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2008 CAM Continuing Education course

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I was the editor and instructor for this course.

I was the editor and instructor for this course.


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  • 1. Welcome Community Association Management Professionals! Bert Rodgers Schools distance learning continuing education courses allow you to enjoy the convenience of studying on your schedule, without the stress and expense of driving to class. Fulfill your 2008 education requirements with the courses in this book or online, studying at your pace, on your schedule in your home or office. It’s easy! Read the courses, written by nationally-known industry experts Richard Thompson and Ellen Hirsch de Haan. At the end of each course evaluate your comprehen- sion of the material by answering the true or false final assessments. Study online or by correspondence. The online option gives you the ability to register, study, answer the final assessments questions, and print your certificate(s) of completion immediately upon passing each course. If you choose correspondence, simply mail or fax your registration form and answer sheet(s) to our school (see detailed instructions in this book). We offer convenient same-day and next-day priority grading options. Save time and money when you choose Bert Rodgers Schools for your continuing educa- tion. For maximum savings, take advantage of our Special Offer—only $129 for all 5 courses (a total of 18 hours), including the 2-hour 2008 Legal Update. That’s a savings of $36! Rely upon Bert Rodgers Schools while enjoying the savings and convenience of distance learning. Benefit from our 50 years of experience in educating Florida professionals that we put to work for you! Continuing Education Requirements Community association manager licensees must satisfactorily complete a minimum of 20 hours of continuing education by September 30, 2008. The 20 hours of continuing educa- tion shall be comprised of courses approved by the Council, pursuant to Rule 61-20.5082, F.A.C., in the following areas: • hours of legal update seminars. Licensees shall satisfactorily complete a 2-hour legal 4 update seminar during each year of the renewal period. The 2-hour 2008 required legal update must be completed between October 1, 2007 and September 30, 2008. • hours of instruction on insurance and financial management topics relating to commu- 4 nity association management. • hours of instruction on the operation of the community association’s physical property. 4 • hours of instruction on human resources topics relating to community association man- 4 agement. • hours of additional instruction in course approved by the Council. 4 Community association managers licensed between October 1, 2006 and September 30, 2008, are not required to complete continuing education for this initial license period. The DBPR requires that licensees retain, and make available to the Department upon request, continuing education course certificates of completion for 3 years following course completion. Community Association Management    CAM_book.indb 1 6/12/08 7:43:53 PM
  • 2. Directory Bert Rodgers Schools 1855 Porter Lake Dr Sarasota FL 34240 Phone 941-378-2900 • Fax 941-378-3883 Toll Free 800-432-0320 Instructor, Technical, and Administrative Support Telephone Hours: M-F 8:30 AM to 5:15 PM Email: CAMinfor@bertrodgers.com Techsupport@bertrodgers.com www.bertrodgers.com Division of Professions Regulatory Council of Community Association Managers 1940 North Monroe Street Tallahassee, FL 32399 www.myflorida.com/dbpr/pro/cam/index.html Phone: 850-487-1395 ii     Bert Rodgers SchoolsCAM_book.indb 2 6/12/08 7:43:53 PM
  • 3. Bert Rodgers Schools Table of Contents COMMUNITY ASSOCIATION MANAGEMENT Founder Bert Rodgers 2008 Legal Update | 1 President Final Assessment | 15 Lori J. Rodgers Administrative Vice President Association Financial Management William E. Giffard and Insurance | 17 Director of Information Systems Final Assessment | 39 Alison Harner Director of Finance Aaron Pulone Operation of the Association’s Director of Operations Physical Property | 41 Kelli Finnigan Final Assessment | 63 Project managers Valerie Churchillo Lisa Lacey Communication Skills and Tools | 65 Instructor Janine Spiegelman Final Assessment | 91 Project Coordinator Jerry Schmitt Board Operation Teamwork and Student Services supervisor Problem Solving | 93 Patti Pasquini Final Assessment | 113 Student Services Brenda Fletcher Mark Forsman Instructions/Grading | 114 Jenncie Grove Mary Killoran Registration Form/Answer Sheets | 115 Shirley Samson Kayla Smillie Typesetting Wild Dezign Printing Action Printing Community Association Management     iiiCAM_book.indb 3 6/12/08 7:43:54 PM
  • 4. Bert Rodgers Schools ©2008 All rights reserved, including the right to reproduce this manual or any portion of this manual in any form, or to use it for teaching purposes without the express written consent of the copyright holder. Richard Thompson courses used by permission. Copyright by Regenesis.net. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Bert Rodgers Schools shall not be liable in any way for failure to receive and/or grade your answer sheet within any specific time period. It is your responsibility to ensure that you have complied with your license renewal requirements in a timely manner. Bert Rodgers Schools recognizes and respects its students’ privacy. Course records are confidential, and the School does not sell or rent students’ names or other information to any company or organization. Cover design: Digital Ink Design Group ISBN: 1-891753-49-5 Printed in the United States of America iv     Bert Rodgers SchoolsCAM_book.indb 4 6/12/08 7:43:55 PM
  • 5. Approved by the DBPR Council for CAM, Provider #0001856, Course #9625416 2008 Legal Update by Ellen Hirsch de Haan, 2 Hours in Subject Area: Legal Update B.A., J.D., M.ED. Learning Objectives Upon completion of the course the learner shall be able to: 1. Discuss the 2007 amendments to the Florida 5. Discuss recent changes to Chapters 718, 719, Statutes. and 721, Florida Statutes, Condominiums, Cooperatives, and Vacation and Time Share 2. Identify and describe recent rule changes to Plans. Chapter 61-20, Florida Administrative Code, Parts I and II. 6. Identify and describe federal laws and regula- tions impacting community association manage- 3. Discuss review of Chapter 455. ment. 4. List key provisions of Florida Statute 617, 7. Discuss case law affecting community associa- Corporations Not for Profit. tion management. LEGISLATION from pedestrian access to a public beach contiguous to a condominium property, except where necessary The Florida Legislature had a very busy session in to protect public health, safety, or natural resources. 2007, considering and addressing a number of bills which affected operations and occupancy in condo- Lender Consent of Amendments. Amends minium, cooperative, and homeowners associations, §718.110(11), F.S., to address lender consent of as well as timeshare regimes. There were also some amendments when required by the condominium changes which generally affect community association documents. Several of the noteworthy provisions of operations. these changes are as follows: As is true every year, in 2007 there were also a • For any mortgage recorded on or after October 1, number of proposed bills which did not pass. This 2007, any provision in the declaration, articles of course includes information on those initiatives, to incorporation, or bylaws that requires the consent keep you posted on possible future trends in regula- or joinder of some or all mortgagees is enforceable tion. only as to certain matters, including, but not limited For your reference: “SB” stands for Senate Bill. to, amendments that adversely affect the priority “HB” stands for House Bill. The letters “CS” before of the mortgagee’s lien or the mortgagee’s rights to either SB or HB stand for “Committee Substitute foreclose its lien or that otherwise materially affect for.” the rights or interests of the mortgagees. • For any mortgage recorded before October 1, SB 902: Community Associations 2007, any existing provisions in the condominium SB 902 affects community associations, cooperative documents requiring mortgagee consents shall be associations, and homeowners’ associations. This law enforceable. went into effect on July 1, 2007. • Includes a method for identifying the holders of outstanding mortgages and providing them with Community Association Impacts notice of the proposed amendment. Beach access. Amends §718.106, F.S., to provide that • After the notice is sent to the mortgagees as a local government may not adopt an ordinance or required under the statute, any mortgagee who fails regulation that prohibits unit owners or their guests to respond within 60 days after the date of mailing CAM_book.indb 1 6/12/08 7:43:56 PM
  • 6.      Bert Rodgers Schools shall be deemed to have consented to the amend- club comprised of recreational facilities in which pro- ment. prietary membership interests are sold to individuals, • For amendments requiring mortgage consent on which membership interests entitle the individuals or after October 1, 2007, any amendment adopted to use certain physical facilities owned by the equity without the required consent of a mortgagee is club. Such physical facilities do not include a residen- voidable only by a mortgagee who was entitled to tial unit or accommodation. notice and an opportunity to consent. This language provides cooperatives with an abil- ity similar to that permitted under the Condominium • Sets a statute of limitations for actions to void an Law, which allows community associations to pur- amendment. chase golf courses, country clubs, and the like. Historically, some of the condominium laws created in the past were written to require lender Homeowners Association Impacts approval of certain types of, or even all, amendments Presuit mediation procedures. Amends the petition to the Declaration of Condominium. This created a for mediation provisions contained within §720.311, significant impediment to the various associations’ F.S., which requires mandatory mediation for certain ability to amend governing documents, even if the disputes (e.g. covenant enforcement, use or changes laws changed. Previously, an association would have to common areas, etc.) between a homeowners associ- had to spend substantial time and money to obtain the ation and a member before the dispute could be filed required mortgagee consents. One of the most ben- in court. The effective date of this new law is July 1, eficial provisions in this new law is that if the proce- 2007. This change is extremely helpful for homeown- dural steps for providing notice are followed and the ers associations, which were previously required to mortgagee does not respond, it will be deemed an wade through a series of burdensome requirements of approval. This should make it easier for associations the petition for mediation process, which allowed the to reach the level of consent required by the govern- person being sued to significantly delay the enforce- ing documents. ment process. Specifically, the aggrieved party no Power to acquire leaseholds, memberships, longer has to file a petition for mediation with the or other possessory or use interests. Amends Division of Land Sales, Condominiums, and Mobile §718.114, F.S., to provide that subsequent to the Homes. Instead, an aggrieved party must now serve recording of the declaration, agreements acquiring upon the responding party a written offer to partici- leaseholds, memberships, or other possessory or use pate in presuit mediation. The form of the written interests not entered into within twelve (12) months offer must be strictly adhered to. A sample written following the recording of the declaration must be offer is contained within the new statute. The written approved in the same manner as material alterations offer, which must be sent via certified and regular first or substantial additions to real property that is asso- class mail, informs the responding party of the dispute ciation property. and offers presuit mediation as an avenue to resolve Mixed-use condominiums. Amends §718.404(1) the dispute. The aggrieved party suggests the use of and (2), F.S., dealing with mixed use condominiums. one of 5 certified mediators to mediate the dispute. §718.404(1) prohibits the condominium documents The responding party is given the option of selecting from permitting the owner of any commercial unit to one of the 5 certified mediators. have the authority to veto amendments to the decla- If the responding party agrees to attend mediation ration, articles of incorporation, bylaws, or rules and with one of the 5 suggested mediators, the mediation must be scheduled within 90 days, unless extended regulations of the association. §718.404(2) provides by mutual written agreement. Both parties are like- that where the number of residential units in the con- wise required to prepay one-half of the mediator’s dominium equals or exceeds 50% of the total units estimated fees. The aggrieved party is authorized operated by the association, owners of the residen- to immediately proceed with the filing of a lawsuit tial units shall be entitled to vote for a majority of the against the responding party if the responding party: seats on the board of administration. The new law will 1) fails to respond to the written offer via certified and make these provisions retroactive as a remedial mea- regular first class mail within 20 days of the date of sure. the mailing; 2) fails to agree to one of the 5 suggested certified mediators; or 3) fails to prepay one-half of Cooperative Association Impacts the mediator’s estimated fees. Equities facilities clubs. Amends §719.103(18), F.S., The new law also states that persons who refuse to provide a definition for an “equities facilities club.” to participate in the entire mediation process may not It provides that an “equity facilities club” means a recover attorney’s fees and costs in subsequent litiga-CAM_book.indb 2 6/12/08 7:43:56 PM
  • 7. 2008 Legal Update     tion relating to the dispute. In addition, the new law Financial reports. Amends §720.303(7), F.S., as fol- allows the prevailing party in any subsequent arbitra- lows: tion or litigation proceeding to recover costs and attor- • Deletes the requirement that the association pre- ney’s fees incurred in the presuit mediation process. pare a financial report within 60 days after the close Overall, the changes made to §720.311, F.S., will of the fiscal year and replaces it with a requirement prove very beneficial to homeowners associations. that within 90 days after the end of the fiscal year, The new law will dramatically accelerate the presuit or on the date provided in the bylaws, the associa- mediation process. Additionally, the new law will pro- tion must prepare and complete or contract with a vide homeowners associations a less expensive path third party for the preparation and completion of a to the courts by providing a lower procedural hurdle financial report for the preceding fiscal year. to moving into court. If you have any questions con- • Requires that within 21 days after completion of the cerning the new requirements mandated by §720.311, financial report, but not later than 120 days after the F.S., you should contact your legal counsel to guide end of the fiscal year or other date as provided in you through the process. the bylaws, the association must provide each mem- Official records. Creates §720.303(5)(d), F.S., to pro- ber with a copy of the financial report or a written vide that the association is not required to provide a notice that a copy of the financial report is available prospective purchaser or lienholder with information upon request. about the subdivision or the association other than Architectural control covenants. Creates §720.3035, information required to be disclosed by Chapter 720. Florida Statutes. The noteworthy provisions are as If the association chooses to provide information, the follows: association may charge a reasonable fee for providing • Provides that the authority of an association or an good faith responses to requests for information if the architectural committee (or other similar commit- fee does not exceed $150 plus the reasonable costs for tee) to review and approve plans and specifications photocopying and attorney’s fees. for the location, size, type, or appearance of any Reserves. Amends §720.303(6), F.S., as follows: structure or other improvement on a parcel, or to • Provides that if the association does not provide for enforce standards for the external appearance of any reserve accounts, each financial report must state structure or improvement located on a parcel, shall in conspicuous type that the budget does not pro- be permitted only to the extent that the authority is vide for reserves. (The exact language required is in specifically stated or reasonably inferred as to such §720.303(6)(c), F.S.) location, size, type, or appearance in the declaration • Provides that an association shall be deemed to have of covenants or other published guidelines and stan- provided for reserve accounts when reserve accounts dards authorized by the declaration of covenants. have been initially established by the developer or • Provides that if the declaration, or other published when the membership of the association affirma- guidelines and standards authorized by the declara- tively elects to provide for reserves. tion, provides options for the use of materials, the • Provides that if reserve accounts are not initially size of the structure or improvement, the design of provided for by the developer, the membership may the structure for improvement, or the location of the elect to establish reserve accounts upon the affirma- structure or improvement on the parcel, neither the tive approval of not less than a majority of the total association nor any committee shall restrict the right voting interests of the association. of a parcel owner to select from the options provided in the declaration or other published guidelines and • If reserve accounts are established, they shall be standards authorized by the declaration. funded or maintained unless the reserves have • Provides that unless otherwise specifically stated been waived or reduced by the membership upon in the declaration or other published guidelines or a majority vote at a meeting at which a quorum is standards authorized by the declaration, each parcel present. shall be deemed to have only one front for purposes • Provides funding formulas for reserves. of determining the required front setback. When • Describes the funding of pooled reserve accounts. the specific setback limitations are not provided, the • Provides that reserve funds and any interest thereon applicable county or municipal setback limitations must remain in the reserve account and used only shall apply. for authorized reserve expenditures unless their • Provides that if a homeowners association or any use for other purposes is approved in advance by committee should unreasonably, knowingly, and a majority vote at a meeting at which a quorum is willingly infringe upon or impair the rights and priv- present. ileges set forth in the declaration or other publishedCAM_book.indb 3 6/12/08 7:43:57 PM
  • 8.      Bert Rodgers Schools guidelines and standards authorized by the declara- Insurance. During the 2007-A Special Session, the tion, the adversely affected parcel owner is entitled Florida Legislature adopted legislation permitting to recover damages caused by such infringement community associations operating at least 50 residen- or impairment, including any costs or reasonable tial parcels or units to “self insure,” for the purpose of attorney’s fees incurred in preserving or restoring pooling and spreading the liabilities of its group mem- the rights and privileges of the parcel owner. bers relating to property or casualty risks or surety • States that neither the association nor any architec- insurance. Specifically, the law permitted windstorm tural control committee shall enforce any policy or insurance coverage for a group of no fewer than 3 restriction inconsistent with the rights and privi- communities created and operated under Chapter 718 leges of a parcel owner set forth in the declaration (Condominiums), Chapter 719 (Cooperatives), Chap- or other published guidelines and standards autho- ter 720 (Homeowners Associations), or Chapter 721 rized by the declaration, whether uniformly applied (Timeshare Associations) to be obtained and main- or not. tained for the communities if the insurance coverage Because architectural control is one of the most is sufficient to cover an amount equal to the probable important functions of a homeowners association, it is maximum loss for the communities for a 250-year particularly important at this time that all homeown- windstorm event. ers associations review their declaration of covenants HB 7031 fixed what was perceived to be certain and other published guidelines and standards provid- “glitches” in the law adopted during the Special Ses- ing for architectural control. A homeowners associa- sion, including: tion or an architectural committee (or other similar • Amends §718.115 and §719.107 to provide that the committee) should not rely on undefined, unwrit- common expenses of an association include the cost ten, or unpublished architectural control guidelines. of insurance acquired by the association, including Rather, guidelines and standards should be published costs and contingent expenses required to partici- in the declaration of covenants or in a separate docu- pate in a self insurance fund. ment if authorized by the declaration of covenants. The new law’s apparent goal of requiring pub- • Amends §720.308, F.S. to provide that assessments lished guidelines and standards for architectural con- may be levied by the board to secure the obligation trol should assist associations and architectural review of the association for insurance acquired from a boards when considering requests to approve plans and self-insurance fund. specifications and when enforcing architectural control Another “glitch” to be corrected was that the requirements. This should eventually result in a fewer original legislation did not amend Chapters 719 and number of disputes between the association and parcel 720 to specifically authorize cooperative associations owners with respect to architectural control. and homeowners associations to self-insure. This law Attorney’s Fees. Amends §720.305(1)(d), F.S., to pro- fixes that glitch and implements for cooperatives and vide that a member prevailing in an action against the homeowners associations the self insurance provisions association under §720.305(1) is entitled to recover in the law adopted during the 2007 A Special Session. reasonable attorney’s fees and additional amounts as Developer Disclosures. Amends §§718.503 and determined by the court to be necessary to reimburse 718.504, F.S. and §§719.503 and 719.504, F.S., relat- the member for his share of assessments levied by the association to fund its expenses of the litigation. ing to developer disclosures prior to sale. These pro- visions apply to both condominium and cooperative Developer requirements. associations. The following are some of the changes: • Creates §720.307(3)(t), F.S., to provide that for asso- • Provides that the figures contained in any budget ciations incorporated after December 31, 2007, the delivered to a buyer are estimates only, that the developer must pay to have a turnover audit pre- actual cost of such items may exceed the estimated pared of the association’s financial records. cost, and that any such changes in cost do not con- • Creates §720.308(2), F.S., to address guarantee of stitute material adverse changes in the offering. common expenses by the developer. • Requires that the budget prepared by a developer be prepared in good faith and must reflect accurate HB 7031: Community Associations estimated amounts. This bill, dealing with insurance, developer disclo- • Preserves the developer assessment guarantees in the sures, and condominium conversions, became effective prospectus and provides that subsequent increases on May 24, 2007 when it was approved by the Gover- that are beyond the control of the developer shall nor. It impacts community associations, homeowners’ not be considered an amendment that would rise to associations, and cooperative associations. rescission rights.CAM_book.indb 4 6/12/08 7:43:57 PM
  • 9. 2008 Legal Update     • Provides that if the closing on the contract occurs the lesser of the lowest percentage of voting interests more than twelve months after the filing of the needed to amend the declaration or as provided in the offering circular with the Division of Florida Land Declaration for termination of condominiums. There Sales, Condominiums, and Mobile Homes, the are special provisions in this bill for the termination of developer must provide a copy of the current oper- timeshare units. Optional termination can be effectu- ating budget to the buyer at closing. ated by 80% of the unit owners if not more than 10% Cooperative Special Assessments. Amends § of the total voting interests of the condominium have 719.108, F.S. to clarify (similar to the Condominium rejected the plan of termination by negative vote or Act) that if a special assessment is levied, excess funds by providing written objections thereto. Mortgagee may, at the discretion of the board, either be returned consent is not required unless the plan of termination will result in less than full satisfaction of the mort- to the unit owners or applied as a credit toward future gage lien. The effective date of this new law is July 1, assessments. 2007. Condominium Conversions. Amends Chapter 718, Part VI, to change the information that must be dis- SB 1844: New Collection and Foreclosure closed by the developer of a residential condominium Regulations for Homeowners Associations created by a conversion. Some of the changes include: SB 1844 deals with liens and foreclosures for hom- • Clarifies the law by adding the terms “converter” eowners associations. The effective date of this new and “as provided in this section” to modify “reserve law is July 1, 2007, and it will have a dramatic impact accounts” in order to better differentiate between on the collection and foreclosure process for home- converter reserve accounts and regular reserve owners associations. SB 1844 creates §720.3085, F.S., accounts. and several of the noteworthy provisions of the bill • Requires the age of any component or structure are documented below: for which the developer is required to fund reserve • The bill mandates that a parcel owner is liable for accounts be measured in years, rounded to the near- all assessments on a parcel and is jointly and sev- est whole year. The amount of converter reserves to erally liable with the previous parcel owner for all be funded must be based on the age of the structure unpaid assessments that came due up to the time of as disclosed in the inspection report, which must be transfer of title. determined by an architect or engineer. • Provides for the payment of interest and late fees on • Requires a developer who sells a condominium unpaid assessments. parcel in a condominium conversion project to dis- close in conspicuous type in the contract whether • Prioritizes the application of any payment received. the developer has established converter reserve • Prohibits the placement of a restrictive endorse- accounts, provided a warranty of fitness and mer- ment on the payment. chantability, or posted a surety bond for purposes of • Requires written notice before a lien is filed against complying with the law. a parcel. • Provides the owner with 45 days to make payment SB 314: Condominium Termination for all amounts due. SB 314 had the strong support of the Real Property • Provides for the foreclosure of the lien, but not Section of the Florida Bar. A very similar bill passed until 45 days after the parcel owner has been pro- the Legislature last session (unanimously), but was vided notice of the association’s intent to foreclose. vetoed by Gov. Bush because he felt the threshold to • Permits the owner to make a qualifying offer one terminate could be too easily attained. Hearings were time during the pendency of a foreclosure action, held around the state to strike a balance between the in which case the foreclosure action is stayed for a property rights of condominium owners as a whole period not to exceed 60 days. against the rights of a lone holdout who opposes the termination plan. The bill was then modified to HB 405: Timeshare and Vacation Plans address those concerns. SB 314 amends §718.117, F.S., to provide a The new law makes a number of changes to Chapter method of terminating condominiums in the event of 721 dealing with timeshares and vacation plans. The economic waste, disrepair of the property, and when effective date is July 1, 2007. Some of the significant continued operation of the condominium is made changes include the following: impossible by law or regulation. In the event of eco- • Permits a seller to offer timeshare interests in a real nomic waste, the percentage needed to terminate is estate property timeshare plan located outside ofCAM_book.indb 5 6/12/08 7:43:57 PM
  • 10.      Bert Rodgers Schools the state without filing a public offering statement poration within the required time period. Additionally, provided certain criteria are satisfied. the bill provides for a time period within which an • Creates definitions for “lead dealer” and “resale application for funding for relocation expenses must service provider” and creates new recordkeeping be submitted to the Florida Mobile Home Relocation requirements for lead dealers and resale service Corporation. SB 259 became law on May 22, 2007, providers. the day the Governor signed the bill. • Provides that the failure of the managing entity to HB 7057: My Safe Florida Home Program, obtain and maintain insurance coverage during any Florida Building Code, and Citizens Property period of developer controls constitutes a breach of Insurance Corporation and Openings the managing entity’s fiduciary duty. Protection • States that a managing entity that is an owners asso- HB 7057 has a number of sections dealing with the ciation may waive or reduce reserves by a majority My Safe Florida Home Program, the Florida Build- vote of those voting interests present, in person, or ing Code, and eligibility for coverage by Citizens by proxy, at a duly called meeting of the owners’ Property Insurance Corporation. The part that has association. received the most attention is the section creating • States that the managing entity is authorized to man- §627.351(6)(a)8., F.S., which provides that effective age the reservation and use of accommodations using January 1, 2009, a personal lines residential struc- those processes, analyses, procedures, and methods ture located in a wind borne debris region that has an that are in the best interest of the owners as a whole insured value on the structure of $750,000 or more is and to encourage the maximum use and enjoyment not eligible for coverage by Citizens unless the struc- of the accommodations and other benefits. ture has openings protections. A residential structure • States that any determination by a timeshare asso- will comply with the requirements if it has shutters or ciation of whether assessments exceed 115% of opening protections on all openings and if such open- assessments for the prior fiscal year shall exclude ing protections complied with the Florida Building anticipated expenses for insurance coverage required Code at the time they were installed. by law or by the timeshare instrument. Note that condominium buildings are not con- sidered “personal lines residential structure.” Rather, • States that the managing entity shall use due dili- condominium buildings are insured as a “commercial gence to obtain adequate casualty insurance in such lines residential” structure. Therefore, it appears that covered amounts and subject to reasonable exclu- the new law will apply to single family homes (with sions and reasonable deductibles. an insured valued of $750,000 or more in the wind • Provides certain factors to be taken into account borne debris region and insured by Citizens), but not when determining whether the insurance obtained to condominium buildings. by managing entity is “adequate.” • Provides that the managing entity is authorized SB 2498: Insurance Reform to apply any existing reserves toward payment of Some of the highlights include: insurance deductibles or the repair or replacement • Freezes rates charged by Citizens Property of the timeshare property after a casualty without Insurance Corporation until 2009. regard to the purpose for which such reserves were originally established. • Amends §627.70131, F.S., to require insurance companies to pay or deny a claim or a portion of the SB 259: Mobile Home Relocation claim within 90 days of receiving notice of a claim. SB 259 changes the eviction notice requirements found • Amends §627.70131, F.S., to apply the 90-day pay- in §723.062, F.S., by requiring the following language ment requirement to residential property claims, be added, “You may be entitled to compensation from commercial property claims for structural or con- the Florida Mobile Home Relocation Trust Fund, tents coverage if the insured structure is 10,000 Administered by the Florida Mobile Home Relocation square feet or less, and commercial property claims Corporation (FMHRC). FMHRC contact information for contents coverage under a commercial property is available from the Florida Department of Business insurance policy if the insured structure is 10,000 and Professional Regulation.” The bill also provides square feet or less. for late fees if a mobile park owner does not make pay- • Amends §627.70131, F.S., to require the insurer to ments to the Florida Mobile Home Relocation Cor- pay interest on any payment or a portion of a claimCAM_book.indb 6 6/12/08 7:43:58 PM
  • 11. 2008 Legal Update     paid 90 days after the insurer receives notice of the SB 714: Sponsored by Senator Siplin claim, or more than 15 days after there are no longer This bill would have prohibited associations from factors beyond the control of the insurer which rea- liening, foreclosing, and/or pursuing a monetary sonably prevented such payment, whichever is later. judgment for amounts less than $2,500 and would have removed the association’s ability to recoup attor- SB 500: Instant Bingo ney fees and costs. Known as the anti-foreclosure bill, SB 500 deals with gambling regulations and amends SB 714 would have greatly impacted an association’s §849.0931, F.S. The effective date of the new law is ability to timely and efficiently collect its assessment July 1, 2007 and recognizes “instant bingo” as a per- stream in order to ensure the continuation of essential missible form of bingo on community association community services. property. Instant bingo is a form of bingo that is played using tickets that contain numbers that are concealed HB 1373: Sponsored by Representative Robaina by a cover. The player removes the cover and wins a This bill would have imposed sweeping changes to prize if the set of numbers, letters, objects, or patterns the laws pertaining to condominiums, cooperatives, on the ticket match a pre-designated pattern. The pre- and homeowners associations as well as expanding the designated pattern appears on a “game flare,” which is powers associated with the Office of the Condomin- a board or placard that contains the game name, the ium Ombudsman. The original version of this bill was manufacturer’s name or logo, the form number, the 221 pages in length. Several of the highlights of this ticket count, the prize structure, the cost per play, and bill are as follows: the serial number of the game. Although many of the • required notices of proposed amendments to be new provisions governing instant bingo are identical sent via certified mail to those governing traditional bingo, there are a few key differences. • eliminated the ability of members to waive the The new law does not restrict the number of financial reporting requirements for more than 2 instant bingo prizes that may be awarded in one day. years Likewise, the amount of each prize is not restricted. • eliminated the ability of the members to opt out of Instead, the prize amount is simply indicated on the the statutory election procedures game flare. Additionally, the number of days per week • required a community association to give members that instant bingo can be played is not limited by this 24-hours advance written notice of any attempt to legislation. The price of an instant bingo ticket must be access a condominium unit, and printed by the manufacturer on the face of the ticket, and the price cannot exceed $1.00. No discounts or • revised the prescription pet requirements free tickets are permitted. The game flare must be posted prior to the sale of any tickets, and the serial RECENT CASES, ARBITRATION DECISIONS, numbers of the tickets and the game flare must match. AND DECLARATORY STATEMENTS AFFECTING COMMUNITY ASSOCIATIONS SB 2234: Regulation of Building Inspection Professionals In addition to legislative changes, during the course of a year, the Circuit Courts, District Courts, and Arbi- This legislation will require that building inspectors, tration Division of the Department of Business and mold assessors, and mold remediators be licensed by Professional Regulation deliver decisions and rulings the Department of Business and Professional Regula- which affect the operations of Community Associa- tion by July 1, 2010. tions in Florida. These are referred to as “case law” or “common law.” SB 1824: Mortgage Fraud The following are case study samplings of rel- This legislation provides greater consumer protec- evant 2007 case law: tions related to the mortgage loan application process and makes mortgage fraud a third-degree felony. The effective date of the law is October 1, 2007. Noteworthy Bills That Did Not Pass These bills did not pass in 2007. The substance of the bills can be reintroduced in subsequent years.CAM_book.indb 7 6/12/08 7:43:58 PM
  • 12.      Bert Rodgers Schools CASE STUDY ONE Holding Chalfonte Condominium Apartment Association, No Inc. v. QBE Insurance Corporation, Case No. 06- 81046 (S.D. Fl. 2007) Rationale The association’s claim went to trial on 3 separate Facts counts (legal theories). The first count asked the court In October 2005, Hurricane Wilma damaged the to issue a declaratory judgment declaring that the asso- Chalfonte Condominium, a luxury condominium ciation was entitled to coverage for damages related adjacent to the ocean in Boca Raton, Florida. Chal- to Hurricane Wilma. The second count alleged that fonte Condominium was insured by QBE Insurance QBE was in breach of the insurance policy as a result Corporation with coverage of approximately $70 mil- of its failure to provide coverage. The third count lion dollars related to property damage, and an addi- was a count for breach of the implied duty of good tional $6.5 million in law and ordinance coverage. faith and fair dealing related to the provisions of the Chalfonte Condominium reported significant damage insurance contract. The association argued that the to QBE immediately after the hurricane. QBE failed duty of good faith and fair dealing is implied into all to adjust the claim in a timely manner. In fact, the Florida contracts, including insurance policies. QBE association did not receive a formal adjustment (esti- argued that the judge should enter judgment against mate) of the damages from QBE until after the asso- the association, at least on the third count, claiming ciation sued QBE in Federal Court. that Florida Law does not recognize a separate count The association stated that it spent approximately for breach of the implied duty of good faith and fair $12 million dollars on hurricane related repairs that dealing related to the provisions of the insurance con- tract. QBE also argued to the judge that Count III of should be covered by QBE. QBE disagreed, and the Complaint was actually an action for “bad faith”, a claimed that the association exaggerated its damages. second lawsuit sometimes feasible only after the con- QBE also claimed that many of the damaged items clusion of the first lawsuit. The judge disagreed and were excluded from coverage due to ordinary wear decided that the association was entitled to allege a and tear, corrosion, and other issues. QBE also chal- breach of the implied duty of good faith and fair deal- lenged the association’s decision to replace all the exte- ing related to the provisions of the insurance contract. rior windows and sliding glass doors, not only those The judge also decided that the discretion afforded to beyond repair. The association’s decision to replace QBE by the insurance contract could not be exercised all the exterior windows and sliding glass doors was in a manner that destroyed the parties’ reasonable based on the analysis of a certified general contractor, expectations based on the language of the insurance who determined that more than 75% of the sliding contract. glass doors and windows were severely damaged and After a trial that lasted 2 weeks, a Federal Court had to be replaced. The association also determined jury returned a verdict finding that the association that it was required to replace all the windows and suffered hurricane related damages in the amount of sliding glass doors because the alternative (replacing approximately $8.1 million dollars and that QBE did the vast majority but leaving a small percentage of the not act in good faith. QBE will also be responsible to original doors and windows) would create an incon- pay pre-judgment interest and prevailing party attor- sistent design and violate the local ordinances. The ney’s fees and costs to the association. The jury’s find- local ordinances specifically require multiple building ing will also allow the association to pursue another communities to have a unity of character and design. lawsuit against QBE for “bad faith” pursuant to Sec- QBE rejected most of the association’s claim, and tion 624.155 of the Florida Statutes, which could lead argued the actual casualty damage suffered by the to QBE having to pay triple the damage award. association was only about $460,000. This amount This verdict sends a message to QBE that they was well under the $1.6 million dollar deductible, so cannot treat their insureds that way. The verdict is also QBE determined that the association was entitled to a reminder to all community associations of the criti- no compensation despite the insurance policy and cal importance of conducting a complete and thor- Hurricane Wilma. ough post casualty inspection, which should include an inventory of the entire property, including the Issue units. This process should also include documenting Was QBE’s claim that it owed the association no all of the damages, and as soon as possible, retaining money because the casualty damage suffered by the competent professionals who also document the dam- association was actually below the $1.6 million dollar ages with photographs, video, and detailed records. It deductible in the insurance policy correct? is also worth noting that it may not be too late to file a supplemental insurance claim if the original claimCAM_book.indb 8 6/12/08 7:43:59 PM
  • 13. 2008 Legal Update     was not adjusted accurately. Supplemental claims are that monetary damages could adequately compensate still being processed by the major insurance carriers any breach, unless there are equitable defenses to the in certain instances. request for an injunction (i.e. failure to enforce similar violations). Therefore, the Appellate Court reversed CASE STUDY TWO the Trial Court’s order permitting the possible breach of a restrictive covenant. Auto Zone Stores, Inc. v. Northeast Plaza Ventures, LLC, 934 So.2d 670 (Fla. 2nd DCA 2006) CASE STUDY THREE Facts Muegge v. Heritage Oaks Golf Country Club, Inc., A landlord filed a lawsuit seeking a court order declar- 209 FED.APPX. 936 (11th Cir. 2006) ing that the landlord could develop certain property. The landlord argued that the development 1) did Facts not breach the restrictive covenants affecting the real The home of plaintiff’s daughter was robbed by paint- property, but 2) the court should enter an immediate ers who were painting the exteriors of the homes in order declaring that the development was permitted the Heritage Oaks Club Homes Three Subdivision. regardless of whether the restrictive covenants were Plaintiff sued (among others) Heritage Oaks Club breached. The landlord argued that if the court even- Homes Three Association, Inc. for negligence. The tually found breach of the restrictive covenants, the Trial Court entered judgment as a matter of law breach could be remedied with a payment of mone- against the Plaintiffs and refused to allow the case tary damages and court orders preventing violations against the homeowners’ association to proceed to of restrictive covenants should only be entered if trial. The Plaintiff appealed. the party suffering from the breach can demonstrate irreparable harm, or that monetary damages could not Issue adequately compensate for the breach. The trial court Does a homeowners association owe a duty to its agreed, and entered the declaratory order permitting residents or their guests related to security where the landlord to develop the property, without ruling the Declaration specifically and clearly states that the on the issue of breach. The tenant appealed. association was not responsible for providing security, even though Heritage Oaks provided gated entrances Issue to the subdivision? Does a party need to demonstrate irreparable harm, or that monetary damages could not adequately com- Holding pensate the breach in order to obtain a court order No, at least as to security issues unrelated to the gates (an injunction) prohibiting the breach of a covenant affecting real property? Rationale In order to bring a successful claim for negligence, a Holding plaintiff must show, among other things, that the party No being sued owed a duty to the plaintiff. Here, the asso- ciation’s governing documents explicitly disclaimed Rationale all liability to provide security. The association con- Restrictive covenants affecting real property are usu- trolled the gates, but the court stated “Muegge failed ally intended to create rights to use or limit the use to present any evidence that Heritage Oaks had a duty of property in order to maintain the character of a to do more.” The court did not write a detailed opin- neighborhood. Their value is often difficult to mon- ion on the issue. The court appears to rely entirely etize and sometimes impossible to replace, unless the on the language in the Declaration to hold that the affected party moves. Therefore, Florida courts have association did not have a duty to do anything other traditionally afforded restrictive covenants affect- than reasonably operate the gates, if it was obligated ing real property (such as the restrictions contained to do even that. Previous Florida courts have held that in community association declarations) a special sta- associations may be responsible for crimes committed tus; and entered court orders to prevent their breach in the community if the association should have fore- without regard to whether the party claiming breach seen the possibility of the crime and did not take any could demonstrate irreparable harm, or that monetary action to prevent it. Additionally, other Florida courts damages could not adequately compensate the breach. have held that even in the absence of a duty, a claim In fact, Florida law requires that injunctive relief to for negligence can be sustained if an entity provides remedy the violation of a restrictive covenant be security voluntarily (despite the lack of a duty to do entered, even if the breaching party can demonstrate so), but does so negligently.CAM_book.indb 9 6/12/08 7:43:59 PM
  • 14. 10     Bert Rodgers Schools The Appellate Court’s order is not clear as to Rationale whether it was holding that the language of the Dec- If the document granting the easement does not laration disclaiming any duty related to security was address the issue, whether or not a gate may be enforceable in all instances, or only in this case because erected depends on whether the gate would unreason- the plaintiff did not present any evidence that the asso- ably interfere with the easement holders’ rights. The ciation should have reasonably foreseen the risk due Appellate Court distinguished one prior community to other similar crimes in the community, or owed a association case precluding the erection of a gate by duty to the plaintiff because the association attempted holding that the gate here was much easier to access to provide security, but did so negligently. Regardless, because it could be opened from a distance by anyone the lesson to be learned from this case is that the asso- in all of the above described ways. It is unclear how ciation’s governing documents should provide for clear many of these access options are necessary to obtain disclaimers of any duty to provide security. the same result in light of the prior cases which have held that other gates without all of these access options CASE STUDY FOUR do unreasonably interfere with easement rights. It is also important to note that Florida case law Sand Lake Residence LLC v. Ogilvie, 951 So.2d 117 still considers some gates and standard speed bumps (Fla. 5th DCA 2007) to unreasonably interfere with the easement rights of the owners that are commonly included in community Facts association’s governing documents. Therefore, absent Landowners who held easement providing for ingress specific language in a community’s governing docu- and egress across permanent access road on adjoin- ments permitting material changes to the Commu- ing property (Sand Lake) sued to remove the speed nity’s gate or the addition of a gate or speed bumps, bumps installed by Sand Lake, and require that Sand the Board should consult the association’s attorney. Lake leave an electronic gate that Sand Lake installed Depending on the language of the Community’s gov- but that was not described in the easement agreement erning documents, such changes (or other material open. The easement agreement provided a nonex- changes) are commonly only permitted if the owners clusive perpetual easement in favor of the adjoining vote to amend the governing documents or otherwise landowners’ over Sand Lake’s access road. The agree- hold a vote to approve the change. ment contemplated the installation of one electronic gate but Sand Lake installed a second electronic gate CASE STUDY FIVE and placed speed bumps across the permanent access Philips v. Hirshon, 958 So.2d 425 (Fla. 3rd DCA road. Sand Lake provided the adjoining owners sev- 2007) eral means to pass through the front gate, which was not contemplated in the agreement. The landowners Facts could open the gate by using a single button remote, by entering a personal access code in the gate’s keypad, An individual owning a cooperative apartment died by calling Sand Lake’s office during business hours, by and willed his cooperative apartment to a friend. The calling their own cell phone numbers from the gate Florida Constitution prohibits the devise of home- and buzzing themselves in. If the owners wished to stead property if the owner is survived by a spouse or minor child. Individuals owning cooperatives are admit a guest or a delivery person, they were per- permitted to declare the cooperative as a homestead mitted to either provide that person with their per- for tax purposes. If the apartment was a condomin- sonal access code, or utilize any of the other options ium (or a free standing home), the portion of the for entry. The Trial Court held that both the speed will regarding the cooperative apartment would be bumps and the gate unreasonably interfered with the invalid because condominiums and homes in associa- adjoining landowners’ easement rights, and ordered tions are considered real property and subject to all that they be removed. Sand Lake did not appeal the of the homestead provisions of the Florida Constitu- ruling with regard to the speed bumps, but did appeal tion (not just considered homestead for tax purposes). the ruling with regard to the gate. This means, among other things, that condominiums and homes that qualify as homestead are protected Issue from forced sale of most creditors, and also may not Does an electronic gate with all the options mentioned be devised by the owner if the owner is survived by a above unreasonably interfere with the easement rights spouse or minor child. of the owners? Issue Holding Is a cooperative apartment, where the “owners” actu- No ally own shares in stock entitling them to occupy theCAM_book.indb 10 6/12/08 7:44:00 PM
  • 15. 2008 Legal Update    11 apartment, but not the apartment itself, treated the CASE STUDY SIX same way as a condominium apartment with regard J. Lynn Construction, Inc. v. Fairways at Boca Golf to all of the homestead provisions of the Florida Con- Tennis Community association, Inc., 2007 WL stitution? 1931390 (Fla. 4th DCA 2007) Holding Facts No The association entered into a written contract with Lynn Roofing, a roofing contractor for construction Rationale and repairs. The contract required Lynn Roofing to In 1978 the Florida Supreme Court decided that obtain a bond insuring that it would comply with its cooperatives were not subject to the homestead provi- obligations under the contract. Lynn Roofing applied sion in the Florida Constitution which prohibits the for and attempted to obtain the bond, but Lynn Roof- devise of homestead property where there is a sur- ing stated that obtaining the bond was impractical. viving spouse or minor child. The Florida Supreme Without modifying their original written contract, Court concluded that “owners” of cooperatives the parties negotiated an alternative. Specifically, the owned stock, and not real property, so this provision association agreed to accept a personal guarantee by of the Florida Constitution did not apply to coop- Lynn Roofing’s President and a more favorable pay- eratives. Although owners of cooperatives can claim ment schedule. The understanding was memorial- the homestead tax exemption, they are still not con- ized in correspondence and an addendum prepared by sidered in the same way as other real property. This the Association’s attorney was signed. However, the appellate court also explicitly disagreed with a recent addendum was not signed by both parties as required appellate decision from another part of the state that by Section 11 of the original written contract, which was decided in 2002. This appellate court concluded required modifications to be in writing and signed that cooperatives are subject to forced sale by credi- by both parties. Within a couple of weeks, the asso- tors, and would not be considered protected by the ciation’s attorney sent a letter to Lynn Roofing ter- homestead provision of the Florida Constitution for minating the contract and arguing that the parties’ that purpose either. The 2002 appellate decision from subsequent negotiations and the addendum were of another area of Florida previously held that coopera- no force and effect because Section 11 of the origi- tives were protected from forced sale and considered nal contract required all modifications to be in writing homestead for that purpose. and signed by both parties to be effective. The trial It is important to note that this appellate court court agreed and ruled that Section 11 of the original recognized that the Cooperative Act (which arguably contract was unambiguous and therefore the subse- was enacted by the legislature and intended to treat quent negotiations and the addendum were not bind- cooperatives as real property) was not considered by ing on the association because they were not signed the Florida Supreme Court in its 1978 decision, but by both parties. Lynn Roofing appealed. felt that if change was warranted, the Florida Supreme Court should make this decision. It is also important Issue to note that the appellate court recognized its decision Can unambiguous written contracts be modified by added to the uncertainty in an area of the law of great subsequent oral agreement or other course of conduct public importance, with broad ramifications. For this of the parties even though the original written con- reason, this appellate court explicitly asked the Florida tract unambiguously prohibits modification without Supreme Court to decide whether the 1978 decision the written consent of both parties? was still viable and also clarify how all judges should treat cooperatives, at least with regard to the homestead provisions related to forced sale and devise and decent. Holding Please note: This decision was written on May Yes 2, 2007, and at least one brief has already been filed with the Florida Supreme Court. There is a reason- Rationale able possibility that the Florida Supreme Court will The appellate court reversed the trial court and stated issue an opinion clarifying how cooperatives are to be that in some instances unambiguous written contracts treated and resolving the conflict. Unless and until can be modified by subsequent action of the parties. that happens, the result in a case now depends in cer- This may also include a subsequent “oral agreement tain instances either on the area of Florida where the of the parties,” even though the parties’ written con- cooperative is located, or the judge randomly selected tract explicitly prohibits such modification. Although in areas where the appellate court has not ruled. the result of this decision was likely due in part to the fact that the association’s own attorney prepared theCAM_book.indb 11 6/12/08 7:44:00 PM
