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January 21, 2008
Board Members: Things to look at in 2008
In tracking news stories about community associations, I can see trends developing as they start somewhere and then start moving across and around the country. Here are my thoughts about the things association boards need to start thinking about, if they already haven't:
Energy Issues
Energy and water conservation are becoming both popular and necessary. Droughts in many parts of the country, coupled with rising energy costs have already created serious problems for some associations, and the liklihood is, that energy will continue to be near the top of the issues we should be working on.
Clothes lines, solar panels and wind turbines - all items that owners are now looking at using. Are you going to let them? If no, are you prepared for the state legislature to force you to accept them?
Aggressive, automated water management, low-energy common lighting, xeriscaping, solar heating for clubhouses and pools, drainage improvement - are among the items that should be investigated and instituted.
Foreclosures
There have been many news stories about the impact of foreclosures on association finances. In many cases, the impact was intensified by the fact that the association didn't have policies in place to handle them and delayed to the point where they were unable to recover large parts of the delinquent assssments. Have a delinquency policy, and enforce it. You have a fiduciary responsibility to make sure the association is financially viable. Stay on top of this one.
Financial and Owner Security
Last year there were about a dozen embezzlements from associations - by board members, managers and bookkeepers. Re-check your financial controls and make sure no one has the ability to write checks, move money, or commit funds, without another person checking. If you haven't had your books audited or reviewed by a qualified, outside third party, then make this year the time to get it done. Financial checks and balances are a pain, but associations lost in the millions last year - make sure it doesn't happen on your watch. Another reason to take more care this year - financial hardships often lead good people to make bad decisions, and this is going to be a tough year.
Another issue that goes with financial hardships is often an increase in crime, specifically robbery. Towards the end of this year, I started noticing more stories about crimes in gated communities, condos and HOA's. Thieves go where they think the money is, and gates don't seem to keep them out. Start talking to you police now about neighborhood watches, increased patrols, security cameras, etc. Get the owners involved with this one.
Huge Assessments/Buildings Not Repaired
There were some shocking special assessments reported in associations this year, not all related to natural disasters. Associations, having kept to a long-standing policy of low or no assessment increases found themselves unable to pay when critical, and major systems began breaking down. Some associations just gave up, letting the buildings deteriorate until they were closed by health or building inspectors. Some owners got a huge shock when special assessments in the 5 figures were received, with almost no grace period.
Times are getting tougher, but you can't postpone everything. This may be the year for that reserve study you've been postponing. I think we may finally see prior boards sued for failure to reserve adequately. Get a handle on your financial situation, not just now, but for the future.
Owner Issues
Last year saw issues with comfort animals, second hand smoke, banning sexual predators, flags, religious statues and practices, "Children Playing" signs; speeding on privately owned streets, as well as the usual flags, fences, parking, colors, etc. The new ones you shold talk to your attorney about. It might actually be nice to be pro-active for a change, rather than always be reactive.
The ones that drove me the craziest were the ones involving handicap requests for changes to their homes, or modifications to a common area, and were summarily rejected by boards. Not getting good legal help on this one can cost you not only in court, but fines from federal and/or state agencies. Don't even discuss these until you understand what is involved regarding ADA and FHA (Fair Housing). Your owners really don't want to hear that because you rejected a reasonable request, that you not only lost the lawsuit, but got hit with a 6-figure fine to top it off.
Make 2008 a year you don't show up in the news.
Posted by joewest at January 21, 2008 8:00 PM
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