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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Help Your Community And Help Your Neighbors By Reporting Delinquent Owners to Credit Bureaus.

A recent study conducted sponsored by a major credit repair firm and conducted by Harris Poll asked specific questions related to what people understand about credit scoring, how they are arrived at, and the information that is taken into consideration to determine them. The study revealed some surprising information.  Eventhough credit scores affect Americans in many important ways including the price they pay for credit and insurance many people are mis-informed about the entire process.  This is shocking as your credit score can not only affect your ability to get credit but also impact on your ability to obtain employment. By not understanding how credit scores are formulated consumers could… Read More

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HOA & Condo Association Collections: How to Collect Unpaid Fees

Note: This article can relate to all community associations but some parts are Florida specific. As part of a community association, it’s common to encounter those one or two owners (or more) who don’t pay their community association fees. Unfortunately, the repercussion of those owners who don’t pay affects those who do. Reliable paying members of an association could face increased fees, special assessments or reduced spending on community maintenance and amenities. Usually in this situation the community association has to enforce the community association’s policy to establish consequences for continued non-payment and for that matter chronic late payments. The Consequences Of Delinquencies To Community Associations Non-payment of community association… Read More

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