  • 16. 12     Bert Rodgers Schools addendum and induced reliance on the part of the Act sets forth the developer warranties and appears to roofing contractor, and the case can be distinguished exclude “mechanical elements serving only one unit” based on this fact alone (among others), there is some such as air conditioners, a review of the history of the broad language in the appellate court’s opinion. As a Condominium Act and the remainder of its provi- result, any time an association takes any action that is sions permit such a claim. This is because the objec- contrary to the express terms of the contract, or could tive of the Condominium Act as demonstrated by its reasonably be interpreted to modify the parties’ origi- other provisions is to also cover and extend warran- nal written contract, the court may consider this evi- ties to personal property transferred by the developer dence. Moreover, if the evidence is substantial, there with the unit, which can include items such as refrig- is a risk that the judge or jury will determine that the erators, stoves, ceiling fans, or air conditioners. The other party reasonably relied on the actions of the opinion is very broadly worded and a developer might association, permitting the judge or jury to ignore the be required to warrant any personal property trans- unambiguous contractual provisions in the original ferred with the unit (perhaps even furniture), but at a contract. This case emphasizes how important it is for minimum, significant items such as those mentioned associations to be very careful when communicating above are subject to claims for breach of warranty, with vendors, and choosing attorneys. despite the apparent exclusion contained in Section 203, and the general rule applicable to most other real CASE STUDY SEVEN estate transactions of “buyer beware.” This decision is a big victory for condominium unit owners and opens Turnberry Court Corporation v. Bellini, 2007 WL the door to claims against developers that were once 2254680 (Fla. 3rd DCA 2007) thought by many to be barred by Section 203 of the Condominium Act and Florida law. Facts Porto Vita was the owner/developer of the South CASE STUDY EIGHT Tower of Porto Vita, a residential condominium complex in Aventura, Florida. On March 22, 2000, a In Re: Petition for Declaratory Statement, Clois- unit was sold to 2 individuals by the developer. Both ter Beach Towers Association, Inc., Docket No. prior to and after the closing, the owners complained 2007003592 (Declaratory Statement Issued Feb- of problems with the unit’s air conditioning system. ruary 28, 2007) These problems included leakage, dust accumulation, abnormal noise, and uneven air flow temperatures. An Facts inspection revealed that the problems were caused by Cloister Beach is community association. In 1995, the several deficiencies in the installation of the air condi- association amended and restated the By-Laws. The tioning system. amended By-Laws provide that “A director who has The owners sued the developer and the jury completed a 3-year term as a member of the Board of returned a verdict in favor of the owners on the the- Directors shall not be eligible to serve on the Board of ory that there existed an implied warranty of the air Directors again for a period of one year.” conditioning system by the developer. The devel- oper appealed and argued that pursuant to the Con- Issue dominium Act (FL. St. §718.203), developers do not Can a community association prevent a unit owner impliedly warrant air conditioning systems, because from running for the Board if the association’s gov- they are excluded from such warranty as “mechanical erning documents explicitly provide certain qualifica- elements serving only one unit.” tions that the unit owner does not meet, and/or can an association enforce term limits contained in an Issue association’s governing documents. Does Florida law permit an individual owner to sue a developer of a condominium based on an implied Holding warranty theory if the unit purchased by the owner No contains defective property such as an air conditioner, which the developer sold to the owner with the unit? Rationale The Division analyzed the language of the Condo- Holding minium Act, and concluded that the Condominium Yes Act explicitly permits all unit owners to run for elec- tion to the Board, with the sole exception of convicted Rationale felons whose right to vote has not been restored. Even though Section 718.203 of the Condominium The Division also noted as support for its interpreta-CAM_book.indb 12 6/12/08 7:44:00 PM
  • 17. 2008 Legal Update    13 tion that when the Condominium Act was amended Florida Statutes does not change the number of mem- in 2000, the legislature repealed the provision of the bers of the Board as it only operates in the absence Condominium Act that specifically stated “In order of any provision specifying the number of members.” to be eligible for Board membership, a person must This broad logic (and the actual text of the statute) meet the requirements set forth in the Declaration.” arguably calls into question the Division’s prior opin- Therefore, all owners, (except felons whose right to ions, which state that if a condominium’s documents vote has not been restored) are permitted to run for are not silent and explicitly address the issue, but the Board, and provisions of the condominium docu- provide a possible range of the number of directors ments adding additional qualifications or term limits without an explicit method for determining the actual are unenforceable because they contradict the current number of directors, there must be 5 directors, even Condominium Act. though the condominium documents provide for a possible range. However, in this instance, the Division CASE STUDY NINE did not reconsider its older decisions on this point, and it did not have to because the Division held that In Re: Petition for Declaratory Statement, Gulf the condominium documents stated clearly enough Island Beach and Tennis Club Community associa- that 3 directors should govern the association. There- tion I, Inc., Docket No. 2007001248 (Declaratory fore, although the Division may clarify this issue in the Statement Issued March 26, 2007) future, the Division’s current opinion appears to be that if the governing documents provide a range but Facts do not provide a method for determining the number Gulf Island Beach and Tennis Club is a community of directors within the range, 5 directors shall be on association. Article VII, Section 1 of the condomin- the board pursuant to the statutory default. However, ium’s Articles of Incorporation provides “The affairs if the condominium documents provide for a range of of the Association shall be managed by a Board con- directors, but also can be reasonably read to provide sisting of the number of directors determined by for a default number of directors other than 5 (such the By-Laws, but not less than 3 directors and in as 3 in this instance), the default number contained in the absence of such determination, shall consist of 3 the condominium documents (3 in this instance) shall directors.” The By-Laws did not specify any number govern the association. of directors. However, Article 4 of the By-Laws stated that the Association shall be managed by a Board “as CASE STUDY TEN set forth in the Articles of Incorporation.” Prior deci- Faircrest Community association, Inc. v. Sullivan sions of the Division held that if a condominium’s – Moore, 2006 WL 4451884 (Final Order June documents provide a possible range of the number of 2006) directors without an explicit method for determining the actual number of directors, they would be treated Facts as silent on this point. Therefore, the association must The association filed a Motion seeking attorney’s fees be managed by 5 directors, the statutory default. This and costs related to an arbitration that was dismissed, is because Section 718.112(2)(a)(1) provides that if the because the owner conceded to the association and By-Laws are silent, the association shall be run by 5 began complying with the association’s written directors (unless there are less than 5 units). demand to cure before the arbitration was served. The owner also ultimately cured the violation (removing Issue the unauthorized lanai cover on her property). If language in a community association’s By-Laws (either explicitly or by reference to another one of Issue the condominium documents) provides for a range of If an owner concedes that the association is correct, directors, but also provides that in the absence of a and begins complying with the association’s written specific mechanism in the condominium documents demand and reasonably begins to cure the violation to determine the number of directors, the Board shall before the arbitration is served on the owner, and consist of 3 directors, should the board be comprised eventually does cure the violation, is the association of 3 directors or the statutory default of 5 directors? entitled to an award of attorney’s fees and costs related to the written demand and the drafting of the arbitra- Holding tion petition? Three directors Holding Rationale No The Division’s logic is that “Section 718.112(2)(a)(1),CAM_book.indb 13 6/12/08 7:44:01 PM
  • 18. 14     Bert Rodgers Schools Rationale have the property sold at public auction. Summary While an association is entitled to attorney’s fees if it judgment is a much quicker procedure, and precludes wins the arbitration or if the unit owner concedes that what could possibly turn into years of litigation on the association is correct and begins to comply after disputed issues. Most foreclosures are uncontested being served with the arbitration, the association is not and decided by summary judgment. The trial court entitled to attorney’s fees if the compliance reasonably granted the association’s motion for summary judg- begins before the owner is served with the arbitration ment of foreclosure, and ordered the property sold at petition, and reasonably concludes shortly thereafter. public auction. The owners appealed. The reason for this is that the Division will not accept arbitration petitions if the owner has decided to com- Issue ply and conceded to the association’s position. While May a trial court grant a Summary Judgment of Fore- case law requires an owner to pay attorney’s fees if the closure if the owner files an affidavit conflicting the owner decides to comply in response to existing legal association’s evidence on a material issue, or is a trial proceedings, the Division will not accept petitions if necessary? the owner has begun compliance. Therefore, accord- ing to the Division (even though the owner was previ- Holding ously warned that such an action would be filed), the owner will be allowed to comply within a reasonable The appellate court reversed, and instructed the judge time without paying the association its attorney’s fees, to conduct a trial. if the owner began complying before the arbitration was served. If the owner does not concede and begin Rationale compliance until after the arbitration is served, or Foreclosure Summary Judgments (which take about 6 loses the arbitration, then the association can recover months from start to finish), are typically the way fore- its attorney’s fees. closures are resolved because owners rarely raise any This decision emphasizes the importance of the valid defenses. However, if the owner retains counsel Board (or the property manager) notifying the associ- and raises valid defenses, Florida law requires a trial ation’s counsel immediately if an owner appears will- because summary judgments of foreclosure (which ing to comply, so that the attorney does not spend take much less time than trials and generally do not time (and the association does not have to incur attor- require Board involvement) may not be granted if the ney’s fees related to) drafting a Petition for arbitra- owner raises valid defenses (though the association can tion that the Division will not consider, and which still obtain a foreclosure judgment after a full trial). cannot be recovered from the owner. Of course, there Although this particular appellate case is new, it are situations where the owner may have a last min- simply reiterates the status of current law, which the ute “change of heart,” and such attorney’s fees are trial judge misconstrued by granting summary judg- unavoidable (though still unrecoverable). However, in ment (which was reversed on appeal). I included it most instances, these situations can be avoided if the because foreclosures are on the rise, and the sheer association keeps the association’s attorney apprised of volume increases the odds that a particular foreclosure any evidence that the owner appears willing to com- case may not be resolved by summary judgment, even ply. Certainly, if the unit owner indicates in response if the association is correct, especially if the owner to the association attorney’s letter that the unit owner hires competent counsel. Depending on how aggres- will comply, it is worth waiting a reasonable time sive the owner’s attorney is, a trial (which the owner is before filing the arbitration, because should the owner entitled to if the attorney raises certain valid defenses) reasonably begin to comply prior to being served with and final resolution could take years, especially if the the arbitration, the owner will not be obligated to pay owner appeals, as occurred in this case. the association’s attorney’s fees. Each case is different, and in most instances, fore- closures will still be resolved at summary judgment. CASE STUDY ELEVEN However, if a determined unit owner retains an attor- Richter v. Beachwoods Property Owners Association, ney who raises a host of valid defenses, the full Board Inc., 959 So.2d 1237 (Fla. 50 CA 2007) should be advised, and the Board should consider alternative options, such as mediation and settlement Facts of the dispute. The Board may ultimately decide to The association brought an action to foreclose a go to trial, but the Board should make this decision, lien for unpaid assessments on a members’ property. because a trial often requires Board member involve- Despite conflicting affidavits that were filed by the ment, results are not guaranteed, and some trials takes association and the owners, the association sought a a significant amount of time to resolve. Summary Judgment of Foreclosure and sought toCAM_book.indb 14 6/12/08 7:44:01 PM
  • 19. 2008 Legal Update    15 Final Assessment 2008 Legal Update For immediate results, test online at www. bertrodgers.com Instructions • Answer the True or False questions below. • Locate the course title on the Answer Sheet in the back of this book • Fill in your answers for each question in the space provided. Please use pen or pencil. • omplete the Final Assessments, Attest Statements, and Course Evaluations for all courses selected, fill out the C Registration Form and submit both the Registration Form and Answer Sheet(s). • A passing score is 70% or higher (7 or more correct answers out of 10). 1. SB 902 affects community associations, cooperative associations, and homeowners’ associations. T F 2. In the past all condominium laws were written to require lender approval of all amendments to the Declaration of Condominium. T F 3. Associations must have a prepared and completed financial report within 90 days after the end of the fiscal year or on the date provided in the bylaws for the preceding fiscal year. T F 4. A homeowners association or an architectural committee (or other similar committee) should not rely on undefined, unwritten, or unpublished architectural control guidelines. T F 5. Effective July 1, 2007 HB 405: Timeshare and Vacation Plans Creates definitions for “lead dealer” and “resale service provider” and creates new recordkeeping requirements for lead dealers and resale service providers. T F 6. Condominium buildings are considered “personal lines residential structure.” T F 7. Effective July 1, 2007 “instant bingo” became recognized as a permissible form of bingo on community association property. T F 8. The new “instant bingo” law restricts the number of instant bingo prizes that may be awarded in one day. T F 9. New legislation will require that building inspectors, mold assessors, and mold remediators be licensed by the Department of Business and Professional Regulation by July 1, 2010. T F 10. Effective October 1, 2007 new legislation provides greater consumer protections related to the mortgage loan application process and makes mortgage fraud a third-degree felony. T FCAM_book.indb 15 6/12/08 7:44:02 PM
  • 20. 16     Bert Rodgers SchoolsCAM_book.indb 16 6/12/08 7:44:02 PM
  • 21. Approved by the DBPR Council for CAM, Provider #0001856, Course #9625407 Association Financial Management and Insurance 4 Hours in Subject Area: Insurance and Financial Management by Richard Thompson Learning Objectives Upon completion of the course the learner shall be able to: 1. Describe the skills needed to prepare budgets 12. Explain the difference between baseline funding accurately, avoiding the creation of deferred and threshold funding. maintenance and special assessments. 13. Explain several of the most common elements of 2. List the 5 fundamental steps of budgeting. reserve terminology. 3. Discuss the components of an Operating Budget 14. List several items found on the reserve compo- and an Income and Expense Statement. nent checklist. 4. Explain the importance of accurately identify- 15. Explain how a policy document can eliminate ing and grouping related expenses into account gray areas in both maintenance and insurance. codes and how this process improves the accu- 16. List 3 strategies a manager can use to reduce racy of the annual budget. insurance premium costs. 5. Explain how to present and gain approval for the 17. Differentiate between a single-entity and all-in budget, thus ensuring asset and property values association insurance policies. are maintained. 18. Discuss several points the manager and board 6. List the elements of a successful assessment col- considered in the case study on risk manage- lection policy. ment. 7. Identify steps the manager may take to acceler- 19. Explain the benefit and limits of Directors and ate collection of late assessment fees. Officers insurance. 8. Explain why managers should exercise a plan to 0. List several scenarios in which directors and offi- 2 repair and replace major common area compo- cers have liability. nents. 1. Discuss how an Areas of Responsibility Policy 2 9. List 5 reasons healthy reserves are critical to a can clarify insurance coverage and limit liability healthy association. for the association and members. 10. Discuss the 5 components needed to conduct a 2. List the 5 steps the manager can follow to 2 Reserve Study. develop a policy for handling insurance claims. 11. List the 4 elements needed to establish a funding plan. BUDGETS alistically low. This budget “starvation” results in deferred maintenance and special assessments. What Better Budget Basics can be done to prevent this? Many potential buyers of condominiums are attracted The accuracy of the budget directly affects future to their maintenance-free aspect. Fixed income buy- year budgets and maintenance fees. Under-budgeting ers expect maintenance fees to remain relatively creates shortfalls which are often covered by reserve stable, possibly adjusted by inflation and little more. funds earmarked for future replacement and repairs. Unfortunately, this is rarely the case due to the ten- This in turn causes a shortage in reserves. If these dency of many boards to keep fees and reserves unre- shortages are not corrected in the year they happen, a 17CAM_book.indb 17 6/12/08 7:44:03 PM
  • 22. 18     Bert Rodgers Schools domino effect results year after year until the commu- replaced with energy efficient ones, a decrease may be nity finds itself in a precarious financial situation. in order. Webster’s defines budget as: “A financial state- These types of questions must be asked for every ment of estimated income and expenses for a specific line item in your budget. Do not make the mistake of period of time”. In an individual’s personal budget, taking the previous year’s budget and merely adjusting income is determined and then assigned to various for inflation. This across-the-board method merely expenses. For a community association budget, the compounds each year’s mistakes. process is reversed. Expenses are estimated and then the source of revenue is determined. Maintenance fee Step 3: Operating budget revenue other than levels are the end product of the budget process, not maintenance fees the starting point. Deciding what maintenance fees Scrutinizing other sources of revenue is necessary will be and then producing a budget will usually pro- because they offset money needed for maintenance duce disastrous results. fees. It involves the same process as Step 2. Prior years should be examined to spot trends. For example, look 5 Basic Budgeting Steps at trends in late-fee collections. Consider interest rev- So how can your community avoid the trap? There enue on reserve funds based on the next year’s begin- are 5 basic steps to budgeting. ning balance, the additions to it and disbursements from it during the year. This will impact your interest Step 1: Reserve contributions revenue. If your association charges move-in fees, is the real estate market active or flat? Do you charge for Reserves are the funds you put away to fund future parking spaces or RV storage fees? (When it comes repair and replacement projects. For this purpose, to limited amenities like these, the association should a Reserve Study is necessary. The Reserve Study consider charging fair market rates to maximize asso- identifies the common area components (like roofs, ciation revenue.) painting, siding, paving, and so on) for which the association has maintenance responsibility, assigns a useful life and replacement or repair cost to each Step 4: Maintenance Fees component, and a long range funding plan so that Now it’s time to calculate maintenance fees. It’s a sim- future maintenance can happen without the need for ple math equation: special assessments. It is the single most important Annual Reserve Contribution + Total Expenses - Total piece of the budget because it provides a long-term Other Revenue = Maintenance Fee Requirements plan for all boards to follow. It also helps relieve the board from political pressure to not raise fees since This figure is then divided equally or by percent- The Reserve Plan dictates a prudent course of action age of ownership, depending on your community’s that defends all owners’ interests, not a particular governing documents, to determine the annual main- individual’s. More importantly, associations that fund tenance fee for each owner. a sound Reserve Plan consistently better maintain the If the budget maintenance fee is close to last property which produces higher resale values. Reserve year’s, your community has probably been budget- Study computer software and workbook manuals are ing well. More than likely, the comparison may show available for self help, or a professional consultant can that a significant increase is in order. If so, this is the perform the Reserve Study. board’s opportunity to revise the budget to reflect an acceptable maintenance fee increase. An acceptable fee does not change reality, however. To move towards Step 2: Operating budget expenses a reality budget the board might propose a transition To budget for the upcoming fiscal year, examine the period of, say, 3 years where the gap between accept- previous 3-year history of each line item (i.e., the able and reality is closed by 1/3 each year. actual disbursements, not the budgeted). This infor- During the transition period, cosmetic reserve mation will show spending trends that may other- repairs like painting and carpeting can be deferred wise be missed. Then, consider future changes that as long as the underlying structure is not threatened. will affect disbursements. For example: utilities, what Lower priority disbursement items like window wash- rate increases are expected for the next year? Call the ing may also be eliminated to help hold the line. On utility companies and ask. Are there any operational the revenue side, consider raising things like park- changes that will increase or decrease utility con- ing fees when possible. Since the budget reductions sumption? For example, if additional security lights reflect an austerity program, the board should care- are to be installed, an increase in the electricity budget fully explain the long term plan to the members. The may be called for; if existing light fixtures are being message to all homeowners, real estate agents, buyers,CAM_book.indb 18 6/12/08 7:44:03 PM
  • 23. Association Financial Management and Insurance    19 lenders, and other interested parties should be that The year-end budget review is important because the plan will make the association financially sound. it reminds the board that each year’s budget affects and is affected by other years’ budgets. Overages and Step 5: The Year-End Financial Statement shortages will increase or decrease funding require- This step compares the current year actual to the ments in future years. budget. It will show whether the association spent While an association’s past budgeting errors are or collected more money than planned in order to water under the bridge, its future financial stability include the changes to account balances in the next can be secured by a commitment to thoughtful bud- year’s budget. If disbursements were higher than bud- get planning that reflects the true needs of the com- geted and/or income lower, the shortage was probably munity. The successful association plans for the future made up by using reserve funds. If this was the case, instead of reacting to it. See Figures 1 through 4 for the association’s reserves are lower than expected and examples of a condominium budget and financial additional funds will have to be collected to bring the statements. reserve accounts up to their proper level. Nottacare Condominium Operating Budget REVENUE Janitorial-Supplies 2,000 Regular Assessments     $130,000 Landscape-Contract 18,000 Laundry Income 2,000 Landscape-Irrigation Repairs 500 RV Parking Fees 2,500 Miscellaneous 2,000 Total Revenue $134,500 Painting 2,000 Pest Control 3,000 EXPENSES Plumbing-Repairs 2,500 Administrative Pool-Chemicals 1,500 Accounting-Tax Returns $ 500 Pool-Contract 6,000 Board Education 1,000 Pool-Repairs 2,000 Insurance 5,000 Roof-Repairs 4,000 Legal 2,000 Siding-Repair 2,500 Office Supplies 1,500 Supplies 2,000 Postage 500 Tree Work 500 Property Management 12,000    Total Maintenance $  71,000 Reserve Study Update 500 Utilities    Total Administrative $ 23,000 Electricity $   10,000 Fees Licenses Gas-Pool 2,500 Elevator 500 Telephone-Elevator 500 Pool 500 Water - Irrigation 1,500    Total Fees Licenses $ 1,000 Water Sewer 15,000 Maintenance    Total Utilities $  29,500 Carpet-Cleaning $ 1,000 Deck-Repair 2,000 TOTAL EXPENSES $124,500 Electrical-Repairs 2,500 RESERVE Elevator-Contract 5,000 CONTRIBUTION $  10,000 Fence-Repairs 2,000 Janitorial-Contract 10,000 TOTAL EXPENSES RESERVES $134,500 Figure 1: Sample Budget (Source: http://regenesis.net/3/accounting.htm#budget)CAM_book.indb 19 6/12/08 7:44:04 PM
  • 24. 20     Bert Rodgers Schools Budget Notes REVENUE Regular Assessments: Collected monthly from each owner Laundry Income: Revenue from 4 washers 4 dryers RV Parking Fees: Revenue from 40 RV parking spaces EXPENSES ADMINISTRATIVE Accounting-Tax Returns: CPA to prepare and file association federal return Board Education: Subscriptions, seminars, memberships, videos Insurance: Deductible: $2,500 Hazard Insurance with Guaranteed Replacement Cost: $5,000,000 Directors Officers Liability Insurance General Liability: $2,000,000 Fidelity: $25,000 Earthquake Insurance (subject to a 10% deductible) Legal: Consult with attorney Office Supplies: Copies, paper products, misc. Postage Property Management: Annual Contract with Velvet Glove Management Reserve Study Update: Adjust study for changes interest earned, inflation, and actual work performed during previous year FEES LICENSES Elevator: Due in September and payable to State Licensing Bureau Pool: Due in April MAINTENANCE Carpet-Cleaning: Clean clubhouse carpet in April and November Deck-Repair: Replace boards, etc. Electrical-Repairs: Repair common area lighting Elevator-Contract: Annual contract with Up Down Elevator Maintenance Fence-Repairs: Replace posts and boards, etc. Janitorial-Contract: Annual contract with White Glove Janitorial Service Janitorial-Supplies: Small equipment and specialized cleaning supplies Landscape-Contract: Annual contract with Mow Blow Landscaping Landscape-Irrigation Repairs: Repair broken pipes and missing heads Miscellaneous: Items that do not fit in other categories Painting: Touch up trim, siding, decks, and fencing Pest Control: Treat buildings for termites and carpenter ants Plumbing-Repairs: Repair common area plumbing Pool-Chemicals: Chlorine tablets, oxidizer, algaecide, etc. Pool-Contract: Annual contract with Pools R Us Pool-Repairs: Fix handrails, loose tiles Roof-Repairs: Repair missing shingles, bad flashing, lifted seams Siding-Repair: Replace bad siding, recaulk Supplies: Fasteners, boards, caulk and other misc. Tree Work: Remove dangerous limbs or cut limbs away from structures UTILITIES Electricity: For common area, clubhouse and pool Gas-Pool: For pool heater Telephone-Elevator: Emergency phone required by state Water-Irrigation: For watering common area Water Sewer: For clubhouse and units RESERVE CONTRIBUTION Annual contribution based on 30-year study Figure 2: Budget Notes (Source: http://regenesis.net/3/accounting.htm#incomeexpense)CAM_book.indb 20 6/12/08 7:44:04 PM
  • 25. Association Financial Management and Insurance     21 Income Expense Statement – MAY Nottacare Condominium Item Month Month YTD YTD Actual Budget Actual Budget REVENUE  Regular Assessments $   9,900 $10,833 $53,200 $54,167 Laundry Income 250 208 1,250 1,041 Parking Fees 200 167 1,150 833 Total Revenue $10,350 $11,208 $55,600 $56,041 EXPENSES  ADMINISTRATIVE Accounting-Tax Returns $   0 $   42 $  0 $  208 Board Education 100 83 500 417 Insurance 417 417 1,800 2,083 Legal 200 167 700 833 Office Supplies 100 125 525 625 Postage 75 83 550 417 Property Management 1,000 1,000 5,000 5,000 Total Administrative $1,892 $1,917 $9,075 $9,583 FEES LICENSES  Elevator $     0 $    42 $     0 $   208 Pool    0 42    0   208 Total Fees Licenses $     0    $    84 $     0 $   416 MAINTENANCE  Carpet-Cleaning $   100 $   83 $  500 $  417 Deck-Repair 250 167 850 833 Electrical-Repairs 300 208 1,200 1,042 Elevator-Contract 417 417 1,400 2,083 Fence-Repairs 100 167 775 833 Janitorial-Contract 833 833 4,167 4,167 Janitorial-Supplies 125 167 750 833 Landscape-Contract 1,500 1,500 7,500 7,500 Lands-Irrigation Repairs 0 42 150 208 Miscellaneous 25 167 1,000 833 Painting 150 167 1,133 833 Pest Control 200 250 1,750 1,250 Plumbing-Repairs 150 208 975 1,042 Pool-Chemicals 35 125 825 625 Pool-Contract 500 500 2,500 2,500 Pool-Repairs 0 167 750 833 Roof-Repairs 225 333 2,200 1,667 Siding-Repair 175 208 684 1,042 Supplies 268 167 552 833 Total Maintenance    0  42 200 208 $   5,353 $5,918 $29,861 $29,582 UTILITIES  Electricity $      825 $     833 $   5,000 $   4,167 Gas-Pool 250 208 950 1,042 Telephone-Elevator 42 42 195 208 Water - Irrigation 200 125 625 625 Water Sewer 1,100 1,250 5,800 6,250 Total Utilities $ 2,417 $ 2,458 $12,570 $12,292 Total Expenses $  9,662 $10,377 $51,506 $51,873 RESERVE CONTRIBUTION  $     833 $     833 $  4,165 $  4,165 Total Expenses Reserves $10,495 $11,210 $55,671 $56,038 Net Gain or (Loss) ($   145) $     (2) ($     71) $         3 Figure 3: Income and Expense Statement (Source: http://regenesis.net/3/accounting.htm#incomeexpense)CAM_book.indb 21 6/12/08 7:44:04 PM
  • 26. 22     Bert Rodgers Schools Account Codes Financial reports need sufficient detail to guide the Board in good stewardship. Assign an account code to each item of income and expense item in each Income Expense Report. By systematically identifying and grouping related expenses, the Board can refine and improve the Annual Budget. For more information on financial reporting, see Articles-Financial. INCOME Spa-Service Building Exterior/Siding Clubhouse Rental Street Sidewalk Cleaning Brick Mortar Repair Laundry Income Street Sidewalk Repair Chimney Caps Late Fees Window Washing Concrete Repair Interest Decks Misc. Income ADMINISTRATIVE EXPENSES Doors Move in/Move out Fees Accounting/Bookkeeping Service Drainage Correction NSF Check Charges Bank Charges Elevator Renovation Parking Fees Board Education Entry Structure Consulting Service Fence MAINTENANCE EXPENSES Insurance-Ordinance or Law Flooring Building Exterior Repair Insurance Deductible Fountain Carpet Cleaning Insurance-Directors Officers. Furniture Chimney Cleaning Repair Insurance-Earthquake Hot Water Heater Clubhouse Maintenance Insurance-Employee Dishonesty HVAC Clubhouse Supplies Insurance-Flood Landscape Renovation Deck Repair Insurance-General Liability Light Fixtures-Exterior Door Lock Repair Insurance-Hazard Light Fixtures-Interior Electrical Lights Maintenance Insurance-Workers Comp Mailboxes Elevator Maintenance Legal Services Office Equipment Entry Structure Repair Licenses Painting - Exterior Fence Repairs Management Add’l Fees Painting - Interior Fire Protection System Repair Management Contract Playground Equipment Garage Door Gate Repair Management-Resident Manager Plumbing Fixtures Gutters Downspouts Cleaning Meeting Expense Pool Deck Refinish Gutters Downspouts Repair Office Supplies Pool Equipment Heating Air Conditioning Payroll Expense Pool Filter Janitorial Services Rental Expense-Resident Manager Pool Furniture Janitorial Supplies Taxes-Federal State Pool Heater Landscape-Barkdust Taxes-Property Pool Pump Landscape-Drainage Repairs Taxes-Unemployment Pool Replaster Landscape-Irrigation Repair Retaining Wall Renovation Landscape-Pest Control UTILITIES Roof-Cedar Shake Landscape-Pond Maintenance Cable TV Roof-Cedar Shingle Landscape-Pruning Bushes Electricity Roof-Composition-3 Tab Landscape Contract Electricity (Pool/Spa) Roof-Composition-Architectural Landscape-Trail Repair Gas Roof Gutter Downspout Landscape-Tree Work Gas (Pool/Spa) Roof-Flat-Built Up Maintenance Misc. Sewer Security Equipment Painting Telephone Siding Pest Control-Building Telephone Elevator Signage-Address Plumbing Repairs Trash Removal Signage-Entry Pool-Chemicals Supplies Water Signage-Street Pool-Equipment Repair Water-Irrigation Spa Equipment Pool-Repair Water Sewer Spa Filter Pool-Service Spa Heater Roof-Building Repair RESERVE EXPENDITURES Spa Pump Roof-Carport Repair Address Signage Spa Replaster Roof-Clubhouse Repair Appliances Tennis Court Fencing Roof-Cleaning Asphalt Paving Overlay Tennis Court Net Security Systems Maintenance Asphalt Paving Repair Tennis Court Restriping Security Guard Service Asphalt Paving Sealcoat Tennis Court Resurfacing Signage Repair Awnings Utility Renovation Spa-Chemicals Supplies Benches Wall Paper Spa-Repair Boiler Window Treatments NOTES Board Education: For purchase of videos, books, subscriptions, seminars, etc. Insurance Deductible: For payment of claims that fall below the policy deductible Insurance-Ordinance or Law: Pays for increase replacement costs due to zoning or building code changes Licenses: For elevator, pool, spa, etc. Utilities-Water-Irrigation: Irrigation water requires no sewer and may only be used for part of a year. By separating building from landscaping usage, irrigation leaks can be more easily detected. Figure 4: Account Codes (Source: http://regenesis.net/3/accountcodes.htm)CAM_book.indb 22 6/12/08 7:44:05 PM
  • 27. Association Financial Management and Insurance     23 Presenting: The Budget! bers to vote, sending out formal announcements, bal- lots, etc., are in order. If the Board has the authority Number crunching—what a drag. But having enough to approve the budget (hopefully yes), it is still a good of it in all the right places ensures the assets and prop- idea to inform the members when and where that erty values are maintained. Community associations approval will take place. It should happen at least 30 have the ability to draw the members into the budget days prior to the start of the new fiscal year. Assuming process in a way big government can’t. With a bit of the budget has increased (and it usually should due to planning, the budget can be a harmonizing exercise inflation alone), the Board should give members at instead of a battleground of discontent. least 30 days notice of any homeowner fee change. Philosophically, it’s important for the Board to adopt a “we’re one of you” attitude because, frankly, it’s true. All association members, including direc- Circulate Approved Budget tors, pay their fair share of the freight. Even if the Once the budget has been formally adopted, a copy of Board has the power to unilaterally adopt the budget, it along with detailed notes explaining each line item approaching it as a consensus-building exercise will and a side by side comparison of the past and future work wonders in how the message is received. budgets should be sent to each member. A cover let- ter should explain what the new homeowner fee will Form a Budget Committee be if equal, or include a matrix showing the different fee levels if prorated by percentage or fraction. This It is often difficult to get members to volunteer for would be the perfect time to distribute payment enve- Board positions but getting some to commit to a short lopes and coupons if you use them. term Budget Committee is not so tough. There are The whole budget process generally takes 4 to always a certain number of bean counters out there 12 weeks from start to finish depending on complex- who would make time for a 4-6 week stint crunching ity and the requirements for approval. There are few numbers. Targeting CPA or bookkeeper members is exercises that have a more profound effect on the asso- logical but there are amateurs that can provide valu- ciation’s destiny so do not downplay it. The budget is able service, especially if they are longtime residents a chance for a new beginning, improvement, and team who know the community association’s history or building. Do not miss the opportunity to engage the have served on a past Board. members. Poll the Members ASSESSMENTS Asking the members for budget suggestions is usually largely symbolic, like raising the flag and see if anyone Greasing the Wheels salutes. There may be a couple who do but most do Money is the grease that oils the community associa- not even notice. But the mere fact that all were asked, tion’s wheels. Without it, the association screeches to a goes a long way toward building support. Those that grinding halt. Without money, bills go unpaid, needed respond may be thoughtful or total flakes but the repairs are delayed, property values fall, and tempers Board does not need to commit to including the sug- rise. In most association budgets, there is little margin gestions, only to consider them. Gather this informa- for slow or no payers, so attention to timely collection tion the month prior to Budget Committee meetings is essential. Yet, it’s a recurring problem in many asso- so the information can be included for consideration. ciations because Boards are reluctant to enforce col- lection on neighbors and/or friends. But there is no Budget Review Meeting government bailout for community associations. If all don’t pay, the remaining members must make up the Once the draft budget has been compiled, a Budget difference. The picture is not pretty. Review Meeting should be scheduled. This could be While the governing documents empower the part of a regular Board meeting if the budget is simple community association to collect the money it needs or a part of a special meeting if the budget is complex to operate, the details on collection is left to the dis- or contentious. All members should be invited and cretion of the Board. There is much to consider: encouraged to attend. A formal presentation should • Should a late fee be charged? be made and presenters must be prepared to answer questions or justify line items. • How about charging interest on the outstanding balance? Budget Approval • How about a bad check charge? After the review is held, formal approval of the budget • Should a lien be filed? should take place. If this requires a quorum of mem- • Should an attorney be used for collections?CAM_book.indb 23 6/12/08 7:44:05 PM
  • 28. 24     Bert Rodgers Schools • Can the community association get reimbursed oldest balance so that late fees are levied for each from the debtor for costs of collection? month there is a balance due. • Should the association consider foreclosure in some Notice of balance due. This statement advises the cases? debtor early of the late fee. It usually results in a • Can the association garnish wages? speedy payment. The debtor may have an explanation (check’s in the mail, Post Office lost it, dog ate it, etc.) The answers to these questions are Yes. And all that can be considered. should be integrated into a collection policy that should be adopted and followed consistently by the Right of appeal. The debtor may dispute the valid- Board and Manager. The primary goal of the policy ity of the debt, especially if there are fines and other should be to keep the community association bill at charges that are not part of the regular fees. They are the top of the debtor’s bill paying stack. entitled to appeal the billing. Of course, convincing Since a collection policy is complex, it should be evidence must be presented that negates the charges. formalized in a board resolution which recites the The Board has the final say and appeals should be governing document authority and the details of the heard quickly and not delay the collection schedule. procedure. As with all resolutions, it should be circu- Repayment plan request. There can be extenuating lated among the membership prior to enactment for circumstances like injury, disability, job loss, or other review and input. Once adopted, the collection reso- unavoidable financial setback that the Board should lution should be posted on the association’s website consider in allowing a repayment plan. Repayment and attached to each attempt to collect a delinquency. plans should not be granted automatically since they That way, members know exactly what the process is put an additional burden on the other members to and are forewarned of consequences. fund the shortfall. However, filing an aggressive col- Collection policies vary in procedure but the fol- lection on someone who is unable to pay for valid lowing reflects a sequence commonly used unless the reasons could alienate an otherwise good neighbor, governing documents indicate otherwise: unnecessarily increase the debt on someone who can’t 1. Homeowner fees (dues, assessments) are due on even pay the principal, and tip the debtor into prema- the first of the month. ture bankruptcy. If there is a reasonable expectation of 2. On the 10th, a late charge is applied and Notice of financial recovery, it is often in the community associ- Balance Due sent which includes a Right of Appeal ation’s best interest to work with the debtor. and Repayment Plan Request. In general, repayment plans should serve as a stopgap measure only and extend only a few months. 3. After 30 days, a 10-Day Notice of Intent to Lien is The plan should be strictly adhered to so the associa- sent. tion does not lose ground as time passes. Approving 4. After 40 days, the account is turned over to the the plan needs to be considered in the overall scheme community association’s attorney for further of the association’s cash flow. If the association needs action. every penny every month, approving a repayment plan 5. The attorney immediately sends a 10-Day Demand means others will have to ante up the cash so bills can for Payment letter again citing the Intent to Lien. be paid. This translates into a special assessment (the 6. By 60 days late, the attorney files a lien against the longest 4 letter word there is). In other words, if the debtor’s property and may, if appropriate, invoke association has no excess cash to draw on, the mem- termination of association paid utilities provided bers should approve the plan. to the owner, restriction to amenities (like pool, Notice of intent to lien. This warning notice advises clubhouse, etc.), acceleration of fees due for the the debtor of the costly consequences for nonpay- remainder of the fiscal year, garnishment of wages, ment. In most cases, outstanding balances are resolved seizing assets for resale (cars, boats, etc.), taking an before the deadline. assignment of rents if the unit is rented, and other allowable options. Lien recording. Recording a lien against the debtor’s unit/home is the most important collection action the 7. By 120-180 days late, the community association community association can take since it secures pay- should consider processing a foreclosure action. ment of the balance due. It is very important that the Here are details on selected actions: lien be properly prepared and recorded. A knowledge- Late charge. A late charge is appropriate for each able community association attorney should always be month the account is delinquent. Generally, a flat fee used for this purpose. of $10 to $25 per month is acceptable. If partial pay- The attorney will need: ment is received, it should always be applied to the • copies of all notices sent to the debtorCAM_book.indb 24 6/12/08 7:44:06 PM
  • 29. Association Financial Management and Insurance     25 • copies of appeals, repayment proposals and and managers ask...mainly because there is no col- responses, if any, from the debtor lection policy. A clearly worded, communicated, and • copy of unit deed verifying who is legal owner enforced collection policy is the solution to collec- tions. A collection policy simplifies one of the Board’s • mailing address of the legal owner most disagreeable tasks: collecting money from neigh- • property tax ID number bors. Since the course of action is predetermined, the • a current account balance with all charges detailed Board does not need to wring their hands over each including late fees and interest charges case. Here are some of the essential components: • a copy of the Collection Policy • Payment Date: _____ of the month Acceleration of assessments. Some governing doc- • Payment Late: _____ of the month uments provide the right to accelerate the balance of • Late Fee: $_________ the current fiscal year’s assessments in the event of • Finance Charge: _____% per month default. Invoking this right is subject to the Board’s • Payments applied to oldest balance first discretion which includes the number of times a par- ticular owner has been delinquent and the amount • Type of notices (10 Day Notice to Pay, Notice of of the delinquency. If your community association Intent to Lien, etc.) has this right, it is best for the Board to establish the • Who provides the notice (association, attorney) criteria under which it is invoked (for example, if the • When account is referred to an attorney debtor has been delinquent twice in the previous 12 • All collection costs charged to the debtor months or the balance exceeds, say, $1000). The association has the right to obtain and exe- Foreclosure. Foreclosure of debtor property is the cute on a personal judgment (garnish wages, attach most extreme form of community association collec- personal property, etc.). Amenities (pool, tennis court, tion and not particularly easy to pull off. The asso- club house) are suspended for delinquencies of a cer- ciation must be able to buy out prior lien holders tain dollar amount. See fairdebtcollection.org. like lenders, and possibly, the IRS. Debtors enjoy Homestead Right protection in most states which Get work phone numbers. Getting a judgment or protects tens of thousands of dollars of equity. After all lien does not guarantee payment. In most jurisdic- prior lien holders are satisfied, there must be enough tions, a collection can receive up to 25% of a debtor’s equity remaining to justify the action, that is to say, to “disposable” wages (after withholding). Ask all own- pay the outstanding balance owed. ers for work phone numbers for “emergencies” with a Foreclosures are politically charged inasmuch pool or car registration form. they usually involve a person’s home. If the owner is Notice all legal owners. There may be more than disabled or elderly, the issue gets even more sensitive. one owner on each unit title. Make sure all applicable For a variety of reasons, the Board should seriously names are on the notices. A title company can assist consider whether foreclosure should be pursued. with this information. All owners are equally respon- Unless the debt is significant (many thousands of dol- sible for the entire debt. lars), it is generally more prudent to wait until the property sells. The attorney should make a recom- Checks marked “Paid in Full”. Cashing checks so mendation to the Board after all the facts are known marked could be considered binding. Make sure the and discussed at length. Foreclosure should never be amount truly is “paid in full” before depositing. undertaken lightly or automatically. Record liens. Liens alert lenders, purchasers, and Money comes and money goes but mostly goes. title companies of a cloud on title that needs to be Money is hard to come by. Keeping the community cleared up. For this reason, long standing delinquen- association wheels greased is a never ending task. To cies often get cleared up at refinancing or sale closing. ensure that your association never lacks the lubrica- A recorded lien improves the odds of collecting even tion it needs, develop and follow a fair but firm col- if an owner files bankruptcy or a lender forecloses. lection policy. Then hire a professional manager to If the lender forecloses, the association can collect if enforce it. Keep that community association rolling. there are surplus proceeds. If there is no lien and the For a sample collection policy see Figure 5 on the property is sold, the association has no claim. next page. Let the attorney handle it. After several rounds of Collection corrections. Why is it taking so long to written notices and 60 days have passed, turn the mat- collect delinquencies? Can we close the pool to the ter over to the association attorney. Cease commu- deadbeat? Why can’t we collect on that judgment? nications with the debtor. Do not discuss repayment These are questions that too many board members agreements, collection costs, or payoff information.CAM_book.indb 25 6/12/08 7:44:06 PM
  • 30. 26     Bert Rodgers Schools Nottacare Condominium Sample Administrative Resolution # ___ Collection Policy WHEREAS, Section _____ of the By-Laws of the ____________________ Association grants power to the Board of Directors to conduct Association business, and Section ____ of the Declaration and Section _____ of the By-Laws grants the authority to levy assessments against owners. And because the Association’s economic well-being relies on the timely payment of assessments and other allowable charges. And because it is the Board’s duty to use its best efforts to collect funds owed to the Association, LET IT BE RESOLVED THAT these collection procedures shall be followed: 1. AMOUNTS PAYABLE TO THE ASSOCIATION include, but are not limited to, regular assessments, special as- sessments, rules enforcement fees, repairs to the common area that are an owner’s responsibility, legal fees and other costs associated with collection of funds on behalf of the Association. 2. PAYMENT SCHEDULE. The regular assessment is payable in advance on the ____ of each month. Fees not received or postmarked by the ____ of the month will be considered past due. 3. LATE FEES, NSF INTEREST CHARGES. • A late fee of $_____ shall be charged monthly on all delinquent balances. • A $____ NSF (Non-Sufficient Funds) charge will apply to any returned check. • Any balance older than 30 days will incur an interest charge of ___% per month until paid. 4. ORDER OF CREDITING PAYMENTS. Payments received shall be first applied to assessments owed, then to late charges, interest, or collection expenses. 5. PROCESS FOR DELINQUENCY NOTIFICATION. For all balances exceeding $_____ that are thirty (30) past due, the following notification process applies: • IRST NOTICE. First Notice of Past Due Charges including detail of assessments, late fees, NSF charges, F interest, and other charges that apply will be sent by First Class Mail to an owner whose balance is thirty (30) days past due. • ECOND NOTICE. Second Notice of Past Due Charges including detail of assessments, late fees, NSF S charges, interest, and other charges that apply will be sent by First Class Mail to an owner whose balance is 60 days past due. • 10 DAY DEMAND. 10 Day Demand for Payment including detail of assessments, late fees, NSF charges, and interest charges that apply will be sent by First Class Mail to an owner whose balance is 75 days past due. This Notice will recite intent to turn the matter over to an attorney for collection enforcement if balance is not paid within 10 days. Attorney actions include but not limited to filing a lien against the owner’s property, a personal judgment against the owner and property foreclosure. 6. LEGAL SERVICES. If a delinquent account is referred to an attorney for collection, the owner shall be charged the Association’s reasonable attorney fees and related costs. 7. OTHER CHARGES. The Association may charge the owner for: • Fees charged by Property Manager to collect funds payable to the Association • Owner bankruptcy • Foreclosure action or deed in lieu of foreclosure • Notification, filing and satisfying liens • Enforcement of the Association’s Rules, Bylaws, Declaration, or Policies • Costs of litigation • Repairs to the Association’s common areas that result from the acts of owners, their tenants, or guests 8. DEBT COLLECTION OPTIONS. In order to collect a debt owed to the community association by a member, the following options may be invoked to satisfy that debt: • Garnishment of member’s wages • Seizing of member’s personal property • Suspension of amenity privileges (like pool, clubhouse, tennis courts, etc.) • Suspension of voting rights • Suspension of community association provided utilities • Collection of rents being generated by member’s community association unit or home • Foreclosure of member’s community association unit or home Recorded in the Book of Minutes: ___________, 200 __ Date: _____________________, 200___ ________________________________________________ President - Board of Directors Figure 5: Sample Collection Policy (Source: http://regenesis.net)CAM_book.indb 26 6/12/08 7:44:06 PM
