Future HOA Forecasting

Preparing for and overseeing a homeowner association's finances are perhaps the most important board responsibilities. It takes money and careful planning to maintain and preserve common area property. One of the best forecasting tools is a "reserve study", needed to identify common element components, their useful lives and cost of repair or replacement. Unlike the weather, this is one forecast that actually happens pretty much as predicted. Read more

Priority Lien Can Shield Homeowner Associations from Foreclosure Losses

Foreclosures are setting new records nationally and locally, and common interest ownership communities are feeling the impact.  As foreclosures and mortgage delinquency rates have increased, so have association accounts payable as more owners fall behind in the payment of their common area fees. There was a time when a foreclosure wave like the one we are witnessing today (2 percent of all mortgages were in foreclosure in the fourth quarter of last year) would have meant financial strain, at best, for most homeowner associations and financial disaster for some confronting the revenue shortfall created when one or more owners fail to pay their share of common expenses.  But thanks to the 1992 “Super Lien” statute, Massachusetts community associations have a means of protecting themselves from foreclosure-related losses.  As the term suggests, the “super lien, also known as a “priority lien,” takes precedence over the claims of all other creditors, including the holder of the first mortgage, ensuring that the association will be able to recover at least six months of unpaid common fees  plus the legal expenses related to the collection of those delinquent payments.  Absent this potent legal weapon, associations would be able to collect unpaid fees following a foreclosure only after the mortgage had been repaid.  Read more

Avoiding Covenant Enforcement Pitfalls

Over the past few years, public sentiment towards homeowner associations has become increasingly unfavorable.  Much of it stems from covenant enforcement issues and the steps taken (or not) by boards of directors.  This has resulted in legislation to make homeowners associations more “user friendly" regarding restrictive covenants. Consequently, courts often hold associations to a strict standard, requiring precise observance of the procedures in the covenants and in rules and regulations.    Most associations are faced with the reality that at one time or another they will need to take an owner to court to enforce restrictive covenants.  Many pitfalls leading to such action can be avoided by using some common sense precautionary measures.   Read more

How to Improve Your Companywide Meeting

Meetings both reflect and reinforce a company's culture, and in many cases, they send unintended messages. Seemingly small facts about how the meeting is run have tremendous symbolic power: Are there enough chairs? Are new employees introduced? How is the leader's body language? Be conscious of these issues and approach a meeting as an opportunity to demonstrate and reward the values and behaviors you want to encourage. You want staffers to leave every meeting feeling better, not worse, about working for your company.  Read more

Delinquency Rates

Managers are beginning to see more associations with delinquency rates approaching 20%. The perceptive managers are initiating conversations with their boards to direct focus on the effects of increasing accounts receivable. Accounts Receivable (AR) reduces an association’s cash. When an association’s AR is 5% or less, there are usually no problems. However, an alarming number of Associations are experiencing AR in excess of 20%. What should a Board do when they are only collecting 80% of the assessments?  Read more

CAI-RF Releases Latest "Best Practice" Report - "Security"

The related issues of personal safety and community association security are the focus of a new Best Practices report issued by the Foundation for Community Association Research. Community Security can be used by associations to determine their security obligations and how best to provide an appropriate level of security for their residents. The report addresses association security obligations, security services, video surveillance and alarm systems, access control systems for vehicles and pedestrians, automated gate systems and more. The 50-page report is the eighth Best Practices report developed by the Foundation. The reports can be downloaded for free or purchased in hard copy by CAI members through Community Associations Press.

Five Steps Toward Disaster Preparedness for Small-to-Medium Businesses

For small and medium-sized businesses (SMBs), the impacts of a disaster can result in loss of or lack of access to data, applications, and work facilities. Hurricane Katrina's devastation of the U.S. Gulf Coast in 2005 impacted countless businesses, from retail stores and hotels to major corporations. Those with disaster recovery plans in place fared much better than those without such contingency plans.  While the business impacts of disasters—such as the loss of data and communications infrastructure, leaving a business unable to function—are widely understood, SMB have been slower to develop disaster recovery plans as compared to larger organizations. But that appears to be changing.  Read more

How to Tame the Unruly Meeting

Board members and managers alike can all recall meetings that left them with churning stomachs and scratching their heads afterwards, wondering how in the world things could have gotten so out of control. The supportive homeowners get up and leave, and the disrespectful folks stay and just get more out of control by the minute. The Board members (and often the homeowners and the manager) feel beaten up and mistreated. While those situations are a learning experience for everyone, it might be helpful for both Board members and managers to do a little advance training to achieve a better outcome the next time around… and the next time will come. Naturally, planning ahead helps to provide some insurance against losing control. Too many boards fall into the trap of thinking that homeowner involvement is always minimal and there would be little point of spending money on them at the meeting. They decide they should not bother with a meeting plan, providing numerous handouts, or taking the time to prepare a PowerPoint presentation. They often focus only on the expense of having their attorney or project consultant present, rather than considering the benefits. While financial considerations are important, the Association will present a business-like image to those community members who attend, if speakers are available and factual handouts are provided. Unfortunately, when you find yourself already in the meeting, it is too late to back track and make a plan.  Read more

Electronic Waste: Managing Hazardous Materials

As organizations continue their efforts to go green, the pressure is mounting for managers to help reduce waste streams and maximize reuse and recycling within facilities. One area in which managers can demonstrate their commitment to environmentally friendlier facilities is in managing electronic waste. Electronic waste includes computers, monitors, printers, photocopiers, telephones, cell phones, fluorescent lamps and batteries. A preferred hierarchy exists for handling and managing electronic-equipment waste: first reuse, next recycle, then dispose. Understanding the federal and state regulations and guidelines designed with this disposal hierarchy in mind will help managers decide which process is best for their organizations.   Read more

Condo Units: The New No-Smoking Frontier - What A Colorado Court Ruling Could Mean To You

“My home is my castle.” Maybe, maybe not, if you’re a condominium owner. After pushing through smoking bans in bars and restaurants, anti-smoking advocates have begun to set their sights on another target: condominium units. These advocates have been predicting that it is only a matter of time before condominiums bar smoking entirely, not just in common areas, but inside individual condominium units as well. In fact, in 2006, a Colorado court upheld an amendment to the Declaration of Condominium prohibiting smoking anywhere within the boundaries of the condominium property, including the individual condominium units.  Read more

When Secondhand Smoke Seeps in

Is the co-op or condo liable when secondhand smoke emanates from an apartment? It is indeed, according to the landmark ruling in Poyck v. Bryant. When smoke gets in your eyes — or nose or throat — this violates the warranty of habitability that applies to all residential apartments.   Read more

Going Green on the Cheap: How You Can Start Today

It can be as simple as switching from incandescent to fluorescent lightbulbs. It can be a bit more complex, like replacing worn-out air conditioners and washing machines with energy-efficient appliances. Or, it can be as exotic as installing a microturbine, or turning a rooftop into an insulating garden. Whichever way, many co-op and condo boards are taking action to make their buildings, their city and their planet shade toward the desirable new color: green.   Read more

Why does talent walk?

Retaining talent is a serious concern for organizations. Each time a talented knowledge worker walks out the door, they take valuable expertise and organizational knowledge with them. In the past this wasn't a concern. People were considered replaceable. Organizational assets consisted of tangible things like the property and equipment that an organization owned. Not any more. Now people, particularly talented ones, are often an organization's most valuable present and future assets.  Read more