Telling the Story of Community Association Insurance

Most condominium association residents are likely to have little or no understanding of the insurance that protects the association in which they reside. Let’s face it; there just isn’t a lot of glamour in discussing deductibles, coinsurance, liabilities and such that make up the community association insurance story. Telling the story of your community’s insurance coverage is going to be a challenge but if done properly, can yield a wealth of rewards. Start with the basics. Every resident needs to know that the community has insurance and that the insurance covers certain elements which the entire community owns in common. Every resident also needs to know that community association insurance… Read More

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Commit to Unit Owner Education. Reward Yourself with a Better Community!

For years, I have been writing about the importance of communication as it relates to community association living. I have stressed how important it is that you tell your story well and that you tell it often. Condominium newsletters, HOA newsletters, letters, websites and any other tools used to communicate need to educate readers about what is happening within their associations and why. There has never been a time when communication and education efforts between Board Members, Property Managers, and unit owners have been more important. Community Association Volunteer Leaders at many events that I attend often indicate that there seems to be a vacuum of education between Board Members… Read More

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The Top Traits of Great and Effective Boards of Directors

Over the years, I have worked with many, many Boards of Directors: As a manager, as a consultant, and as a member of the Board. And as we all – managers and Board members alike – know, some Boards are just better than others at administrating their community and effectively achieving their agenda with grace, dignity, professionalism and humor. These Boards are a pleasure with which to work or on which to serve. So, what differentiates a Great Board from just an okay Board? Great Boards develop, maintain and value their credibility and their integrity. And they continually display, individually and as a group, the following traits: Great Boards focus… Read More

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More Top Traits of Great Boards!

What’s the difference between a great Board and just an okay Board? Great Boards develop, maintain and value their credibility and integrity.  As a group and individually they continually display the following traits: Great Boards suffer no illusions.They know that if they receive three bids for a particular service and one of the three bids is substantially lower than the two, it is reasonable and logical to assume that there is something to question within that bid. Maybe the contractor read the RFP wrong. Or, maybe they simply low-balled the bid. Great Boards are seldom fooled by this tactic: They understand they can’t have a Mercedes for the price of… Read More

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Board Expectations v. Managers’ Available Time Part I

This past month I gave a presentation to CAI Channel Islands Chapter entitled Ready or Not, HEAR it Comes! It was based on the chapter’s anonymous survey of Board members and managers which consisted of only one question for each: For the Boards: What 3 things do you want to say to your manager? For the Manager: What 3 things do you want to say to your Board? As you can imagine, everyone had a lot to say (!); however, amazingly enough, the responses from both sides were variations on the same theme: Board expectations v. managers’ available time. This month we’ll take a look at legitimate concerns Board members… Read More

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Life Isn’t Fair – But Funding Plans In A Reserve Study Should Be…

Fairness is a concept a reserve analyst must consider when developing a financial strategy for a community. It’s one of the basic concepts outlined in National Reserve Study Standards which was published by the well-respected Community Associations Institute in 1998 and is an extremely important consideration when providing the most tailored options(s) available to a community.  1. What is fairness? Fairness refers to adequately dispersing the reserve allocation expenses to the membership over time in an equal and stable fashion. This can be challenging as expenses occur irregularly and often seem to come due all at once in “Peak Years”; when several of the larger expense common areas meet the… Read More

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Approval With FHA, Fannie Mae, Freddie Mac – The 10% Rule

In recent years lending institutions have become much more restrictive in approving and/or insuring loans for common interest communities. The FHA approval list has fallen by about 50% over the past 4-5 years. This has been due to a variety of reasons including new more restrictive reserve allocation requirements, owner occupancy standards and extensive documentation requirements. Impact on Market Appeal It has been our experience than many projects have seen declining marketability as financing options have dried up for Buyers. With rising real estate markets across the country this typically means the units in these community are seeing increases at a lower rate than units in communities which are approved… Read More

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Surefire Ways to Drive Your Association to Financial Ruin

Common interest communities are non-profit businesses and just like any business budgeting and financial planning are essential to the success and longevity of the business. What is everyday common sense with respects to businesses is often ignored for common interest communities. While this may seem like a harsh assessment of many Boards out there it is an unfortunate reality as is evident by the high number of special assessments and loans being taken out by Associations to cover expenses that are usually expected and have years or decades to properly fund for. The reasons for the lack of adequate funds can most often be attributed to the following scenarios.  … Read More

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Reserve for the roof? But We Just Replaced the Roof!

This was a response from a homeowner in a condominium community that I was completing a site inspection for. She was under the impression that there should be no reason to fund for the roof for many years since it was recently replaced. Unfortunately this is an common view among homeowners and Board members and is a big reason why many Associations remain at a poor funding level over many years. The Reserve Account is Not for Future Expenses It’s an important concept when completing reserve studies that the recommended allocation rate to a reserve account is not for the future; instead it’s to offset the current deterioration of common… Read More

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Communication is good…Solid Information Is Critical

In my journeys through the community association world I go to a lot of conferences, seminars, board meetings and read hundreds of articles about how to best manage and govern a community association.  It has almost become a cliché that communication is the most important aspect in managing an association.  While I don’t disagree I also believe that information and facts are just as important and it is a commodity that is sorely lacking. Every day I am astounded about how little information boards of directors and management companies have regarding the status of their associations, specifically rosters of owners with proper addresses phone numbers & contact information, aging of… Read More

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