  • 31. Association Financial Management and Insurance     27 Referring all calls to the attorney will expedite the RESERVES process. One attorney letter often does the trick. Reserve Study Tutorial Take away privileges. Many association governing Every association should exercise a plan to repair and documents allow the association to withhold access to replace major common area components like roofs, amenities like pool and parking. If allowable, do it. siding, and decks. Healthy reserves are critical to a Shut off association utilities. In some cases, drastic healthy association because: action is called for. Your collection policy can call for • Buyers examine the reserves before buying. shutting off association paid utilities like water, if all other measures to collect have been tried and failed. • Lenders examine the reserves before approving a This may require a plumber. loan. • The board has a fiduciary responsibility to protect Copy assessment payment checks. For the record, the association from financial hardship. photocopy a check from each owner when received, whether delinquent or not. The information will • The costs of maintaining the property will be shared be valuable if collection is necessary and may save a by all owners now and in the future. $100-$200 “skip trace” cost later. • It provides a predictable, manageable contribution Money is the life blood of every community asso- plan ciation. Since most operate on a tight budget, if one • A healthy reserve fund will enhance the value of the owner defaults, the effect is soon felt by all. There’s home. no magic money or lines of credit. If one doesn’t pay, • Most importantly, it will avoid special assessments. the rest have to. If your collections need corrections, get after it. To conduct a reserve study, you need the follow- ing information: Trumping the IRS • item/component description A recent U.S. Supreme Court decision could be help- • number of units per item/component ful to community associations in collecting judg- • replacement cost per unit ments for delinquent assessments in cases where the • year built or placed in service IRS records a lien against the debtor’s real property • life expectancy in years after an association’s judgment lien. In U.S. v. Estate of Romani, the Supreme Court resolved a conflict 3 Steps to Determine Reserves between 2 federal statutes, one which provides that federal tax liens “shall not be valid” against properly Step 1: Make a list of all common and limited recorded prior judgment liens and the other which common elements. These are defined in your association’s governing documents (Declaration of provides that, in certain circumstances, claims of the Condominium, Site Plan, and Floor Plans). Some U.S. Government “shall be paid first.” examples include: decks/patios, gutters, roofs, siding, In 1985, a Pennsylvania court entered a $400,000 elevators, fire protection equipment, pavement (resur- judgment against Romani. The judgment was facing, sealcoating, restriping), pool (equipment, fur- recorded in the county clerk’s office, thereby becom- niture, replastering, deck resurfacing), fences, and ing a lien against Romani’s real estate. Later, the IRS signage. filed a series of tax liens on Romani’s property, total- To ensure a thorough list, consider all structures ing $490,000. Romani died in 1992, leaving an estate on the property, not just the most obvious ones. For worth only $53,001. The estate’s administrator sought example, dwelling roofs are obvious. However, do not permission from the court to transfer the real prop- overlook garages, clubhouses, and shed roofs. If simi- erty to the judgment creditor, but the IRS claimed lar items are built or placed in service in the same year, that its later-recorded tax lien had priority. lump them together as a single line item and note the The Supreme Court decided that a prior-recorded total number of items; if not, list them as separate line judgment lien prevails over a later-recorded federal items. This will be the case in associations which were tax lien and authorized conveying the property to built in phases. the judgment creditor. This decision is important for Avoid combining dissimilar items together, like community associations in situations where there is clubhouse roof and dwelling roofs. Separating these not enough money to satisfy creditors. So long as an gives a more accurate picture of your reserve needs association’s judgment lien is recorded before IRS tax and reduces confusion should questions arise in the liens, the association should have priority in satisfying future. If you feel you must combine items, document its judgment. the rationale behind it.CAM_book.indb 27 6/12/08 7:44:07 PM
  • 32. 28     Bert Rodgers Schools Document any assumptions made to eliminate earned on the invested Reserve Funds? (see past tax confusion. By doing so, anyone unfamiliar with the records or the accountant.) association will be able to understand the report. • What is the current area inflation rate? This is Note, for example: “The boat dock located in the SW important because in a cash flow analysis, you corner of property is not being reserved. Although examine the contributions and expenditures over 5 a common element, it was decided by an association or more years. vote to remove it at the end of its useful life. Refer to the May 2004 Board minutes.” Once you have determined these parameters, you are ready to put together your cash flow analysis. Step 2: Determine life expectancy and replace- ment cost. These items go together. A question Review Analysis about one leads directly to the other. Check associa- tion records for work that has been done in the past. Review your reserve analysis annually and make This will provide an indication of an item’s life expec- adjustments as needed to the 3 areas listed below. A tancy and replacement cost. In a development where change in any will have an effect on your reserves. the developer is still selling units or has recently Life expectancy. This can vary due to use, weather, completed all sales, ask the developer to provide this workmanship, and so on. As items get close to the information. If you are in an older development, ask projected end of their useful life, closer monitoring is qualified contractors or equipment manufacturers, warranted. getting a minimum of 3 estimates. The lowest esti- Review replacement cost. As items get close to the mate is not always the best indicator of the quality of projected end of their useful life, you will need to get work, so ask for and check references. a minimum of 3 bids for their replacement from qual- Some contractors may require a nominal fee for a ified contractors. detailed estimate. However, most will credit payment for an estimate toward any work done within a rea- Addition/removal of items. As time passes, items sonable time frame. If an item is nearing the end of may be added or deleted from list of common and its useful life, getting a detailed estimate (regardless limited common elements, for example, removing a whether it is free or not) is a good idea. If the item in boat dock or adding a gazebo. question has a long remaining useful life, pursue get- Healthy reserves are critical to the wellbeing of ting a conservative, general estimate. This is usually every community association. Investing in a compre- sufficient for planning purposes. hensive reserve study and following a carefully charted You can also obtain costs for labor, material, and funding plan will reap huge dividends in the coming useful lives through sources that provide national years. If your association hasn’t already done so, get averages indexed to your local area. This is generally the ball rolling today! sufficient for long range general planning. If you use See Figure 6 for definitions of key reserve terms. national averages, always get a detailed estimate near See Figure 7 for a sample of a Reserve Study the end of the useful life of a component for a more Checklist and Figure 8 for a Reserve Study Component accurate picture. Check List. Step 3: Establishing a funding plan. You now have INSURANCE ISSUES all the required information to complete a Reserve Study. Next, you must select a funding strategy. This Insurance Sense and Sensibility decision is very important and has serious financial Insurance claims in community associations are a implications for your association. The preferred fund- frequent area of dispute. All too often, conflict arises ing strategy accountants and professional Reserve because one party is underinsured and hoping anoth- Study providers use is a Cash Flow Analysis. In gen- er’s insurance will pay for a loss. Misunderstanding the eral, it examines and projects the reserving needs insurance responsibilities of association versus owners (contributions and expenditures) over many years, abound. Governing documents are often vague and combining funds from all components, in order to who reads them anyway? determine a stable annual contribution. There is a frequent misconception that the asso- In order to establish your funding plan, you need ciation will cover all major losses to owner property. to determine: To complicate matters, many insurance agents never read the association’s governing documents and don’t • What is your current reserve balance? understand which coverages are appropriate for their • Do you currently invest the money in your Reserve owner clients. How can the management, board, Fund? If so, what is the investment rate? homeowners, and agents make sense out of this insur- • What tax rate applies to the interest or dividends ance mire?CAM_book.indb 28 6/12/08 7:44:07 PM
  • 33. Association Financial Management and Insurance     29 Reserve Study Terminology Component: The elements which form the foundation for the Reserve Study. Reserve components consist of those that are maintained and repaired by the association. Component inventory: The task of identifying and measuring reserve components by visual observation, re- view of association files, and blueprints and input from knowledgeable experts. Condition assessment: The task of evaluating the current condition of the component based on observed or reported characteristics. Deficit: An actual (or projected) reserve balance less than the Fully Funded Balance. The opposite would be a surplus. Financial analysis: The portion of a Reserve Study where current status of the reserves (measured as cash or percent funded) and a recommended reserve contribution rate (Reserve Funding Plan) are derived, and the projected reserve income and expense over time is presented. Fully funded: When the actual or projected Reserve Balance is 100% funded. Fully funded balance: An indicator against which the actual or projected Reserve Balance can be compared. This number is calculated for each component, and then totaled. Funding goals: There are several approaches to Reserve Fundings: Baseline funding: Establishing a Reserve Funding goal of keeping the reserve cash balance above zero. Fully funding: Setting a Reserve Funding goal of attaining and maintaining reserves at or near 100% funded. Statutory funding: Establishing a Reserve Funding goal of setting aside the specific minimum amount of reserves required by local statues. Threshold funding: Establishing a Reserve Funding goal of keeping the Reserve Balance above a speci- fied dollar or percent funded amount. Depending on the threshold, this may be more or less conserva- tive than “Fully Funding”. Funding plan: The savings plan followed to funds adequate to pay for anticipated reserve expenditures. Funding principles: In the development of a funding plan, the following 4 principles are to be considered: • Sufficient Funds when Required • Evenly Distributed Contributions over the Years • Fiscally Responsible Percent funded: The ratio at a particular point of time of the actual Reserve balance to the fully funded bal- ance expressed as a percentage. Physical analysis: The portion of the Reserve Study where the Component Inventory, Condition Assessment, and Life and Valuation Estimate tasks are performed. Remaining useful life: The estimated number of years that a Reserve Component will serve its intended func- tion. Replacement cost: The cost of replacing, repairing, or restoring a Reserve Component to its original functional condition. The Current Replacement Cost would be the cost to replace, repair, or restore the component dur- ing that particular year. Reserve balance: Actual or projected funds as of a particular point in time that the association has identified for use to defray the future repair or replacement of those major components which the association is obli- gated to maintain. Also known as Reserves, Reserve Accounts, Cash Reserves. Reserve study analyst: A professional that prepares Reserve Studies. Reserve study: A Reserve Study identifies the major components for which the association has maintenance responsibility that have a useful life of 3 to 30 years. Each component is assessed for condition, useful life, and cost of replacement. With this information, a 30-year maintenance schedule and funding plan is produced. This 30-year plan provides current and future Boards with a roadmap to responsibly maintain the community’s assets. Following the plan insures that all members pay their fair share of these major expenses. Special assess- ments become a thing of the past! Special assessment: An assessment levied on the members of an association in addition to regular assess- ments. Special Assessments are often regulated by Governing Documents or local statutes. Surplus: An actual or projected Reserve Balance greater than the Fully Funded Balance. See Deficit. Useful life: The estimated time in years that a reserve component can be expected to serve its intended func- tion when new if properly installed and maintained Figure 6: Reserve Study Terminology (Source: http://regenesis.net)CAM_book.indb 29 6/12/08 7:44:08 PM
  • 34. 30     Bert Rodgers Schools Reserve Study Checklist Figure 7: Reserve Study Checklist (Source: http://regenesis.net)CAM_book.indb 30 6/12/08 7:44:08 PM
  • 35. Association Financial Management and Insurance     31 Reserve Study COMPONENT Checklist Figure 8: Reserve Study Component Checklist (Source: http://regenesis.net)CAM_book.indb 31 6/12/08 7:44:09 PM
  • 36. 32     Bert Rodgers Schools A policy document called Maintenance and ers get pink slips even though they have never made a Insurance Areas of Responsibility can eliminate gray claim. Fortunately, the community association insur- areas or gaps in both maintenance and insurance. ance market has not dried up altogether. As longtime By identifying building and grounds components players are benched, others are coming up to bat, even and assigning responsibility to either the association in this roller coaster market. or owner, gaps are effectively closed. The idea is to One underlying principle to keep in mind is that clearly define the point where association responsi- insurance in any form presents some form of risk for bility stops and owner responsibility begins. If you the insured. The gamble is that bad things won’t hap- maintain it, you insure it. For example: repairs to all pen but insurance companies know that somewhere, common water supply and drain lines are an associa- sometime, they will. And, when the insurance pays tion responsibility; repairs to all unit water supply and off, the costs impact the premium rate structure. drain lines from connection point with common lines Therefore, during tight insurance markets, the Board are an owner responsibility will need to consider increasing the association’s risk Once the areas of responsibility are completed, to reduce premium cost. Here are some strategies to approved, and distributed to the owners and their help see you through. insurance carriers, all have the same point of refer- Shop around. Not all insurance carriers have expe- ence. Bottom line: maintenance requests and insur- rienced the same loss history and have lower pre- ance claims are expedited and the association is only miums. Check with national companies that have a paying for things that are its responsibility. One special line of community association coverages like caveat: for every rule, there is an exception. As excep- State Farm, Allstate, Farmers, and CAU-Community tions are identified, the areas of responsibility should Association Underwriters for options. Call each com- be revised. pany’s administrative office and ask for the name of The association must be careful on how many the agent who writes the greatest amount of commu- insurance claims it turns in. Frequency of claims nity association insurance. It is very important to only affects the association’s premium level and insurabil- deal with an agent who is knowledgeable about how ity. Associations that file too many claims get canceled. community associations work. There are also a variety Assigning certain insurance responsibilities to the of independent insurance agents who can shop a wide owners reduces the association’s exposure and keeps market of companies to build a policy for you as well. insurance affordable. Another cost cutting technique But again, it is important that the agent understands is to raise the deductible to $2,500 or higher and have what community associations are about. The wisdom the association pay for smaller claims (also called self of this will become crystal clear as soon as you need to insurance). Raising the deductible will often result file a claim. in a dollar-for-dollar savings in premium. Premium savings can be assigned to a budget category called Review coverages. All associations should have Fire “Insurance Deductible” to cover insurance losses that Hazard, Directors and Officers Liability, Employee fall under the deductible. Dishonesty, and General Liability coverages. Some It’s the board’s responsibility to make the best other desirable coverages include Earthquake (manda- “sense and sensibility” by turning the vagaries of the tory in some regions), Wind and Flood, and Building governing documents into a practical policy. The Ordinance or Law. The latter covers increased recon- work that goes into developing this policy will reward struction costs due to building code or zoning restric- the association by reducing conflicts and promoting tions. Earthquake insurance typically has a sizeable harmony. deduction, like 10% of the coverage amount. The Board should discuss with the agent the pros and cons Insuring Success of eliminating certain coverages. Or, reducing a par- ticular coverage may reduce premium. Review options The last several years have been brutal to the insur- with your agent. ance industry and policy holders. Terrorist attacks, weather-related claims, huge court awards, shrinking Increasing deductibles. Increasing the deductible reserves, and stock market volatility have conspired to always reduces premium. It also means the commu- hammer profits. The industry has reacted by ratch- nity association self insures for that amount. Offset eting up premiums, discontinuing or limiting certain raising your deductible with an insurance reserve. coverages, adding exclusions (like mold), and termi- Control claims. It is extremely important for the nating higher risk clients. Board to control the kind and frequency of insur- Community associations have seen first hand ance claims. To aide that process, an Insurance Areas the effects of these insurance industry “corrections”. of Responsibility Policy should be adopted that care- Some have seen premiums double or triple and oth- fully defines what qualifies for an association insur-CAM_book.indb 32 6/12/08 7:44:09 PM
  • 37. Association Financial Management and Insurance     33 ance claim, and just as importantly, what does not. expands coverage to include standard fixtures and fin- Association members are charged with insuring cer- ishes provided by the builder. The broadest is referred tain things. In condos, it often is described as “from to as all-in or modified single entity which includes the decorated surface of the unit in”. That means unit coverages for owner installed upgrades such as cabi- interior damage should be paid for by the member’s nets, light, and plumbing fixtures. insurance, even if the source of the damage came from Many association insurance policies are the all-in outside, like a roof leak or an errant sprinkler head (as type which creates a dilemma. While the association long as the association was not negligent in repairing could cover many owner claims, it is unwise to do these items). so. The association’s policy is somewhat like an auto Directing claims to members’ insurance will policy in that multiple claims may increase future pre- reduce claims on the association’s insurance. The miums or cause the policy to be canceled. So, many association’s insurance should typically be used for association governing documents require the owners larger claims like wind, rain, and fire damage that to insure their own interior finishes and fixtures and impact many units or other common area structures. the association insurance only comes into play if there Reserve for self insurance. Whichever your deduct- is multiple unit damage due to, say, a fire. This spreads ible is—$1,000, $2,500, $5,000 or higher—that is the the risk around and keeps the association insurance amount that the community association is self insured viable. for. It is reasonable to plan for one claim a year by Since the association and owners each have dis- funding an Insurance Deductible Reserve within your tinct repair and insurance responsibilities, it is very reserve account in the amount of your deductible. If important that those responsibilities be clearly delin- you file no claims during the year the reserve can be eated. “Inside=Owner” and “Outside=Association” rolled over to the next year’s reserves. If your asso- won’t cut it because there are exceptions. And at some ciation has not filed a claim in years, you might set point, “Inside” and “Outside” meet. Where exactly up a 3-year reserve, funding one third of the deduct- is that dividing line? A way to clarify this has been ible each year. If no claims are filed, it’s money in the developed called the Maintenance Insurance Areas bank. of Responsibility. It lists grounds and building compo- Even though community associations have been nents like the roof, gutters and downspouts, plumb- rocked by the insurance storm in recent years, using ing-interior, plumbing-exterior, and so on, and assigns these strategies will help ensure success at the most responsibility either to owner or association. reasonable cost available. Since these costs are likely The Areas of Responsibility not only eliminates to climb even higher, be prepared by taking action many disputes, it advises both association and owners’ early. insurance agents what kind of coverage is necessary. It also helps the Board and Manager perform consis- Areas of Responsibility tent maintenance because there is a clear roadmap. This document is one of the building blocks of com- Understanding the scope of association insurance munity harmony. Do not wait for the next insurance coverages is basic to protecting the vital interests of “event” to come crashing or burning in. Write your the owners. Do you understand what the association’s own “Areas of Responsibility” and be prepared. duties are when a fire, windstorm, or burst pipe dam- ages the common elements or unit interiors? The association’s insurance duties are addressed in Types of Coverage the governing documents (sometimes called CCRs Managing risky business. I recently received a call - Covenants, Conditions, Restrictions). The from a community association about their recreational insurance company’s duties are based on the word- facility. Our conversation formed the basis of a case ing of the policy. The 2 documents often contradict. study on Board “risk management” that is applicable Surprisingly, the insurance policy often pays for the to other associations. repairs that aren’t even an association’s responsibility. Here’s the scenario: This upscale community Are there reasons why such broad coverage may not maintains a clubhouse and multi-pool facility. In addi- be in the association’s best interest? If an owner neg- tion to social events, the members can take advantage ligently causes a loss, is it fair that the repairs be done of aquatic classes of various kinds. While access to the under the association’s policy? pool area is restricted and controlled, there has been Traditionally, association insurance policies have a growing concern by the Board that the association fallen into one of 3 different categories. The narrow- may not be providing adequate pool safety by way of est is called bare walls and covers little of the owner’s lifeguards. On the other hand, the payroll costs for fixtures and finishes. Next, and most common, is the lifeguards are significant. What’s the proper/legal/ broader coverage known as single entity. This type moral/cost-effective thing to do? Hmmm, a quandaryCAM_book.indb 33 6/12/08 7:44:10 PM
  • 38. 34     Bert Rodgers Schools on the horns of a dilemma..... understandable. The question seems better asked, All Boards will face difficult decisions at some “Who’s responsible for providing the protection?” point. The most important part of a decision is not Historically, each citizen had the primary respon- the outcome as much as how it was arrived at. For sibility to care for those things or people that insignificant points of policy or budget, the process were held dear. Should the association step in and may be as simple as a motion carried by the majority. be more effective than an individual with a vested For other issues, such as our case study, it behooves interest? Talk this one through before moving to the Board to break it down into its component parts. other considerations. As the saying goes, “If you truly want to understand • Future obligations: Entering into a new or something, just try to change it.” expanded service sets the stage for many years Major points to consider. The lifeguard issue can to come. Something that didn’t formally exist in take on other forms, like security guards and parking short order will become an amenity, an expectation. patrols. The Board needs good information to come Amenities are difficult to undo even when their to a reasonable decision. So what are the major points need or usefulness has long since passed. The Board to consider? Some are no nonsense, strictly business needs to carefully consider future financial ramifica- while others are emotional and morality based. Let’s tions of decisions made today. look at a few: • Legal: On the one hand, the association needs to • Governing documents: Before you go too far provide reasonable protections for its owners. On the down the road of radical change, always check your other hand, by providing lifeguards, guard services, governing documents and the state statutes to see and the like, some courts have held that owners, what the association is obligated to do. If you are guests, and even trespassers are relieved of personal still unclear, consult with a knowledgeable attorney. responsibility when injury is suffered. Questions If the proposed new service is not required by docu- come up like: If it is valid for the association to pro- ments or statute or ordinance, the Board is blaz- vide lifeguards during normal pool hours, is it also ing new trails. This isn’t necessarily wrong but the reasonable for the association to have to provide Board needs to examine the issue more closely than a guard service in off hours to keep people from otherwise before coming to a decision. jumping the pool fence, swimming, and drowning? • Insurance risk: Insurance is a way of life in America These things have a way of growing beyond their and no community association should leave home original intended scope. without it. Take matters like this one to your agent • Homeowner involvement: For sweeping issues and get a written reply as to what the current policy or increases in cost, it is reasonable that the Board will, or won’t, protect against before and after the inform and give a voice to the homeowners. While proposed change. Either the association is on solid the governing documents may not require it, it ground insurance-wise or it may need additional makes practical sense. Faced with the conflicting coverage. aspects of our case study, a homeowner meeting • Cost: The cost of additional services, like life- specifically called to discuss the issue is appropriate. guards, is significant. When spread out over hun- At that meeting, all arguments should be presented dreds of homeowners, however, the sum may not and homeowner opinion solicited. If the proposal be unmanageable for each owner. Here, the eco- is to fund a new service and the majority of own- nomic status of the homeowners plays a big part. Is ers disagree, the Board can either agree, go against your community composed mostly of fixed income the tide, or step down and be replaced. Whatever retirees, working professionals, or young struggling the case, the record will show that the Board did families? Ability of the homeowners to pay should its homework by soliciting professional and hom- be a big part of the decision. eowner input. In short, the Board used due diligence in coming to its decision. • Benefit: Who will benefit from the service—the majority, most, or a few? Governments provide ser- Conclusion. Are there risky issues to deal with in vices for minority interests that are paid for by the your community? Remember that you are not alone majority under the theory that the more affluent in sorting them out. The effective Board is a team have a social responsibility to care for the less fortu- effort where the sum is greater than its parts. By tak- nate. In community associations, the majority rules. ing advantage of collective experience, risky business This may mean that the minority’s needs go unmet. can become business as usual. • Ethics: It gets sticky trying to argue safety issues. No one wants anyone to get hurt and a caring Why Do DO? Board wants to do the right thing. This is certainly Every director and officer of a community associa-CAM_book.indb 34 6/12/08 7:44:10 PM
  • 39. Association Financial Management and Insurance     35 tion board has personal responsibility for association a Board member climbs on the roof to inspect it, falls business. The basic purpose of Directors and Officers and gets injured, there will likely be no insurance cov- insurance (DO) is to protect directors and officers erage for medical bills or lost wages. This is because from claims made because of wrongful (or allegedly directors are typically not required to climb on roofs wrongful) acts or omissions made while acting in their as part of their job. individual or collective capacity on behalf of the com- A typical DO liability policy protects the asso- munity association. ciation when someone makes a claim for monetary General liability insurance will not protect direc- damage, not property damage or personal injury, aris- tors and officers in the same way. This insurance is to ing from the negligent actions of the Board. Claims cover against third party bodily injury and property for personal injury or property damage usually fall damage. Directors and Officers insurance covers under the association’s general liability policy. The against third party financial damages and other claims insurance company is required by the terms of the not covered under General liability. insurance policy to defend such a claim and to pay any Here is a list of scenarios in which directors and settlement reached or judgment entered due to the officers have liability: association’s negligence. Payments are capped by the • continuing a wrongful practice after learning it’s policy limits less any applicable deductible. wrong Some general liability policies have “Medical Payments” coverage regardless of who is at fault, • libel or slander however, most policies exclude claims for medical • failing to pay community association debts in a payments to the “insured” and generally define the timely manner “insured” to include officers and directors. • improper management resulting in losses Also, since directors and officers are rarely deemed to be association employees, they would not generally • receiving personal gain while performing as director be covered by workers compensation insurance. or officer Before an association is liable for an injury suf- • making decisions based on adequate information fered by a director or officer, it must be established and advised judgment that either: • ignorance of association books and records (1) the association directly caused the damage • verifying content of official documents before signing (2) required the director to perform the task which injured him • obedience to the governing documents (3) was negligent in some way that the director • self dealing was injured. In the example, the association did not • aiding and abetting illegal actions of others act in a negligent manner and, therefore, has no liabil- • conflict of interest ity to pay for the director’s medical expenses • carelessness in conducting business or legal matters One Final Consideration • failing to see what could be seen by merely looking DO coverage will not protect Boards that knowingly • inducing intentional or careless wrongdoing violate the governing documents or state law. For this • ignoring statutory or regulatory requirements reason, it is very important that all board members • insufficient oversight of officers or employees review and become familiar with them. Ignorance of • nondisclosure of questionable or unlawful actions the documents or law is no excuse. Understanding the scope of association insur- Because of all these traps and pitfalls a director or ance coverages is an important part of serving on the officer could fall into, DO insurance should never Board. If it has been a while since the policy has been be optional. No one should serve on a board without reviewed, invite the association insurance agent to it unless, of course, you have absolutely nothing to attend a board meeting to explain the coverages and lose. I personally don’t know one person that doesn’t. ways to improve it. Do DO. Coverage and Compensation When DO Insurance Won’t Do Insurance: How much is enough? If you own a All wise community associations should carry DO condominium, adequate insurance for your dwell- which provides coverage in the event of a lawsuit ing is every bit as important as it is for other kinds of claiming some Board act or omission caused harm. homeowners. Determining exactly how much insur- DO insurance does not, however, cover a director ance you need, however, can be tricky. or officer who is hurt while on the job. For example, if It is a common misconception by condominiumCAM_book.indb 35 6/12/08 7:44:10 PM
  • 40. 36     Bert Rodgers Schools owners that association insurance covers everything. Insurance victim compensation. An oft repeated Many wait until there is a major catastrophe to find scenario in common wall communities is water out it doesn’t. One of the first things to do is to review damage which originates from a neighboring unit. your association’s governing documents to determine Whether it’s a broken pipe or washing machine hose, what you are responsible for insuring. Believe it or surf’s up! and usually between midnight and 4 AM not, this varies greatly from association to associa- (disasters are funny that way). tion. While victim frustration and irritation always The governing documents should spell out who is results, the most natural reaction is looking for some- responsible for insuring what, like common (all own- one to blame. However, this is a crime that usually has ers use) elements such as sidewalks, swimming pools, no perpetrator. Rarely does someone consciously set landscaping, and limited (specific owner use) common out to flood the neighbors. This is one of those irri- areas like garages, decks, and so on. It should also tating events controlled by unseen forces commonly state whether the association or owner is responsible referred to as “stuff” happens. What now? for insuring building fixtures and appliances inside Of the 2 entities the victims would like to blame— your unit. the neighbor or the association—both have legitimate Many association bylaws call for assessing each alibis. The neighbor’s toilet supply line probably owner a proportionate share of major property and broke when the neighbor was gone so there is con- liability losses, also called a “loss assessment”. For siderable damage done their unit as well. And they example, if a major fire wreaks havoc on your build- had no control of the event. Your neighbor may have ings or a repairman sues the association after falling even called his insurance agent about fixing his and from a ladder, you may be asked to pay a share of the your damage. The agent often replies either, “We’ll losses not covered by insurance. In most locations, fix yours but not your neighbor’s” or “Call the asso- unit owner condominium policies provide an automatic ciation’s insurance carrier. They’ll pay for the damage $1,000 of coverage for loss assessment for covered to both”. Technically speaking, correct, but practically speaking, wrong advice. perils. But you may want to increase this amount with Like the neighbor, the association usually is not a loss assessment coverage endorsement if the deduct- negligent in causing the damage. Things happen. And ible on the association’s master policy is higher than unless the result is catastrophic, involving many units normal. and 10s or 100s of thousands of dollars of damage, the Not all loss assessments are covered by insurance. association’s insurance should not be involved in the For example, if hurricane winds damaged the pool repairs even if the policy covers it. Why? Insurance house, a resulting loss assessment would be covered companies set their rates according to the number by your insurance up to your limits for loss assess- of claims filed and the dollar value of those claims. ment. But if the association decides to remodel the Association insurance is written on the assumption pool house and owners are assessed, this would not be that it will rarely be needed. And to keep premiums covered by insurance. Loss assessment coverage does even lower, higher deductibles like $2,500 are opted not insure for poor planning. for. This encourages the association not to file small Unit owners insurance also provides for personal claims which may jeopardize insurability. Too many property coverage. You determine how much insur- claims result in cancellation. ance you need. Experts recommend getting a replace- All unit owners are required to carry homeowner ment cost coverage endorsement. Without it, covered insurance for a good reason—to spread the risk losses to your personal property will be paid accord- around and ensure that each owner has the correct ing to their market value at the time of loss adjusted amount and appropriate kind of insurance. Some need by depreciation. Replacement cost coverage costs relatively little and some need more to cover valuable a little more but if you have a covered loss, you will contents, home businesses, and other special needs. It be able to replace most items with new ones with no is important that owner insurance be the first line of deduction for depreciation. The policy deductible defense when possible. In the scenario discussed here, does apply and there are coverage limits on jewelry, unless either the neighbor or association was negli- furs, silverware, and firearms. gent in some way, the owner victims would file claims How much insurance is enough? First make sure on their own insurance and pay the deductible out of you have the right kinds of insurance to protect you their own pocket. where the association’s policy does not. Setting levels The association can assist in sorting out claims is the second step. Your agent can assist you with both and responsibilities by enacting an Areas of steps. Don’t forget to review your policy periodically Responsibility Policy which clearly defines who is especially if property values have changed signifi- responsible for insurance and maintenance according cantly. to building and grounds components. This one pageCAM_book.indb 36 6/12/08 7:44:11 PM
  • 41. Association Financial Management and Insurance     37 document establishes the guidelines for the Board, authority to define who is responsible for repair- owners, and insurance agents and eliminates most dis- ing common area damage according to the source putes. Once adopted, the Board should be extremely of the damage. If the damage originates from an careful what things the association repairs. Fixing unit association-maintained source, the association is damage that the association is not responsible for may responsible. If it originates from an owner-main- establish an expensive precedent. tained source, the owner is responsible. Owners Avoiding insurance victimization is a matter of do not have the same policy-making authority as proper planning and notification. Make sure all own- the association and can only make claim against a ers know what’s what with an Areas of Responsibility neighbor’s policy if negligence can be proven. Policy. Then, owners won’t get caught with their 5. To help clarify these principles, the board should insurance pants down. adopt a Maintenance and Insurance Areas of Responsibility Policy. This policy eliminates gray Limiting Insurance Claims areas in maintenance and insurance. It provides a One of the biggest traps for community associations is quick reference for the board, property manager, that their insurance coverage often permits payment owners, and insurance carriers. It also expedites of claims that rightly belong to homeowners. This is maintenance requests and insurance claims. due to the broad or “blanket” coverage nature of the Since insurance is such an important element of association policy. In effect, the insurance carrier looks the community’s well being, it behooves the Board to to the association to determine whether it should pay formalize a comprehensive policy. Why wait for an a claim or not. If given no direction, the carrier usu- accident to happen? An association policy on insur- ally errs on the side of the homeowner. ance claims is pro-action in action. The problem is that if the association permits all claims regardless of their source, soon the premium Insurance Gapposis would skyrocket or worse, the policy would be can- One of the all too frequent occurrences in commu- celed. To protect the association’s interests, the board nity associations occurs when a gap exists between should develop and enact a policy concerning insur- insurance carried by the association and insurance ance claims and put the association insurance carrier carried by each homeowner. This is not a small prob- on notice. Each owner would then be responsible for lem. According to Murphy’s Law: If there is a loop- notifying his own carrier of the association policy. hole, insurance adjusters will find it and refuse to pay Barring conflicting insurance requirements in the a claim on it. In community associations where the governing documents or state statute, here are reason- association maintains and insures the common area able guidelines for the association to follow in devel- and building exteriors, owners are expected to main- oping a policy for handling insurance claims: tain and insure from the unfinished interior surfaces 1. The association is responsible for repairing only in, plus all personal property. When different insur- those things for which it has maintenance responsi- ance carriers define coverages differently, a gap in bility. coverage results. 2. If the association is negligent in maintenance that One way to eliminate the possibility of insur- results in unit damage, like failing to repair a leak- ance gaps is to have both the association and all own- ing roof in a timely manner when notified, the ers insured by the same carrier. It makes sense to go association is responsible for the damage repairs to one step further and all use the same agent. When the the units. same carrier is used, where one policy stops, the other begins. No gaps. 3. Each unit owner is responsible for insuring his own Another way of solving the problem is for the unit and personal property. For example: If a washer Board to adopt a Maintenance and Insurance Areas hose breaks in Unit A on the 3rd floor, damaging of Responsibility List. This list can get rather lengthy 3A and its 2 downstairs neighbors, each unit owner because it identifies specific building components and would be responsible for insuring damage suffered subcomponents (e.g., as lights-parking, lights-build- within his unit. The association’s insurance would ing, lights-entry, etc.) and either assigns responsibility not be involved. to either the association or the owner. This list should 4. If association common area property is damaged by be consistent with maintenance responsibilities found an event that originates within a unit (e.g., described in the governing documents. Once the list is complete in Item 3) the association may hold the unit owner and approved by the Board, a copy should be provided liable for the damage and seek recovery under the to each owner with instructions that a copy be sent to liability portion of the unit owner’s insurance. This the owner’s insurance carrier. All agents are then con- is based on the principle that the association has the structively put on notice as to what level of coverageCAM_book.indb 37 6/12/08 7:44:11 PM
  • 42. 38     Bert Rodgers Schools is expected by the insured. The written notice should request any exceptions to the coverage to make dou- bly sure there are no gaps. If there are gaps, there will be an opportunity to close them. Insurance claim disputes are among the most frequent found in community associations. Many of them could be avoided by closing the gap between coverages and clarifying the maintenance and insur- ance expectations of the parties. If your community has not gone through this exercise, now is a good time to get started. And don’t delay. There is too much at stake. And don’t forget to put it on your annual calen- dar to remind new owners.CAM_book.indb 38 6/12/08 7:44:12 PM
  • 43. Association Financial Management and Insurance     39 Final Assessment Association Financial Management and Insurance For immediate results, test online at www. bertrodgers.com Instructions • Answer the True or False questions below. • Locate the course title on the Answer Sheet in the back of this book • Fill in your answers for each question in the space provided. Please use pen or pencil. • omplete the Final Assessments, Attest Statements, and Course Evaluations for all courses selected, fill out the C Registration Form and submit both the Registration Form and Answer Sheet(s). • A passing score is 70% or higher (7 or more correct answers out of 10). 1. The accuracy of the budget directly affects future years’ budgets and maintenance fees. T F 2. Under-budgeting creates windfalls which are often covered by reserve funds earmarked for future replacement and repairs. T F 3. The approval of the budget should happen at least 30 days prior to the start of the new fiscal year. T F 4. The Board should give members at least 30-days notice of any homeowner fee change. T F 5. A late charge is inappropriate for each month the account is delinquent. T F 6. If a partial community association fee is received, then it should always be applied to the oldest balance so that late fees are levied for each month there is a balance due. T F 7. Recording a lien against the debtor’s unit/home is the most important collection action the community association can take since it secures payment of the balance due. T F 8. It is not very important that the lien be properly prepared and recorded. T F 9. Some governing documents provide the right to accelerate the balance of the current fiscal year’s assessments in the event of default. T F 10. Foreclosure of debtor property is the most extreme form of community association collection and not particularly easy to pull off. T FCAM_book.indb 39 6/12/08 7:44:12 PM
  • 44. 40     Bert Rodgers SchoolsCAM_book.indb 40 6/12/08 7:44:12 PM
  • 45. Approved by the DBPR Council for CAM, Provider #0001856, Course #9625408 Operation of the Association’s Physical Property 4 Hours in Subject Area: Operation by Richard Thompson of the Association’s Physical Property Learning Objectives Upon completion of the course the learner shall be able to: 1. List several key steps managers can take to main- 16. Explain how the acronym P-A-I-N-T serves as a tain the value of the association’s physical prop- helpful checklist for managers planning a paint- erty with a minimal amount of funds and energy. ing project. 2. Identify 5 areas to overview during the annual 17. Discuss 3 strategies managers can use to deter- maintenance review. mine the proper color code for their community. 3. Define the guidelines for maintenance of the 18. Explain the concept of color dynamics and how components of the common area checklist. size and position of the buildings factor into 4. List 3 things regarding the pipes in the associa- color selections. tion’s common areas that managers should have 19. Identify the 5 main causes of paint failure. checked on an annual basis. 0. Discuss the causes of paint blistering, contrasting 2 5. Explain the importance of developing guidelines moisture, and heat blistering. for maintenance of each component of the com- 1. Explain how managers can best monitor and 2 mon area. control the usage of community paid utilities. 6. List the 3 steps that ensure the manager’s preven- 2. List 3 considerations when servicing exterior 2 tive maintenance plan is successful. lighting. 7. List 3 reasons it is a good business practice to 3. Compare and contrast Compact Fluorescent 2 hire a construction manager when maintenance Bulbs (CF) and Incandescent Bulbs (IB). projects involve several trades. 4. Discuss how creative use of landscape options 2 8. Discuss 2 contract clauses that should be coupled with the latest irrigation technology included in all construction contracts. can significantly reduce maintenance and utility 9. List 4 steps managers should take to prepare for a costs. professional roofing job. 5. Explain how informed landscape maintenance 2 10. Explain how to determine if the manager should policies can contribute to the aesthetic appeal, hire a roofing consultant. enjoyment, and value of the community’s property. 11. Discuss 3 experts the manager should consider 6. Discuss 3 of the 7 basic horticultural principles 2 hiring prior to selecting a roofing contractor. that serve as the basis for xeriscaping. 12. Differentiate between 3 commonly used roofing 7. Explain the differences between structural and 2 materials, comparing the benefits and pitfalls of topographical drainage. each. 8. List several techniques managers can utilize to 2 13. List 3 drawbacks of asphalt pavement. conserve water. 14. Contrast the properties of asphalt and coal tar 9. Discuss 3 benefits of hiring an arborist. 2 and discuss the best methods to protect asphalt 0. Identify 5 reasons a tree should be removed. 3 pavement. 15. Identify 3 forms of asphalt pavement mainte- nance. 41CAM_book.indb 41 6/12/08 7:44:13 PM
  • 46. 42     Bert Rodgers Schools MAINTENANCE carefully who will perform this duty. In addition, include reputable, licensed, and qualified contrac- Building Value by Preventive Maintenance tors, engineer, or architectural consultants or certified Many community associations are growing old—and building inspectors. These people have a “trained” not always gracefully. Dry rot, extensive wood boring eye which will pick up potential problems that laymen insect damage, leaking roofs, and hefty special assess- would miss. ments seem to be the order of the day. Letting mainte- Although they may charge for their time, they will nance slide year after year is not the answer. Owners’ save money in the long run. Once you have completed property in associations that are well maintained your walk-through, categorize all components in the will sell faster and for more money. It is a matter of following manner: protecting and maintaining the value of the asset, a • Building components. Roofs, gutters, windows, Board’s primary and legal responsibility. siding and trim, decks, garage doors, heating/AC So how can those associations that want to main- units, elevators, etc. tain their assets do so with a minimal amount of funds • Site components. Pavement, concrete, area light- and energy? There are several keys which may assist ing, fences, entry monuments, etc. in the maintenance journey: • Landscaping components. Time clocks, sprinkler Get committed. The Board needs to first go on heads, controllers, water features, etc. record that it is committed philosophically to preven- tative maintenance. Consider enacting a formal writ- • Recreational components. Pool, spa, sauna, tennis ten resolution approved by the Board that mandates courts, playground, exercise room, clubhouse, etc. professional quality maintenance of the property as a foundation of this commitment. As boards change, ANNUAL MAINTENANCE REVIEW they will be held to this standard. Now is the time to assess the condition of your asso- Get organized. Find volunteers for a Maintenance ciation’s assets. Sharpen your pencils, dust off your Committee. If any of the volunteers have experience clipboards, and prepare to scrutinize the buildings, in construction, design, or architecture so much the grounds, and amenities. Let’s starting with the build- better. Next, put together a job description for the ings. There is a lot going on, so pay attention. committee outlining the major responsibilities and At the roof line, scrutinize the chimney caps. Are time lines for completion of certain tasks. any missing or rusted through that need replacing? Develop a component list. Besides the obvious like Make a note by location. Next, look at the chimney roofs, paint, paving, and so on, there may be other chases (enclosures). The section above the roof line not-so-obvious components. Review your documents gets more weather than the sheltered part and the sid- to identify all the components that your association is ing often needs repair or repainting. Next, check out obligated to maintain. If there is confusion regarding the roof, if it’s the kind you can see from the ground. maintenance responsibility for limited common areas Anything obvious that needs repaired or cleaned? Note like a unit’s deck, you may wish to consult your attor- any areas that have moss buildup so that moss killer ney. If your community is older, you may want to do can be applied during the summer. Since it’s difficult this anyway to make sure the documents conform to to truly assess roofing condition from the ground and current laws. Amending them will clarify maintenance dangerous to be “mountain goating” on the roof, it’s responsibilities that are vague or absent. highly recommended that you have a roofing contrac- Your insurance agent needs to know which com- tor do the roof and flashing inspection. They have the ponents the association will be taking responsibility knowledge, equipment, and guts to do it right. Finally, for and how that might affect coverage and premiums. the gutters and downspouts probably need a cleaning. (Insurance coverage disputes between association and Check the siding and trim. Any popped nails that homeowners are common because of poorly written need to be resecured? Check the caulking joints documents and failure by the Board to properly define around the windows, doors, and trim. More than responsibility). The key is to bring clarity and distinc- likely some have opened up and need recaulking. tion to those components which will be maintained by Any paint peeling? In particular check the south the association, as opposed to those maintained by the sides or those likely to receive more weather. Scrape homeowners themselves. bad areas, prime and spot paint, unless you are plan- Physically inspect the components. Many Boards ning a project-wide painting. Do you have synthetic have never taken the time to walk around the property stucco (EIFS-Exterior Insulation Finishing System)? on a maintenance inspection and those that do often An annual inspection by a trained inspector is highly do not possess the proper skills. Choose the people recommended. EIFS hides and promotes dry rot thatCAM_book.indb 42 6/12/08 7:44:13 PM
