Condo & HOA Collections For Condo & HOA Budget Time

By Mitchell Drimmer, CAM Once a year in every community association the most significant event occurs and that is the formulation of the association’s annual budget. It’s even more important than the annual election because this budget is the road map for how the association is to be run for the next year. The board can decide to on many issues including capital improvements, added amenities, reduced services, and everything in between. However, the one item that always leaves the board and management confused is the disposition of delinquent fees and questionable debt. What can be done to predict the unknown because the more accurate you’re are the more realistic… Read More

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Storm & Catastrophic Preparation – An Emergency Line of Credit

We are in an age of dramatically more devastating natural events: frequent and expansive wild fires, intense hurricanes, stronger tornadoes and historic rains/snowfall resulting in record flooding. As never before, establishing catastrophe planning strategies supported by adequate insurance coverage is a critical element to restoring the facilities impacted. There is a banking program specific to community associations that is particularly valuable for the environmental changes being experienced. The program has traditionally been referred to as a “Standby Line of Credit for Named Storm Damage”. The reason such a bank facility becomes valuable has largely to do with expediency and unforeseen dilemmas with insurance coverage. The general description of such a… Read More

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Building Components: Technological Advancements Make Upgrades Worthwhile

With technology advancements, replacing worn elements may be less effective than upgrading to new materials. For instance, wooden decks may look fantastic at a shore side condominium complex. It’s too bad they need to be replaced every 10 years. They just don’t hold up to the elements. Until recently, using wood to replace wood may have been the only option. Now, it is not uncommon for modern materials like plastics, amalgamations, and even recycled products like rubber from tires to be used to offer beautiful options with the benefit of longer life and lower cost of ownership. There was a time when most condominiums were referred to as “brick and… Read More

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HOAs & Condos…Beautiful Dreams or Horrific Nightmares

The property is beautiful, and the apartment or house is just what you have been dreaming about. This place is shouting “welcome to your new home” as loud as possible. It’s what you have always wanted but the question remains; is this a good place to buy? When you buy a house that is not part of an Association the relationships are between you, the house, and the neighbors. When you buy a property in a Condo or HOA another component is added – you are not just purchasing a house or apartment, but you are essentially entering into a business partnership with a bunch of people that you don’t… Read More

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Delinquency and the HOA

The timely collection of fees and assessments is the lifeblood of any HOA, condominium association, co-operative, or timeshare. However, unit owners are not always able to pay their fees and assessments on time. Depending on the state you live in and the penalties for late payments ascribed in the governing documents, delinquency is handled in one a few different methods. This article describes some of the best practices common interest community associations can use to keep their delinquencies to a minimum and their collection efforts on track to keep the revenue flowing while the delinquency is remedied. Most HOAs have rules about when payments are late and what steps the… Read More

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Effects of Reverse Mortgages on Condos and HOAs

Many condominiums and HOAs are filled with units and homes that are financed with bank-held mortgages. Reverse Mortgages are available to home and condo unit owners over the age of 62 who would prefer to draw money from the equity in their home or condo unit. These mortgage owners can either take a lump sum or periodic payments from the equity in their home. The mortgage holder gets paid back when the home is sold or liquidated upon the death of the mortgage owner. The Federal Housing Administration, better known as FHA, is the leading insurer of these mortgages. Banks prefer to offer mortgages to borrowers and real estate that… Read More

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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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Dear HOA: There is No Fun in Dysfunction

Several years ago I authored an article, When Worlds Collide, which outlined how Board members are often out of touch when it comes to the compensation and replacement value of an onsite manager.  In short, Board members use what I call “The Association Metric” in determining remuneration, as opposed to the “Executive Replacement Metric,” which is what the market uses. The Association’s Metric is almost solely based on the Association’s current and past experiences with onsite managers; it is colloquial and subjective and usually is based on: a) What we now remunerate our manager; b) What ‘type’ of manager we currently have; c) Other factors that affect the thought processes… Read More

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Deck / Lanai Refurbishment, Replacement, Maintenance – A Common Budgeting Mistake

  Decks / Lanais systems are typically one of the larger project expenses a community will face. Budgeting for their short and long term care is not always as straightforward as it appears to be as the degree of deterioration of this component is heavily reliant on historical maintenance trends in the community. I will touch on one of the more common budgeting mistakes we see on a regular basis. Maintenance and proper care will actually save a community a significant amount of money in the long run; deciding who (and how) this component is maintained can have a significant impact on the budgeting recommendations in the reserve study as… Read More

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