hugely in its cost but there IS affordable powerful association management function software out there. It is worth the time and effort it takes to research this type of investment in your management future!

Gayle J. Hasley,
Community Association Manager
Community Association Homeowner
gayle@campro.us
www.campro.us