  • 47. Operation of the Association’s Physical Property     43 often cannot be detected by visual observation. Special ken branches, disease, and overgrowth that require moisture scanning equipment is required. knowledgeable “corrective” care. Don’t rely on your Decks should be checked for dry rot and negative landscape contractor who usually only contracts to do drainage or ponding. Look underneath at the deck, “maintenance pruning” to keep limbs off the build- supporting posts, and joists and use a small screw- ings and walkways. driver to probe for dry rot. Check the deck fences and Inspect the pool and spa with the pool mainte- rails. Replace bad wood as needed. Check the points nance contractor. How’s the plaster? Are the railings of connection to the building since this is often incor- and coping stones loose? Are there potential trip haz- rectly done and provides a point of water intrusion. ards? Is it time to rebuild the sauna? Don’t forget to Check flashing at sliding glass doors, again, a likely do a safety check of the playground equipment. point of leakage. Springing into action takes planning. First make a Look at the grounds. For asphalt, the best time to list of the problem areas and prioritize repairs. Don’t do the sealcoating and general repairs is in warm, dry delay contacting contractors since their “dance cards” weather. Don’t forget to repaint curbs and parking fill quickly. spaces. Walk the concrete walks and look for tripping hazards caused by lifted, cracked, or sunken slabs. Note the locations and get those areas ground down FALL FIX-UP or removed and repoured. Moss and algae growth Every fall, community associations should exercise a can cause slipping hazards. Treat or pressure wash as series of preventive common area maintenance func- needed. This is particularly important in senior com- tions. For small community associations or those with munities. few common elements, the list will be short and easy Check your fencing. Summer rains can change exist- to complete. For larger, more complex complexes, the ing grade contours. Other than the posts, there should list can be daunting. But, overlooking these things be no earth-to-wood contact which will promote dry can have disastrous and expensive consequences. See rot and insect infestation. Check the posts to make sure Figure 1 for a helpful checklist to kick-start the pro- they are solid and replace any that are dry rotted. Use cess. only metal, redwood, cedar, or pressure treated posts. Look for signs of sprinkler overspray on fences and MAINTENanCE GOALS have your landscaper adjust spray heads accordingly. Develop a maintenance plan. Define the guideline Check common area lighting for broken, cracked, for maintenance of each component assuring profes- or rusting fixtures. Consider upgrading older incan- sional lasting repairs. Avoid the band-aid mentality— descent lighting to more efficient high pressure it will cost you dearly. Use your service providers to sodium, metal halide, halogen, or fluorescent. The determine reasonable methods and costs. light levels will increase dramatically and the power Allocate the funds. The best maintenance plan in the bills will plummet. world is useless if not properly funded. Since money Look for evidence of water ponding around build- comes from the operating budget and increasing the ing foundations. Fill and regrade for positive drain- maintenance budget is not popular, it is critical to age. Ponding on walkways can be cured by clearing have the plan that justifies the budget. Build the bud- ground drains or installing drain tile pipe to carry get around the maintenance program, not vice versa. water away. Clean out ground and storm drains. Follow-up on the work. Have the Maintenance Walk the common area landscaping with your Committee or property manager do monthly (at least landscape contractor and make a punch list of quarterly) inspections and put the observations in items needing attention. The sprinkler system writing for the file. The report can be used as a check- should be checked for broken pipes, missing or bro- list for the maintenance or landscaping people doing ken heads, and clogged valves. Splash blocks can be corrective work. added where downspouts dump into landscaped areas. Build service continuity. Establish long term rela- Look for wet, spongy areas in the lawn indicative of tionships with reputable service providers for conti- drainage problems. If severe enough, the contractor nuity. Once a provider understands and provides the can install drain tile pipe to dry the area out. Check service you are looking for, why reinvent the wheel for bare spots or pests in the lawn and ground cover. every time the Board changes? Check each vendor’s Have trees inspected. Trees are one of your big- costs at budget time to confirm that the association is gest assets and should be closely inspected at least getting a competitive price. every 3 years by an arborist. Look for split and bro- If a preventive maintenance program is imple-CAM_book.indb 43 6/12/08 7:44:14 PM
  • 48. 44     Bert Rodgers Schools FALL FIX UP CHECKLIST q Smoke Detectors Change batteries for those that require them and check to make sure all are operating properly. q Clean Carpets Upholstery, Draperies Air Ducts • Carpets should be cleaned at least once a year and more often if traffic demands it. • Furniture upholstery and draperies of common areas should be inspected and cleaned if necessary or at least every 2 years. • Common area air ducts in the hallway, clubhouse, etc. should be cleaned at least every 3 years to abate spores, dust, and mold that trigger respiratory problems or allergies. q Forced Air Heating/Cooling System Main­ten­ance Remove any flammables stored in the room since the fumes could be ignited by the furnace when it’s fired up. Change the fil- ters. Set the thermostat to heating mode and test the furnace to burn off the dust that collects over the summer and to ensure it is in working order. Consider hiring a heating professional to perform a maintenance check-up, including these steps: 1. Inspect thermostat for proper operation. 2. Inspect filter and change or clean as needed. 3. Check all electrical components and controls. 4. Oil motors as needed. 6. Inspect heat exchanger for possible cracks, which would introduce carbon monoxide into the living space. 7. Check air flow. If diminished, it may be necessary to clean the evaporator coil and ductwork. q Door Window Weather Stripping Check the weather stripping around all doors and windows and replace it if necessary. q Storm Windows Doors • Inspect and replace cracked or broken glass. Repair frames; replace broken, worn, or missing hardware; tighten and lubricate door hinges and closers; check for broken or missing glazing. • Consider installing thermapane windows to replace storm windows and improve energy efficiency. q Garage Doors Clean and lubricate hinges, rollers, and tracks; tighten screws. q Parking Lots • Arrange for sweeping. • Have drains cleaned out. • Repaint curbs. • Repair deteriorated areas. q Exterior Lighting • Replace burned out bulbs for better security and night visibility. • Reset exterior lighting clock to adjust for seasonal change or replace with photocell system. q Water Heaters • Every 6 months you should turn off the energy source and flush until clear of sediment. • Inspect flue assembly (gas or oil heater); check for leaks and corrosion. q Foundation • Close or plug foundation vent openings. • Check and correct grade for proper drainage away from foundation. • Repair cracks. q Decks Remove potted plants and removable carpet which can promote wood dry rot under wet conditions. q Gutters Downspouts • Clean gutters and downspouts and make sure they are running clear. • Correct known drainage issues. q Landscaping • Prune back trees or shrubs at least 3 feet from the siding and roof. • Fertilize, thatch, aerate, and reseed turf areas. q Pipes • Check for rust or white lime deposits that indicate leaking. • Install covers on outside hose bibs if danger of freeze is possible. • Perform a preventive flush or rooting to prevent drain line blockage back-ups and flooding due to build-up or tree roots. q Roof-Shingled • Check for warping, aging, moss, and cracking; repair or replace as needed. • Inspect and repair flashing around chimneys, skylights, and vents. q Roof-Flat • Sweep to remove debris; clear all drains and scuppers. • Inspect and repair separated roofing seams • Inspect and repair parapet wall caps. • Inspect and repair vent and pipe flashing q Siding Inspect siding (especially on the sun and weather sides) for evidence of deterioration, including cracks, splintering, decay, and insect damage; clean, treat, recaulk, and repair as needed. • Brick and stone. Check joints between wood and masonry. Waterproof, repair, or repaint if necessary. • Wood. Look for peeling paint or splitting wood; evidence that water is getting into the siding. Prime and repaint as needed. • Stucco. A chalky residue is evidence of oxidation and deterioration of paint or color coat that reduces stucco’s effectiveness. Check for cracks which allow water to get in around windows and doors. Hire a professional to correct the problem. • Trim. Remove peeling paint on the trim and fascia boards, window sills, and sashes; prime and repaint as needed. Figure 1: Fall Fix-Up ChecklistCAM_book.indb 44 6/12/08 7:44:14 PM
  • 49. Operation of the Association’s Physical Property     45 mented, the association can not only help protect documents. This policy will eliminate insurance dis- itself from unscheduled special assessments, but will putes and ensure maintenance is handled correctly and enhance the unit values as well. The purpose of pre- consistently. While this sample is not comprehensive, ventive maintenance is to spend some money now to it does include many components commonly found in save a lot later. It is a legacy deeply appreciated by condominiums. Once adopted as policy, a copy should those that follow. be distributed to every owner with instructions to The Areas of Responsibility Checklist (Figure 2) provide a copy to their insurance company. clarifies responsibilities and should be tied to a Board Resolution which is consistent with the governing Areas of Responsibility Checklist for Maintenance Insurance A = Association O = Owner 1. Exterior Siding Trim 15. Plumbing A Repair, replace, paint, caulk A Common supply and drain lines O Supply/drain lines from connection with common 2. Gutters Downspouts O Unit water shut-off valves, interior fixtures A Repair, replace, paint, caulk, clean A Central hot water heater 3. Roofs, Roof Flashing Decking O Unit hot water heater A Repair, replace 16. Decks Patios 4. Perimeter Wall Studs Insulation A Repair, replace, paint A Repair, replace O Surface materials 5. Perimeter Wall Interior Sheet Rock 17. Hallways Stairs - Common Area O Repair, replace A Repair, clean, paint 6. Party Wall Studs 18. Sidewalks Steps - Common Area A Repair, replace A Repair, replace, clean 7. Party Wall Sheet Rock Insulation 19. Insect Pest Control O Repair, replace O Unit interiors A Unit exteriors: wood boring or stinging insects; animals 8. Building Ceiling Floor Rafters A Repair, replace 20. Water Smoke Damage O Damage to unit interior from unit or neighbor source 9. Unit Interior Wall Sheetrock Finish A Damage to unit interior from common area source O Repair, replace 22. Common Area Trees, Flowers, Plants Shrubs 10. Unit Interior Ceilings Floors A Maintenance, removal, replace O Finish, sheetrock, insulation, subfloor A Ceiling floor rafters (SEE #8) 23. Parking Garage Lot A Clean, restripe, repair, signage 11. Unit Fixtures Finishes O Appliances, cabinets, plumbing fixtures 24. Elevator O Floor coverings, window treatments A Repair, replace, remodel 12. Unit Doors Locks - Exterior 25. Pool, Pool Deck, Furniture Equipment O Repair/replace door, door casing and locks A Maintenance, repair, replace, remodel A Paint, caulk, flash, exterior trim 26. Fences 13. Windows Screens A Repair, replace, refinish O Repair, replace 27. Signage-Entry, Address, Street A Paint, trim, caulk, flash A Repair, replace, refinish 14. Electrical A Electric panels, meters A Exterior outlets fixtures A Wiring from meters to unit breakers O Unit electric wiring, switches, etc. Figure 2: Areas Of Responsibility Checklist For Maintenance And Insurance (Source: http://regenesis.net)CAM_book.indb 45 6/12/08 7:44:15 PM
  • 50. 46     Bert Rodgers Schools CONTRACTORS property to which their labor or materials is attached. Don’t tender payment without exchanging it for a lien Start to Finish Contracting release that transfers this liability to the contractor. Your community may be faced with a large siding, dry Writing the check to both the contractor and sup- rot, or structural repair. These projects often involve a plier is additional insurance that it won’t come back number of trades like carpentry, electrical, plumbing, to haunt you. and engineering that must be properly combined for Scheduling. CMs handle the complex schedul- a satisfactory outcome. If the scope of work is large, ing of various trades to ensure smooth job progress. it makes sense to use the services of a professional Understanding the sequence of construction events is Construction Manager (CM). Here are some reasons. essential. CMs aren’t afraid to apply pressure to speed Speak the same lingo. Contractors prefer to work up slow contractors (contractorese is “kicking butt”). with people who understand their trade. Making a Hold back. It is common to withhold 10% of the profit depends on maximum production and efficiency total contract pending completion of a punch list from a work crew. CMs speak “Contractorese”. gathered as result of a walkthrough by the contractor Good specifications. A good CM provides the kind and CM. Do not release funds unless satisfied that the of specifications that allows subcontractors to be more job is complete. price competitive. When dealing with laymen like Construction managers are masters in piecing homeowners, it’s common for subs to add a margin together complex projects and getting the best value to compensate for potential problems resulting from for your money. There is too much at stake to risk try- inadequate specs. ing to do this yourself. Do not go down this road with- Getting material you bargained for. Occa­sion­ally out one. Get a Construction Manager involved in the materials get “mistakenly” delivered to another job planning stages to run the project from start to finish. site or arrive in a lesser quality than ordered. Consider having your CM buy the materials direct and have Managing Construction them delivered to the job site. The CM will ensure you get what you ordered. As stated above, your community may be faced with a large siding, dry rot, or structural repair. These proj- A good contract. Include contract clauses that keep ects often involve a number of disciplines like carpen- costly change orders to a minimum such as: try, electrical, plumbing, and engineering that must be • time frame for job completion properly integrated for a satisfactory end result. When • penalties for failing to meet the deadline it comes to accomplishing complex renovation proj- ects, it makes sense to use the services of a professional • hours when work may be performed Construction Manager (CM). Here are some of the • requirement for liability and workers compensation reasons. insurance quality checks prior to payment Subcontractors prefer to work with people who • progress payments based on work completed understand their trade since making a profit is based • 10% holdback pending final review on achieving maximum production and efficiency from a work crew. A good CM provides thorough specifica- Don’t advance funds. Associations managing their tions, scheduling, and supervision that allow subs to own projects, large or small, often fall into the trap be more price-competitive. On the other hand, when of advancing money prior to work being done. dealing with laymen like homeowners, it’s common to Prepayment is a red flag. Contractors who require add a margin to compensate for potential production prepayment are often in financial straits or do not problems. have adequate credit to purchase the materials needed CMs help design contracts that include details for the job. Occasionally, contractors disappear with that keep costly change orders to a minimum. These the money or pay another job’s bills with it. There contracts contain specific time frames for completing can be exceptions to this rule, like purchasing custom the job, penalties for failing to meet the deadline, and built windows or installing special order materials. If the hours when the work may be performed. Typical this is the reason for prepayment, have the materials contracts also require written evidence of liability and delivered to the jobsite and pay the bill directly. workers compensation insurance. Lien releases. Lien releases are written and signed Associations overseeing their own projects often statements from the contractor that warrant all fall into the trap of advancing money prior to work employees, subcontractors, and suppliers involved in being done. Prepayment is a red flag for trouble. the job have been paid. Employees, subcontractors, Contractors that require prepayment are often in and suppliers have the legal right to file a lien on the financial straits or do not have adequate credit to pur-CAM_book.indb 46 6/12/08 7:44:15 PM
  • 51. Operation of the Association’s Physical Property     47 chase the materials needed for the job. It’s not uncom- • A short narrative that summarizes the agree- mon for these contractors to disappear with the money ment. For example, “Nottacare Condominiums is or pay another job’s bills with it. hiring I.M. Manly Contractors to remove the old CMs understand the importance of progress pay- siding and install new siding on Buildings A-D fol- ments and lien releases. Progress payments allow a lowed by a total repaint of all buildings. (see Scope contractor to receive a portion of the total contract of Work for specifics)” based on the actual work completed. These payments • Obligations of each party. For example, the con- include the contractor’s signing of a lien waiver that tractor agrees to provide the labor and material to warrants all employees, subcontractors and suppliers complete the scope of work (attached) in a timely and involved in the job have been paid. professional manner. All changes or additions must CMs handle the complex scheduling of various be approved in writing by the association President. trades to ensure smooth job progress. Understanding The association is obligated to pay the contractor in the sequence of construction events is essential. 4 progress payments within 7 days of billing. Moreover, CMs “speak the language” and aren’t afraid • Deadline for performance. This clause usually to apply pressure to speed up slow contractors. includes the phrase, “Time is of the essence” to In the final analysis, Construction Managers more imply that work must be completed barring only than pay for themselves in cost savings and quality unforeseen circumstances like material delay or results. If your association is contemplating a sizeable weather. Working 6 different jobs at the same time or complex project, contact one today to discuss the is not a valid excuse for delay. advantages. • Time effectivity of the contract. Cause for Clauses • Cost of the work and materials. This could either be a set price or an hourly labor rate with material Each year, thousands of community associations across at, say, cost plus 10%. the country engage in complicated renovation projects that run the gamut from siding replacement to roof • Payment schedule. Is it due on completion or in overhauls to dry rot repair to new decks and fences. installments? Aside from the complexity of the tasks themselves, all • Late payment penalties. Can interest be charged? need a carefully crafted construction contract that not • Warranties. These come in 2 forms, material and only describes the scope of work and price but includes labor. Material warranties come from the manufac- the fine print. turer and are subject to proper installation. That Contractors typically present contracts that means that even though the material warranty is, address what is most important to them—the money. say, 20 years, improper installation will void the war- The scope of work described is usually very general, ranty. Labor warranties are offered by the installa- like “paint buildings”. The contract rarely includes tion contractor and are usually relatively short, a few the “how” details, which is the part most critical to years at most. In either case, be crystal clear what the the community association. For this, get independent conditions for honoring warranties are and get them consultants to provide the scope of work. Local paint in writing. suppliers, for example, will provide custom specifica- • Terminating the contract. Define under what tions to fit your surface and location. They will even condition either or both parties could terminate provide a free progress inspection service to ensure the contract. Breach of contract can be enforced by the work is being done properly so that the material either. There should also be a mutual agreement warranty is not voided. clause to terminate. Similarly, take advantage of other knowledgeable consultants for complex and costly projects. While • Arbitration or dispute mediation. If there is a they aren’t free, they are generally worth their weight problem that cannot be worked out, it’s usually in in gold in making sure the work gets done right. They both party’s interest to have a trained mediator help can often steer you to reliable contractors and sub- sort it out rather than engaging dueling lawyers. stantially lower costs. • Paying attorney fees. If the matter lands in court, Below is a list of contract clauses that should be the prevailing party should be entitled to payment included. Simply attach them as an addendum to your of attorney fees and legal costs. contractor’s contract and make them a condition of While the fine print seems cumbersome and acceptance. unnecessary, these clauses ensure either performance You should have a knowledgeable attorney review or consequences for failure to perform. These are the contract as well. clauses with a true cause. See Figure 3 for an example • Names and business addresses of the parties. of a contractor screening list. • Date that the contract is signed.CAM_book.indb 47 6/12/08 7:44:16 PM
  • 52. 48     Bert Rodgers Schools Contractor Screening Checklist This checklist applies to small and medium size renovation projects. For larger ones, hire a construction manager, architect and engineer. Company___________________________________________________________________________________________________ Contact:_ ___________________________________________________________________________________________________ Address:____________________________________________________________________________________________________ City______________________________________________________________________________ State_____ Zip_____________ Phone:___________________________________________________________ Fax:______________________________________ Cell_____________________________________________________________ Email_____________________________________ Website_ ____________________________________________________ State Contractors License Number: ________________ _ 1) Number of years in the business: _____ 2) Performed community association construction projects? q No q Yes List: ___________________________________________________________________________________ a. Association _ _________________________________________________________________________________________ Address:_ ____________________________________________________________________________________________ Work performed:______________________________________________________________________________________ b. Association _ _________________________________________________________________________________________ Address:_ ____________________________________________________________________________________________ Work performed:______________________________________________________________________________________ 3) Current work load: q Available now q Available within 30 days q Other _______________________________________________ 4) How much of this project will be done “in house”? q All q Most q Other ___________________________________________________________________________ 5) How much work will be subcontracted? q None q Some q Other _ __________________________________ 6) Total number of employees: _______ 7) References for recently completed projects: a. Project: _ ____________________________________________________________________________________________ _ Contact: ________________________________________________________________________ Ph#_________________ b. Project: _ ____________________________________________________________________________________________ _ Contact: _______________________________________________________________________ Ph#__________________ 8) Bond Carrier:____________________________________________________________________________________________ Limits $ ________________________________________________________________________________________________ Agent ____________________________________________________________________________ Ph#__________________ 9) Liability Insurance Carrier: ________________________________________________________________________________ Limits $ ________________________________________________________________________________________________ Agent ____________________________________________________________________________ Ph#__________________ 10) Payment Options: q In Full Upon Completion (Best) q Progress Payments according to work completed q Deposit or Advance Required $_________ q Other ________________________________________________________________________________________________ 11) Tour some active construction sites. Site #1: ________________________________________________________________________________________________ Impression: _____________________________________________________________________________________________ Site #2: ________________________________________________________________________________________________ Impression: _____________________________________________________________________________________________ 12) Visit the contractor’s office. Impression: _____________________________________________________________________________________________ 13) Overall Rating: q Fair q Good q Great Date: _________________, 200__ Completed by: _ ________________________________________________________ Figure 3: Contractor Screening Checklist (Source: Compiled by the author.)CAM_book.indb 48 6/12/08 7:44:16 PM
  • 53. Operation of the Association’s Physical Property     49 ROOFING There are building code and product specifica- tions that need to be considered. Code allows no Getting Roof Ready more than 2 roofs over a dwelling. Regardless, it is For many community associations, this year will bring recommended to remove the existing roof system new roofs. Roofs, of course, come in many variations, so that the roof deck can be properly inspected and designs, and materials. Some can last a hundred years repaired. Also, some manufacturers will not warrant like tile or a few decades like flat hot tar built-ups. their product when it is installed over an existing roof. With longevity comes increased cost although many Finally, a roof installed over another never lays down higher priced options are better values. Architectural properly and detracts from curb appeal. If a new type composition shingles are very affordable and carry 30 of roofing is being considered that is heavier than the to 50 year warranties. For flat roofs, rubberized mem- original, like tile or slate, a structural engineer should branes offer better durability and ease of repair than calculate the weight load requirements. It may require traditional hot tar varieties. structural enhancements to carry the additional load. Preparation. While improvements in roofing mate- Since a roofing project is always costly, it is worth rials are great news for consumers, the best roof hiring an attorney prepare a contract which includes invented can be your worst nightmare if it’s not the manufacturer’s installation specifications. Besides installed properly. Installing a roof is a technical exer- getting the work done properly, getting it done within cise that requires special training and attention to a certain time frame is important. This is done by detail. Since roofs are intended to last many years, including a per day dollar penalty for non-weather selecting a roofing company that will likely be around related delays. for years is also extremely important. Here’s how to The payment schedule is extremely important. Do get ready for a proper roof job: not enter into an agreement that requires prepayment • Hire only licensed roofing contractors that specialize for labor or materials. This is a red flag for a contrac- in the kind of roof you want. If you have a multiple tor that is financially strapped or using your money year roofing repair schedule, it’s very important to to pay for other bills. Making several progress pay- use the same roofing company even if it costs a bit ments is normal but the payments should be based on more money. When different contractors are used, actual work completed. Of course, never tender final sorting out repair, maintenance, and warranties gets payment until all work is completed and the contrac- to be almost impossible. tor provides a properly executed lien waiver. Finally, assemble a roofing file which includes the contract, • Get at least 3 bids from qualified contractors product information, and warranty. • Check contractor licensing with the appropriate state agency. Most states keep licensing and insur- Right Roofing ance information plus a history of complaints made. There are a number of things to consider when select- • Call at least 3 references from each of your bidders ing the right roof for your association. Cost and dura- to inquire about performance. bility head the list, but aesthetics are important too. Bid specifications. Unless the roofing job is straight- The right roof for your home is the one that balances forward (remove and replace with no repairs), invest all of these considerations. in a roofing consultant (not a contractor) to prepare • Asphalt shingles hold an overwhelming share of detailed specifications which can be bid by the con- the U.S. roofing market. Most asphalt shingles are tractors. Those specifications should include: fiberglass reinforced which consist of a fiberglass • removal and disposal of existing roof mat with a top and bottom layer of asphalt and min- • repair of damaged sheathing eral granules. Zinc or copper granules are applied • protection of landscaping, decks, etc. to asphalt shingles to protect against algae growth. • properly installed sheathing if required While 3-Tab style shingles have been very popular, “Architectural” style (mimics a wood shake look) • proper underlayment has become increasingly popular. Asphalt shingles • proper attic ventilation are available in 25-50 year warranties depending on • adequate insulation, if applicable the thickness. Most roofing materials are catego- • selection of the right roof system rized as UL Class A, B, or C, with A being the most fire resistant followed by B and C. Most fiberglass • proper flashing shingles have a Class A fire rating. • gutters and downspouts, if necessary • Wood shingles and shakes are made from cedar, • rain protection during course of work redwood, southern pine, and other woods. Shingles • regular debris clean up are machine-sawn; shakes are hand-hewn andCAM_book.indb 49 6/12/08 7:44:16 PM
  • 54. 50     Bert Rodgers Schools rougher looking. Their natural look is popular in Poor resistance to the sun, salts and chemicals. California, the Northwest, and Midwest. Things Asphalt is a complex mix of thousands of chemicals to consider: they have a UL fire rating of Class B, with predominantly open chain molecules with a high C, or none at all, and they should be treated with a degree of double bonding. What this means to the preservative every 3 to 5 years to prevent decay. In average mortal is that open chained molecules provide other words, they are high maintenance. easy access for sun, salts, and chemicals which break • Clay or concrete tile is a durable but fairly expen- them down and destroy their binding and waterproof- sive roofing material. “Mission-style” and “Spanish” ing properties. The visual indicator of this breakdown round-topped tiles are widely used in the Southwest is the change of color from dark black/brown to gray. and Florida, and flat styles also are available to cre- Poor resistance to petrochemicals. Asphalt is the ate French and English looks. Tile is available in a heaviest and final component of petroleum distil- variety of colors and finishes. Note: Tile is heavy lation. The distillation process separates the asphalt so if you are replacing a lighter roofing with tile, from other byproducts like gasoline and oil. Since you will need to verify that the structure will sup- these byproducts are similar in molecular structure, port the load. they easily dissolve chemicals in asphalt. • Slate is quarried in Vermont, New York, Penn­syl­ The drying process. As unprotected asphalt ages, the vania, Virginia, and Canada. It comes in different oils migrate to the surface and are burned off. As this colors and grades, depending on its origin. While continues, the pavement hardens and shrinks produc- extremely durable, it is more expensive than other ing hairline cracking. Cracking allows water to pen- roofing materials and its application requires skill etrate the water repellent barrier to the ground below and experience. Many old homes in the Northeast which, in turn, causes ground swelling and sinking still are protected by this long-lasting roofing which causes more damage to the asphalt. Advanced ma­terial. deterioration causes “alligatoring” (cracked surface • Metal roofing is a normally commercial roofing area resembles an alligator’s back), heaving, sinking, material that works in some residential settings. and disintegration. Some metal shingles are constructed to simulate traditional roofs like wood shakes, shingles, and tile. Pros and cons of traffic. Major roads have an advan- Apart from metal roofing’s longevity, metal shingles tage over community streets and parking lots because are relatively lightweight, typically have a Class of heavy traffic which continuously “kneads” the oxi- A fire rating, have a greater resistance to adverse dized surface back into the pavement bringing up weather, and can be quite aesthetically pleasing. fresh material. After the asphalt binder is exhausted, major roads are either overlaid with fresh asphalt or • Synthetic roofing simulates slate, wood shingles, the pavement is completely removed and reinstalled. and shakes. Visit a building that is roofed with that Low traffic community roads do not receive the same product before making a buying decision. traffic loads and must apply different maintenance Aside from product choices, the roofer’s experi- techniques to preserve the asphalt. ence level is critical to the installation. Check refer- ences and the product warranty carefully. Product Protection. So, what is the best way to protect asphalt warranties often have “loopholes” for installation pavement? Sealcoating or slurry coating is recom- problems. If possible, use an installer that is certi- mended. Sealcoating uses refined coal tar. Coal tar is fied by the manufacturer. This way, no matter what a byproduct of coal being converted to coke in steel the problem, you’re covered. Choose the right roof- mills. Coal has different origins than petroleum so it ing weighing aesthetics, cost, durability, warranty, and has different properties than asphalt. It has a much maintenance. The last thing you want is your resi- more stable molecular structure that is resistant to dents singing “Raindrops Are Fallin’ on My Head”. weather and chemicals. Coal tar is mixed with clay, mineral fillers, and water to produce an emulsion or ASPHALT slurry which is easily applied to the asphalt. The min- eral fillers give it durability. The coating is both flex- ABCs of Asphalt ible and protects against weather, sun, and chemicals. Asphalt is the material of choice for most roads and When should a sealcoat be applied? Since asphalt parking lots. It is a mix of about 92% stone aggregate begins to oxidize immediately after installation, it is and mineral filler combined with 8% asphalt binder. recommended that sealcoating be applied when the This combination allows it to stay in place and repel asphalt is new. Thereafter, recoating should occur water. Because it stays dry, it has the strength to carry about every 5 years (sooner in high traffic areas). traffic loads and lasts a long time. It does, however, Major cracks should be sealed and spot pavement have drawbacks: repairs made before each sealcoat application.CAM_book.indb 50 6/12/08 7:44:17 PM
  • 55. Operation of the Association’s Physical Property     51 If sealcoating is done as recommended, the life of materials to be painted, complexity of architec- of the pavement can be extended up to 300%. It also tural features, types and degree of weather exposures, leaves a satin black finish which adds to the beauty impact of landscape features, and shade configurations and value of the property. Clearly, asphalt mainte- all make a big difference in a well-conceived painting nance should be a high priority in every community program. Even the purpose of painting can vary from association. Do your community a favor and contact a one project to the next. Painting may address preven- qualified paving contractor today for an evaluation. tive maintenance, aesthetics, a waterproofing pro- gram, or all of the above. Regardless of the variables, Why Maintain Your Asphalt? following the acronym “P-A-I-N-T” will enhance your chances of success: Asphalt pavement is basically sand, gravel and glue. The glue used to keep the sand and gravel together is P - Plan. Inventory every paintable item and decide asphalt, a heavy by-product of oil refining. While sand when it needs to be painted. Prioritizing is particu- and gravel do not deteriorate significantly, the asphalt larly important if the painting budget is inadequate to binder does quite rapidly due to oxidation, solar radia- paint everything at once. You can concentrate on the tion, pollution, and chemicals spilled from vehicles. short-term needs, and accrue money in reserves for No pavement has ever been constructed that does future painting. not need maintenance. Many community associations A - Ask. The paint industry changes rapidly so make find out too late that proper maintenance could have no assumptions. All paint companies offer free expert prevented costly replacements. advice on the latest and best products for your par- Maintenance is the art of keeping pavements ticular needs. In addition, they can provide specifica- in full service, with minimum expense, and the tions to use for bidding the project and actually do least inconvenience to the public and the residents. inspections on the project to ensure the product is Improper maintenance is usually worse than none at being applied properly. This is also the time to update all. Preventative maintenance is a wise investment. your color scheme. Ask the paint company to prepare There are several basic forms of maintenance. a color board with 3 different trim and body options Sand slurry sealer. Also called sealcoating, this pro- (usually a free service but worth paying for). Let the cedure will protect against oxidation and spills while owners vote on their favorite. making the asphalt visibly attractive. This application I - Inspect the work. In the planning process, walk should be applied at least every 5 years or more fre- the site completely. Notice which areas are fading quently if use is heavy and deterioration is apparent. faster than others (typically south, southwest expo- Applied at proper intervals, it will prolong the life sures). Determine the condition of the underlying of pavement indefinitely at a fraction of replacement materials to be painted (they may need to be refur- cost. bished or replaced). Crack sealing. Cracks are usually caused by either a Note the detrimental effects your sprinkler sys- failure of the base, water damage, or excessive weight tem may be having on your painted surfaces, and on the pavement surface. Cracks can easily be repaired make necessary connections to avoid premature fail- by installing a hot pour material to fill them. The ure of the new paint. Know what unavoidable damage crack sealer provides a waterproof bond and is rub- the painting process may cause to landscaped areas berized to give support while the pavement expands and plan accordingly. and contracts in changing temperatures. Cracks that During the job, do not rely on the painting con- go unsealed will continue to allow water into the base tractor to inspect his own work. Make sure that the structure, causing severe damage to the pavement as paint manufacturer’s representative inspects the proj- the base deteriorates. A pavement crack inspection ect at logical intervals. This way, the manufacturer and correction should take annually. cannot void the warranty for improper application. Each product has a recommended “mil” thickness Patching. If significant deterioration has taken place, which can vary depending on method of application removal and replacement of certain areas may be pos- (brush, roll, or spray), ambient temperature, and dry- sible. If excessive ground water or poor soil conditions ness of the surface. It is critical that the right product have aggravated the problem, corrections should be be applied in the right way. performed before applying the patch. After the job is done (at least according to the painter), do a walk-through inspection of your proj- PAINT ect before you pay the final painting bill. There are always, always, always (did I repeat myself?), always P-A-I-N-T Perfection corrections and additions to every job. Get them No 2 painting projects are alike. Types and conditions done before you make final payment while the painterCAM_book.indb 51 6/12/08 7:44:17 PM
  • 56. 52     Bert Rodgers Schools is motivated. Once paid, it’s off to the next job and and from different angles. Keep in mind that colors motivation plummets. will appear lighter when painted over a large surface. After 6 months, and especially after the first rainy Poll the members. To promote participation and period, inspect the whole job to see how it’s holding harmony, let your members decide which combina- up. There are often areas that begin to flake or crack. tion they like best. If your property is large enough to In particular, look for painted rails and other exposed permit several combinations, allow the owners of each horizontal surfaces that get direct rain. All significant building to decide which combination they want for failures should be touched up immediately. Do not theirs. They’re paying for it. Let them decide. wait! Color dynamics. Consider the effects of light and N - Negotiate. Get competitive bids from qualified dark colors in relationship to the size and position of contractors whose references you’ve checked. All bids the buildings. Lighter colors make a building seem should be based on identical and clear specifications larger while darker colors make it smaller. A darker provided by the paint manufacturer. Do not automati- color is often a good choice for buildings built in close cally choose the low bid. All bids are negotiable and proximity to one another and vice versa. you may get the price you want from the painter you like best just by asking. You’ve got nothing to lose. Tie in landscaping. Use the colors of flowers, trees, and shrubs as inspiration for a pleasing, complimen- T - Timing. All your planning and painting needs tary color scheme. should take into consideration that most painting is done usually within a relatively small weather window Use lighting accents. Besides increasing safety, cre- (unless it’s interior). Give your contractors plenty of ative lighting provides a delightful after-dark variation lead time so you don’t get caught in the “schedule to your colors. Consider spot lighting around build- squeeze”. It’s common for painters to take on more ing entrances and focal points. work than is humanly possible given the weather enve- Ask the experts. Paint companies often offer color lope. The last thing you want is to have the painter design counsel for no charge in hopes of selling paint. working in the rain saying “We always do it this way”. A design consultant will give you the latest contem- Better to wait until next year. porary colors and combinations to modernize your There are few community association projects community look. Don’t get caught in a time warp by more important than painting. Remember the acro- staying with the same-old same-old. Keep your colors nym P-A-I-N-T as you venture into your next round fresh. HINT: Buyers pay more. and it will turn out A-O-K. A carefully selected color pallet is the key to main- taining high market values and attractive appearance. Choosing the Paint Color This is a coat of colors your members will wear with pride. Coat of many colors. Jacob’s son Joseph in the Bible wore a coat of many colors which attracted much attention. In matters of both fashion and paint, color Paint Failure Glossary matters. In community associations, it matters even Understanding the primary causes of paint failures more since the impact of the color palette is so much will help prevent future paint problems. The primary larger. And it’s not just the colors you choose but how causes of paint failures are moisture, inadequate sur- they are applied. Trim accents can make or break face prep, improper application of paints, the sun, and the overall effect. Practically speaking, paint color is weathering. Some of the more common paint failures fundamental to curb appeal. Curb appeal translates are listed below in alphabetical order with recommen- directly into increased market value. Lack of curb dations for their prevention. appeal translates into...well, you know. So what’s the Alligatoring. Cracked paint that resembles alliga- proper color code for your community? tor skin, and is generally found on wood surfaces. It Complement permanent colors. Use a color range occurs when paint cannot adhere to a glossy surface, that complements the permanent colors such as the when a second coat of paint is applied over an inade- roof and brickwork. If you plan on changing the color quately dried first coat of paint, weather aging, exces- of the roofing in the near future, be sure to consider sive coats of paint, or when the finish coat expands and this in selecting paint colors or keep the roof color contracts at a greater extent that any underlying coats. neutral. Paint must be completely removed when alligatoring Assess in natural light. Study paint color samples has occurred to ensure an even and uniform finish. in natural light. Buy quarts of several body and trim Wood surfaces should be primed with a top quality color combinations and paint test areas which receive alkyd primer and acrylic latex finish. full sun. View these colors at different times of the day Bleeding. An unsightly surface discoloration com-CAM_book.indb 52 6/12/08 7:44:18 PM
  • 57. 54     Bert Rodgers Schools replace it, it burns out, you replace it, it...you get the Utility Audit picture. When it comes to servicing exterior lighting, there are a variety of considerations such as: 1. Toilet[s] running continuously? q Yes (how many? ___) • Do the bulbs provide enough light for security and safety? No If unsure, put a couple drops of dark q food coloring the tank, wait for 15 minutes • What does burn-out replacement cost in time and and if color shows in the bowl, it’s running. money? 2. Faucets drip? • How much do the bulbs themselves cost? q Yes (how many? ___) q No • How long do they last? 3. Do you have low-flow faucets? • What is the energy cost? q Yes q No (how many? ___) q Unsure Fortunately, there is a handy solution that maxi- mizes utility while minimizing cost called compact 4. Do you have low-flow shower heads? fluorescent bulbs. They come in many sizes and q Yes q No (how many? ___) q Unsure shapes that fit your existing fixtures. 5. o you have a programmable clock for your D Let’s do a little comparison between incandescent heat? bulbs [IB] and compact fluorescents bulbs [CF] and q Yes q No q Unsure be amazed. Exterior garage, entry, and porch lights 6. Are all exterior light fixtures using compact are often lit by 60W IBs with an average life of 750 fluorescent bulbs? hours versus a 13W CF that has a life of 10,000 hours (13 times more). Used 12 hours a day, an IB will last q Yes q No (how many? ____) about 2 months while a CF lasts over 2 years. 7. (Add other questions that apply) Let’s assume that exterior lights burn 4,380 hours a year (12 hours/day average). An IB will use 262 kilo- Figure 4: Utility Audit watts versus 57 kilowatts for the CF. At 5.5¢/kilowatt hour (West Central Florida area power cost) that’s major budget item, the reduction is significant. Based an energy cost of $14.41/year versus $3.14 (a $11.27 on the savings, the community association can justify per bulb savings/year). Multiply the total number of paying for the repairs and it’s cheaper for everyone 60W IBs times $11.27 you have and be impressed at if they’re done efficiently. These repairs can be done the savings. For example, if there are 100 bulbs, the by maintenance people who charge a fraction of what annual energy savings is over $1,100! plumbers charge. While CFs are more expensive than IBs (around Perform repairs. Pick a weekend when a repair crew $4 each versus 50¢) the extra long life, reduced bulb can do repairs and advise residents of the schedule changes, and brighter light more than make up for the and the need to be home during no more than a 2 cost difference. Watt a difference! hour time frame. Using the returned Utility Audit as When it comes to conserving energy and reduc- guides, have crews equipped with toilet tank repair ing costs, it’s the drips and the watts that’ll get you. kits, an assortment of faucet washers, low-flow water Do an annual energy review to make sure you don’t restrictors, 13-watt compact fluorescent bulbs, and slip drips and know what’s watt. programmable clocks for heat move quickly from house to house. The repairs shouldn’t take more than LANDSCAPING 15-30 minutes per unit so 2 men could do around 40 homes or more in a day. Plantasy There may be several homes that cannot be As community associations age, both structures and accessed because the owner is unavailable. Arrange landscape wear out. And just like those groovy har- another weekend to finish up. There may be a few vest golds and avocado greens of the 1970s, landscape who refuse access but with 80-90% compliance, the tastes have changed. Fortunately, the varieties of project is a great success. And if there is evidence that plants available have made the options wonderful and a holdout’s unit is leaking water (you can hear it run- numerous. The best news of all is that creative use of ning), it qualifies under the community association’s these options coupled with the latest irrigation tech- emergency access rights. nology can significantly reduce both maintenance and utility costs. That is landscape news every association Watt Savings! can use—more is less. Here are few pointers to get In many associations, light bulb replacement contin- the landscape renovation process moving: ues like the Sorcerer’s Apprentice: it burns out, you Develop a landscape plan. Rather than cruisingCAM_book.indb 54 6/12/08 7:44:19 PM
  • 58. Operation of the Association’s Physical Property     55 Wal-Mart looking for plant bargains, hire a land- get larger with each passing season, until ultimately scape architect who will integrate site, irrigation, curb the only realistic option remaining is removal and appeal, and maintenance needs in a comprehensive replacement. plan. This plan will include specific plant selections As you can see in this example, the landscape that are placed appropriately for best impact. The plan maintenance philosophy can produce vastly different can then be bid by a variety of installation contractors returns for your investment. The recommended phi- so the community association can get the best value. losophy produces a maturing shrub that contributes Convert turf to planting beds. Reduce mainte- more each year to the aesthetic appeal, enjoyment, and nance and water costs. Bushes have deeper roots than value of your property. The other philosophy leads to turf and require less water. overcrowding, property devaluation, and requires cor- rection by replanting a new, small plant. This replace- Tree thinning and replacement. Developers are ment will take years to contribute much to the appeal notoriously bad about planting too many trees, the of your association. What landscape philosophy does wrong kind, or letting the low bid dictate the number your association follow? or mix. Generally, since new trees come in small cali- pers, it takes more of them to make the desired mar- keting impact. The job done 20 to 30 years ago has Xeriscaping now produced an over-dense mix of trees that are too One of the great challenges most community associa- close to buildings, road, and walkways. An arborist tions experience is how to reduce landscape mainte- can evaluate the mix and make removal and replace- nance and water costs. Xeriscaping is a method of ment recommendations to suit a mature landscape. combining attractive, pest resistant, and low mainte- Modernize the irrigation system. Recent improve- nance native plants in a way that conserves water. It is ments to irrigation technology now deliver water based on 7 horticultural principles: where and when it’s needed. With more zone control, 1. Plan and design. Group like-water need plants. turf and planting beds receive differing water amounts. Consider existing vegetation, topography, and the Rain override sensors eliminate cycles as needed. Drip intended use. Use native species to reduce adaption irrigation provides steady yet low water flows to plant- problems. Eliminate runoff conditions. Decide ing beds. Buried drip systems apply water directly to plants placement based on visual impact and sun/ the roots, and reduce water loss through evaporation shade needs. (See www.floridayards.org/ for Florida and runoff. Drip systems are coupled with traditional friendly landscaping tips.) sprinkler systems to deliver water efficiently. 2. Evaluate and improve soil. Soil analysis provides For any association over 20 years old, the time information for plant selection and soil amend- has come, the walrus said, to talk of many things. But ments which help soil absorb and store water. Soil few things are more compelling than landscape reno- amendments such as peat moss or compost improve vation. Cut costs, lower maintenance, improve curb root development, water penetration, and reten- appeal, and up market values...a true plantasy. tion. 3. Reduce turf. Turf should be considered a design Protect Your Landscape Investment! element rather than the whole landscape. Reduce Landscaping is your one property asset that can and or eliminate turf areas, and locate them so that they should improve with age. However, diligent atten- may be watered more efficiently. tion is required in order to make this happen. Skilled 4. Use appropriate plants. While most plants have maintenance work, along with occasional and ongo- a place in Xeriscape, using low water-need plants ing improvement work, are essential. maximizes water conservation. Skilled shrub pruning is one of the most impor- 5. Install efficient irrigation. Use soaker hoses or tant requirements of a sound maintenance program. drip irrigation. Adjust according to seasonal needs Selective cutting sustains a natural form while remov- and the weather. Irrigate for plant condition, not ing twigs and branches that are getting too large or for schedule. New plants require additional irriga- overcrowded. Knowledgeable pruning will allow tion for up to 3 years. plant size reductions with improved vigor in most cases. Plant shearing, shaping, and hedge trimming, 6. Use organic mulch. Mulch reduces evaporation, by contrast, ignores plant growth habit and ultimately weed growth, erosion and soil temperature fluctua- destroys the branch structure. Carving a sheared form tions. Proper mulch application is a key to a suc- into any shrub increases twig density at the surface, cessful Xeriscape. Organic mulches like wood chips thereby shading out, and in many cases killing off or bark are best. interior growth. The sheared shrubs still continue to 7. Maintain appropriately and consistently.CAM_book.indb 55 6/12/08 7:44:19 PM
  • 59. 56     Bert Rodgers Schools Properly pruned, weeded, and fertilized plants ness in the concrete and crack it. If these conditions require less water and also look nicer. A landscape exist, excavating around the foundation and installing adapted to the environment will require less main- a perforated drainage system to carry the water away tenance, less fertilizer, and reduce the use of pesti- is a possible solution. cides. Perforated pipe systems are a good solution as So, how low can your H20 go? Consult with a well for swampy landscaped areas where regrading is professional landscape design architect to discover the not possible. Another solution is a French drain sys- wonderful options for beautifying and reducing costs tem like an underground perforated 55-gallon drum at the same time. You grow girl (or boy)! For more, set in the low or swampy area. Ground water accu- see Landscaping Specifications below. mulates in the drum and either slowly percolates out or is removed by the drainage pipe system sometimes Water Water Everywhere supplemented with a sump pump. A verse from The Rhyme of the Ancient Mariner The rains of summer teach us much about weak- reveals a man surrounded by water that he wants but nesses in our drainage systems. While the rains will can’t have. Florida has lots of water which can be in pass, poor drainage will continue to damage the land- the wrong places, and drainage is a common prob- scaping and buildings if not corrected. Take the time lem. Drainage falls into 2 categories: structural, which to inspect your property for problem areas that can be involves buildings, and topographical, which involves corrected. Before you undergo any substantial correc- surfaces. tions, get detailed design specifications from a quali- All buildings have a structural drainage system: fied engineer. Roofs capture the water, gutters manage it and down spouts and ground drains dispose of it. Ninety percent Watering Wisely of structural drainage problems start with the system As community associations enter the highest water design. When gutter size is determined by aesthet- demand season, there are several conservation tech- ics, downspout placement by convenience, and little niques that will help them do the job a bit better. thought given to carrying capacity, poor drainage is the result. If overflowing is occurring, design correc- Compost, mulch, and barkdust. These hold water tions are in order. like a sponge, slowly releasing moisture when plants Improper installation of well designed systems is need it. In this environment, plants grow deep roots, another variable. The proper functioning of all gut- reducing how much and how often sprinkling and ters, down spouts, and ground drains is based in posi- fertilizing is needed. If your planting beds are bare tive slope—water runs downhill. Resetting a negative dirt, consider an application of these recommended slope can correct that issue. amendments to promote root growth, reduce water Ground drains receive water from roofs, gut- consumption, and reduce weed infestation. Also leave ters, and down spouts. They also accept leaves, twigs, grass clippings to build up mulched soil that uses less bottle caps, nails, pieces of shingles, and what-have- water. you that create blockage. Regular gutter and down- Wash your plants. Airborne urban pollution can spout cleaning helps maintain healthy ground drains. leave a layer of residue on plants and soil that inhibits Periodically, however, a pipe-rooting service is called water absorption. One easy way to counteract this is by for. As the name implies, many of the blockages can be spraying the planting beds and turf down using a hose attributable to roots getting in the pipes. This is par- end sprayer filled with inexpensive liquid dishwash- ticularly common in older systems that have cracked ing soap. As strange as it sounds, it actually breaks up pipes or unsealed joints. If ground drain backups are the residue and reduces water tension, allowing better frequent, it’s wise to have a preventive rooting done water absorption. to the system. If you forget, fear not. The flooding Sprinkler tune-up. Adjust all your sprinkler heads to will remind you. irrigate living things, not walks and driveways. Replace Now, on to topographical drainage. Some areas leaky faucets and broken sprinkler heads. Water turf are blessed with a high clay content soil which “sponges” water. Positive grading is critical to move areas about 1” a week. water downstream because clay won’t allow water to Sprinkler enhancements. Install a rain sensor to “percolate” out quickly enough to prevent ground sat- override the automatic sprinkling system when it uration. Ground saturation creates swampy, soft areas rains. Where possible, install drip irrigation systems and puts enormous pressure on building foundations. to trees, shrubs, and flowers. Get water directly where If the foundation has cracks, the water will find them. it’s needed. If you are using hoses to irrigate, install If there are no cracks, the pressure will cause a weak- hose timers to control the flow.CAM_book.indb 56 6/12/08 7:44:20 PM
  • 60. Operation of the Association’s Physical Property     57 Xeriscape your plants. Xeriscape refers to creative, • Not suited for the location. Depending on size, attractive landscaping that provides a diversity of trees can either overshadow the competition or be seasonal colors and textures while reducing outdoor overshadowed. Either case creates problems for water use by 30 to 50%. Nurseries carry numerous turf, bushes, and flowers. Trees should lend shade trees, shrubs, perennials, and ground covers which are and beauty but not turn the common area into a low water-using. Visit them and ask for suggestions. wooded gloom. Watering wisely creates a healthier landscape and • Overcrowding. This condition usually results from reduces one of the community’s most costly budget the developer stage when many small trees were items. This is one area where your investment will planted for effect. Once mature, a thinning process pay BIG dividends. Water on!...rather, water off! is needed to reduce the crowding. • Blocking view. Small trees get tall and block cher- Arborists Are Awesome ished and valuable views. Rather than removal, cre- An arborist is a specialist in tree care. Proper tree care ative pruning can open views while retaining the is an investment which leads to substantial returns to privacy that trees lend to neighbors in close prox- a community association. These living assets should imity. be treated with the best expertise available. A certi- fied arborist is someone trained in the art and sci- Planting. Arborists can recommend and plant trees ence of planting, caring, and maintaining trees. The suitable to your location and topography. Since trees International Society of Arboriculture offers its ISA last a long time, making the right choice up front is Arborist Certification to those seeking advanced train- very important. ing. It requires at least 3 years field experience and Planning and design. Many Arborists are trained passing a comprehensive exam along with continuing in landscape design and can provide a comprehen- education to maintain the certification. sive tree plan for ease of maintenance, durability, and Arborists offer very important services: improved aesthetics. Pruning. There are 4 classes of detailed prun- Tree care. Arborists can lay out a maintenance plan ing outlined in the National Arborist Association for your trees to keep them healthy including: Pruning Standard (for more, see our Landscaping • Fertilization Specifications section below). In general, though, “maintenance” pruning keeps branches off buildings • Cabling or bracing for added branch support and away from streets and walkways. This kind of • Aeration to improve root growth pruning is often covered under a landscape contrac- • Spraying or injecting for insect and disease prob- tor’s agreement but it is very limited in its scope. Most lems landscape contractors limit pruning to no more than Proper tree care is one of those things that should 12 feet off the ground. This leaves a lot of tree that never be skimped on. Using trained professionals like needs attention. Arborists just makes tree-mendous sense. Corrective pruning done by Arborists is more intensive and addresses issues related to a tree’s health, appearance, and longevity. Besides dealing with Politics of Trees branches that damage the building gutters, roof, and One of the most controversial issues that faces a com- siding, corrective pruning removes dead or diseased munity is tree removal. While there are many prac- branches, improves the tree structure for appearance, tical reasons to remove trees, some residents take a and can open up view windows. deeply personal interest in their fate. It is the practical Removal. There are a variety of reasons to remove versus the emotional. Let’s explore the dynamics of trees: this phenomena. In a new development, the builder often selects • Dead or dying. While removing a dead tree is a no trees for visual appeal, rapid growth, and ease of main- brainer, removing a dying tree may prevent other tenance. The trees are young and occupy a relatively species from contracting the same problem. Cut small area. Over time, these trees do what trees do, one so others may live. get bigger and denser. With size come maintenance • Hazardous (leaning or destroying property). It’s problems like: not uncommon for trees to be planted by develop- • tree debris that clogs the gutters ers too close to buildings. It’s no big deal when the trees are 10 feet tall. When they get to be 30 feet • branches that damage roof and siding and start damaging the building, sidewalks, and • branches that obscure security lighting or vision, a foundation, it’s time to remove them. safety issueCAM_book.indb 57 6/12/08 7:44:20 PM
  • 61. 58     Bert Rodgers Schools • overcrowding that promotes plant and tree diseases includes the location of the trees and the reasons for • roots in the sewer lines that cause backups and removal. It is important to include all owners because flooding tree removal is a philosophical issue that impacts more than those in the immediate vicinity of the • shading that promotes moss and algae growth removals. The notice should allow at least a 30-day • tree roots that lift sidewalks or crack asphalt review period during which the Board accepts written • trees that block views comments before making a final decision. If there are The cost of tree damage control can easily get to numerous trees involved, it is prudent to hold a spe- a point where removal may need to be considered. cial owner meeting to discuss the issue. Let concerned From a strictly dollars and cents point of view, the cost owners vent. Remember, this is a hot topic. to remove a tree versus ongoing maintenance costs is Once the Board has gathered opinions, decision a no-brainer. In most cases, several hundred dollars time is at hand. Before moving ahead, keep in mind in removal cost will often save thousands of dollars that many cities require removal permits. Tree com- in maintenance or damage. However, the politics of panies don’t always comply with the law, so check removal should not be ignored. with your local City Hall before proceeding. Also, a Emotions run high about tree removal and opin- lone dissident owner or even renter may file a com- ions often run 180 degrees apart. A resident who com- plaint with the City road-blocking the removal pro- plains of debris in the gutters and lobbies for removal cess. This doesn’t necessarily kill the process but is often countered by another that loves looking at the will involve another level of review that will delay it. lush foliage. And let’s face it, trees don’t happen over- Finally, make sure all pruning alternatives have been night. There are those who feel that killing such an considered. For example, view removals can often be enduring life form is morally wrong and that people cured by “window” pruning that can often satisfy view should adapt to the changing tree environment. blockage complaints. An issue like this is best handled by an informed The politics of tree removals give the Board an democratic process: First, hire a certified arborist to opportunity to show true leadership and sensitivity. inspect and make written recommendations about Trees are one of the community’s most valuable assets. the trees in question. This step is invaluable since the A good board politician will earn a vote of confidence Board now has expert input into the process that often if this issue is handled carefully. offers alternatives to removal. Second, flag trees with See the following Florida Landscaping Specifi­ca­ bright surveyor tape for easy identification. tions chart. Next, send a written notice to all owners that Landscaping Specifications - Florida January - March Turf This is the best time of year for a number of chores. Mow and water as needed; this being the dry season, it’s likely watering will be more needed than mowing. Hold off on fertilizing your lawn grass until the weather warms up. Remove thatch—grass growing on top of other grass, rather than in the soil. Some mowers have a “de-thatch” setting, or you can use an ordinary rake. It’ll be easier to get it now than any other time. And if you don’t, it’ll just get worse. It’s the best time to apply a pre-emergent herbicide to stop (weed) seeds from germinating in your lawn. Be care- ful not to apply it in flowerbeds that you want to re-seed naturally. And be sure to read the label carefully even before you buy an herbicide. Many of the popular “weed and feed” mixtures contain chemicals that should not be used near streams, bodies of water, areas that drain directly to the aquifer, or where children or animals will be exposed to the chemicals. Shrubs And Trees Now is the best time of the year to shop for azaleas and camellias. Why? Because you can see them in bloom— no guessing about what color and type of flowers they’ll have. Azaleas and camellias prefer similar growing con- ditions: shade (they can tolerate some direct morning sun, but not afternoon sun) and rich, well-drained, acidic soil (they don’t like soggy soil or over-watering). Although they’re susceptible to a few pests and diseases, once established they’re generally healthy, long-lived, low-maintenance plants.CAM_book.indb 58 6/12/08 7:44:20 PM
  • 62. Operation of the Association’s Physical Property     59 January through March is the prime time to prune many trees and shrubs. Prune these summer and fall flower- ing trees and shrubs about the time they come out of their winter dormancy (any day now). You can tell they’re coming out of dormancy when the first signs of new growth—little green things—appear on the stems: Abelia, Goldenrain tree, Oleander, Cassia, Hibiscus, Tibouchina, Crape Myrtle, Mimosa, and Roses. Evergreens such as Boxwood, Juniper, Podocarpus, Holly, Ligustrum, and Wax myrtle can be pruned any time (except that you prob- ably don’t want to cut off flower buds). DO NOT prune azaleas or camellias now, though. In fact, there’s almost no need to prune azaleas and camel- lias at all, except to remove damaged limbs. For azaleas, camellias, and these other winter and spring flower- ing trees and shrubs, wait and prune them during the first 2 months after flowering is over: African Tulip Tree, Hydrangea, Spirea, Dogwood, Indian Hawthorn, Star Magnolia, Fringe Tree, Redbud, Wisteria, Gardenia, and Saucer Magnolia. Annuals And Shrub Beds There’s still time to transplant a number of cool season annuals, but mainly we’re entering the beginning of planting season for warm-season annuals and perennials. In our climate, the cool-season plants will be dead or dying by the end of May, and many of the warm season annuals planted now will be worn out by mid-July, so plan on repeat plantings over the next few months so you can extend the colors of summer. Even though there’s still some risk of frost and freezes, 4” pots of the following can safely be planted now: Alyssum, Baby’s Breath, Calendula, Candytuft, China Doll Carnation, Delphinium, Dianthus, Dusty Miller, Foxglove, Lobelia, Marguerite daisy, Nasturtium, Pansy, Petunia, Snapdragon, Statice, Stokes Aster, Sunflower, Sweetpea, and Yarrow. Water Requirements Unless rains have been regular, you probably need to irrigate. Watch for indications of drought from your lawn before watering. Irrigate about 3/4”-1”, 2 to 3 times per week during the summer. Water during the early morn- ing to avoid diseases. Even with a professionally installed system, it is important to check coverage at least weekly as heads may become clogged, damaged, or off-center, and leaks in the line may occur. An easy way to routinely check your irrigation system is to place small, straight-sided cans in a straight line from your sprinkler to the edge of the watering pattern and look for uniformity of coverage. If an area is not receiving water from one or more heads, or if a head is not providing complete coverage, dry spots can develop. This can lead to any of the problems associated with drought-stressed turf. While checking uniformity with the coffee can method, you can also easily determine how long it takes your system to apply 3/4-1 inch of water. Turn the water on for 15 minutes and calculate the average depth of water in the cans. Multiply this number by 4 to determine the irriga- tion rate inches per hour. APRIL - JUNE Turf Time to restart the endless summer cycle: water, fertilize, water, weed, water, mow, and repeat cycle. Go easy on the fertilizer and pesticides, especially if you have the sandy soil typical of northern and central Florida. It’s more like a sieve than a sponge, and the chemicals make their way pretty quickly into waterways and the underground aquifer. A pre-emergent herbicide is a chemical that prevents weeds by stopping seeds from germinating; if the weeds are already up, it has no effect. Also, it’s nondiscriminatory—it stops good seeds as well as weed seeds. If you apply one of these or a “weed and feed” product to your lawn, read the label carefully BEFORE you even buy it. Many of these mixtures contain chemicals (atrazine, for example) that should never be used near streams, bodies of water, areas that drain directly to the aquifer, or where children or animals will be exposed to the chemicals. Shrubs And Trees April through June is the time to fertilize most trees and shrubs, especially the ones that are just finishing flower- ing. The type of fertilizer you use should depend partly on the type of plant and partly on the condition of the soil it’s growing in. If there are fertilizers formulated for the specific plants that need your help, such as camellias, it’s probably wise to use them for its regular diet. At the same time, if your camellia’s leaves look yellow this is a condition known as chlorosis. It’s caused by a deficiency of iron in the soil and is easily corrected by adding an iron supplementCAM_book.indb 59 6/12/08 7:44:21 PM
  • 63. 60     Bert Rodgers Schools to the soil around the plant. These products are also available in the fertilizer section at garden centers and have the word iron in the product name. Florida soils tend to be somewhat alkaline and high in phosphates, so you want to be careful not to add too much phosphate. It’s best to use a time-release fertilizer and water it into the soil so it gets to work right away and doesn’t oxidize. Pruning. If any of your trees and shrubs still show freeze damage from last winter, don’t wait any longer to remove any cold-damaged or dead wood. There are a couple of ways to tell if a branch is dead. One is to try gently bending it; if it breaks, it’s dead, if it bends and snaps back into position, it’s probably not. Or scrape the branch with your fingernail; if there’s some green underneath the outer layer, it isn’t dead. Annuals And Shrub Beds The afternoon rains tend to shatter blooms of geraniums and can promote leaf spot diseases on many flowers. Use a general-purpose fungicide labeled for flowers when frequent afternoon rains begin. 4” pots to plant in April: Celosia, Coleus, Calliopsis, Crossandra, Dusty Miller, Exacum, Gaillardia, Gazania, Hollyhock, Impatiens, Lobelia, Marguerite Daisy, Marigold, Nicotiana, Ornamental Pepper, Pentas, Periwinkle, Phlox, Portulaca, Rudbeckia, Salvia, Streptocarpus, Sweet William, Thunbergia alata, Torenia, Verbena, and Zinnia. In May, plant 4” pots of Celosia, Coleus, Calliopsis, Crossandra, Exacum, Gaillardia, Gazania, Hollyhock, Impatiens, Kalanchoe, Marigold, Nicotiana, Ornamental Pepper, Pentas, Portulaca, Salvia, Torenia, Verbena, Vinca, and Zinnia. June is a hot month, which limits planting of many flowers. For June planting, choose hardy flowers: Celosia, Coleus, Exacum, Hollyhock, Impatiens, Kalanchoe, Marigold, Nicotiana, Ornamental Pepper, Portulaca, Salvia, Torenia, Vinca, and Zinnia. Water Requirements The amount of water to apply at any one time varies with the amount of water present in the soil, the water-hold- ing capacity of the soil, and soil drainage characteristics. An efficient watering wets only the turf grass root zone, does not saturate the soil, and does not allow water to run off. Florida soils are typically sandy and hold 1 inch of water in the top 12 inches of soil. If the roots are in the top 12 inches of soil and the soil is dry, then 3/4 to 1 inch of water is required to wet the area thoroughly. This is equiva- lent to 465 to 620 gallons of water for each 1,000 square feet of lawn. Generally, turf grasses require no more than 0.3 inches of water per day. Under extreme summer conditions, water use can be as high as 0.4 inches of water per day. During winter, when grasses are not actively growing, water use may be only 0.05 inches of water per day. JULY - SEPTEMBER Turf If you still want to establish a lawn, you can seed, sod, or sprig all types of grass. However, seed of St. Augustine grass is not available and you must sod or sprig. Make sure to water it regularly to promote root development. If you are planning to travel out of town, make arrangements for your lawn to be watered. This is a good time to fertilize Bahia, Bermuda, St. Augustine, and Zoysia with a water-soluble inorganic nitrogen source like ammonium nitrate or ammonium sulfate at a rate of 1 pound of actual nitrogen per 1,000 sq. ft. An alternative balanced fertilizer, like 16-4-8, may be applied at the same rate of 1 pound of actual nitrogen per 1,000 sq. ft. This is also the time of year to watch for insects and diseases that damage lawns. It is much easier to control a problem when it is detected early. Watch for symptoms or changes in your yard that do not appear normal, and then identify the cause. Chinch bugs may be observed in St. Augustine grass from April through September causing yellow or brown patches. Blades appear brown but not wilted. Only treat when population levels have reached a damage thresh- old of 25 chinch bugs per square foot. Spot treat affected areas with Diazinon.CAM_book.indb 60 6/12/08 7:44:21 PM
  • 64. Operation of the Association’s Physical Property     61 If mole crickets are a problem, you can apply a mole cricket bait. Lightly broadcast the bait evenly over the sur- face late in the afternoon when it is not likely to rain. Do not irrigate after the application. There are several diseases that can be a problem. Dollar spot is a disease, which looks like 2-3 inch diameter dead spots scattered across the lawn. It can affect Bahia, Centipede, and Bermuda. Apply 1/2 lb. of nitrogen to encourage grass to out grow the problem. Gray leaf spot is a disease primarily of St. Augustine common in the summer, especially now that our seasonal rains have returned. Prolonged wet foliage and excess available nitrogen tend to increase severity and spread of this disease. Elongated, oval brown spots can occur in the leaves sheaves or stem. Some spots may have a yellow hallow. Disease blades wither and brown giving the lawn a scorched appearance. Mow less frequently and col- lect clippings if you have gray leaf spot. Pythium and Take All root rots are common lawn diseases now. Grass weakened by poor drainage, excessive traffic, poor mowing practices, or nematodes are susceptible. Shrubs And Trees Containerized trees and shrubs can be planted now. Prune azaleas only up to mid July because buds will come soon. Cut back poinsettias by one-half to promote increased branching. Trim the spent blossoms off the crape myr- tle tree to encourage a second bloom on new growth. Divide and replant ferns and liriope that are too crowded. Fertilize azaleas, camellias, and gardenias with “Camellia-Azalea Special” or other acid-forming fertilizer now. Fertilize roses with each new flush of blooms. Plant palms and potted crape myrtle in bloom. Annuals And Shrub Beds Even though it is the hottest time of the year, there are quite a few flowers that can be planted. In July plant 4” pots of: Blue Daze, Blue Sage, Cannas, Celosias Cleome, Coleus, Crossandra, Dahlberg Daisy, Exacum, Echinacea, Gerbera Daisy, Golden Shrimp Plant, Globr Amaranth, Goldenrod, Impatiens, Justicia, Kalanchoe, Lantana, Lisianthus, Melampodium, Mexican Sunflower, New Guinea Impatiens, Nierembergia, Pentas, Portulaca, Purslane, and Salvia. Refresh your garden with summer color in August by planting Coleus, Kalanchoe, Marigolds, and Salvia. In September, plant Alternanthera, Blue Daze, Exacum (Persian Violet), Foxglove, Kalanchoe, and Wax Begonia. All are heat tolerant and will be colorful until first frost, which may be late November. Water Requirements Irrigation of many Florida lawns is controlled by a pre-set automatic sprinkler system. While automation is becoming increasingly necessary in many areas of our lives, automatic sprinkler systems and improper watering practices are undoubtedly the single biggest factor leading to decline of home lawns. It is important to remember that we do, on average, receive 60 inches of rainfall or more yearly in most parts of Florida, and that the major- ity of this rainfall occurs between June and October. When rainfall is adequate to meet the plants transpiration needs, supplemental irrigation systems should be turned off. How do you know what the grass transpiration needs are? University of Florida guidelines call for watering lawns on an “as-needed” basis. This can be deter- mined by observing the grass for signs of drought, which indicate that transpiration needs are not being met. The signs that you need to look for are: • Leaf blades are folded in half lengthwise in an attempt to conserve water. • The grass takes on a blue-gray tint rather than maintaining a green color. • Footprints or tire tracks remain visible on the grass long after being made. When these signs of drought are seen on a large portion of the lawn, its time to irrigate. OCTOBER - DECEMBER Turf It’s almost too late to fertilize for the fall. Hurry to do it before mid October. Pre-emergence herbicides can be applied now to control winter annual weeds. BE CAREFUL when you use products that contain Atrazine. If tem- peratures are above 85 degrees Atrazine herbicide damage may occur on your St. Augustine grass.CAM_book.indb 61 6/12/08 7:44:21 PM
  • 65. 62     Bert Rodgers Schools In many parts of Florida, it is not possible to have an attractive, green lawn throughout the winter months due to low temperature exposure. Permanent lawn grasses in upstate Florida (Bahia grass, Bermuda grass, Centipede grass, St. Augustine grass, and Zoysia grass) go dormant in the late fall and winter. These grasses grow very slowly, lose color in the fall, and then turn completely brown with the first frost. Brown lawns throughout the winter are unattractive and weeds are easily seen, so a practice called “over seeding” is often used to provide a green winter lawn. Over seeding is the practice of using a temporary grass that is seeded into the permanent lawn to provide winter color. Which grass to use? Several cool season grasses can be used for over seeding, including ryegrass, bluegrass, Bentgrass, and tall fescue. Bent grass, bluegrass and fescue are beautiful and because of their fine texture are very compatible with Bermuda grass and Zoysia grass. However, due to their maintenance difficulties and costs, they are not generally recommended for the average homeowner. By far the most common temporary grass is RYEGRASS. Annual, intermediate, and improved (perennial) ryegrasses are popular because of rapid seed germi- nation, fast growth, adaptability, and reasonably low cost. Ryegrass is widely adapted, does well in either sun or shade and tolerates close, frequent mowing. If seeded heavily and mowed closely, ryegrass can provide a very dense and beautiful lawn throughout the winter. By the time the ryegrass dies, the permanent lawn grass should be actively growing again, and will provide color and cover the rest of the growing season. Of course, the rye- grass will have to be reseeded each fall to provide a green wintertime lawn. Timing? Establishment of winter ryegrass is a fairly simple procedure. Seeding time varies from October to early November in north Florida to mid-November and early December in central Florida. It is best to wait until the daytime temperatures are consistently in the low- to mid-70°F range. If the seeds are planted during warmer peri- ods, water stress and diseases will reduce the chance of seedling survival. In frost-free areas of south Florida, it is usually warm enough so the lawn does not go dormant. In this case, over seeding is probably not needed for winter color. Shrubs And Trees Plant containerized trees and shrubs anytime. However, wait until winter to transplant deciduous trees. It is too late in the year to fertilize or prune most landscape plants. We are getting near the cold season and fertil- ization may result in cold damage. Watch closely for scale insects on Camellias, Magnolias, Euonymus, Gardenia, Loquat, and Coniferous ever- greens. Horticultural oil, Cygon Diazinon, Malathion, Merit, Orthene, or 2% Di-syston G may be used to control the scales. Check landscape plants for aphids. These are small insects that suck the plant juices from the under side of the leaves. A new aphid has appeared on the scene. The wooly hackberry aphid, which looks like snow on the twigs and leaves, is infesting only hackberry trees. Aphid feeding can also result in black sooty mold. Control with insecticidal soap, Orthene, Malathion, or Diazinon. You can mix your own soap solution by adding 2 table- spoons of dish detergent to 1 gallon of water. Whiteflies have also been bad this year. Control is the same as with aphids. You may need to apply a series of spraying to eradicate. In recent years, caterpillar infestations have been serious on a variety of landscape trees and shrubs. They can be controlled using Dipel, Thuricide, or Sevin. Pruning. It is best to prune trees such as oaks, maples, hickory, and other large shade trees during the dormant season or just following a growth flush. Pruning at other times frequently promotes undesirable sprouting. Trees sprout excessively when pruned during active shoot elongation. Annuals And Shrub Beds In October set out 4” pots of the following seasonal annuals: Snapdragon, Shasta Daisy, Foxglove, Pansy, and Petunia plants. In November, also plant Statice, Carnations, Calendula, and Dianthus. All are for December plant- ing. Fertilize annual flowers during soil preparation and then monthly. Water Requirements Water during dry spells, especially Azaleas and Camellias. When rains stop, water 1-2 times weekly. It is better to water your landscape more thoroughly and less often than to apply frequent shallow waterings. A good rule of thumb is to irrigate1/2” of water per irrigation. Adjust your irrigation seasonally as during the winter, your land- scape requires much less water due to shorter days and cooler temperatures. (Source: Phillips Environmental, Clearwater, FL www.phillipsenvironmental.com)CAM_book.indb 62 6/12/08 7:44:22 PM
  • 66. Operation of the Association’s Physical Property     63 Final Assessment Operation of the Association’s Physical Property For immediate results, test online at www. bertrodgers.com Instructions • Answer the True or False questions below. • Locate the course title on the Answer Sheet in the back of this book • Fill in your answers for each question in the space provided. Please use pen or pencil. • omplete the Final Assessments, Attest Statements, and Course Evaluations for all courses selected, fill out the C Registration Form and submit both the Registration Form and Answer Sheet(s). • A passing score is 70% or higher (7 or more correct answers out of 10). 1. A Board’s primary and legal responsibility is to protect and maintain the value of the asset. T F 2. The best maintenance plan has the budget built around the maintenance program. T F 3. The purpose of preventative maintenance is to spend a lot of money now and more money later. T F 4. If the community is faced with a large siding, dryrot, or structural repair, then it makes sense to use the services of a professional construction manager. T F 5. Since roofs are intended to last many years, selecting a roofing company that will likely be around for years is not important. T F 6. Unless the roofing job is straight forward, invest in a roofing consultant to prepare detailed specifications which can be bid by contractors. T F 7. The right roof for your home does not balance cost, durability, and aesthetics. T F 8. Asphalt is a mix of about 92% asphalt binder and 8% stone aggregate and mineral filler. T F 9. Since asphalt begins to oxidize immediately after installation, it is recommended that sealcoating be applied when the asphalt is new. T F 0. The acronym P-A-I-N-T stands for plan, ask, inspect the work, negotiate, 1 timing. T FCAM_book.indb 63 6/12/08 7:44:22 PM
  • 67. 64     Bert Rodgers SchoolsCAM_book.indb 64 6/12/08 7:44:22 PM
  • 68. Approved by the DBPR Council for CAM, Provider #0001856, Course #9625409 Communication Skills and Tools by Richard Thompson 4 Hours in Subject Area: Human Resources Learning Objectives Upon completion of the course the learner shall be able to: 1. List 3 reasons managers need to communicate 16. Describe 5 strategies managers can utilize to with community members. produce great newsletters. 2. Discuss the strengths and weaknesses of your 17. List the 12 essential elements of a newsletter. diplomacy skills. 18. Explain what type of information should be 3. Explain 2 strategies that managers can use to lis- included in all newsletters. ten effectively to the different personality types 19. Discuss 3 elements of newsletter design and lay- within the community out. 4. Describe how the use of tact can promote the 0. List 5 newsletter tips that keep reader’s interest. 2 manager’s leadership role as well as harmony within the community. 1. Discuss 3 ways online newsletters can be deliv- 2 ered to readers. 5. Identify 4 steps managers can take to defuse explosive personalities. 2. Explain the ways email can be used as an effec- 2 tive communication tool. 6. List 3 strategies managers can use to resolve conflicts. 3. List 5 basic steps that can improve the quality of 2 email communication. 7. Discuss steps a manager can take to help neigh- bors resolve disputes. 4. Explain the benefits of establishing a community 2 website. 8. Identify procedures to take when a board meet- ing is disrupted by a disgruntled homeowner. 5. Contrast Fill-in-the-Blanks Websites with 2 Homegrown Website. 9. List 3 benefits of Alternative Dispute Resolution. 6. List 4 steps managers can take to cultivate a 2 10. Discuss the differences between Arbitration, good neighbor policy. Mediation, and Conciliation. 7. Explain 4 techniques managers can use to 2 11. Explain how an effective communication system resolve disputes between homeowners. supports a proactive management style. 8. Discuss 4 reasons community members may 2 12. List 7 types of communication managers can resist action that is in their best interest. utilize to build trust and allay rumors in a com- munity. 9. Discuss the benefits and guidelines for open 2 forums. 13. Identify 3 types of letters managers frequently need to send. 0. Identify 3 ways a manager can deal with strong 3 arm tactics. 14. List 3 tips for effective collection letters. 15. Explain 4 ways to respond effectively to com- plaint letters. 65CAM_book.indb 65 6/12/08 7:44:23 PM
  • 69. 66     Bert Rodgers Schools CLEAR COMMUNICATION get read because they would be an unending ramble. Without a careful selection of words, communications Wordsmithing can be misinterpreted or ignored. Communication is both a skill and an art form. When Communication comes in many shapes and sizes. babies cry, the motivation is to get their needs met. The common ones include signs, newsletters, meeting Meeting the needs of others is nowhere in a baby’s minutes, postings, emails, and the community associa- method. While infant communication is primitive, tion’s website. These communications can have a vari- it is highly effective. A crying baby gets fed, diapers ety of meanings: to inform, to warn (rule violations), changed, burped, etc. With maturity and training to invite (summer social), and to congratulate (kudos come more sophisticated and usually less self-serving for a job well done). ways to communicate. Community associations are charged with communicating with the members. The So, effective writing requires careful thought reasons for communicating vary including: because an arrow, once loosed, cannot be retrieved. Words have both strengths and weaknesses. One • Socialization. As moderns become more isolated weakness of the written word is that it may be read from each other, the need to find connecting points by an unintended audience which does not have becomes more important. Community associa- the background the writer needs to be understood. tions can provide a platform to coax members out Another pitfall is that some of the audience may be of their isolation by offering volunteer opportuni- prejudiced against the writer and refuse to understand ties and social functions. Introducing the members the communication the way it’s intended. These folks to new residents through newsletters grooms the will actually take the message, add their own spin, and connections as well. A Welcoming Committee not circulate the real story. A war of words ensues. The only provides the human touch, it can provide early time and emotional energy it takes for damage control warning about important association rules and reg- may discourage future communication altogether. ulations so that newcomers don’t inadvertently get crosswise with the association from the get go. As it is written, In the beginning, there was the Word. Words are with us forever. It’s what we do with • Paying the bills. There are few things more imme- those words that make all the difference. Like black- diate and urgent than collecting association fees. smithing, wordsmithing takes hammering and shap- Without money, community association services ing before the whole thought can take shape. suffer or are curtailed. Without money, mainte- nance lags and property values drop. Therefore, getting 100% payment compliance is extremely Hearin’ Now? important. While the hope is that it is done volun- When to speak and when to listen is a challenge we tarily, sometimes it must be coerced by legal means. all face. In daily conversations, the greater gift is the But even when lawyers are brought into the matter, ability to listen. a carefully worded demand letter can produce quick Board members and property managers deal with results. irate homeowners that make blood boil. The urge to • Getting compliance. Every community associa- strike back is natural. The person yelling at you is not tion has rules. Hopefully, those rules are few, neces- only a shareholder in the association you serve, but also sary, and not overly intrusive. When a rule is made, believes passionately in what has caused their anger. explaining the need for it and the goal in having That person is owed a full and fair hearing. Your role it can go a long way to encouraging compliance in any exchange is to remain calm, listen attentively, rather than defiance. Whenever a rule is being con- and discover the key to the conflict before you commit templated, the board should always, always, always to any action. solicit member input. This tactic reduces the likeli- Effective listening is the key to dealing with differ- hood of challenge. ent personality types within the community. Listening without jumping to conclusions can be mastered by The more the words, the less the meaning. When even a type-A personality eager to cut to the bottom it comes to effective communication, less is more. line. Listening means really concentrating on what Choose words thoughtfully. Use words economically. another person is saying and not just waiting for your This takes thought. In conversation, many words are turn to speak. Listen with both your eyes and ears. Let used to test impact on the listener. So, in conversation, your body language show that the person speaking has it’s not uncommon for the same thing to be repeated your full and undivided attention. Show that you care with different words in an effort to embellish or give about their problem. greater impact to the meaning being conveyed. If folks Remember back in school when the English write the way they talk, their writings would rarely teacher stressed the importance of the 5 W’s in com-CAM_book.indb 66 6/12/08 7:44:23 PM
  • 70. Communication Skills and Tools     67 positions: who, what, when, where, and why? Suc- How did you do? A score of 7 or more “Yes” cessful communication includes these same elements: answers indicates that you can be diplomatic. Since Who is responsible? What is the issue? When did it none of these questions asks the impossible, a score start? Where is action is expected? Why is it being of 6 or below probably indicates that you place being brought to your attention? right above teamwork, cooperation, and mutual While the issue will often be emotionally charged, respect. Standing up for what you believe in can be the effective listener focuses on the facts, not the emo- seen as a desirable trait, but not when it gets in the tion. Try this technique. Patiently listen while the way of your community’s progress. If you’re having person is speaking, nodding your head, and saying, problems dealing with community members, learn “Uh-huh” and “Mmmm.” After the person has fin- from this test. You’ve got the ability and the positive ished, pause and repeat back what has just been said. results will be amazing to all, including yourself! Then ask if you understood correctly. By restating Arguments happen in community associations too. the key elements of the conversation, you are clarify- Some owners challenge the board with issues based ing their position while showing that you are listening more on control than substance. Others simply have a without agreeing with what has been said. (There are need for attention or assurance of being heard. occasions when no amount of diplomacy will win the Still, there is an issue that must be dealt with. day. When that happens, it’s best to revisit the issue While sorting out the basis of the issue (control, atten- after a reasonable cooling-off period.) Now that you have softened any anger with your superb listening skills, it’s problem solving time. Really Listening Choose your words carefully. Once spoken, an ill word cannot be retrieved. For example, the word but acts The famous English comedy group Monty like a roadblock to alternatives. Negotiate resolutions Python did a sketch involving a man who visited making the homeowner part of the process. Restate a business offering “Arguments by the Hour”: the key points discussed and what you both agree on Client: I came here looking for an argument. as the correct course of action. Business Owner: No you didn’t. Effective listening separates winners from wanna- Client: Yes I most certainly did. I’d like to bees. Hear what I’m saying? engage in an argument. The Test of Diplomacy Owner: No you don’t. Client: Are you trying to argue with me? Diplomacy can mean the difference between a friendly resolution or all-out war. Are you diplomatic when Owner: No. dealing with community members? Take this test to Client: But you are. Everything I say, you dis- find out: agree to. 1. Can you communicate clearly that your thoughts Owner: No I don’t. are opinions, not facts? Client: But what you’re doing isn’t arguing, it’s 2. Do you avoid confrontation with those you’re being contrary. most inclined to argue with? Owner: No it isn’t. 3. Do you hear the other person out before formu- Client: An argument isn’t mere contradiction. lating a reply? It’s 2 people engaging in debate over a topic of 4. Can you find common ground with another per- mutual interest. son’s position? Owner: No it isn’t. 5. Can you reinforce your views with facts, instead Client: Look, this is ridiculous. Are you going of raw emotion? to argue or not? 6. Do you avoid making sarcastic remarks? Owner: Maybe. 7. Can you keep your cool under fire? Client: Just answer me yes or no. 8. Do you truly believe that everyone is entitled to Owner: Time’s up! their own opinion? Client: What do you mean “Time’s up”?...We 9. Do you take pride in the battles that you success- just started! fully avoided? Owner: No we didn’t. 0. Do you think others may offer a better solution 1 Etc., etc, etc. than yours?CAM_book.indb 67 6/12/08 7:44:24 PM
  • 71. 68     Bert Rodgers Schools tion, or reasonable concern), address the party in a Proverbs 18:19 advises, “A brother offended is caring and concerned manner. Gather information harder to be won than a strong city, and contentions with an open mind. The answers may surprise you— are like the bars of a castle” Solomon wrote, “The even “crazies” have insight. Look for points of com- heart of the righteous ponders how to answer.” And promise. These are neighbors after all, and decisions other equally insightful proverbs note, “The tongue made today affect future community harmony. And of the wise brings healing” and “a man has joy in an try not to scold. Attention seekers will use scolding as apt answer and how delightful is a timely word.” grist for mills that go ‘round and ‘round. “They don’t With whom in your community do you have a care what you know until they know that you care.” difficult time communicating? Could it be that your Truth sometimes gets lost in the translation. Sec- “brutal honesty” is more brutal than honest? Look for ondhand information may or may not be true. Dis- opportunities to forge consensus rather than being cernment is the key. Make sure that information you right. There’s no doubt about it, tact is a virtue that receive and communicate to others is the truth and promotes harmony and the positive leadership role of nothing but. Remember, the difference between the every board, committee member, and manager. truth and a lie is that a liar needs a better memory. RESOLVING CONFLICTS The Art of Tact Constructive Conflict One of the greatest challenges for leaders of a commu- nity association is to treat adversarial members with While conflict is inevitable in a community associa- kindness and respect. In certain communities where tion, there are choices about how it’s dealt with. When verbal bullets frequently fly, holding the tongue can handled constructively, conflict can create a healthier be difficult. For leadership to maintain its position, awareness and better relationships. however, the maturity demonstrated by tact can be Conflict rarely gets better with time. If allowed to the deciding factor in power struggles. fester by avoidance or grow by ongoing aggression, Charles Swindoll in his book, Come Before Winter, the feuding parties become more entrenched in their notes that tact is “the saving virtue”. He goes on to positions and arriving at resolution becomes more say, “Tact graces a life like fragrance graces a rose. difficult. Resolution is most easily achieved early on. One whiff of those red petals erases any memory of Here are the steps to getting it done: the thorns....It’s remarkable how peaceful and pleas- • Speak directly. Speaking directly with the person ant it can make us. Its major goal is avoiding unnec- with whom you have the problem, assuming that essary offense...Its basic function is a keen sense of there is no threat of violence, will usually resolve what to say or do in order to maintain the truth and the issue. Meet in person or talk over the phone to relationships...It is incessantly appropriate, invariably explain your concern in a positive, respectful way. attractive, incurably appealing, but rare...” (Anonymous letters, banging on the wall, or com- plaining to your neighbors does not qualify.) • Plan your approach. Think about what you want The Truth and Nothing But to say in advance. Talk about the problem as you Pepe, a notorious bank robber, regularly see it and how it affects you. Help the other party robbed Texas banks, returning to Mexico understand that a problem exists and invite them to before the Texas Rangers could catch him. help you find a solution that you can both live with. The Rangers illegally crossed the border into • Choose a good time. Consider a time when you Mexico and cornered Pepe in a bar. Since Pepe think the other person will be most receptive. A couldn’t speak English, the bartender was quiet place where you won’t be easily disturbed, asked to translate. With guns drawn, they told perhaps with a cup of coffee, can make it easier to the bartender to ask Pepe where he had hidden talk and listen. Avoid cocktail hour. the stolen loot. “Tell him that if he doesn’t tell us, we’ll shoot him dead where he stands!” • Communicate openly and honestly. Express a The bartender translated and Pepe hast- positive attitude about working together to find ily explained in Spanish that the money was solutions. Blaming the other person makes it harder hidden in the town well, 17 stones down from for him to hear and understand your concerns. the handle. The bartender then turned to the Remain open to a different perspective than your Rangers and said in English, “Pepe says that own and try to understand it. you are a bunch of stinking pigs, and he is not • Listen. Give the other person a chance to explain afraid to die!” their view, concerns, and feelings. Summarize what you hear and ask questions to clarify your under-CAM_book.indb 68 6/12/08 7:44:24 PM
  • 72. Communication Skills and Tools     69 standing. Understanding doesn’t mean that you it go. Don’t encourage this kind of immature behavior agree. But just echoing another’s thoughts goes a by facilitating more of it. long way toward compromise. Clarify the issue. If the issue impacts the whole com- • Open up. Get the issues and feelings out in the munity, clarify it. What seems to be isn’t always what open. Don’t ignore the part that seems too diffi- is. Ask each party what they think the issue is. That cult or minor. Your resolution will be durable if the alone may resolve the issue when they realize they issues are considered and addressed. don’t really know. • Consider options. Be creative and offer solutions Facilitate discussion. If the association’s interests that you both think might work. Cooperating to are involved, here are several tips for facilitating the find a solution is much more effective than one per- d ­ iscussion: son demanding that the other change. • Schedule a convenient time to talk. • Be SMART. SMART stands for Specific, Meas­ur­ • Agree on a neutral place for the meeting. able, Achievable, Realistic, and Timely. For exam- ple, “Beginning tomorrow, I’ll turn down my music • Stick to the facts. Steer clear of “He said, she said”. by 9:30. If I forget, call me and let me know.” • Avoid blaming, insulting, and exaggerating which • Keep the door open. Agree to revisit the issue to make it difficult to consider other viewpoints. make sure your agreement is working. Communicate • Listen, even if you disagree, to better focus on the immediately if the solutions are not having the issues. desired effect. Congratulate yourselves on working • Defuse hostility. Let them know you understand together to resolve the problem. they are angry or upset. Explore what’s behind the Building a lasting resolution from conflict can not emotion. only solve an immediate problem, but opens the door • Direct the conversation toward solutions. to better understanding and even, possibly, a lasting friendship. Don’t preclude the latter. Build on your • Question claims and assertions: success and miracles can happen.  There are too many/much/little/few... Com­pared to what? Quelling the Quarrel  You never... What would happen if we did? Quarrel has been defined as the minimum number of  We’ve tried that already... What was the out- people required to hold an argument. One of the many come? challenges facing community associations is resolving  The only way is... Yes, that’s one option. Any oth- disputes between neighbors. Noise, parking, garbage, ers? pets, trees, fences, and other territorial based conflicts can erupt any time. Most conflicts result from false  It will never work... What would work? assumptions and (according to the prison warden in Good conflict resolution focuses on needs, not Cool Hand Luke) a failure to communicate. Neigh- positions. It is indeed possible to quell the quarrel, bors, wanting to avoid confrontation, stew over issues and harmonizing your community should be a top until their emotional pot boils over, usually scalding priority. innocent bystanders. What now? Conflict is a natural part of human relationships. Community Association Terrorism Self interest is a top priority while other’s interests are usually somewhere down the list (WAY down). Peo- Out of the blue, an irate homeowner launches a ter- ple become embroiled because interests or values are rorism campaign aimed directly at the Board. It’s challenged. Here are a few suggestions for quelling relentless and focused. The motivation may be some the quarrel: personal grievance, hatred of a board policy, disagree- ment on how the Board does business in general, Know what’s what. The Board wasn’t elected to or loathing for the community association concept. baby-sit or police neighborhood squabbles. Some Rather than seeking redress in an orderly and open issues are association problems, some are not. Don’t way, however, often it takes the form of poison pen take on personality conflict issues. People that can’t letters, back alley rumor mills, or a terrorist-like get along often look for others (you) to blame. Don’t assault at a Board meeting. get involved unless it affects the general harmony of Board meeting terrorism is designed to hold the the community. Board hostage to relentless rants of demands. The Let them deal with it. If asked to intercede, suggest goal is clear: instant gratification. This form of com- they discuss and resolve it like adults. If they won’t, let munity association terrorism is designed to directlyCAM_book.indb 69 6/12/08 7:44:25 PM
  • 73. 70     Bert Rodgers Schools challenge board authority and to disrupt the orderly Alternative Dispute Resolution (ADR) process. As with any terrorist attack, the Board’s ini- From time to time, disputes arise between community tial reaction is disbelief. But, the reality of the assault association members or between a member and the soon becomes clear and the need to act urgent. association. If left unchecked, these disputes can esca- How should the Board deal with this kind of late into dueling lawyers duking it out in a no holds attack? When presented a list of demands, should the barred courtroom battle. However, there is never items be discussed point by point? Should they be a satisfactory end to this war. The time, emotional recorded in the minutes? What should be done? stress, and financial cost of legal jousting is tremen- dous. Judges are rarely schooled in how community Rule #1. Never negotiate with terrorists. The associations work so the verdicts are highly unpre- Board is not obligated to discuss anything not dictable. Often both defendant and plaintiff are dis- on the agenda. And it’s unfair and unreason- appointed with the outcome. And after all is said and able to expect answers to firing line questions. done, the parties are still neighbors who must figure The response should be, “Thanks for making out a way to get along. your points. We’ll review them and give you a ADR is an alternative that is gaining rapid accep- response in writing or consider them at the next tance in resolving community association conflicts. Board meeting.” The basic premise of ADR is that neither party is Rule #2. Don’t record a list of demands. Min- 100% right or 100% wrong. A trained mediator can utes are intended to discuss in broad terms the usually sort out the issues, cut to the heart of the mat- ter, and forge a compromise that allows both parties business of the Board. Specific motions should to save face. This face saving is often more important have enough detail for a description, for the than the issue that began the fight in the first place. discussion, and the outcome of the vote. It is One thing is for certain, neighbors do not always not a forum for soap boxing, editorializing, or get along. Since that’s known, it’s only a matter of time where items are entered into “evidence”. It’s before there is conflict. Since community associations enough for the minutes to state, “Mr. Terrorist have a structure in place to deal with people issues, it’s asked that the Board consider issues relating to important to plan for these events just like preventive (describe).” maintenance on the buildings. Once conflict erupts, Rule #3. Control your owner forum. To it’s usually too late to get the parties re-pointed to an encourage owner input, an Owner Forum amicable settlement. To that end, adopting an ADR before the meeting should give each speaker- Policy is a perfect way to help guide combatants toward a quicker, cheaper, and usually more effective owner up to 5 minutes to speak, but no more, so resolution to the conflict. the Board can get on with its business. Letting On the next page is a sample policy (Figure 1) someone hold the Board hostage should never which uses the Resolution Process. Use it to shape be allowed and it’s up to the President to con- your own, making sure to conform with applicable trol such actions. An abusive person should not state statutes and existing provisions in your govern- be allowed to continue for any length of time. ing documents. Some states may have a specific stat- Rule #4. When attacked, respond quickly and ute in place so always have the policy reviewed by a firmly. When the attack becomes apparent, it’s knowledgeable community association attorney before the President’s job to interrupt and, if neces- adopting it to ensure it complies with existing law. sary, ask the attacker to leave the meeting. If the attacker refuses to comply, the President should Dispute Mediation adjourn the meeting and advise that such con- While Americans have embraced the aggressive and duct will not be allowed at future meetings. Call competitive sport of lawyer-fighting by hiring them to the police if necessary. litigate over issues significant or otherwise, skyrocket- ing litigation costs have caused many to re-examine Association terrorism is designed to fan the flames the value of lawsuits for problem solving. Nowhere is of emotion and to promote rash response. The Board this more apparent than in community associations, needs to walk the high road and refuse to dance with where disputes are a regular part of life. If you are a such people. While this isn’t easy when the attack is member of one, you know. Pets, parking, renters, late intense, the directors outnumber the attacker and fees, fences, and an endless list of other issues are fuel with a unified response, should be able to defeat the for the fires of furious disagreement. challenge and even help point the terrorist toward a Consider cases like one in California where a dis- better way. pute over a fence landed a homeowner with $40,000CAM_book.indb 70 6/12/08 7:44:25 PM
  • 74. Communication Skills and Tools     71 Nottacare Condominium Alternative Dispute Resolution Policy WHEREAS, the Board of Directors of Nottacare Condominium believes that conflicts which arise between members or between a member and the community association are best resolved by way of negotiation and mediation rather than litigation; and WHEREAS Alternative Dispute Resolution (ADR) is faster, friendlier, less expensive, and more effective than resorting to the courts to resolve disputes; BE IT THEREFORE RESOLVED that the following ADR procedure is hereby adopted by the Board of Directors on the 31st of December 2002 and shall be added to the Resolution Section of the Rules, Regulations Resolutions: a. Applicability. This ADR procedure shall apply to all disputes which arise within Nottacare Condominium between members or a member and the homeowners association. Participation in the ADR procedure is voluntary on the part of a member and required by the community association. b. ethod. The ADR method used shall be “mediation”. Mediation is an informal, cooperative, problem-solving ap- M proach to conflict resolution. It provides for a neutral mediator to assist the parties negotiate a settlement of their dispute which is agreeable to the parties. c. ediator. The mediator used for this process shall be one professionally trained to perform this service. The county M offers free mediation service and there are several paid services in the area. If the parties cannot agree on a media- tor, the free mediation service will be used. If paid mediation is selected, the cost will be shared equally by the parties. d. rocedure (Dispute Between Members) P i. Upon formal notice to the Board from a member that a dispute exists with another member, the Board shall con- tact the parties to determine the nature of the dispute and attempt to resolve the dispute quickly. ii. If the efforts by the Board are not successful, within 3 (3) days, the Board shall send written notice to the parties acknowledging that a dispute exists, identifying the nature of the dispute, and offering ADR to the parties. iii. Parties must respond acceptance or rejection within 5 days. Upon receipt of acceptance by the parties, the Board shall schedule ADR to be held within 14 days. iv. In a dispute involving more than 2 parties, if less than all parties agree to ADR, the hearing may still go forward only if such mediation would be beneficial. In a dispute involving only 2 parties, if less than both agree to ADR, then the offer of ADR will be withdrawn. If the ADR offer is withdrawn and the dispute involves a violation of the Rules, Regulations Resolutions of Nottacare Condominium, the Board will proceed with normal enforcement procedures. v. If the mediator is unable to achieve a satisfactory compromise, each member is entitled to use other legal meth- ods available to resolve the issue. e. Procedure (Dispute Between Member and Association) i. In the event that a member violates a Rule, Regulation, or Resolution of the Association, the Board shall notify the member in writing of the violation and request that the member immediately correct the violation. The notice shall also inform the member of the option to resolve the dispute by way of ADR. If the member accepts the offer of ADR, it must be done in writing to the Board within 5 days. ii. In the event that a member claims that the Association has failed to act properly or has acted improperly with regard to the exercise of its duties, responsibilities, and powers, the member shall notify the Association in writing of the claim. The Board shall investigate the claim and respond to the member in writing within 5 days stating the Board’s position with regard to the claim. This notice shall also inform the member of the option to resolve the dis- pute by way of ADR. If the member accepts the offer of ADR, it must be done in writing to the Board within 5 days. iii. If the mediator is unable to achieve a satisfactory compromise, the Association may proceed with normal en- forcement methods. Each member is entitled to use other legal methods available resolve the issue. DATED this __________________________ day of ______________________, 200___. ATTEST: _________________________________________________ ________________________________________________ President Secretary Figure 1: Alternative Dispute Resolution Policy (Source: http://www.regenesis.net/3/policy-resolution-creation.htm)CAM_book.indb 71 6/12/08 7:44:26 PM
  • 75. 72     Bert Rodgers Schools in his own legal fees and, when he lost the decision settlement. The American Arbitration Association, in court, forced him to pay the $61,000 of commu- listed in the Yellow Pages of most cities, reports a nity association legal fees as well. Or drapes—litigat- steady increase of commercial mediations over the last ing over a $500 set of drapes ended up costing one 6 years. A dispute mediation service created in 1991 association homeowner $15,000 in legal fees. On top in Hawaii reported an 85% success rate among those of which, after the legal jousting has ended, there you parties who could be brought together. Clearly, ADR are living next door to the same people with whom is having an impact on the homeowner and condomin- you did battle by proxy. The war often settles down ium association communities. to a slow seething simmer and stays there for years. What a way to live. There’s got to be a smarter way Forgive and Forget for alleged adults to resolve differences, you’d think. Basic human nature causes us all to offend others There is. from time to time. Sometimes it’s done unintention- Call off your dogs. ADR is the problem-solving ally while other times with malice and forethought. method of choice for more and more homeowner But regardless of intent, if we are to coexist in peace, organizations. Training is available for those who are making amends is essential. Here are 7 “A’s” to go interested in starting an ADR program as well. Partic- about it: ipants in mediation or arbitration procedures between A-Address everyone involved. If your offense community association members describe the results was perpetrated in a group setting, you should make as astonishingly effective and satisfying. The cost for amends to everyone that was there, both the target and mediation services in most areas is low or nominal. the audience. The audience part is important because onlookers may not have been personally offended, but Mediation and Arbitration may carry the impression that you’re a jerk until you disabuse them of the notion. There are 2 ways ADR can work: In mediation, the A-Avoid if, but, and maybe. Don’t rationalize disputing parties take their problem to a third-party what you did. (“You made me mad”). Take responsi- neutral, who is the mediator. Investigation and doc- bility for your actions. umentation of the complaint is made. The mediator A-Admit specifically. Say that you lost your tem- conducts meetings in which he or she presents non- per, you misunderstood or whatever it was that trig- binding resolution recommendations. Mediation is gered your inappropriate behavior. usually described as a nonbinding settlement. A-Acknowledge the hurt. Admit that damage was In some parts of the country, if both parties are done. willing to accept the terms of the recommended solu- A-Accept the consequences. If there is something tions offered by the mediator, a conciliation or con- that needs to be restored (stolen, broken, etc.) restore sent agreement is drawn up. Both parties sign the it and pay the price. agreement and it becomes an enforceable contract. A-Alter your behavior. Promise to do better in Some groups that use this form of ADR insist that if the future. both parties cannot reach an agreement the dispute A-Ask for forgiveness. This may be the toughest proceeds to a public hearing of the association. The part because you may not get the forgiveness you ask outcome of that hearing results in a binding agree- for. You can’t control the response but you can con- ment as well, which carries the same weight as a lower trol your desire for it. Expect the worst and hope for court decision. the best. Accept whatever response you get. Either Finding an ADR Provider. ADR providers vary way, it doesn’t change your part of the process. widely in specialization, expertise, ability, and quality. Forgiveness is a life changing event for those who Potential providers should be questioned about their forgive and for those who ask for it. We’re all guilty training in the issues in dispute. Costs vary depending of offending our neighbor. Forgive, forget, and be set on the type of dispute and the expertise of the ADR free. provider. Some providers charge an hourly rate, while others charge a flat fee. Information is available from FORMS OF WRITTEN COMMUNICATION the following organization: Better Business Bureau Sharing the Good News 4200 Wilson Blvd., Suite 800 Do you have a reliable system to get information to Arlington, VA 22203 www.bbb.org your association members quickly and accurately? The other form of ADR is the process of arbitra- Do you request suggestions and feedback? These are tion in which both parties, at the outset, accept that all signs of a proactive management style. Proactive the ruling of the arbitrator will result in a binding managers welcome communication because it letsCAM_book.indb 72 6/12/08 7:44:26 PM
  • 76. Communication Skills and Tools     73 them know whether they are on track or derailed. As President calls 2 people and those call 2 more, and the saying goes, “The light at the end of the tunnel those 4 call 2 more, etc. Each person only needs to may be the headlight of an oncoming train.” Better to make 2 calls to get everyone informed. know sooner than later. Welcome packets. These can include things like On the flip side, reactive communications keep the governing documents, budgets, rules and regula- the Board on the defensive and are indicative of a cri- tions, and other need-to-know information. The mes- sis management style. With crisis management, noth- sage should be, as the name implies, “Welcome to the ing gets done unless the smell of tar and feathers is in neighborhood!” Include also architectural guidelines, the air. Under these circumstances, it’s unlikely that maps, association services, clubhouse and pool sched- the end result will be good. If this is the kind of style ules, a telephone directory, management, and emer- your Board has been practicing, consider what kind of gency information. environment this creates. Association phone number. This essential tool is Failure to communicate makes fertile ground for often overlooked. Since board members and managers rumor. And rumors can trample on the Board’s initia- change, why not have a permanent association phone tive and planning. While it’s best to head rumors off number with voice mail that can alert the right party? at the pass, rumors can sometimes be a way for the Large associations can have a voice mail system that Board to identify some unaddressed issues. To deal can provide information by category or connect call- with them, you might title a newsletter article “Rumor ers with emergency response, repairs, etc. Has It...” and dispel the rumor with the facts. Here Clear and frequent communications is fundamen- are some great ways to “tell it like it is”: tal to a successful community. It builds trust and allays The Internet. Bar none, the Internet is the fastest fears that grow when folks don’t know what’s going and cheapest way to interact with the membership. on. Rather than get ground up in a rumor mill, share Most folks now have email addresses so why con- the Good News and watch harmony grow. tinue to waste time and money on duplication, labels, stamps, envelopes, and the U.S. Snail Service if you Plain Speaking don’t need to? For about $1/day, your association can Good communication relies on common understand- have its own website with key information posted and ing of terms. English is particularly irksome because a turbo charged communication system. the same word or phrase can have radically different Newsletters. These can be as small as one page and meanings. Take the military’s various translations of as large as the LA Times depending on how much “Secure the Building”: time, budget, volunteer effort, and information there Army: Occupy, neutralize the defenders and establish is. Pick a format and catchy name and stick with it. a guarded perimeter. Make the information interesting. Decide at budget Navy: Batten down the hatches so what’s outside time how many newsletters there will be and when won’t come inside. they will be produced. Marines: Level the building, pave the lot, and erect a razorwire fence to secure the Humvees. Flyer boxes. Flyers distributed at the mailbox, club- Air Force: Lease with an Option to Buy. house, recycling center, and other common points are National Guard: Hello Baghdad. a quick and cheap way to get the word out, but don’t forget to mail to nonresident owners. Community Association Communication Message board. Very effective if properly located and managed. Don’t let messages stay for more than a All humor aside, the type of communication practiced can form the basis of clear understanding and agree- week as they blend into the landscape. Keep the board ment or chaos and conflict. One of the community neat and sectioned according to topic. association Board’s greatest challenges is to communi- Owner forum. Always give the owners a voice at cate to the members effectively. Let’s look at various Board meetings by way of a pre-meeting forum methods of community association communication: designed to let them speak their mind, ask questions, Email. In terms of speed, efficiency, and cost, email or offer suggestions. To facilitate this, always hold can be a great boon to the Board if used properly. your meetings in a location that is large enough to Email allows group discussions and transfer of infor- accommodate guests. mation. But email discussion requires a high degree Phone trees. In the kind of community where folks of skill. There are significant differences between a know each other, phone trees can work well for face-to-face and email-to-email exchange. In per- encouraging meeting attendance, polling, or passing son, facial expressions and tone of voice can make all on alerts. The idea of a phone tree is that, say, the the difference to meaning. Small misunderstandingsCAM_book.indb 73 6/12/08 7:44:26 PM
  • 77. Communication Skills and Tools     75 impact and sincerity long after the fact. Begin with a Collection Letter #1 (see Figure 3) by the 20th of the simple statement describing what you liked and why month, another letter should be mailed that steps up you liked it. the pressure (see Figure 4). If Collection Letters #1 Rule violation letters. Enforcing rules on neighbors and #2 have not produced good results, the debtor has not made payment arrangements or paid in full, is one of the touchiest things community associations it’s time to send Collection Letter #3 (see Figure 5). deal with. Never automatically accept responsibility It is a no nonsense notice reciting previous attempts on every rule matter. Most rule breaking should be to collect the Balance Due and the consequences for first dealt with directly between affected neighbors. non-payment. Make sure they try to resolve the issue first before getting involved. Some rule violations break the law Follow-up letters. These are in response to a com- (like loud parties). Let the police handle those. munication you received. Use this basic structure: If the issue truly is the community association’s 1. Express thanks for their concern, idea, suggestion, responsibility, soften the blow by opening the let- etc. ter with a statement like “Rules are needed to keep 2. Recap the situation prompting the communication. the peace and maintain high value of a cherished and valuable asset, your home. The few rules we have 3. Assure the recipient of your dedication to the issue. are not meant to be intrusive. They are meant to be 4. Invite future communication and input. inclusive. If all comply, better neighbor relations will result. That’s a good thing, right?” This approach is Complaint letters. These should never be written in intended to promote community. Then you get to the anger. Cool down by waiting a day or 2 if that’s what heart of the issue. Quote the appropriate section of it takes to regain your composure. This is particularly true of email. It is way too easy to fire off something the governing documents or rules, request compli- you regret within seconds after it’s sent. Complaint ance by a certain date, and offer the option of appeal. letters should point to a solution of a problem rather See Figure 2 for an example. than venting against some injustice. A constructive Collection letters. Money is the life blood of a com- tone will vastly increase the chances of getting what munity association. Since there is no government you want. Follow these steps: bailout for community associations, if one member 1. Describe the problem. doesn’t pay, the rest have to pony up. This is par- ticularly painful when it comes to special assessments 2. State what is wrong. since the amounts tend to be large. 3. Say what you’ve done about it so far. Opening with a philosophical statement simi- 4. Indicate what you want done. lar to the Rule Violation letter is appropriate. But 6. Request a response or resolution by a specific date. remember that the failure to pay may be more than an unwillingness to pay; it may be an inability to pay Response to complaint letters. A response to a com- (job loss, death, disability, etc.). It’s important to get plaint letter varies depending on if you agree or dis- to the root of the problem quickly, so ask. There may agree with the complaint. be a payment plan option if warranted, but be careful not to allow the association’s bill to sink to the bot- Steps to agree: tom of their pile too quickly. Food and shelter are 1. Admit that the complaint is justified and apologize. top priorities. Never allow credit cards, car payments, and other less critical expenses to preempt the associ- 2. State precisely what you are going to do to correct ation’s needs. Remember, if they don’t pay, you and the problem. the other members will have to pick up the slack. 3. End on a positive note. Back to the meat of a collection letter: always Steps to disagree: provide a current balance along with penalty, inter- est, and other charges accruing. Attach a copy of your 1. Thank the writer for writing. Collection Policy which discusses what will happen 2. State the complaint to verify you understand what if the bill is not paid. (You have a Collection Policy it is. right? If not, enact one as soon as possible. There 3. Explain the Board’s view of it. are few things more critical in a community associa- 4. State your decision clearly, without apology. tion than cash flow. Include the deadline for payment before the collection moves to the next phase (more 5. Offer alternatives to help the homeowner penalties, attorney fees, etc.) A collection letter must Every association letter is an opportunity to pro- demand action. mote professionalism, reconciliation, and harmony. If you have not received payment requested by Use better letter techniques to pave the road.CAM_book.indb 75 6/12/08 7:44:27 PM
  • 78. 76     Bert Rodgers Schools Form-Notice of Rule Violation Letter April 1, 2008 Mr. Rowdy N. Wilde 666 Devil’s Alley Leisure City FL Phone: 666-6666 Regarding: NOTICE OF RULES VIOLATION Dear Mr. Wilde, Nottacare Community association has a long history of cooperation and peaceful coexistence. This is only possible if all residents practice the Golden Rule in daily interaction with neighbors. A matter has come to my attention that requires me to tender you a Notice of Rule Violation. These are the circum- stances: On March 15, 2008, your all day (and all night) “United Nations Day Celebration” which featured a Tequila Slamming Contest, Viking Smorgasbord, Samoan Fire Walking Ceremony, and Bacchanalian Orgy was suffered by all your horrified neighbors. Your exuberant guests made boisterous comments, lurid hand gestures, and unwanted advances to numerous neighbors that respectfully requested that you “tone it down a bit”. The event was in violation of the Nottacare Community association Rules Regulations section titled “Quiet Hours” which reads: “All residents shall respect quiet hours from 10 pm to 8 am to ensure restful sleep for the neighbors. For the balance of the day, noise level should be kept at a level so as not to disturb the neighbors.” Violation of this rule carries a $25 fine which has been added to your current balance owing to the Asso- ciation. Please remit by no later than April 15, 2008. I would ask for your particular attention to main- taining quiet hours (and civil behavior) in the future. If you have any questions about this Notice, please call me at 777-7777. If you would like to appeal this Notice, please so in writing to me at the address listed below. All appeals will be heard by the Board within 10 days. Sincerely, I.M. Encharge Board President Nottacare Condiminium Association PO Box 1234 Leisure City FL 22333 Figure 2: Notice of Rule ViolationCAM_book.indb 76 6/12/08 7:44:28 PM
  • 79. Communication Skills and Tools     77 Collection Letter #1 MAILED BY CERTIFIED FIRST CLASS MAIL April 10, 2008 To: Mr. U.R. Tardy 123 Easy Street Anytown, USA Regarding: ottacare Condominium N Homeowner Fees - Request for Payment Dear Mr. Tardy, It is now the 10th of the month and we have not received your homeowner fee of $175.00 for the month. Was this just an oversight? If not, please call me immediately to make payment arrangements. Nottacare’s budget is lean and requires prompt and full payment from all members so we can pay our bills on time. Please forward payment today to the address listed below and include a Late Fee of $25 for a Total Balance Due of $200.00. (Starting April 11, 2008, there will be an additional $2.50 per day added to your Balance Due). A copy of Nottacare’s Collection Policy is attached for your reference. Thank you for your immediate attention to this matter. On behalf of Nottacare Condominium, Tommy Treasurer PO Box 12345 Anytown, USA 54321 Phone 666-6666 Email: treasurer@nottacare.org Figure 3: Collection Letter #1CAM_book.indb 77 6/12/08 7:44:28 PM
  • 80. 78     Bert Rodgers Schools Collection Letter #2 MAILED BY CERTIFIED FIRST CLASS MAIL April 20, 2008 To: Mr. U.R. Tardy 123 Easy Street Anytown USA 54321 Regarding: ottacare Condominium N Balance Due - 2nd Request for Payment Dear Mr. Tardy, It is now the 20th of the month and I have not heard from you or received payment. Your current Bal- ance Due is: Balance as of April 1, 2008 Late Fee applied April 10, 2008 Per day Late Fee 4/11 - 4/20/08 @ $2.50/day *plus $5/day thereafter $175.00 $ 25.00 $ 25.00 * $225.00 * Balance Due If there is a problem that prevents payment, please contact me immediately. Otherwise, please for- ward your Balance Due to the address listed below today. If not received by the April 30, 2008, your account will be forwarded to Nottacare’s attorney, Ms. Lien N. Mean, for further action which may in- clude placing a lien on your property, filing a judgment against you, and other legal means of debt col- lection. To avoid more costs and inconvenience, please forward payment today. A copy of Nottacare’s Collection Policy is attached for your reference. On behalf of Nottacare Condominium, Tommy Treasurer PO Box 12345 Anytown USA 54321 Phone 666-6666 Email: treasurer@nottacare.org Figure 4: Collection Letter #2CAM_book.indb 78 6/12/08 7:44:28 PM
  • 81. Communication Skills and Tools     79 Collection Letter #3 MAILED BY CERTIFIED FIRST CLASS MAIL May 1, 2008 To: Mr. U.R. Tardy 123 Easy Street Anytown, USA 54321 Regarding: ottacare Condominium N Balance Due - 3rd Request for Payment Dear Mr. Tardy, It is now the 30th of the month and I have neither heard from you nor received your balance due which is: Balance as of April 1, 2008 Late Fee applied April 10, 2008 Per day Late Fee 4/11 - 4/30/08 @ $2.50/day *plus $5/day thereafter $175.00 $ 25.00 $ 50.00 * Balance Due $250.00 * Inasmuch as you have not responded to my previous requests, this matter is being forwarded today to Nottacare’s attorney, Ms. Lien N. Mean, for further action. From this date forward, please communicate only with Ms. Mean at Phone 444-4444 about this matter. On behalf of Nottacare Condominium, Tommy Treasurer PO Box 12345 Anytown USA 54321 Phone 666-6666 Email: treasurer@nottacare.org Figure 5: Collection Letter #3CAM_book.indb 79 6/12/08 7:44:28 PM
  • 82. 80     Bert Rodgers Schools Newsletters place, too much of it is a downer and chases most readers away. Strive for the positive. Be upbeat. Community association newsletters are a great way to enlighten, inform, remind, and encourage. Inviting Proofread. Editing is a rewording experience. Care- the membership to association events and meetings fully review your work for grammatical and spelling helps neighbors meet neighbors. Frequent reminders mistakes or get a detailed oriented person to do it for of important rules or architectural policies helps build you. Make sure your facts are straight. a friendlier and more harmonious community. Rec- Reprint with permission. Search the Internet for ognizing volunteer efforts encourages others to step content that would be of interest to your readers. If up. Newsletters needn’t be long and involved, just rel- you find an article that includes author and contact evant. The more you do it, the easier it gets. information, be sure to get permission before reprint- ing and give credit where credit is due. Newsletter Gold Have fun with it. Give them a giggle or 2. The Inter- Here are tips to make your newsletters pure gold: net is full of jokes, puns, and cartoons. Focus on building community. Get association Publish pictures. Folks love to see themselves in the members to become participants rather than observ- paper. Share event pictures, photos of board mem- ers. Offer opportunities to do that on committees and bers, the manager, committee members, and other social events. volunteers. Understand your audience. How old are they? PDF it. Programs like Adobe Acrobat make it possible What is their financial status? How do they like to to convert word processing and newsletter programs spend their time? Find out by getting feedback from into Portable Document Format (PDF) which can be your readers with a questionnaire. posted on the association website or emailed to those Inspire your readers. Make sure events, activities, who have email. PDF was designed with community and volunteer opportunities are well publicized. Cre- associations in mind. Using it can save thousands of ate headlines to grab the reader’s attention. dollars in printing, supplies, and postage each year plus countless processing hours each year required of Be consistent in layout and content. If you have a paper newsletters. “Rules Regs Corner” which highlights a particular association rule or policy, publish it in every issue. Get advertisers. If your community is large enough Always include current board and management con- and its newsletter regular, it may attract advertisers tact information (mail, email, and phone). like real estate agents, insurance agents, painters, and remodelers and help pay for itself. Dash the draft. Write the rough draft as quickly as Newsletters are a wonderful way to bind your possible and then go back to polish and flesh out the community together in a custom way. Keep your details. community association in the know with timely and Archive your newsletters and articles. Many arti- relevant newsletters at least 4 times a year. Build com- cles bear repeating and as time passes will have new munity through communication. eyes that see them for the first time. Repeat seasonal reminders. Create folders on your computer for the Newsletter Parts months you publish your newsletter and put article Every association needs to communicate regularly files in the months they fit best. In time, you can build to the members on association related issues like a reservoir of content to draw upon that will make finances, rules, meeting minutes, and the like. Add- newsletter writing much simpler and quicker. ing the personal touch with pictures of newcomers Lead with your strong suit. Put the most important and volunteers makes the piece of greater interest to information up front. Organize the strongest points many. of an article before you write it. Besides content, newsletters need to have an Keep articles short. If an article is long or compli- appealing and organized look. Software programs cated, readers will move on. If there is simply too like Microsoft Publisher offers professional looking much good content to abbreviate, break the article templates which require little more than filling in into several articles. the blanks. With a little effort, the same effect can be cloned with word processing programs like Word and Give credit and contact information. Include the Word Perfect. newsletter committee, writer, and editor names and The Internet provides a substantial number of contact information. resources to assist in newsletter execution. One of the Be positive and uplifting. While criticism has its best can be found at www.desktoppub.about.com.CAM_book.indb 80 6/12/08 7:44:29 PM
  • 83. Communication Skills and Tools     81 Explore the intricacies of professional newsletters that graph that indicates the name of the author of will truly make them shine. What follows are of the an article in a newsletter. The byline commonly 12 components that every newsletter should have. appears between the headline and start of the Knowing how to use them will improve the finished article, prefaced by the word “By” although it product. could also appear at the end of the article. 1. Nameplate: The banner on the first page of a 8. Continuation lines: When articles span 2 or newsletter that identifies the publication is its more pages, a newsletter uses continuation lines nameplate. The nameplate usually contains the to help readers find the rest of the article. name of the newsletter, possibly graphics or a • Jumplines - Also called continuation lines, logo, and perhaps a subtitle, motto, and publica- typically appear at the end of a column, as in tion information including Volume and Issue or continued on page 45. Jumplines at the top of a Date. column indicate where the article is continued 2. Body: The body of the newsletter is the bulk of from, as “in continued from page 16”. the text excluding the headlines and decorative • ontinuation heads - When articles jump from C text elements. It’s the articles that make up the one page to another, continuation heads iden- newsletter content. tify the continued portion of the articles. The 3. Table of contents: Usually appearing on the continuation headlines, along with jumplines, front page, the table of contents briefly lists arti- provide continuity and cue the reader as to cles and special sections of the newsletter and the where to pick up reading. page number for those items. 9. End signs: A dingbat or printer’s ornament used 4. Masthead: The masthead is that section of a to mark the end of a story in a newsletter is an end newsletter design, typically found on the second sign. It signals the reader that they have reached page (but could be on any page) that lists the the end of the article. name of the publisher and other pertinent data. 10. Pull-quotes: Used to attract attention, especially May include staff names, contributors, subscrip- in long articles, a pull-quote is a small selection of tion information, addresses, logo, etc. text “pulled out and quoted” in a larger typeface. 5. Heads and titles: 11. Photos/Illustrations: A newsletter design lay- • Headline - After the nameplate, the headline out may contain photographs, drawings, charts, identifying each article in a newsletter is the graphs, or clip art. most prominent text element. • Mug shots - The most typical people photo- • icker - Often seen in newsletter design, the K graph found in newsletter design is the mug kicker is a short phrase set above the headline. shot—a more or less straight into the camera The kicker can serve as an introduction or sec- head and shoulders picture. tion heading to identify a regular column. • Caption - The caption is a phrase, sentence, or • eck - The newsletter deck is one or more lines D paragraph describing the contents of an illus- of text found between the headline and the body tration such as a photograph or chart. The cap- of the article. The deck elaborates or expands tion is usually placed directly above, below, or on the headline and topic of the accompanying to the side of the picture it describes. text. 12. Mailing panel: Newsletters created as self-mail- • ubhead - Subheads appear within the article’s S ers (no envelope) need a mailing panel. This is the body to divide it into smaller sections. portion of the newsletter design that contains the • unning head - More familiarly known as a R return address, mailing address of the recipient, header, a running headline is repeating text— and postage. The mailing panel typically appears often the title of the publication—that appears on one-half or one-third of the back page so that usually at the top of each page or every other it faces out when folded. page in a newsletter design. The page number is sometimes incorporated with the running News Fit to Print headline. Communication is essential for the wellbeing and 6. Page numbers: Page numbers can appear at the harmony of your community. Do you have a regu- top, bottom, or sides of pages. Usually page 1 is lar newsletter? Is it informative and timely? Do the not numbered in a newsletter. owners read it? Is it worth reading? Answers to these 7. Bylines: The byline is a short phrase or para- questions vary, but more often then not, most news-CAM_book.indb 81 6/12/08 7:44:29 PM
  • 84. 82     Bert Rodgers Schools letters are “throwaways”. It doesn’t need to be that read the newsletter. Put your imagination to work and way. With a bit of imagination, they could be both make your news fit to print. informative and fun to read. First, what kinds of “boilerplate” information Newsletter Baker’s Dozen ought to be included? Unless your community transacts all its business town • Names of Board Members meeting style, a newsletter is essential to keep the • Contact information for the management company owners informed. Almost all communities should pro- duce one at least 4 times a year to remind old timers • Most recent Income Expense Statement and notify newcomers of critical information. There • Committee Reports: architectural, budget, land- are newsletter tricks of the trade to increase effective- scape, etc ness and readability. Here’s a baker’s dozen: • Special upcoming projects, like tree trimming, are 1. Keep articles short. Get to the point. Headings particularly appropriate. and bullet points grab readers’ eyes as they scan. • Rule reminder of those being regularly violated (like Put important information in boxes. barking and unleashed dogs) without being preachy 2. Include good stories. Newsletters can be much • Event Calendar of social, meetings, maintenance more than information. Profile your board com- mittee members. Include a Newcomers section. Design and Layout Promote events. Include a QA section (even if you make up the question). Another extremely important ingredient in a readable newsletter is the layout and design. There are many 3. Put “hook” into your headlines. A good head- software programs available with standardized tem- line reels a reader in. For example, “Board Raises plates included. Microsoft Publisher is inexpensive Assessments” will pique more interest than “Board Passes New Budget”. Use puns, rhymes and user friendly. There are others more or less com- plus movie, TV, and book titles into your head- plicated depending on your computer sophistication. lines. For example, if a wind storm tears off a Here are some of the basics to keep in mind: roof, try “Gone with the Wind.” • The design should be attractive, inviting and dis- 4. The facts. Stories should include who, what, tinctive. The “look” of the newsletter attracts the where, when, and how information. If the cover reader. story announces a new rule, explain why the rule • Each issue should look the same. Choose a simple was enacted, who it applies to, when it’s effective, format and stick with it. and how it will be enforced. Don’t leave them • For maximum readability, use headlines and sub- with more questions than answers. headings. It’s easier to read. 5. Lead with power. Lead off with high impact • Avoid continuing articles on another page. information. For example, instead of “The Board • The newsletter title page should explain what the discussed ways for getting residents to com- newsletter is about and who publishes it. ply with the pet policing policy, try “The Board discussed a new stock and pillory enforcement • Make the title distinctive. policy for residents who don’t police their pets.” • Use only standard typefaces like Times Roman, (Just kidding but you get the idea, right?) Arial, and Helvetica. 6. Proofread. Use a second set of eyes and always • Italics can slow the reader down up to 30%. Use double check the spelling of names. them sparingly. 7. Use photographs. Photos help neighbors meet • Body text should be 10 or 11pt, main headlines neighbors. Black-and-white photos will gener- 18-24pt, and sub-headings should be 14pt. ally reproduce better than color photographs • Use bold type and/or italics to highlight people’s although using a digital copier eliminates most names and to point out important details. of the difference. Actions shots work best. Include descriptive captions. • Avoid using all caps. 8. Share the good news. This is a golden opportunity • Use clipart. to publicize accomplishments and things to come. • Don’t put boxes around illustrations as they make 9. Standardize your look. Software like Microsoft the pages look cluttered. Publisher offer attractive templates. Pick one and An editor’s challenge is to include copy and an stick to it. Use no more than 3 different typefaces attractive format that encourages residents to want to to avoid a busy and cluttered look.CAM_book.indb 82 6/12/08 7:44:30 PM
  • 85. Communication Skills and Tools     83 10. Use white space. White space frames the con- tribution lists of 50 or less and very inexpensive for tent and gives the page breathing room. larger lists. 11. Use a readable font. Serif fonts like Garamond, PDF newsletters. Convert Word and WordPerfect Times Roman, and New Century are easier to documents into a Portable Document Format (PDF) read that san serif fonts like Helvetica, Futura, using Adobe Acrobat software. A companion software and New Gothic. San serif works for headlines. called Adobe Reader is available free at www.adobe. NEVER SET BODY TEXT IN ALL CAPS— com to enable viewers to open PDF files. PDF news- it’s difficult to read and intimidating. Use italics letters can be mailed as attachments or posted on the and bold sparingly—mainly for impact. community association’s website. Emailing PDF files works well if the file size is relatively small (under 12. Use humor. Jokes and cartoons liven it up. 250k). Larger files cause problems for dial up users or 13. Post it online. While the paper chase will be those that have a limited email Inbox capacity. with us for some time, the web is a terrific way Word processor or publisher software newslet- to reduce costs and improve efficiency. Anything ters. Both Word and WordPerfect have newsletter you can lay out on paper can be done on your composing capability. There are also newsletter spe- own community website and more. cific software like Microsoft Publisher that are layman So there’s your baker’s dozen. Newsletters can friendly and come with templates and other help- inform, tweak and pique interest. Informed owners ful features. These files can be distributed as email tend to be more supportive of Board business and attachments. more likely to become involved as volunteers. Use newsletters to unify and harmonize your community. Website newsletters. Directly published to the com- munity association’s own website. Both website posted ONLINE COMMUNICATION and PDF newsletters offer a number of advantages in that past newsletters can be archived and each news- Online Newsletters letter can be searched by key words. In community associations, consistent and effec- Formatting newsletters. When crafting the news- tive communication is extremely important to build letter itself, there are a number of basic formatting consensus and to keep the gossip mill at bay. Besides recommendations: the timely distribution of meeting minutes, newslet- Fonts. Use only a few different fonts and type sizes. ters are key to this charge. While printed newsletters Newsletters are commonly done in Times Roman and have been the norm (and local printers thank you), Arial which are easy to read. Choose one of these for the Internet offers a wonderful alternative to publish your basic text and several of the thousands of others newsletters online and eliminate printing, mailing, for titles. Use bold, italics, and color sparingly and for labeling, and postage costs. emphasis. Online newsletters offer a number of really cool features that printed copy either can’t or would be Columns. Follow the example of magazines and very expensive to duplicate. They can include color newspapers by using 2 or 3 columns. Articles are for no extra charge so pictures, graphics, and fonts can much easier to read in that layout. shine with chromatic intensity. The same feature for Pictures and graphics. Images make the newsletter printed newsletters ratchets up the cost considerably. more eye-catching. But keep the file size small (10- Text, graphics, and pictures can be hyperlinked to 50k) so they don’t slow the load time for viewers that the community association’s website or other Internet are still using dial up connections. locations. Newsletter ads can be linked to the vendor’s Text boxes. Text boxes are floating fields can be website where the vendor can prattle on endlessly placed anywhere in the newsletter either lining up about the benefits of the product or service. You can with columns or straddling them. The background even add sound and video features to really jazz it up! can be shaded with color and the borders have a num- Online newsletters can be delivered to the reader ber of options. in a variety of ways: Newsletter distribution. Getting the word out that Email newsletters. Appear within the email message the newsletter is available is a snap. Simply email a itself and include all the newsletter bells and whistles distribution list that the newsletter is available and like fonts, color, and graphics. Internet websites like attach it or include a link to the newsletter’s location. www.ConstantContact.com offer customizable It’s helpful to include a brief description of articles to newsletter templates that are easy to use, track deliv- woo better response. ery, and other ingenious features that are free for dis- One obstacle to email newsletters is delivering theCAM_book.indb 83 6/12/08 7:44:30 PM
  • 86. 84     Bert Rodgers Schools goods to computer challenged members. But let’s face protocol for hyperlinks. Instead, use bold and ital- it, there is a high price associated with printed com- ics, but use them sparingly and for emphasis only. munications in both labor and hard costs. These costs • Don’t cut or copy and paste documents from your often discourage newsletter production or reduce the word processing program into emails. Certain fonts, frequency. characters, and formatting are lost or corrupted in Fortunately, there is no law that says newslet- transit. ters, meeting minutes, and other association commu- nications (other than legal notices) need to be snail • Instead, send the original document as an attach- mailed. To encourage use of email delivery, why not ment. Avoid attaching files over 100 Kb (kilobytes) give consenting members a credit of $25 a year? The since many email services have Inbox capacity association will save an unnecessary expense, reduce restrictions or the recipient may have a slow modem paper needs, and the members that drive the savings and have difficulty opening the file. Or, post the enjoy the savings. information on the association’s website (You do If your newsletters are not all they could be, why have one don’t you? See our “Working the World not explore the fascinating world of online publish- Wide Web” section below and provide the link in ing? Dramatically lower the cost and production work the email, like www.nottacare.org/minutes.htm.) while improving the quality of the product. This is • Archive “keeper” emails in logically named folders good news indeed. on your computer instead massing them in your Inbox or Sent Items folder. Be Availed of Email • Consider carefully what you write and to whom you Email is an ideal way to transact many kinds of com- send it. Emails have a nasty habit of finding their munity association business. Once used by a few, now way to people you did not intend. Be clear to the it is a generally accepted way to communicate. When recipient if an email is for “Your Eyes Only”. As a tied to an association website, it provides a conduit to rule, don’t write something about someone that you transmit requests and information quickly and cheaply. wouldn’t say to their face. The rumor mill delights So, it is not only the most efficient way of moving in using such for grist and it will come back to haunt information, it can significantly reduce the cost of cop- you. ies, office supplies, postage, and the labor to assemble • Write descriptive subject lines that will be famil- those snail mailings. Email can be used for: iar to the recipient. Increasing levels of junk email • information requests (spam) cause many to delete emails that have no • maintenance requests Subject or a Subject that looks undesirable. • polling the members • new policy rule review • If you forward a message, preface it with personal • sale closing requests comments and ask for feedback. That way, it looks • meeting minutes distribution personalized rather than mass emailed. • newsletters • When forwarding or sending to multiple recipients, • meeting notices list only one of them in the To line and the rest in • invitations to social events the Bcc (Blind carbon copy) line. That way, each In addition to all the forms of communication recipient will get a personalized email without dis- it can handle, it provides a record of who, what, and closing the entire list to every recipient. This makes when. Requests can be screened, sorted, and forwarded it look personalized and protects recipient privacy to the right person for execution. Clearly, there are as well. many compelling reasons to make email the standard • Save commonly used email addresses in your for community association communications. Address Book. Use your Address Book to compile As with any form of communication, there is pro- Distribution Lists like Condominium Board or tocol that should be followed for it to be “all that it Association Members. That way, selecting the list can be”. Here are some email basics to put zing in the and placing it in the Bcc line has the same effect thing: as selecting addresses one by one. It’s a great time • Proofread and correct spelling and grammar before saver. sending. This demonstrates attention to detail and • Delete all dated, no longer needed, duplicate, or caring. reply emails to free up hard drive storage space. • DON’T TYPE IN ALL CAPS. It is perceived as • When replying, carefully select either Reply or shouting or anger. Reply to All depending on your intent. If your mes- • Refrain from underlining words since this is internet sage is intended for one, don’t bother every one.CAM_book.indb 84 6/12/08 7:44:30 PM
  • 87. Communication Skills and Tools     85 Lack of communication is one of the bugaboos and cheaper than the web. Since the dream of com- many association members complain of. To cure that, munity associations is carefree living, take advantage email is a godsend to community associations. It not of what the web has to offer and your association will only significantly reduces cost and labor, it improves come closer to the dream. efficiency and frequency of communication. Isn’t it well nigh time you availed yourself of email? Types of Association Websites Having a community association website is a tremen- Working the World Wide Web dous plus when it has all the right stuff and is kept The Internet is the fastest growing communication current. Members access the budget, rules, policies, and information resource the world has ever seen. and governing documents with a few button clicks. There are literally millions of websites that provide Prospective owners learn about the community before information on subjects only limited by your imagi- closing the deal. Need-to-know information is avail- nation. For a community association, the possibilities able 24/7 so it saves time, money, provides a platform are equally limitless. for efficient communication, and helps define a com- The cyberworld of the web offers rare opportuni- munity identity. Association websites come in differ- ties. Here are some ideas: ent formats and slants, depending on who is paying Build an association website. A community calen- the bill. dar, governing documents (sometimes called Cov- Developer marketing website. Developers spend enants, Conditions, and Restrictions or CCRs), considerable money these days promoting community budgets, meeting minutes, community handbooks, association projects online. The sites are beautiful, rules and regulations, newsletters, and other items of intended to attract buyers, and increase profitability. interest to your community can be posted there. All They usually include floor plans, architectural render- these items can be made available 24 hours a day, 7 ings, 360 degree panoramas, and other hot buttons days a week to owners, real estate agents, lenders, title for buyers. They rarely include information about the companies, prospective buyers, or anyone else who association operations, which is what really matters in has a need to know. Just think of the time and cost the long haul. State laws usually require written dis- savings to the association by eliminating the need to closure of this information in a phonebook size stack duplicate piles of documents! Instead, when docu- of documents which is carefully perused by each buyer ments are requested, you simply direct them to the before closing (NOT!). association website and let them copy or print out Developer websites often wisely choose a web address whatever they want, when they want it! The cost of that reflects the community like www.NottacareCon- designing and maintaining a website is very modest dos.com. This address can be transferred to the asso- and there are a number of companies that specialize ciation upon turnover or, at least, when the developer in association websites. In every metropolitan area, has no further use for it. The community association there are a variety of ISPs (Internet Service Provid- can often transform it for operations use while retain- ers) that will host your website for under $50 a month ing the high quality graphics. which includes email service for the board members and property manager. This one is just too good to Fill in the blanks website. Template based websites pass up. are designed for ease of use. This is particularly impor- Improve association communications. The website tant when using volunteers to maintain the website. is an efficient way to communicate meeting agendas, Simply fill in text, documents, and pictures into pre- to survey the community, get feedback, and to place determined fields and upload the result quickly. Some maintenance requests. Whether an owner is a resi- of these “fill in the blanks” websites are more focused dent or out of state, communications are fast. And on association business than others that include dis- with an email network, all directors, property manag- tractions like advertising, weather, and stock reports. ers, and committee members can receive communica- Ad-supported websites are generally cheaper but tions simultaneously. annoying for the users. Free web access. If you want to consider these Homegrown website. Website building software is options and currently don’t have Internet access, your available like Microsoft Front Page that is relatively local library probably does. There are even helpful simple to learn and allows quite a bit of creativity in folks to show you how to use it. Check it out! look and layout. Having the ability to make changes When it comes to communication and informa- instantaneously is a huge advantage. tion storage and transmission, there is nothing fasterCAM_book.indb 85 6/12/08 7:44:31 PM
  • 88. 86     Bert Rodgers Schools Community Association Web Tips Include special features. The truly effective community association website • downloadable documents and forms requires thought and planning. Here are some tips for • activities calendar achieving success: • resident directory (get privacy release from all listed) Define the benefits. • newsletter archive • enhance property values • minutes archive • communicate information quickly • pictures of social events • transmit maintenance and service requests • online community association fee paying • platform for neighbor communications Do it right. • notification system for association meetings and • Get a web address of your very own. While free social events website services are enticing, committing to a pri- • reduce supplies, labor, and postage costs vate URL will make it much easier to find and dem- • conduct polls and surveys onstrate long term commitment. • inform buyers, title insurance, and real estate licensees • Budget time money. Commit adequate man- • save money power and funds to produce a professional result. Engage the members. When critical information is • Include all the “right stuff” (See Figure 6) included on the websites, members can be directed Having a community association website has so many there frequently. In time, it will become a matter of advantages that it’s foolhardy to do without one. The habit for many. A real bonus of the Internet is that it’s affordable and user friendly options are many, so there open for business all the time. No more phone tag. is little excuse for not making the move. The web Tip Fast track communications. Having the ability to of the Day is “Just Do It”. broadcast email to the members is more than just efficient. Many communications never happen at all GETTING ALONG because of the time and money it takes to assemble a mailing. Email eliminates those hurdles by allowing Neighbor Knowledge newsletters, meeting minutes, and notices to move One of any community association’s challenges is fast and free of charge. To encourage use of associa- helping neighbors make nice. The board is frequently tion email communication, offer association members called on to mediate disputes and fine neighbors for a rebate or credit of, say, $25 a year if they agree to doing bad things. Actually, it’s not the board’s job and accept email communications. The community asso- in most cases, except those that directly impact the ciation will be money ahead. common area, these opportunities should be bounced Maintain fresh content. As the central informa- back to the complainer to handle. tion distribution vehicle, the website requires regular What exactly is a “good” neighbor? To be one, you updating to remove the old and add the new. It needs don’t need to be friends or hang out together. Being to be at the top of the To Do List. If the website is out a good neighbor is an attitude. A good neighbor atti- of date, traffic will soon fall off and folks will return tude allows you to live as privately or as sociably as to their old ways. Fresh content tied with broadcast you wish. Here’s how to cultivate and nurture it: emails pointing to the website will encourage mem- bers to use it. Meet them. While marching up to their door with hand extended is great, the chance encounter works Include basic information. well too. Introduce yourself at the mailbox, while • community association name walking the dog, or when taking out the trash. Learn • physical and mailing address, location, directions, their names and offer a cordial “Hello” or “Good and map Morning” when you see them. • community description (like, 86 condos, clubhouse, Keep them informed. Contact them before under- pool, park, and walking paths) taking something that might affect them, such as • management information (company name, man- hosting a big party, building a fence, cutting down a ager, contact information) tree or getting a dog. • Board information (name, office held, contact infor- Be aware of differences. Age, faith, ethnic back- mation) ground, and marital status can drastically affect life-CAM_book.indb 86 6/12/08 7:44:31 PM
  • 89. Communication Skills and Tools     87 styles. Be aware of the differences between you but of time to deal with. And you can’t ignore them home in on what you have in common. because they’ll only throw a bigger fit! Point of view. From your neighbor’s viewpoint, how With MINE!ors, there is a Parent-Child rela- does your compost pile, swing set, or junk car look? tionship at work and precious little logic behind their Would you like that view? (If you do, refer to your actions and anger. MINE! is a territorial imperative— neighbor’s viewpoint). a wall of defense built out of fear. It’s reactionary and intense. For the MINE!or, facts and information are Be appreciative. If a neighbor does something you extraneous. When dealing with one, the main response like, tell them! They’ll be pleased that you noticed the should be reassurance. Responses like “I understand”, new awning, patio furniture, plants, etc. “We won’t do anything without polling all the own- Assume the best. Most people don’t intentionally ers” and “We are getting expert counsel before we create problems. Assume the neighbor doesn’t know decide” are all calming responses. about the annoyance when you speak to them. Your There are several other techniques for resolving delivery will be dramatically kinder. And assume they MINE!or differences: will be cooperative. • Allow the MINE!or to vent without interruption. Be candid. If your neighbors do something that both- • Respond without anger. Don’t fuel the fire. ers you, let them know as soon as possible. • Apologize without taking the blame: “I’m sorry you Be calm. When discussing a point of contention, feel that way.” speak calmly, listen carefully, and thank them for tell- • Empathize: “I’ve felt that way myself.” ing you how they feel. You don’t have to agree or jus- • Ask questions and solicit solutions. tify your behavior. If you don’t react defensively, anger usually subsides, lines of communication remain open, • If you can resolve the issue, say how and when it and resolution is possible. will happen. Take your time. If caught in angry confrontation, • Confirm that your solution is acceptable. take a break to reflect and finish the discussion when • End the conversation cordially and thank them. cooler heads prevail. Don’t leave it hanging. Time and • Beat a hasty retreat. lack of resolution will intensify hostilities. Sometimes the property manager gets blamed for Best advice of all. Treat others as you would like to issues that are rightly the Board’s, due to lack of pol- be treated. This attitude will pave the way for good icy and procedure. When that happens, the manager neighborliness. Love your neighbor as yourself. should advise the Board in writing (copy to owner) and ask for a decision at the next Board meeting (or Coping with MINE!ors as soon as possible if urgent). Advise the owner of the In many community associations, frustration is lurk- right to address the Board in person. ing just below the surface, waiting to explode into A final tip—Some MINE!ors resort to abusive anger. Frustration is the result of unfulfilled expecta- behavior like screaming, swearing, and physical vio- tions. These expectations can be either reasonable or lence. MINE!ors often vent during the cocktail hour unreasonable, mature or immature. Mature expecta- and tend to disrupt a happy home. Never deal with tions are thoughtful considerations colored by fair- someone who is clearly out of control. As a general ness. These folks will generally resolve their issues in rule, board members should not take phone calls a win-win fashion. Immature expectations are out of directly about association business unless it’s an emer- balance and summarized by the philosophy we’ll call gency. If you don’t have a manager to intercept such “MINE!”. MINE! thinking generally permeates those calls, consider getting an association phone line with who delight in (for example): Caller ID, Voice Mail, and Message Notification options. Prescreening the calls will determine whether • parking in someone else’s reserved spot to respond immediately or later. This process will • allowing their dog to bark incessantly cool MINE!ors who want response NOW! • planting in the common area Coping with MINE!ors is an infrequent yet demanding task. Ignoring them will only increase • generally irritating the neighbors, yet their intensity. Be patient...be calm...be consistent. • don’t believe the rules apply to them MINE!ors respect a firm yet gentle hand. • want quick enforcement on others While “MINE!ors” aren’t plentiful (thank good- Mind Bending ness), they do tend to take a disproportionate amount Money! There is never enough of it and communityCAM_book.indb 87 6/12/08 7:44:32 PM
  • 90. 88     Bert Rodgers Schools association Boards often struggle to get the member- treating seriously the trust that has been given to ship to ante up enough to take care of common assets you. which often include the members’ own homes. You’d Even though these mindsets are largely emotional, think protecting one’s own property would be natural. they are very real and don’t go away. They must be But in associations where the Board controls member overcome for the Board to move business along. It’s assets, it’s often a point of contention. Tight fisted the people aspect of the community association busi- members challenge efforts to raise homeowner fees so ness. These people are the association’s customers and adequate maintenance can take place. Consequently, if they aren’t buying, business comes to a standstill. the assets deteriorate and the members experience Persuasiveness through patience, planning, and prod- declining market values, livability, and unhappiness. ding—it’s a mind bending experience. Illogical you say? There are several reasons members resist what is Having Their Say in their own best interest. These reasons often under- lie other areas in their lives so don’t take it personally. There is a thin line between opening Board meetings Just recognize that facts and logic are secondary with to guests and having those guests commandeer the some people. Consider: show. While most guests are content to sit back and listen, others feel it’s their duty to pipe up on every • Mistrust. This feeling often runs deep. For this subject and give their sage advice. You might even see person, a Board that communicates poorly or dicta- their hand go up when the President asks for a vote. torially invites challenge. If there is a long history of While maybe well intended (and maybe not), guests this, resistance to money proposals, rules, and poli- need to remain just that when attending a Board cies is almost automatic. meeting. This means only speaking when requested • Inflexibility. If the community association has to speak. maintained no or low reserves since the beginning, One mechanism for letting guest members have getting the members to change is difficult. Like their say is an Open Forum which is held just prior turning a barge, the process must begin early with a to the formal Board meeting. But Open Forums need firm hand on the controls to ensure the association their ground rules. Some guests use them to soapbox, changes direction. Recognizing the natural resis- harangue, and harass. The Open Forum is designed to tance to change and plotting a gradual course of allow members to express opinions, ask questions, and correction gradually woos support. petition the Board in a civilized and orderly fashion. • Peter Pannism. Community associations are mar- It’s up to the Board President to lay down the rules in keted as a way to reduce cost of living and home advance and cut folks short that violate the privilege. maintenance (called carefree by developers and A 15 minute Open Forum is usually adequate to real estate agents). But carefree doesn’t come free. accommodate the few guests that attend. The Presi- It just means that someone else handles it for you. dent should ask upfront who would like to speak The Board often discovers that someone is the in the Open Forum. Not all do, so establishing the Board and asking for money to get the job done is number is important. If 3 say “I do” than that means an insult. This thinking is best summed up, “The each is allotted 5 minutes. If there are 4, that means community association can’t afford (reserves, man- about 4 minutes. Announce the time limit and have ager, landscape contractor, pool contractor, etc.) but a board member keep time. The message conveyed I personally don’t want to do any of it myself.” to the guest speakers should be “Be brief and to the point. We want to hear what you have to say but have • Intractability. Even the most successful Board lob- important board business on the agenda we also need bying effort battles some opposition to the bitter to attend to.” end. Some just refuse to cooperate. That’s human The Open Forum is not designed to examine or nature. As long as the majority come around, you’ve debate complex issues or have the Board actually vote succeeded. The biggest critics often become the on a guest’s petition. If the guest is bringing a mat- staunchest supporters once the Board has proven ter of complexity to the Board, it should be put on successful. the agenda and dealt with properly. By so doing, the • Fear and trust. Some fear what tomorrow will guest can have enough time to address the topic in bring and need a higher degree of reassurance. the detail it merits and can expect a board verdict at These folks make decisions slowly or not at all for the conclusion, unless the issue is tabled until the next fear of making the wrong one. They rely heavily on meeting. Members need to understand this important those they trust. This is a great responsibility for difference. The Board cannot (or should not) be mak- those that accept it. For the community association ing shoot-from-the-hip decisions on any subject that Board, this means making informed decisions and cannot be thoughtfully considered. An owner showingCAM_book.indb 88 6/12/08 7:44:32 PM
  • 91. Communication Skills and Tools     89 up at the Open Forum with an Architectural Change and is not likely to be very cooperative. There’s going Request he wants approved so his contractor can start to be a certain level of resentment built up that must tomorrow is a prime example of something the Board be overcome before communication can take place. should never act on. Complex issues take time to study Rather than write a letter or email, a personal phone and reflect upon. call or visit is the best first step. This will address the An important component of allowing members feeling of being ignored. Express concern and get to to attend Board meetings is having enough room to the bottom of the problem. This is a fact-finding mis- actually have them attend. Holding Board meetings in sion so get the facts: dates, places, he saids and she someone’s kitchen does not lend itself to guests. Hold saids. Keep notes. Then ask what exactly it will take them in a location that allows a reasonable number of to resolve the issue now. This is where it gets tricky. guests and provide seating. Do not let them sit around The answer you get may or may not be reasonable. the Board table since this blurs the Board author- If the request is entirely reasonable, assure that ity and guest function. The Board should face each steps will be taken to move it forward. Give a time- other, not the guests. This configuration is impor- line for getting the task done and ask that you be tant to maintain the Board nature of the meeting. A called personally if it isn’t. Ask that the assessment be Board facing an audience invites continuing interac- brought up to date in the meantime so late fees aren’t tion with the guests and makes it difficult to focus on incurred. Offer to waive any that may have already the agenda. been assessed if the balance is resolved within 48 The Open Forum is a privilege, not a bully pul- hours. This will allow a graceful way out and demon- pit. While a guest should be able to speak freely, it strate that you sympathize. should be done with civility. If not, she should be If the request is not reasonable, not the commu- asked to leave the meeting. Letting community asso- nity association’s responsibility, or not budgeted or ciation members have their say is an extremely impor- planned, explain that to make sure that it’s understood. tant facet of living in a community association. Even Maybe it has not been properly explained before. If it if they rarely show up, always keep the door open and has and the response is “I could care less. I’m still not be prepared to accommodate them. paying until it happens.” then conclude the conversa- tion by saying you understand what’s being requested Community Association Extortion but can’t accommodate the request for such and such reasons. Add that the request can be formally There’s a gangster in the ‘hood. He’s rough, he’s tough, appealed to the Board but that withholding money and he’s gonna show the Board who’s boss. He’s hold- could negatively affect the Board’s decision. Ask that ing his monthly assessment hostage to extort action the holdback be paid so late fees and collection costs from the association. It could be something he wants aren’t added to the balance. Another scenario to con- fixed or some rule he wants changed but regardless, no change is going to come until he’s satisfied. This extortion technique is fairly common in Wisdom of Silence community associations. It usually comes up when an owner’s request for maintenance has been ignored. A man of knowledge uses words with restraint, Sometimes it’s because of how the Board is doing and a man of restraint is even-tempered business: secret meetings, abuse of power, poor or The words of a man’s mouth are deep waters, unequal rule enforcement. So there is a demand for but the fountain of wisdom is a bubbling change which often includes an element of righteous brook. indignation. “I’m not gonna TAKE it anymore!” Sometimes the excuse for the holdback is legiti- A fool’s lips bring him strife, and his mouth mate. Repeated maintenance requests have gone invites a beating. ignored. The roof has been leaking for weeks and damage is being done to their personal property. And A fool’s mouth is his undoing and his lips are a that constant dripping!!! Or there’s been a junk car snare to his soul. with flat tires and a growing oil slick parked in front of their unit for months and yet still no action. So, He who answers before listening—that is his one morning, Mr. Irritated wakes up and says “Hey! I folly and his shame. pay my fair share. If I can’t get service, I’m not paying Even a fool is thought wise if he keeps silent, any more!” and discerning if he holds his tongue. There are several courses of action that the Board can take. But first, keep in mind that anyone who has From Proverbs 17 and 18 withheld money has already had the last straw brokenCAM_book.indb 89 6/12/08 7:44:33 PM
  • 92. 90     Bert Rodgers Schools sider—the holdback may be a cover up for a lost job or some other financial setback. That doesn’t justify it, but does throw a different light on the issue. Ask if there is something else, like a financial problem, that’s driving it. You might be surprised how often it is and, when caught off guard with your perception, an owner will fess up. If this is the case, focus on the truth of the matter. If there is a financial problem, maybe there is an accommodation the Board can make. Strong-arm tactics to extort action from the com- munity association can be based in exasperation, a hidden agenda, or a personal conflict. It’s important to understand the underlying motivation so that rea- soned action can be taken. Getting to the bottom of it will help you make nice in the hood. There are many opportunities for any leader to bear witness to these truths. For example, how do you handle irate phone calls from community members? Do you listen or counterpunch? At meetings, do you pontificate or do you act as a catalyst to productive discussion? If challenged, do you respond with anger or sincere concern? Does pride bring out the worst or best in you? Community leaders are not expected to have all the answers. If you have nothing to say, don’t say it! Often, silence is the most effective form of wisdom. Silence allows a fool’s challenge to echo in his ears. That echo may just be the most effective answer. Silence is a sign of wisdom.CAM_book.indb 90 6/12/08 7:44:33 PM
  • 93. Communication Skills and Tools     91 Final Assessment Communication Skills and Tools For immediate results, test online at www. bertrodgers.com Instructions • Answer the True or False questions below. • Locate the course title on the Answer Sheet in the back of this book • Fill in your answers for each question in the space provided. Please use pen or pencil. • omplete the Final Assessments, Attest Statements, and Course Evaluations for all courses selected, fill out the C Registration Form and submit both the Registration Form and Answer Sheet(s). • A passing score is 70% or higher (7 or more correct answers out of 10). 1. Effective listening is the key to dealing with different personality types within the community. T F 2. One of the greatest challenges for leaders of a community association is to treat adversarial members with kindness and respect. T F 3. SMART stands for Specific, Mindful, Achievable, Realistic, and Temporary. T F 4. The Board is obligated to discuss anything not on the agenda. T F 5. Alternative Dispute Resolution (ADR) is a popular method that allows people to solve disputes in a cooperative manner rather than through litigation. T F 6. The various methods of community association communication include email, newsletters, telephone, website, and face to face. T F 7. Every community association letter is an obstacle in promoting professionalism, reconciliation, and harmony. T F 8. The 12 components every newsletter should include are nameplate, body, table of contents, masthead, heads and titles, page numbers, bylines, continuation lines, end signs, pull-quotes, photos/illustrations, and a mailing panel. T F 9. The website is an inefficient way to communicate meeting agendas, survey the community, get feedback, and place maintenance requests. T F 10. Having a homeowner association website has so many advantages, it’s foolhardy to do without one. T FCAM_book.indb 91 6/12/08 7:44:33 PM
  • 94. 92     Bert Rodgers SchoolsCAM_book.indb 92 6/12/08 7:44:33 PM
  • 95. Approved by the DBPR Council for CAM, Provider #0001856, Course #9625410 Board Operation, Teamwork, and Problem Solving 4 Hours in Subject Area: Other by Richard Thompson Learning Objectives Upon completion of the course the learner shall be able to: 1. List 3 common myths regarding the role of the 11. List 3 types of motions made by boards. community’s manager. 12. Discuss how managers play a key role in board 2. Identify 4 key traits of an effective community teamwork. manager. 13. Explain why group wisdom is superior to indi- 3. Explain 3 specific situations in which managers vidual wisdom. can mentor the community’s Board. 14. List 3 important elements of an association’s 4. List 6 traits of a great manager. Code of Conduct. 5. Explain the responsibilities of board member- 15. List 5 items that should be included in a Board ship. Manual. 6. Discuss the role of the manager in developing 16. Explain the 3 levels of formal consensus. effective meeting agendas. 17. Identify 3 methods to recruit volunteers. 7. Discuss several important features of the min- 18. List 4 ways to retain volunteers. utes that can protect the association in the event of litigation. 19. Explain the phenomena of pluralistic ignorance. 8. List 3 ways to increase proxy returns. 0. Describe 3 methods managers can use to help 2 boards deal with threats and disputes. 9. Describe how managers can help improve meet- ings through seating arrangements. 1. Identify 3 strategies managers can implement to 2 help boards break free from mistakes of the past. 10. Identify 3 key components of parliamentary pro- cedure. 2. List 4 ways to prevent board member burn-out. 2 MANAGEMENT ROLES AND trated between clients to maximize efficiency and cost RESPONSIBILITIES effectiveness to the clients. Dispelling Manager Myths Manager is responsible for contractor perfor- mance. The manager does not have direct control Community associations hire managers for 2 basic over the contractors. It’s up to the contractor to pro- reasons: to carry out board policies and to manage the vide agreed upon services in a timely manner. When community association’s business affairs. Sometimes, the contractor fails, it’s up to the manager to enforce however, the manager’s role is misunderstood which provisions of the contract by whatever means neces- could bring the manager into conflict with the board sary including withholding payment or legal action. or members. Following are some of the most com- mon myths. Manager should anticipate maintenance. There is a perception that the manager is omnipresent and Manager is available 24/7. Community association should catch maintenance problems as they happen. managers generally manage many communities and In reality, the Management Agreement typically calls must divide their schedule among them. While the for periodic property inspections (weekly, monthly, or management company usually provides emergency quarterly) which are supplemented by maintenance response 24/7, the manager’s time is carefully orches- requests from the Board or homeowners and feedback 93CAM_book.indb 93 6/12/08 7:44:34 PM
  • 96. 94     Bert Rodgers Schools from maintenance contractors. To control manage- so they will be an effective forum for policy mak- ment costs, identifying maintenance problems is a ing. The effective manager helps the president stay team effort. focused on business for maximum efficiency. When Manager works for the owners. The manage- board actions deviate from the governing documents, ment company enters into a written agreement with the manager should point it out and get them back on the Board of Directors which usually authorizes the track. manager to run association business in accordance As organizer. Since the manager is usually the holder with the governing documents, approved budget, and of the records, he or she plays an active role in the additional direction provided by the Board or Board preparation and organization of meetings by assist- president. Owners have no contractual authority and ing the president to prepare the agenda. The manager the manager should not take direction directly from should present a concise and understandable report an owner. focused on the agenda. If the manager anticipates and Manager takes direction from directors. Managers provides answers to the board’s questions in the report, act under the direction of the entire board of directors they will be able to make decisions more quickly. or the Board president, who generally has authority to As tactician. The manager must understand the speak for the board between board meetings on many, dynamics of the Board of Directors in order to antici- but not all, issues. pate their questions. The manager must get to know Manager is a referee. Homeowners should not and understand each board member’s personality, expect managers to arbitrate disputes with their background, and experience. Constructive sugges- neighbors. Unless the dispute involves a violation of tions must be delivered tactfully recognizing varying community association rules or policies, the manager levels of sensitivity. should not be involved. As communicator. Board decisions should be com- Manager is an advocate. Venting frustrations at the municated to the members quickly, usually by news- manager about a Board action or inaction may make a letter. The manager can work with a newsletter homeowner feel better, but it’s up to the homeowner committee to develop the format and content. The to make the case directly to the Board. The manager newsletter should not only provide the pertinent is not hired to be an advocate. Board meeting information, but promote pride and Manager is responsible for delinquencies. The teamwork in the community. It should be presented manager is responsible to follow the community asso- in a way that will encourage readership. Make it fun! ciation’s collection policy or as directed by the Board. Mention names and events! Use graphics or clip art! Demanding payment doesn’t ensure getting it but Add jokes and quips! the manager is responsible to keep up the pressure As diplomat. Phone calls fielded by managers deal by following the collection policy which, hopefully, with financial, maintenance, and general information provides for escalating penalties for nonpayment (late questions. Sometimes callers are upset and angry. By fees, legal fees, restriction from amenities, curtailing being attentive and asking questions, the manager can voting rights, etc.). demonstrate the incredibly effective communication The manager’s list of duties is long and encom- tool of caring. Once the caller feels understood, the passes many categories of management including finan- manager can move on to problem solving. As the say- cial, maintenance, and administration. The manager is ing goes, “They don’t care how much you know until a hired contractor that works under direct supervision they know how much you care.” of the Board and according to conditions of the man- Meeting expectations is the manager’s greatest agement agreement. The job is complex and each day challenge. By preparing thoroughly for meetings, presents a new series of challenges. De”myth”tifying expectations are more likely to be met. Meeting half- the job tells you what the manager is not. way won’t do it. Managing Expectations Manager Mentoring Community association managers wear many hats A professional community association manager serves while handling association business. However, the in many capacities—rule enforcer, money collec- managers’ role at Board and homeowner meetings and tor, maintenance supervisor, newsletter editor, social the follow-up is pivotal to overall effectiveness. Here chairperson, and on and on. One of the most impor- are some of the key traits of a competent manager. tant functions is as mentor to the Board. Mentoring As coach. The manager coaches the board of directors provides an informed and objective perspective that is in its duties and helps organize and conduct meetings critical to Board decision making.CAM_book.indb 94 6/12/08 7:44:34 PM
  • 97. Board Operation, Teamwork, and Problem Solving     95 Much manager mentoring goes on at Board meet­ the manager has thought long about what would work ings since that is where decisions are made. Since best. Having a recommendation also reduces the time Board decisions can have sweeping implications, spent talking about uncomplicated or straight-forward having a manager’s informed input can make all the issues. difference in the outcome. By the same token, the Pointing out conflict of interest. Conflict of inter- Board needs to seek and hear what the manager has est is not always easy to detect by those guilty of it. to say. To this end, the manager should jump in where In community associations, it usually starts innocently appropriate to assist the Board in coming to reason- enough as a way to save the association money or time able conclusions. by hiring a director’s nephew to mow the lawn, for Managers have the benefit of experience and example, or paying a director to oversee a renovation perspective. That experience is grounded in work- project. It seems logical at the time, but it sets up the ing knowledge of the governing documents, applica- Board for accusations of self dealing. It’s the manag- ble state statutes, and good business practices. Both er’s job to call a spade a spade and point the Board to statutes and documents should be kept on hand with alternatives. important sections highlighted. Good business prac- tices for community associations include fiduciary Defusing personality conflicts. Personality clashes duty, clear communications, long range planning, are not uncommon on an association Board. The financial stewardship, avoiding conflict of interest, manager can see the ones that are interfering with and seeking wise counsel for informed decision. In association business and discreetly counsel the offend- these areas, the manager’s role is key. ers. In some cases, a director should be encouraged to Here are some specific areas where the manager step down from the Board if continuing conflict com- should mentor the Board: promises the ability to perform the duties. Education. Volunteer Boards typically don’t devote a Keeping the meetings on track. Unfocused and lot of time to getting educated. They tend to be issue lengthy board meetings are one of the main reasons oriented, seeking answers as needed. But there are good volunteers don’t serve as directors. The manager fundamentals that every Board needs to understand: can help keep the meeting productive and short by How to run a meeting, how to build a budget, how to tracking the agenda, pressing for decisions, and point- deal with conflict, how to run a successful renovation ing out when the discussion is off topic. Manager’s project, and how to make rules. Understanding the recommendations are invaluable to reaching decisions principles behind these issues will streamline business. and keeping the meeting moving. The manager should educate the Board and promote Mentoring the Board is a high and worthy call- educational resources when available. It will benefit ing. A good mentor works from the sidelines coaching both the community association and the manager’s the team and does not lecture, talk down, or be heavy ability to get work accomplished. The better the Board handed. Instead of pushing, the good mentor encour- understands what the manager does, the less time the ages better performance allowing the Board to take Board will spend micromanaging the manager. credit for the good results. Success encourages more success. What’s good for the community association Avoiding legal quagmires. The manager can be Board is good for the manager. indispensable in steering the Board away from legal traps caused by inequitable rules and inconsistent Manager Key Indicator Checklist enforcement, poor collection policies, disability access issues, and inadequate maintenance planning. There are character traits and ways of doing busi- The Board can attract litigation by both being overly ness that make some community association manag- aggressive and too passive. The manager knows when ers much more effective than others. Key indicators that risk is likely. touch on significant aspects that make or break the effective association manager (or association manage- Informed decisions. Boards meet infrequently and ment company). Check the appropriate boxes as they it’s common for directors to show up ill-prepared apply to you (see Figure 1). for decision making even when meeting information packets have been provided in advance. Since deci- sions are called for, directors will make them even when they aren’t familiar with the issues. It’s impor- tant that the manager review the issues and make specific recommendations rather than let the Board meander to some conclusion. While the Board may come to a different conclusion than the manager’s, the recommendation should be the starting point sinceCAM_book.indb 95 6/12/08 7:44:35 PM
  • 98. 96     Bert Rodgers Schools Manager Key Indicator Checklist Item Yes No 1. Communicates openly and honestly with the Board? q q 2. Responds to information and maintenance requests promptly? q q 3. Reasonably accessible by phone and email? q q 4. Prepared for Board and owner meetings? q q 5. Vigorously pursues delinquent homeowner fees? q q 6. Produces complete, readable, and timely financial reports? q q 7. Obtains at least 3 qualified proposals for large renovation projects? q q 8. Regularly attends association continuing education programs? q q 9. Knowledgeable about construction and maintenance management? q q 10. Spends funds prudently without sacrificing quality and workmanship? q q 11. Uses only licensed, bonded, and insured service providers? q q 12. Consistently acts with the community association’s best interests in mind? q q 13. Good understanding of community association governing documents? q q 14. Has a proactive management style? q q 15. Has conflicts of interest with vendors or maintenance providers? q q 16. Profits from service providers services? q q 17. Is the association receiving the benefits of volume purchasing? q q 18. A specialist in community association management? q q Totals ___ ___ If you scored 14 or more YES answers, you are a great manager. Give yourself a pat on the back. A score between 9 and 13 YES responses indicates you may need improvement. Identify weak points and develop a plan for increased training and education in those target areas. Between 4 and 8 YES responses indicate a need to develop a timeline for correction of areas that are falling short of expected performance. Less than 4 YES responses…May Day! May Day! Bail out before impact! Figure 1: Manager Key Indicator Checklist TRY ON A NEW HAT serve. “The nominations are closed”, a vote is taken, and suddenly you’re on the Board! What does being Board members. The following content is designed on the board mean? Who is going to teach you? How to give you a perspective from the other side of the much does it pay? table, allowing you to gain a greater understanding of What does it mean to be on the board? You have the challenges these volunteers face. As you temporar- made a commitment that you will serve the commu- ily put on the board member hat, realize how you can nity interests to the best of your ability, be fair on turn these insights to your mutual advantage. Now matters that come before the board, will do your best enter the world of the board member... to preserve and enhance the values of the association common areas, and that you will spend money in a BOARD MEMBERSHIP prudent manner. Being a director also means that you have fiduciary duties which require making reasonable Welcome to the Board! investigation into matters dealt with and acting in a The annual homeowner meeting convenes. The presi- businesslike, prudent manner when making decisions. dent of the association announces that the floor is open Who is going to teach you? Hopefully, you have for nominations. A fellow homeowner says to you, several veterans on the board who will help you. Ide- “You know, you would make a good board member.” ally, you will have an experienced property manager Before you have a chance to reply, some body move- who works closely with the board and is willing to ment indicates that you are willing, ready, and able to offer guidance. Continuity is one of a board’s great-CAM_book.indb 96 6/12/08 7:44:35 PM
  • 99. Board Operation, Teamwork, and Problem Solving     97 est challenges. Ask questions. How have issues been you and do your best. If you serve as a committed handled in the past? Current boards should carefully member, it will be one of the more rewarding experi- consider plans laid by previous boards and not change ences that you will have. them impulsively. Take time to become familiar with your association grounds and facilities. Review the association governing documents, the rules and Annual Meeting Checklist regulations, and any other board policies in order to develop a familiarity with them. (Keep a set handy for Include in the Meeting Notice: when specific questions arise). q eeting Date, Meeting Time, Location, and M Make a commitment to attend all board meetings Agenda and prepare in advance by studying the agenda and q ail Proxy for all to execute and return at least 3 M related material. There generally aren’t many meet- days before the meeting to insure a quorum ings and each deals with critical issues. Give them Notice Requirements your full attention. Budget time offers an opportunity to help build a q ow many days in advance is notice required? H sound financial future for the community. The 2 basic _______ parts of the budget are operating (deals with routine q ail notice _____________. Note the actual date M maintenance and day-to-day expenses) and reserves mailed. (long range, major repairs and replacements). As a Board Election member of the Budget Committee, you will be asked to predict future financial needs by using both past q umber of vacancies: ______ N budget history and new information accumulated for q ames of retiring directors:__________________ N future repairs. __________________________________________ How much does the job pay? While no money is q ength of each term [if varies] L paid, there are many personal rewards to be had for a ________ ________ ________ ________ job well done. Dealing with people requires patience and flexibility. Remember that while disagreement is Quorum not always avoidable, you were elected to make deci- q Percentage of members required? _______% sions. Consider carefully those decisions put before q Developer lots/units:_______ q Owner lots/units:_______ Board Meeting Agenda q Total lots/units: _______ q Total needed: _______ Board Meeting Nottacare Condominium q Proxies received: _______ April 1, 2008, 7 - 9 pm at the Clubhouse q Number needed in person: _______ Other Items 7:00-7:15 Homeowner Forum 7:15 Call Meeting to Order - President q Sign-in Sheet 7:15-7:25 Review Approve Minutes to Previous q Extra copies of Agenda Board Meeting - Secretary q Ballots 7:25-7:35 Financial Report - Treasurer q Minutes of last year’s meeting 7:35-7:45 Manager’s Report q Financial/Treasurer’s Report Committee Reports q Current budget 7:45-7:55 Landscape 7:55-8:05 Architectural Review q Election Tabulation Sheets 8:05-8:15 Rules Enforcement q Committee Sign-up Sheets 8:15-8:25 Newsletter q Architectural Design Policy Old Business q Architectural Change Request 8:25-8:40 Authorize lien filing on Unit 14 q Pool/Tennis Registration forms New Business q Pool/Tennis Court keys 8:40-8:50 Review request for deck installation at 123 q Parking stickers or ID tags Easy Street 8:50-9:00 Review approve Park Policy proposal q Governing documents - CCRs 9:00 Adjourn Meeting q Pens/pencils/notepads Figure 2: Sample Board Meeting Agenda Figure 3: Sample Annual Meeting Checklist Source: http://regenesis.net/3/Meetings-Agenda.htm (Source: Regenesis.net.)CAM_book.indb 97 6/12/08 7:44:36 PM
  • 100. 98     Bert Rodgers Schools Action/Timed Agenda Socialize the membership. People tend to want to Keeping the meeting moving and getting business help those that they know personally. However, many done is what successful meetings are all about. Fig- are shy and don’t make friends easily. The association ure 2 is a sample of an agenda with each item allot- can promote several socials annually to facilitate the ted a certain time to control the length of discussion. process. Consider a spring clean-up party, pool party, or just plain potluck. It will help create a real “com- Action words like approve and authorize are used to munity”. guide the issue to a vote. Assign real jobs to do. It’s been said, “A commit- Annual Meeting Checklist tee takes minutes and wastes hours”. There is noth- ing more futile and frustrating than a job with no job Annual meetings are more productive, organized, and description or substance. There is real work to do at harmonious with a bit of advance planning. Figure 3 is each community association. Directors and committee a useful checklist to prepare for this important event. members should have clear “marching orders” detail- ing exactly what the objectives are, the time frame, Cultivating Volunteers and the money available to help get the task done. A common community association board ques- Be an encourager. It is incumbent on the board to tion is: “How do we get better participation from our take the lead in cultivating volunteers. The success- members with board and committee work?” Many ful leader motivates by persuasion and not authority. associations experience a large degree of apathy from Remember, “A servant does not lower himself but the membership when it comes to volunteering. On elevates others”. the one hand, one of the reasons people buy into community associations is to reduce personal respon- The ask. This is a little-used technique. Many folks sibility, like for exterior maintenance. On the other don’t think they’re needed or talented enough. A per- sonal request can go a long way in getting these folks hand, there are many willing and talented members to step up. Something as simple as “You know, you who could and would participate if given the right set would be really good at (fill in the blank)” make the of circumstances. ask very personal. You will be surprised how many There is an art to recruiting volunteers. Posting a will respond and will be flattered and receptive. notice is not the right approach. You must woo them on many levels and over time. Here are some of the Respect their time. Part of what keeps volunteers proven methods: away is fear of over commitment. The board should be very sensitive to time demands on volunteers. Board Communicate regularly. A frequent complaint of meetings should be few and action packed. With members is not being kept informed. To draw out vol- proper scheduling and timed agendas, community unteers, it’s critical that they know there is an ongo- association business can get done with a minimum of ing need. Also, some members develop a suspicious time and fuss. When wooing volunteers, make sure to nature about board motives when kept in the dark and explain the time requirements for the job. The prop- use it as an excuse not to be involved. Let them know erly managed association should demand hours, not what you’re up to early and often! Repeated pleas for days or weeks of volunteer time each year. If you’ve help will have their effect. A newsletter and flyer dis- achieved this, let potential volunteers know. tribution box (the kind used by real estate agents) is an inexpensive and convenient way to get the word out. Demystify the job. While having special training or talent can be a bonus to a board or committee posi- Give credit where credit is due. People love recog- tion, it isn’t required. Encourage those that simply nition. Make sure that directors, committee members, want to serve because they have the time and interest. and other volunteers are given formal recognition for These traits are more valuable in the long term than their efforts by way of meetings, minutes, and news- special training. letters. Use every opportunity where there is an audi- ence. Be specific in your praise. For example, point Aim high. Look for ways to pique interest of achiev- out members who show superior landscaping abili- ers. If you aim too low, folks don’t think you need ties. (They are obvious candidates for the Landscape them. Identify several projects that take real thought, Committee). Award Certificates of Achievement at planning, and work but demonstrate visible results. the annual meeting. Remember to recognize faithful Assign those special projects to members that like to volunteers doing more mundane day-to-day tasks like “git’er done”. light bulb replacement or trash pick up. It is a wise 24/7 recruiting. The month prior to the annual meet- board that makes a point of recognizing mere effort ing is not the only time to look for board candidates for its own merits. and volunteers. New members often have an interestCAM_book.indb 98 6/12/08 7:44:36 PM
  • 101. 100     Bert Rodgers Schools Meeting Seating often millions of dollars of community assets. As such, they should be held at places and times conducive to The seating arrangement at meetings is critical to a business. Meetings held in someone’s home prove productive outcome. Foreign diplomats are particu- challenging. larly careful in choosing the shape of the table and who sits next to whom since the slightest faux pas can have At home meetings. Considering that owners are disastrous results. In King Arthur’s day, meetings were entitled to attend Board meetings (as an audience, not held at a Round Table so that all could freely partici- participants in the discussion or voting), there should pate without the King dictating the debate or worse. be adequate seating available for them. If meetings are (Swords, lances, and maces were checked at the door). held in tiny quarters with room only for the Board, There are lessons to be learned from this age-old guests are effectively shut out and the impression is that they aren’t welcome. Seek the most spacious home experience that can be applied to community associa- available to accommodate both Board and guests. tions. Associations have both Board and homeowner Avoid using living rooms except for guest seat- meetings and both formats demand very different seat- ing. It’s very difficult to juggle papers or take notes ing considerations. while sitting in a Lazy Boy. Meetings should be held Board meeting seating. Board meetings are designed at a table large enough to spread out agendas, reports, to transact regular business for the care and welfare of and other papers without having to continually shuffle PROXY Nottacare Condominiums Annual Owners Meeting Saturday 7 p.m. on December 7, 200___ at the Clubhouse 1515 Leisure Lane, Peaceville, USA INSTRUCTIONS A quorum of at least _____% of the voting interests must be present either in person or by proxy (a representative you appoint to vote on your behalf) to hold a valid homeowner meeting. You can appoint anyone of legal age as your Proxy. Proxies assigned to “A Director of the Board” will be distributed equally among the attending Directors who are not running for re-election. You may designate a specific Director if you wish with Option #1. Please complete and return by the deadline whether you plan to attend the meeting or not to ensure a quorum. If you attend the meeting, you may reclaim your Proxy and vote as usual. I appoint: (CHECK ONE BOX ONLY) q Option #1______________________________________________________________________________________ q Option #1a If my Representative fails to attend the meeting, this proxy may be reassigned to a Director of the Board who is not running for re-election for both voting and quorum purposes. q Option #1b If my Representative fails to attend the meeting, this proxy may be reassigned to a Director of the Board for quorum purposes only. q Option #2 A Director of the Board who is not running for re-election for both voting and quorum purposes. q Option #3 A Director of the Board for quorum purposes only. Date:________________________ Signature: _ _______________________________________________________________________________________ Print Name:_______________________________________________________________________________________ Address:__________________________________________________________________________________________ Return to Board Secretary or Property Manager no later than ____________________________________________. Figure 4: Sample of a ProxyCAM_book.indb 100 6/12/08 7:44:37 PM
  • 102. Board Operation, Teamwork, and Problem Solving    101 the stack. If using a kitchen table, remove everything All board members should have a good understanding except meeting items. Turn off home and cell phones of these basic parliamentary procedures so meetings during the meeting since the ringing always disrupts can flow smoothly. the discussion and pulls someone away from the busi- ness at hand. (They’re probably telemarketers that will BOARD TEAMWORK only foul your mood anyway.) If there is a table head, the Board president should Group Think sit there and direct the meeting. The head of the table is the historical place of authority and there is no rea- Community associations are often portrayed as the son to buck tradition. The secretary taking minutes detached governed by thankless volunteers. It’s the should sit at the opposite end of the table so all direc- blind leading the blind—the clueless in charge of those tors can be more easily seen and heard. Guests should that could care less. So how should this union of the not sit at the meeting table since this is an invitation unwilling go about acquiring the wisdom it needs? to actively participate in the business. James Surowiecki makes the case that a group is Avoid the temptation to have the Board face the smarter than the smartest individual, in his book Wis- guests as a panel. This seating format also invites par- dom of Crowds. Surowieki’s research indicates that ticipation from the guests and makes it difficult for the wisdom of answers from those with only general the Board to talk amongst itself. life experience exceeds the wisdom of world experts. Here are some excerpts from an interview: Formal Board Meetings. Ideally, the Board should How did you discover the wisdom of crowds? The meet at a location that is designed for meetings. idea really came out of my writing on how markets Basics include a large conference table, good light- work. Markets are made up of diverse people with ing, bathrooms, temperature control, and room for different levels of information and intelligence, and guests. If none exists in your association, seek out yet when you put all those people together and they meeting rooms in area community centers, libraries, start buying and selling, they come up with generally intelligent decisions. I realized that it wasn’t just mar- and churches. They may be closer and cheaper than kets that were smart. you think. Could you define “the crowd?” A “crowd” is any There are a number of advantages to moving out group which can act collectively to make decisions of the kitchen into a formal meeting place. The dis- and solve problems. So, big organizations like a com- traction potential is enormously reduced: no phones, pany count as crowds and so do small groups, like food, TV, kids, dogs, and neighbors. The business a team of scientists working on a problem. But so meeting takes on a true business nature. Folks are less are groups that aren’t really aware of themselves as likely to linger in this environment or get into pro- groups, like investors in the stock market. They make up crowds, too, because they’re collectively produc- tracted discussions. As with home meetings, seating ing a solution to a complicated problem: the choices should be adequate for both Board and guests—Board of investors determine stock prices. at the conference table and guests off to the side. Under what circumstances is the crowd smarter? Annual community association meetings. These There are 4 qualities that make a crowd smart: meetings should be carefully choreographed. Always Diversity. Group members are bringing different hold them in a formal meeting facility large enough to pieces of information to the table. accommodate all owners. Owners normally sit gallery Decentralized. No one at the top is dictating the style with the Board at a head table unless your group crowd’s answer. is small enough to fit around an Arthurian Round Summarizes Answers. Combines all member Table. Ideally, the head table should be “half moon” answers into one collective verdict. or “U” shape so all directors can see each other as Independent. Individual answers are independently well as the audience. Avoid having the Board sit panel arrived at without worrying about what others think. style unless the meeting is intended to be a question And what circumstances can lead the crowd to and answer session with directors on the firing line. make bad decisions? Bad answers are more likely Make sure to have a proper sound system if the room when most of the group are biased in the same direc- requires it. tion. When diverse opinions are squelched, groups Meeting seating is critical when it comes to get- tend to be dumb. It usually spells disaster when too ting things accomplished efficiently. Set your sites for much attention is paid to what others think. Stock successful meetings and, don’t forget to check your market bubbles are a classic example of group stu- pidity: instead of worrying about how much a com- swords at the door. See Figure 5 for Roberts Rules of pany is really worth, investors start worrying about Order and Parliamentary Procedure. In order for a how much other people think the company is worth. community association to conduct business in a pro- The wisdom of crowds is that the best decisions come fessional and effective manner, procedures are needed. from independent individual decisions.CAM_book.indb 101 6/12/08 7:44:37 PM
  • 103. 102     Bert Rodgers Schools What kind of problems are crowds good at solv- sophical issues and not to transact business. Business, ing and what kind are they not good at solving? as always, should be handled in a duly-called board Crowds are best when there’s a “right” answer to a meeting open to the homeowners. problem. If there is a factual question, groups consis- When it comes to having critical information tently provide the correct answer. Groups aren’t good at hand, the Board Manual fills the bill. The Board at problems of skill—for instance, don’t ask a group to perform surgery or fly a plane. Manual is a collection of essential association infor- mation that can be easily and quickly accessed to Why are we not better off finding an expert to respond to questions and emergencies such as: make all the hard decisions? Experts, no matter how smart, only have limited amounts of informa- • Governing Documents (Declaration, Bylaws, tion. They also have biases. It’s very rare that one Articles of Incorporation) person can know more than a large group of people, • Rules Regulations and almost never does that same person know more about a whole series of questions. It’s actually hard to • Current Operating Budget Reserve Study identify true experts. • Insurance Coverage Recap Agent Contact How can the crowd’s collective wisdom help an Information individual? The principle works for individuals as • Management Planning Calendar long as the groups are diverse and individuals try to be as independent as possible. • Maintenance Insurance Areas of Responsibility Is the wisdom of crowds about consensus? No. • Current Financial Report The wisdom of crowds emerges from disagreement. • Meeting Minutes (last 12 months) It’s the “average” opinion of the group, but not an • Newsletters (last 12 months) opinion that every one in the group can agree on. Collective wisdom does not result from compromise. • List of Board Members, addresses, phone numbers, and email addresses In the final analysis, while it’s common to rely on the wisdom of experts or leaders when making difficult • Management key contact, phone numbers, email decisions, it’s more effective to rely on the wisdom of address the group. Together all of us know more than any one • Utility Companies (trash, water, power, gas, cable, of us does. The Board of a community association can phone) phone numbers draw wisdom from its members by involving them in • List of Regular Contractors, key contact, phone policy and rule formation, the annual budget exercise, numbers (landscape, janitorial, etc.) architectural design, and a host of other decisions. • Map showing streets, buildings, homes, utility Involving the members adds another bonus. Compli- meters, fire extinguishers, underground plumbing, ance is more likely when the governed are involved in equipment, etc. the governance. Remember the Boston Tea Party? • Security Information (keys, passwords, etc.) Informed Decision Making • Tool and Equipment Inventory • Equipment Information (elevator equipment, park- As a member of the Board, you are charged with ing garage door, pool equipment, etc.) directing association business and being in the know. Since you are often directors of a multimillion dol- Organize this information by subject in a 3 ring lar nonprofit corporation (asset-wise), you should binder so updates can be easily made. Provide one to carefully consider all business before acting. Asso- each board member. With this basic information on ciation business is seldom cut and dried. Often there hand, most issues and crises can be addressed without are political ramifications to what the Board decides. scrambling. These decisions should not be made on the fly but Prepare for meetings. All Board meetings should only after careful reflection. have an agenda and related materials distributed to In some organizations, retreats are used as a way the directors at least a week in advance of the meeting. of getting groups to focus on important goals and Review things like financial reports, owner requests, issues. A retreat needs to be held apart from day to and contract proposals in advance of the meeting so day activities that invariably interfere: ringing phones, you’re not shooting from the “lip”. At the meeting, the kids’ rap music, and barking dogs make it impos- stick to the agenda. Do not allow owners to spring sible to focus on really tough issues. Consider gath- complicated issues at the meeting and expect a deci- ering in a community meeting room. Libraries often sion. Architectural change requests and rules enforce- have them available for little or no charge with the ment issues should only be considered after a full and advantage of an available copier. Churches are also complete written request is received and calendared options. Retreats are designed to talk about philo- for the Board Meeting.CAM_book.indb 102 6/12/08 7:44:38 PM
  • 104. Board Operation, Teamwork, and Problem Solving    103 BOARD TEAMWORK case study A Most Excellent Way to Board Teamwork This is how one Board of Directors successfully dealt with an issue that all too frequently haunts com- munity associations—special assessments. While the example is about a community in the Northwest portion of the U.S., this type of issue could apply to any community association in Florida. Tom, the Board President of Coastal Village Condominiums, slammed the telephone receiver down after talking to the property manager and breathed a heavy sigh. After having to deal with several significant dry rot projects over the past 5 years, there was more yet to come. How could this have happened? The association had spent several hundred thousand dollars already to fix dry rot—what now? Coastal Village had the misfortune of being built with the Northwest’s favorite building product, wood—wood framing, wood steps, wood siding, wood shingles. It was beautiful to look at, yes, but cold, rainy weather and wood buildings, unless properly constructed and maintained, are a formula for disaster. In the case of Coastal Vil- lage, the condominiums were built with T-111 siding, a type of decorative plywood panel with presawn grooves for accent. Where the siding panels met, decorative “batten’ strips were installed to cover the seams. On several recent site inspections, it was noticed that in places there was mushroom growth coming from beneath the bat- tens. Woodpeckers had also been drilling holes in the siding, a further indication of dry rot. So what is dry rot anyway? In brief, dry rot is wood cancer. Actually misnamed, dry rot occurs under wet, cool, overcast conditions that frequent much of the Northwest. Spores that thrive under these conditions grow and multiply, breaking down wood fibers and structural integrity of wood building materials. Dry rot spores love dark hidden places beneath the siding like studwalls, subflooring, and floor joists. Unlike termites and carpenter ants, there is often no telltale signs until it erupts on the surface. A dry rot spot in the siding is often indicative of a much worse problem beneath—the proverbial tip of the iceberg. Dry rot causes major structural damage and is a call for action. The Board of Directors and property manager met to discuss the preliminary findings. It was recommended that an inspection report be developed that could be used as a basis for action. Who was to develop this report? While a licensed building inspector can identify dry rot, correction usually requires technical knowledge of construction materials and techniques. The Board approved an architect experi- enced in dry rot and gave him the task of physically inspecting all buildings. Lastly, a written communication was mailed to all homeowners advising of the dry rot alert. It took the architect several days to complete the site inspection. Siding was probed for softness and marked, crawlspaces were inspected where possible for rotten subfloors or joists, batten boards were removed, and all roofs were inspected. It was obvious that there had been a major original construction oversight: the siding had not been preprimed before the battens were nailed on leaving raw wood underneath the battens. Over time, rainwater had seeped behind the battens, soaking the wood and giving dry rot a foothold. The “weather” sides of the buildings showed a greater decay but virtually all sides of all buildings showed varying degrees of deterioration. The architect wrestled with the proper solution: Do a remedial repair (patch) or a comprehensive recon- struction? The Board had experienced several “partial” fixes only to return to the problem all too soon. A special Board meeting was called and all homeowners invited to attend. The architect presented a comprehensive report detailing his findings. His recommendation: replace all siding and trim boards performing needed repairs to the underlying structure. The Board’s logical response was: How much is all of this going to cost? The Bidding Process: An invitation to bid the project was sent to experienced area contractors. Experienced meant specific and verifiable dry rot repair experience. Area contractors were chosen for proximity and ease of warranty follow-up work. The use of in-state contractors also meant more recourse for warranty issues through the Construction Contractor Board. Interested contractors met with the architect at a bidder’s walk-through held at Coastal Village. Questions were asked and answered by the architect. The architect also considered suggestions from the contractors on materials and correction techniques to use. The 3 hours were well spent and revised job specifications were sent out to the contractors within several days. They were given 30 days to submit a written bid. Once the bids were received, the Board scheduled another open meeting to which homeowners were invited.CAM_book.indb 103 6/12/08 7:44:38 PM
  • 105. 104     Bert Rodgers Schools The bid review meeting was most interesting. Dry rot repair bids generally cause much uneasiness. Why? There are always 2 parts to the bid: Part One offers a set price to repair what can actually can be seen. Part 2 deals with what cannot be seen on a “time and material” basis. So the Board asked the logical question: How much should we plan for in total? The architect’s best guess: triple the Part One bid. There is an expression that goes, “If you’re going to New York, don’t stop at Chicago”. After discussing the dry rot repair bids, one board member suggested that if all siding was to be removed, why not replace the outdated aluminum windows with more energy efficient ones at the same time? Aside from the fact that the cost of the sid- ing repair alone was sizeable, the suggestion made a lot of sense. The Board, keeping an open mind, agreed to look at options and costs. Then, a board member/building contractor decided to submit a bid to do the work. That bid was substantially cheaper than the others received. Since there was an obvious conflict of interest, the remaining board members agreed that if his bid was accepted, he would have to resign from the Board. The architect inspected the contrac- tor’s work and references and reported back to the Board that all was acceptable. Based on the recommendation, the Board accepted his proposal and he promptly resigned from the Board. The stage was now set. Based on combined estimates to replace all siding, paint, roofs (didn’t I mention that roofing was needed too?) and install new windows, the Board approved a special assessment of, hold on to your hat... $14,000 per unit. An elaborate presentation was carefully prepared and laid out at the Annual Homeowners Meeting 6 weeks later. Samples of dry rotted siding, window, and roofing samples were exhibited. There were several vocal own- ers that made their case against the assessment loudly. One howled “MISMANAGEMENT”. Some had legitimate concerns about not being able to pay. However, most listened patiently to the discussion. All were given a chance to ask questions and give opinion. It was a l o n g meeting. The board called for a vote of confidence and fell only a few shy of unanimous approval. Following the meeting, a formal notice of special assessment was mailed to all owners of record. For those of limited means, a 3 year payment option was included while a discount was offered to those that prepaid. It is said that an earthquake’s after shock is often worse than the initial shockwave. After the special assess- ment notice was received by those that had not attended the Annual Meeting, the Board was bombarded with phone calls again. It was obvious that there was still more damage control to be done. Another meeting was called and many that missed the Annual Meeting were in attendance, as well as others that had come before. Of course, there was a rehashing of old information for those who missed it the first time around. The Board patiently indulged all input, positive and negative. While the meeting was long, this time it was different. Many of the owners who had attended the Annual Homeowners Meeting stood in defense of the Board. By meeting’s end, the overwhelming majority again affirmed the special assessment. Some thoughtful owners actually offered well deserved thanks to the Board for their hard work job. The Moral of the Story: This Board undertook a HUGE challenge successfully using the following tech- niques: Teamwork: Once alerted to a problem, a meeting of the whole Board was convened. The Board acted as a unit and unity was crucial to success. Consultation: A specialist was hired to determine the scope of the problem and proper correction. That informed opinion served as a solid foundation for action. Communication: Homeowners were notified early and updated regularly. Integration: All owners were allowed to give input into the solution. Patience: The Board systematically analyzed and implemented the plan. No Conflict of Interest: When a board member wanted the job, he did not vote on the matter and stepped off the Board when he was selected. Re-evaluation: The Board made course corrections, like adding window replacement, when logic dictated. Leadership: The Board was elected to make tough decisions and they understood the need to lead. This Board was successful by integrating all of these important components. In so doing, they succeeded in achieving the ultimate goal of a community association: HarmonyCAM_book.indb 104 6/12/08 7:44:39 PM
  • 106. Board Operation, Teamwork, and Problem Solving    105 Get good advice. One area where Boards often Proposals ought to be prepared in writing and stumble is failure to seek out competent advice. Use distributed well in advance of the meeting in which your insurance agent, an attorney specializing in com- a decision is required. This encourages prior discus- munity association law, a CPA, reserve analyst, engi- sion and consideration, helps the presenter anticipate neers, and architects when the subject matter is clearly concerns, minimizes surprises, and involves everyone beyond the expertise of the Board. Do not “wing it” in creating the proposal. If the necessary groundwork to save a few bucks. There is too much riding on the has not been done, the wisest choice might be to send outcome and the owners are depending on you. the proposal to committee. Proposal writing is diffi- The Board is not charged with knowing every- cult to accomplish in a large group. The committee thing but to make informed decisions. Gather infor- would develop the proposal for consideration at a mation indicated for a Board Operations Manual and later time. The presenter reads the written proposal assemble it now! And, give yourself time to reflect aloud, provides background information, and states on the impact and consequences of the decisions you clearly its benefits and reasons for adoption, including make. Those decisions directly affect the harmony of addressing any existing concerns. the community. The Formal Consensus process consists of 3 levels: Level 1: Broad Open Discussion: Allows everyone Formal Consensus to express their perspective, including concerns, but When it comes to decision making in community group time is not spent on resolving problems. The associations, parliamentary procedure (Roberts scope is broad, allowing the discussion to consider Rules) is often the basis for making them. It provides the philosophical and political implications as well as a systematic and efficient way to get business done. the general merits and drawbacks and other relevant However, parliamentary procedure is based on the information. democratic notion of majority rules. Sometimes you Level 2: Identify Concerns: The group focuses its win and sometimes you lose. Americans have come to attention on identifying concerns, still not resolv- think this is the best option. While the system works ing them. Reactive comments, even funny ones, and pretty well, there is another process for decision mak- resolutions, even good ones, can suppress the creative ing called Formal Consensus. ideas of others. The concerns are identified and pub- Consensus is generally understood to mean that licly listed, which enables everyone to get an overall all parties agree to a proposal or the proposal fails. picture of the concerns. The focus is on identifying But it’s hard enough to get 2 people to agree much the body of concerns and grouping similar ones. less a group, so consensus is rarely sought or consid- At this level, only concerns are to be expressed, ered. The idea behind Formal Consensus is a process reasonable or unreasonable, well thought out or vague that leads a group through levels of decision making feelings. The facilitator wants to interrupt any com- which is more inclusive, invites creativity, and group ments which attempt to defend the proposal, resolve solution making. For those used to democracy, it may the concerns, judge the value of the concerns, or in take some practice since a goal of Formal Consensus any way deny or dismiss another’s feelings of doubt or is to engage the silent majority which typically don’t concern. Sometimes simply allowing a concern to be or won’t express an opinion. expressed and written down helps resolve it. Formal Consensus is a process which requires an Level 3: Resolve Concerns and Call for Consen- environment in which all contributions are valued and sus: The group explores resolutions. The scope is very participation is encouraged. To develop this process narrow. The focus of discussion is limited to a single requires an organization to define commonly held unresolved concern until it is resolved. To encourage principles which form the foundation upon which the the process, the facilitator asks, “Are there any unre- process is built. solved concerns?” or “Are there any concerns remain- With Formal Consensus, decisions are adopted ing?” If there are, concerns are discussed. If, after a when all participants consent to the outcome of discus- suitable interval of silence, no concerns are raised, the sions about a proposal. People who do not agree with facilitator declares that consensus is reached and the a proposal are responsible for expressing their con- proposal is read for the record. If, at this level, consen- cerns. No decision is adopted until there is resolution sus cannot be reached, that too should be announced of every concern. When concerns remain after discus- so other business can be attended to. sion, individuals can agree to disagree by acknowledg- It is important to note that the question is not “Is ing that they have unresolved concerns, but consent there consensus?” or “Does everyone agree?” These to the proposal anyway and allow it to be adopted. questions do not encourage an environment in which Therefore, reaching consensus does not require that all concerns can be expressed. If some people have a everyone must be in complete agreement. concern, but are shy or intimidated by a strong show-CAM_book.indb 105 6/12/08 7:44:39 PM
  • 107. 106     Bert Rodgers Schools Roberts Rules of Order and Parliamentary Procedures Justice and courtesy to all One thing at a time The rule of the majority The right of the minority Securing the Floor When a member wishes to bring a matter before the house, he /she must first “secure the floor” (be recognized and get permission to speak). To do this: 1. Member raises hand or rises to get Chair’s attention. 2. ember addresses the Chair by title (not by name) and says “Mr. (Madam) Chairman” and then waits for rec- M ognition. 3. he Chair recognizes a member by either calling the member by name or nodding in the member’s direction. T 4. nce recognized, the member “has the floor” and permission to introduce business. O Introducing Business As in securing the floor, there are several steps: 1. A motion is made by stating, “I move that...” “I move,” is the equivalent of, “I propose”. 2. nother member seconds the motion by saying “I second the motion.” The reason that a motion needs to be A seconded is to indicate that more than one person is in favor of discussing the matter. It is not necessary to secure the floor in order to second a motion. 3. The Chair restates the motion: “It is moved and seconded that ...” “Is there any discussion?” Discussing the Motion: Discussion of the motion allows opposing views on the motion to be debated. The Chair guides the debate by encouraging opposing views. For example, after a member has offered support for the motion, the Chair asks “Is there anyone opposed to the motion?” If a member expresses opposition, the Chair then asks “Does anyone want to speak in favor of the motion?” This back and forth method is important to limit endless discussions that are clearly in favor or opposed to the motion. If the Chair gets this impression, discussion should be ended and vote called for. If the motion is a hot topic, this process may continue for several rounds before the motion is ready to be voted on. Motions that are less volatile may have little or no debate. Based on the topic, the Chair may decide to extend or shorten the discussion before proceeding to a vote. Voting on the Motion by Voice: Voting by voice is the most common method. The form is “All who are in favor of the motion say Aye (or Yes)”. In response, the members who are in favor of the motion should say “Aye,” loud enough to be heard. The chair then says: “All who are opposed say No”. All those opposed then say “No”. The chair announces the result by saying either, “The Ayes have it, the motion is carried,” or “The Nos have it, the motion fails,” followed by lightly rapping the gavel on the table. This completes the vote on a particular motion. Voting on the Motion by Hand: If the motion is particularly sensitive, a hand vote and tally is advisable. The Chair says, “All those in favor, raise their hand.” A tally is then taken and recorded in the meeting minutes. The Chair then says, “All those opposed, raise their hand.” That number is recorded as well. The Chair may ask for those that abstain (do not vote at all) if there are those present. However, members should abstain only if there is a conflict of interest or lack of understanding or background on the motion being voted on. Voting on the Motion by Acclamation: If a motion being made is universally accepted by the members, the Chair may call for a voice vote by acclamation (no dissenters). If there is no objection, the vote is taken and recorded as such. Voting by Secret Ballot: For motions that are highly sensitive, such as election of officers, a paper ballot vote may be appropriate. In this case, each member indicates preference on a ballot, folds the ballot and passes it to the secretary or someone appointed to count the votes. In the case of elections where secret ballots are normal, the process isn’t necessary if there is only one candidate. In this case, the Chair may request a Vote by Acclamation. Types of Motions Main Motion: When a motion has been made, seconded, and stated by the Chair, all other business should be deferred until the motion has been disposed of. If the motion is long and involved, the secretary should write it down before proceeding to debate or vote. Motion to Amend: This motion changes, adds, or omits words in the original main motion. It is debatable and subject to a majority vote. Motion to Amend the Amendment: This motion changes, adds, or omits words in the first amendment. It is debat- able.CAM_book.indb 106 6/12/08 7:44:39 PM
  • 108. Board Operation, Teamwork, and Problem Solving    107 Voting Procedure: The main motion has been amended and subsequently re-amended. The first vote deals with the re-amendment. The second vote deals with the amendment. The final vote deals with the main motion (as amended if appropriate). Motion to Commit: When it becomes apparent that a particular motion requires further investigation or study, it may be moved to commit the motion to a committee for further review. This motion is debatable and amend- able. Motion to Table: This motion postpones the subject under discussion to some time in the future. It is not debat- able or amendable. Motion to Take from The Table: The removal from the table a motion that has been previously tabled. It may be at the same or a later meeting. This returns the motion for further consideration; not debatable or amendable, and can have no subsidiary motion applied. It takes precedence over any main motion. Motion to Postpone Definitely: A motion that automatically comes up under Unfinished Business at the next meeting. It is a debatable motion. Motion to Adjourn: This motion is in order except when a speaker has the floor, a vote is being taken or when the assembly is in the midst of urgent business. When a motion is made to adjourn to a definite place, and time, it is debatable. Motion to Reconsider: The motion to reconsider a motion that was carried or failed is in order if made on the same day, but must be made by one who voted with the prevailing side. Motion in question can be twice recon- sidered. It is debatable. Question: This motion is made to close debate on the pending motion. It is not debatable. The form is “Mr. (Madam) Chairman, Question (I move we vote on the motion).” The Chairman then asks, “Shall debate be closed and the motion voted on?” If this is adopted by a 2/3 majority, the motion is immediately voted upon. If not, dis- cussion continues. Point of Order: This motion is always in order, but can be used only to present an objection to a ruling of the Chair or some method of parliamentary procedure. The form is “Mr. (Madam) Chairman, I rise to a point of order.” The Chairman: “Please state your point of order.” After the member has stated the objection, the Chair answers either “Your point of order is sustained” or “Your point of order is denied.” The Chair’s decision may be appealed. If appealed, the Chair addresses the assembly and says, “Shall the decision of the Chair be sustained?” This is debatable and voted on like any other motion. A majority or tie vote sustains the decision or reverses the decision of the Chair. Point of Information: Request that is made when a member desires clarification of details. The member may inter- rupt a speaker and need not obtain the floor. Repeal: Motion to revoke a former action by the group. It may completely remove the motion that originated the action. It may or may not include that the former motion be “struck from the records.” Parliamentary Procedure in Brief 1. Securing the floor Member raises hand or rises. Member addresses the chair. Chair recognizes member. 2. Introducing the business Member makes a motion. Another member seconds the motion. Chair states the motion. 3. Voting on the question Chair takes the affirmative vote. Chair takes the negative vote. Chair announces the result. Figure 5: Roberts Rules of Order and Parliamentary Procedures (See other resources: Roberts Rules Online and Parliamentary Cheat Sheet. A little humor: Bob’s Rules of Disorder and Cartoon.CAM_book.indb 107 6/12/08 7:44:40 PM
  • 109. 108     Bert Rodgers Schools ing of support for a proposal, the question “Are there nition can come in plaques, kudos, and a pat on the any unresolved concerns?” speaks directly to them back. Do it often to build job satisfaction. But a key and provides an opportunity for them to speak. element of praise is trust. Trust is allowing volunteers Formal Consensus provides a creative way to autonomy over some area of authority, be it large or integrate conflicting views. Adopting this approach small. Resist the urge to micromanage and reinforce achieves a much higher degree of “buy in” by those trust by saying things like, “You make good decisions” who are subject to the decision. Being heard is the key and “I trust you in this”. Then let them do their best. and this process strives to make sure that all are. Limit criticism. When giving constructive criticism, For more on Formal Consensus, see www.con- consider carefully before delivering it. Constructive sensus.net. criticism is helpful when given on occasion and in the proper tone. Serial criticism (weighing in on every Perfecting Praise aspect of performance) delivers the message loud and There is a myth hanging around that association vol- clear that you have no confidence in their perfor- unteers are scarcer than hen’s teeth, and those that are mance. Who wants to serve for free and be harangued there must be loonier than a toon for stepping up. In at the same time? Praise takes practice. The more you reality, volunteerism is at the very core of the commu- do it, the better you get at it. Be sincere. Don’t gush. nity association concept. The neighbors-governing- Phoniness is worse than no praise at all. Praise makes neighbors concept will work best when volunteers over- perfect sense since it encourages performance and see the hired guns (manager). And why is this? Com- attracts volunteers. Volunteers are what every success- munity associations were conceived to give authority ful community association is about. to small private communities. That authority includes being able to customize the community according to PROBLEM SOLVING the wishes of the members. By definition, a non-own- ing manager can only execute the wishes and desires Pluralistic Ignorance of the client. That leaves the authority in the hands of Community associations sometimes come under attack the community association. To avoid an unavoidable for suppressing Bill of Rights freedoms. Sometimes conflict of interest, boards receive no compensation. the accusation is one of principle (I’m not allowed to People who work for no pay are called volunteers. do what I want) rather than a specific instance (I’m So, volunteers make or break a community associ- not allowed to post signs). While the media makes ation. The need for them is mandatory, not optional. it appear that this phenomena is pervasive, in reality, Fortunately, not all members are required to volun- they are isolated cases caused by an overly aggres- teer at the same time. (Whew, what a relief!) But the sive board, member, or both, who lock horns. Most need is still there and there must be a conscious and community associations actually enjoy an incredible continuing effort to draw them in. amount of consensus. And why is that? Is it a herding Job satisfaction consistently rates highest on rea- mentality? sons people work. Even where money would seem to According to ChangingMinds.org: be the prime driver, it’s not. With volunteers, money Groups all have norms of attitude and behavior isn’t even on the list, which makes job satisfaction all which are shared and which help form the identity of the more important. This is the key to attracting and the group. Adopting these norms, even if you do not holding volunteers: make the job rewarding. How, agree with them, is a part of the individual sacrifice that people accept as a price of group membership. you say? It is thus possible for groups to have norms which Get organized. Community association boards with- hardly anyone agrees with, but with which everyone out a plan are boards without a clue reacting to crises. conforms. These situations typically occur when the Who wants to serve in chaos? Get organized by estab- norms are older than all members of the group or when one member or a small group is dominant and lishing a meeting, social, and maintenance calendar. can force their attitudes on the rest of the group. Setting dates is setting deadlines for action. Action begets results. Results are what successful people are This phenomenon is called pluralistic ignorance all about. Success attracts volunteers who are success- (PI) by social psychologists. It is a state of mind in ful in their personal and business lives. which people mistakenly think their own thoughts and feelings are different from those of people around Plan ahead. Reserve studies forecast major renova- them and look to others for cues instead of trusting tion projects and provide a funding plan to pay for their own instincts. them. Looking far into the future reassures the mem- PI is particularly vexing when the situation bership. involves imminent danger. When the danger appears Recognize effort. (This is the praise part.) Recog- to be ambiguous (unsure if the danger is real or per-CAM_book.indb 108 6/12/08 7:44:40 PM
  • 110. Board Operation, Teamwork, and Problem Solving    109 ceived), the social rules of belonging and acceptance manages business has a profound effect on the mem- trump looking different or alarmist. Once the situa- ber home values and community livability. Whether tion is correctly interpreted as dangerous, pluralistic the other members are engaged or not, it behooves ignorance fades and logic takes hold: RUN! the Board to strive for excellence. But can PI explain what goes on in some com- munity associations? Do the associations really adopt Board Under Attack! norms that few agree with but with which most con- From time to time, a homeowner will launch a take- form? Well, yes and no. Norms come in all shapes and no-prisoners war against the Board because of some sizes. Some are contentious and others really don’t deeply felt issue. To these folks, the Board represents matter that much. Most issues in community associa- the Devil Incarnate and is untrustworthy, domineer- tions simply aren’t worth fighting over. There have to ing, irresponsible, and worst of all, in control. This be some standards and while no standard will reflect everyone’s standard, some standards are better than is intolerable to someone who wants what they want no standards. The driving consideration is whether and they want it NOW! Sometimes, the individual is the standard is “reasonable”. actually serving on the Board which makes matters Humans seem to possess an innate sense of fair considerably more onerous. play. It’s sometimes described as live and let live. Part The blitzkrieg tactics can be relentless. They of that sense is the willingness to sacrifice a personally harangue at Board meetings, are personally abusive, held belief for the greater good, as long as that sacri- write poison pen letters to other owners which detail fice doesn’t land too close to home. So, if the board the Board’s crimes in great detail. They are unyielding enacts a policy that is “reasonable” (not hot, not cold and uncompromising. Their objective is clear: to get but juuuuuust right), most will accept it and move on. rid of the Board so that something better (them) will On the other hand, those that have their closely take its place. held beliefs challenged or denied often respond Boards under such attack get understandably aggressively, even taking the matter to court, or in a apprehensive. (Hey, I’m a volunteer...I don’t need this few extreme cases, resorting to killing. This much is kind of grief!) Most folks so attacked either flee from clear: challenges to matters of principle can trigger confrontation, despair, or react angrily. Since this is disproportionately large responses. There are numer- war and not a simple difference of opinion, there are a ous court cases where extensive time and money (BIG variety of retaliations Boards under attack may take: money) has been expended to validate those matters Appeasement. Even though the attacker’s demands of principle. But when the judge’s gavel has fallen, win may be unreasonable, there may be an inclination to or lose, the adversaries will return to being neighbors give him what he wants so he’ll go away. Remember trying to find a way to get along. Only now, a wall when England and France gave Hitler Czechoslova- of pride usually takes the place of the contested prin- kia’s Sudetenland to make him go away? It’s important ciple. The feud isn’t over by a long shot. to consider the consequences. Know who you’re deal- A survey once stated: “It’s said that the 2 greatest ing with and whether this is a one-issue or a multi- problems in America are ignorance and apathy. What pronged attack. By appeasement, the Board may well do you think?” Answer: “I don’t know and I don’t open the door for future assaults. Appeasement didn’t care”. There is a degree of those attitudes in commu- work with Hitler and won’t work in this situation nity associations. It’s not malicious. Some folks just either. aren’t interested. That leaves association matters in Concession. A concession is different than appease- the hands of the few that are. The rest mill around in ment. It recognizes give and take within issues without the stockyard of apathy chewing their cud. running roughshod over principles. When conceding, Of the few that remain, some serve on the Board the Board should get written agreement on the terms. and others watch what the Board does. Again, the An example would be allowing a special exception archi- watching generally is just that because most com- munity association Boards do pretty well avoiding tectural change like a ramp for disability access. The controversy. But sometimes the Board isn’t handling concession is granted only until the resident moves. business properly or at all. In an effort to avoid con- Compromise. When an issue is viewed in extremes, frontation, some Boards neglect to collect money or there is room in the middle for both sides to save face. enforce the rules. Board watchers are quick to blow Compromise may require professional dispute reso- the whistle. lution when emotions run high. Dispute resolution But is anyone listening? Is pluralistic ignorance is also useful for defusing vendettas (revenge for a getting in the way? Or is it a lone voice crying wolf perceived wrong). Professional arbitrators can assist in the wilderness by throwing stones at glass houses? warring factions to “make nice”. This is extremely Holy mixed metaphor! Clearly, how well the Board important considering neighbors are involved. WhileCAM_book.indb 109 6/12/08 7:44:41 PM
  • 111. 110     Bert Rodgers Schools you may not end up friends, establishing mutual tude will usually lead to the best resolution for all respect is essential. concerned. Kill the attacker with kindness. Don’t return the volley. One strategy is to refuse to fight. After trying reason, stop responding to inflam- Bogged Down Board matory comments. Fight fire with silence or a state- “Now I saw in my dream that...they drew near to a ment like, “We obviously disagree on this matter but very miry slough that was in the midst of the plain; and the Board has voted, and we intend to move on to they being heedless, did both fall suddenly into the other matters. We hope you will as well,” pretty much bog. The name of the slough was “Despond.” Here, says it. Prepare to ride out the storm. Most typhoons therefore, they wallowed for a time, being grievously blow themselves out. bedaubed with the dirt.” From The Pilgrim’s Progress Responding to threats. Depending on whether a by John Bunyan. threat is legal (I’m gonna sue) or physical (I’m gonna An interesting phenomenon that occurs from time punch your lights out) the response is different. An to time in a community association is a Board’s inabil- ity to break with the mistakes of the past. Longtime owner or director suing the Board is like shooting infighting and discontent has created malevolent stag- yourself in the foot. Assuming that the association nation. Recrimination abounds, credibility is lost, and has Director Officers Liability Insurance (which it the Board flounders in its own Slough of Despond. should), the coverage will pay for a lawyer to defend This association is stuck in quicksand that is sucking the Board. The appropriate response might be, “Sue the life and joy out of the community. if you must, but insurance covers our legal defense. To those so entrenched, it may just seem business Who pays for yours?” However, when it comes to as usual. Another Board Meeting, another shouting physical threats, waste no time. Call the police. This match, and little gets done. Adrenaline pumps, hearts kind of behavior needs to be stopped cold. and fists pound. It’s Friday night at Pro Wrestling. Fire when ready. Sometimes, reason “took the last It’s Gettysburg with brothers and neighbors locked in train to the coast” and it ain’t comin’ back. If the attack mortal combat against each other. is coming from a Board director, the Board majority Okay, quick! Show of hands. Who wants to volunteer may need to consider stronger alternatives. A ren- to serve on the Board? (sound of crickets) No, really! We egade director can virtually destroy the whole Board need you to step up. (sound of pin dropping) Nobody? I’ll with ongoing strife and conflict. While all directors never get off the Board! need not agree on every issue, it is important to yield Effectively, a community association like this to the majority opinion. If a director gets stuck and plays out a self-fulfilling prophecy. And tragically, get- refuses to move on, he may need to be culled from the ting bogged down like this is not all that uncommon. ranks. Once the deed is done, it’s important to com- Some folks love to dwell on the past to keep others municate to the remaining owners about the reasons off balance. It’s a form of control that keeps things in the action was taken. a brouhaha. But who in their right mind wants to play the game for long? Call the bluff. If the attack persists, call a special In this slough of despondency, however, is a great owner meeting to get it all out in the open. The opportunity. Learning from past mistakes is some of the purpose of the meeting should not be to humiliate best education there is. Dwelling on them is fatal. If the or point fingers. Often the attacker is shown to be a Board is in a dwelling place, it will take a strong deci- Lone Ranger and not supported by a majority of own- sive action to break free. Here are some of the ways: ers. Ask for a vote of confidence. Mediate. Get some objectivity into the mix with Bailing out. Boards under attack may feel the urge a trained mediator. These folks can often sort out to cut and run—resigning “en masse”. Sometimes heated issues and personalities to forge compromise. this may be a strategic move to get an owner show of There are usually a number of inexpensive media- confidence. However, wholesale resignation generally tion alternatives in every city, some are even free. See plays right into the attacker’s hand and opens the door Regenesis.net Links for Dispute Resolution options. for all kinds of radicals to jump on the Board. The welfare of the association depends on level headed and Board retreat. Having a retreat to discuss concepts concerned volunteers. Letting a tyrant take control is can be helpful in getting repointed. It’s advisable to the last thing you want. Resist the temptation to take include a facilitator who ensures that all get heard and the easy way out. Remember your property is at stake. that the discussion doesn’t degenerate. Hold the high ground. List of goals. Having written goals helps the bogged- Regardless how you respond, strive for compas- down Board stay focused on its mission. sion, as difficult as it may be. A compassionate atti- Written agenda. If your Board Meetings are agenda-CAM_book.indb 110 6/12/08 7:44:41 PM
  • 112. Board Operation, Teamwork, and Problem Solving    111 less, they can easily be twisted into personal agendas. will do it. This attitude can be a self fulfilling proph- Have a written agenda and a tight time limit for get- esy. It is not the president’s job to solve all problems ting it done. Stick to it and opportunities for disorder but to lead and delegate. The board structure was will vanish. designed to spread out the load. Resist the temptation Purge the old guard. Some people simply are too to take carry the burden alone. inflexible to change. They should be encouraged to step down. If they refuse, a member recall can force The board as administrator. A fundamental error removal. Or, start campaigning for the next annual that many Boards make is doing office and mainte- meeting election. nance work for free that would otherwise be hired The Board has significant responsibilities to grap- out. Doing this undermines the Board’s true pur- ple with. Making them as pleasant as possible is the pose...to administrate association business. An admin- only way to attract and keep good volunteers. If your istrative position that should only take a few hours Board is bogged down with infighting and personal a month rapidly escalates to a full time unpaid job. agendas, it’s time to redirect the action. Learn, not Who wouldn’t burn-out? Remember the Board’s true burn, from past mistakes. purpose and stick to it. Rx for Board Burn-Out? Reward the volunteers. The most widespread rea- “How can the board avoid the burn-out that comes son for burn-out is because it’s a thankless job. In job with the job?” satisfaction surveys, recognition and appreciation Getting and keeping dedicated board and com- consistently rank way above pay. Find ways to reward mittee members is one of a community association’s directors, committees, and other volunteers through greatest challenges. Here are some of the ways to pre- awards, recognition in newsletters, and certificates. vent burn-out: They cost little or nothing but address the human Have a plan. Handling community business effi- need for significance. Volunteers who receive appre- ciently and effectively can be an enormous stress ciation in small but regular ways stay enthusiastic. reliever. One great tool is the Management Plan Cal- endar which establishes dates for meetings, regular maintenance (like gutter cleaning, etc.), administra- KEEP YOUR MANAGER HAT ON! tive events (like tax return filing, etc.), major main- tenance (like painting, etc.) a year in advance. The Managers are invaluable to board members. Their Management Plan Calendar evens out the work load multitude of roles includes developing effective meet- and demonstrates that the Board is acting proactively, ing agendas, protecting the association from litiga- not reactively. This, in turn, reduces complaints that tion, increasing proxy returns, orchestrating seating contribute to burn-out. arrangements, familiarizing new members with parlia- Communicate regularly. Keeping association busi- mentary procedure and motions, and fostering team- ness open and above board reduces suspicion that work among board members. Managers can help the leads to criticism (no closed meetings). Distribute regular newsletters, monthly financial information, board deal with threats and disputes, break free from and meeting minutes. Ask for feedback on issues by mistakes of the past and prevent member burn-out. circulating surveys. In summary, managers are vital to ensuring smooth Protect your privacy. Board members have the right board operation and teamwork. to peaceful enjoyment of their homes. Don’t accept association calls after hours, especially abusive ones. HOMEOWNER ADVOCACY Deal with association issues whenever possible only at scheduled board meetings. Popular belief is that the solution to community asso- ciation problems lies in better education and respon- Get it in writing. Members who constantly complain can be very wearing. Insist that comments be put in sible self regulation. Some advocate strong federal writing. Several things will happen: Either the prob- and state regulation or optional membership. We lem isn’t important enough to put in writing and they include this section because there are lessons to be will go away or they will put it writing so it can be learned from other viewpoints. Following are Advo- dealt with properly at a Board meeting. cacy Groups, News Sources, and News Articles links. Use the board. Board presidents often feel that they have to do everything themselves because no one elseCAM_book.indb 111 6/12/08 7:44:42 PM
  • 113. Board Operation, Teamwork, and Problem Solving    113 Final Assessment Board Operation, Teamwork, and Problem Solving For immediate results, test online at www. bertrodgers.com Instructions • Answer the True or False questions below. • Locate the course title on the Answer Sheet in the back of this book • Fill in your answers for each question in the space provided. Please use pen or pencil. • omplete the Final Assessments, Attest Statements, and Course Evaluations for all courses selected, fill out the C Registration Form and submit both the Registration Form and Answer Sheet(s). • A passing score is 70% or higher (7 or more correct answers out of 10). 1. Good business practices for community associations include fiduciary duty, clear communications, long range planning, financial stewardship, avoiding conflict of interest, and seeking wise counsel for informed decisions. T F 2. Volunteer boards typically don’t devote a lot of time to getting educated. T F 3. Unfocused and lengthy board meetings are one of the main reasons good volunteers serve as directors. T F 4. Continuity is one of a board’s greatest challenges. T F 5. The purpose of community association minutes is to subjectively record business that takes place at homeowner, board, and committee meetings. T F 6. Proxies are used to achieve the quorum required to hold and transact business at an annual or special meeting. T F 7. For motions that are highly sensitive, such as election of officers, a motion by voice may be appropriate. T F 8. Types of Motions include a Main Motion, a Motion to Amend, and a Motion to Amend the Amendment. T F 9. The Board Manual is a collection of nonessential association information that can be slowly accessed to respond to questions and emergencies. T F 10. A goal of Formal Consensus is to engage the silent majority which typically do not or will not express an opinion. T FCAM_book.indb 113 6/12/08 7:44:42 PM
  • 114. 114     Bert Rodgers Schools Bert Rodgers Schools Community Association Management Continuing Education Instructions/Grading Online Study from the courses in this book and take the Final Assessments online! Get immediate results and print your official Certificates of Completion. Go to www.BertRodgers.com, complete the registration and pay- ment information. It’s that easy! Student Information The license number you provide on the enclosed Registration Form is the number our school will use to report your continuing education to the Department of Business and Professional Regulation. Tuition We offer four 4-hour courses and the 2-hour 2008 Legal Update. Choose the courses you wish to complete and pay individually or select the Special Offer, a total of 18 hours including the 2008 Legal Update, for maximum savings. Grading Services Standard Grading-Correspondence Fax or mail your Registration Form/Answer Sheet(s) and payment information. Upon receipt, we process your answer sheet(s) and send your official Certificate(s) of Completion to you by First-Class Mail. Priority Grading Services Same-Day Priority Grading by Return Email or Fax – $10 Fax both your Registration Form and Answer Sheet(s) with payment information to us any business day by 3pm est. We will email or fax your certificate(s) of completion the same business day. The original certificates will be mailed the next business day. Next-Day Priority Grading by Return Email or Fax – $7 Fax your Registration Form and Answer Sheet(s) with payment information to us any business day by 5pm est. We will email or fax your certificate(s) of completion by 11am est the next business day. The original certificates will be mailed the next business day. Priority Grading Notes • riority Grading is only available to those with a fax number or email address. P • ax your Registration Form and Answer Sheet(s) to 941-378-3883. You must provide a legible fax number F or email address. • RS will attempt to fax your Certificate(s) of Completion 3 times. B • or email priority service, your Certificate(s) of Completion are sent as a PDF attachment(s). You must F have the free program Adobe Acrobat Reader (www.acrobat.com) to view and/or print your certificate. • ake prioritygrading@bertrodgers.com a trusted source to prevent your email certificate from going M into your junk email. • Please call our office if you have not received your Certificate of Completion by 5pm est. • he priority grading fee is not per individual course, but for all courses received, completed, and paid on T the same registration form at the same time. Grading Policy A passing score is 70% or higher (7 or more correct out of 10). Payment Method Bert Rodgers Schools accepts checks, money orders, Discover, Visa, MasterCard, American Express, and Visa or MasterCard check cards. Note: Your course registration will not be processed unless complete payment is received. There are additional charges for Priority Service.CAM_book.indb 114 6/12/08 7:44:42 PM
  • 115. REGISTRATION FORM STUDENT INFORMATION Name___________________________________________ CAM License # _______________________ Address_________________________________________City/State/Zip__________________________ Email ___________________________________ Day Phone (_______)__________________________ COURSE TUITION o Special Offer (All 5 Courses - SAVE $36) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Hours . .——— . .Group Price $199 5 Courses)———————————————————————— 18 Hours . . . . Group Price $129 o 2008 Legal Update (MANDATORY) ————————————————————— . 2 Hours . .——— . .Single Price $24.99 Update (MANDATORY) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Hours . . . . Single Price $  25 o Association Financial Management and Insurance . . —————————————— 44Hours . .——— . .Single Price $39.99 Management and Insurance . . . . . . . . . . . . . . . . . . . . . . . Hours . . . . Single Price $  35 o Operation of the Association’s Physical Property . . ———————————————4 Hours . .——— . .Single Price $39.99 of the Association’s Physical Property . . . . . . . . . . . . . . . . . . . . . . . . 4 Hours . . . . Single Price $  35 o Communication Skills and Tools . .———————————————————————4 Hours . .——— . .Single Price $39.99 Communication Skills and Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Hours . . . . Single Price $  35 o Board Operation, Teamwork, and Problem Solving . . . . . . . . . . . . . . . . . . . . . . . . 44Hours . .——— . .Single Price $39.99 Board Operation, Teamwork, and Problem Solving ————————————— Hours . . . . Single Price $  35 Total Hours ______ Total Tuition__________ Total Hours ________ Total Tuition __________ GRADING SERVICES Need your results in a hurry? Choose Email or FaxBack Grading Service: $10 Same-Day Priority Grading* (In by 3PM EST, M-F, back the same business day) +$ +$ ________________ _____________ or $7 Next-Day Priority Grading* (In by 5PM EST, M-F, back by 11AM next business day) +$ +$ ________________ _____________ Email or Fax my Certificate(s) Email or Fax my Certificate(s) of Completion to: ______________________________ of Completion to: ______________________________________________________ (your return email address or fax number) TOTAL $ ________________ TOTAL ______________ $ (your return email address or fax number) MM ETHOD OF PAYMENT Please check the appropriate box below. Enclose your check or money order in the reply envelope. Check (enclosed) Check # ___________ (payable to Bert Rodgers Schools) Money Order (enclosed) MC Visa Amex Discover Card# Exp Date - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 (month) (year) Signature of Cardholder ________________________________________ (required) ANSWER SHEET 2008 Legal Update #9625416 2 Hours $25 1. T F 4. T F 7. T F 10. T F Attest Statement Attest Statement 2. T F 5. T F 8. T F By By signing my name, I I certify thatpersonally completed thethe signing my name, certify that I I personally completed course and final assessment without assistance from others. course and final examination without assistance from others. 3. T F 6. T F 9. T F _____________________________ _________________________________ __________ _______________ Signature Signature Date Date Course Evaluation Poor Good Excellent 1. Learning objectives were clearly stated. 1 1 2 2 3 3 2. Course content was clear and organized. 1 1 2 2 3 3 3. Course material was relevant to my profession. 1 1 2 2 3 3 4. I felt prepared for the final asessment. 1 1 2 2 3 3 Association Financial Management and Insurance #9625407 4 Hours $35 1. T F 4. T F 7. T F 10. T F Attest Statement Attest Statement By signingmy name, II certify that II personally completed the my name, certify that personally completed the 2. T F 5. T F 8. T F By signing course and final examination without assistance from others. course and final assessment without assistance from others. 3. T F 6. T F 9. T F _____________________________ __________ _________________________________ _______________ Signature Signature Date Date Course Evaluation Poor Good Excellent 1. Learning objectives were clearly stated. 1 1 2 2 3 3 2. Course content was clear and organized. 1 1 2 2 3 3 3. Course material was relevant to my profession. 1 1 2 2 3 3 4. I felt prepared for the final assessment. 1 1 2 2 3 3 1CAM_book.indb 115 6/12/08 7:44:43 PM
  • 116. ANSWER SHEET Student Name:_____________________________________________ Daytime Phone:_________________________________ Operation of the Associationʼs Physical Property #9625408 4 Hours $35 1. T F 4. T F 7. T F 10. T F Attest Statement Attest Statement 2. T F 5. T F 8. T F By signing my name, I I certify that personally completed thethe By signing my name, certify that I I personally completed course and final examination without assistance from others. course and final assessment without assistance from others. 3. T F 6. T F 9. T F _____________________________ _______________ __________ _________________________________ Signature Signature Date Date Course Evaluation Poor Good Excellent 1. Learning objectives were clearly stated. 1 1 2 2 3 3 2. Course content was clear and organized. 1 1 2 2 3 3 3. Course material was relevant to my profession. 1 1 2 2 3 3 4. I felt prepared for the final assessment. 1 1 2 2 3 3 Communication Skills and Tools #9625409 4 Hours $35 1. T F 4. T F 7. T F 10. T F Attest Statement Attest Statement 2. T F 5. T F 8. T F By signing my name, I Icertify that I personally completed the By signing my name, certify that I personally completed the course and final examination without assistance from others. course and final assessment without assistance from others. 3. T F 6. T F 9. T F _____________________________ _________________________ _________________________________ Signature Signature Date Date Course Evaluation Poor Good Excellent 1. Learning objectives were clearly stated. 1 1 2 2 33 2. Course content was clear and organized. 1 1 2 2 33 3. Course material was relevant to my profession. 1 1 2 2 33 4. I felt prepared for the final assessment. 1 1 2 2 33 Board Operation, Teamwork, and Problem Solving #9625410 4 Hours $35 1. T F 4. T F 7. T F 10. T F Attest Statement Attest Statement By signing my name, I I certify that personally completed thethe By signing my name, certify that I I personally completed 2. T F 5. T F 8. T F course and final examination without assistance from others. course and final assessment without assistance from others. 3. T F 6. T F 9. T F _____________________________ _______________ _________________________________ __________ Signature Signature Date Date Course Evaluation Poor Good Excellent 1. Learning objectives were clearly stated. 1 1 2 2 33 2. Course content was clear and organized. 1 1 2 2 33 3. Course material was relevant to my profession. 1 1 2 2 33 4. I felt prepared for the final asessment. 1 1 2 2 33 General Evaluation Poor Good Excellent N/A 1.Overall satisfaction with online learning experience. 1 1 2 2 33 � ¨ 2.The instructor responded to my inquiries in a reasonable amount of time. 1 1 2 2 33 � ¨ 3.The instructor demonstrated knowledge of course content. 1 1 2 2 33 � ¨ 4.The information provided to contact the instructor was adequate. 1 1 2 2 33 � ¨ 5.The teaching / learning method was effective. 1 1 2 2 33 � ¨ 6.Technical support sufficiently handled my inquiries. 1 1 2 2 33 � ¨ 7.Technical support issues were handled in a quick manner. 1 1 2 2 33 � ¨ 8.Administrative support met my overall needs. 1 1 2 2 33 � ¨ Please help us serve you better by taking a few moments to share your comments about our course(s). Thank you! Fax your Registration Form and Answer Sheet(s) to: (941) 378-3883 or mail to Bert Rodgers Schools, P.O. Box 4708, Sarasota, FL 34230 • Call 800-432-0320 or 941-378-2900 2CAM_book.indb 116 6/12/08 7:44:44 PM