Association Boards, Things You Should Have Learned From the News

Here are examples of a few lessons that should have been learned by reading the newspapers:

• There is no substitute for good financial management and a solid reserve program.

The combination of foreclosures, budget deficits, embezzlement and the inability to continue with the maintenance was felt in Community Associations across the country. Those Associations which had to cut corners, or assessments, are often found in deeper problems, and in some extreme cases, in the street. This is the time to be smart.

• Disasters happen – do not bet the HOA that you will be spared.

The last two years have seen not only a financial disaster hit the U.S., but also a string of natural disasters that have severely affected a large number of Homeowner and Condominium Associations. Many did not have flood insurance, or increased deductible or lower limits of their insurance coverage. Many canceled special policies that covered hurricane, earthquake, wind or other things that they hoped would miss them. Too often, it was the wrong bet. As a result, some organizations simply disappeared, owners forced to leave, the units condemned, without any hope of recovery. Some had to sell the buildings damaged at a great loss and move on. Others had to live for months outside the homes in hotels with only some or none of the costs covered, while the Board has wrestled with insurance companies, contractors and the courts. Insurance is one of the most important things that boards have to deal with.  Do not bet on the future of the Association, Mother nature may try to ignore you.

• Find a way to deal with “going green“, without confusion, expense and visibility.

In nature (and often the CC & R), Associations,  are resistant to change. But this is not going away, and the Association is almost always going to come through to look bad when they resist any change. Clothes lines, solar panels, false grass, landscaping and other items are only the beginning. Start with an owners vote on how they feel about various issues and real information (not just rumors) about how they will help and what are the options. It can be a single owner that poses a problem, but you can expect many more to follow.

• Flags cause problems – no flags allowed at all causes even more problems.

If you allow the U.S. flag to fly on holidays with a bracket attached to the unit / home, you can almost count on someone  pushing to do more. They want to fly the flag every day, on a pole 20 feet in front of your unit / home, or a service flag for the Navy or Marine, or the stars in the windows to show a family in danger, or flag college game day, etc, etc, etc. Someone will always push the envelope. Again, just survey the residents and see what is the general consensus, which the majority will support. This is not only an individual problem, the Board must decide and then publish.

• If you’re not active on the internet, it is very likely you will be found “on” the internet.

The number of sites created by the owner of the individual to attack or publish less than favorable information about your Association has grown exponentially. You can get on the Internet for almost no cost and see what is published can  stay forever. Transparency of operations and multiple methods of communication must be a primary consideration of the board. Do not keep putting it off. Get connected now.

• State legislatures will cost the HOA more money unless the owners SHOW UP.

Since there is very little actual data about Associations and owners available, state legislators often act due to the squeakiest wheel, usually one or two owners who have beaten their heads with the Board. Who is really to blame rarely counts.  It is what you can give a legislator in particular. The positive exposure usually results in bills that will cost money from the owners. Boards should be aware of how legislation will impact the potential of the Association and all owners and find a way to voice their position.

Riverside Property Management, Inc. is a leading provider of financial reporting, maintenance and governance, legal collection procedures and management consulting services for Homeowners Associations and Conominiums in the Atlanta Metro area..

Our clients include homeowners associations and developers of multi-family, owner-occupied housing throughout the Atlanta Metro area.

Our team includes certified Professional Community Managers (PCAM), Licensed Real Eastate Agents (RES) and a Board Certified Collection Attorney (ESQ), licensed in Georgia, who all specialize in maintaining property condition, collection of  assessments and enforcement of existing Covenants.  Individual consultations, management reviews and educational workshops for association boards, to help improve their community governance skills.

We also provide critical budget and financial planning tools that include reserve studies and budget projections for maintenance and repair costs of community owned assets.

Detailed reserve studies and maintenance plans prepared in conjunction with our consulting architect are one of the most valuable management tools available for any association. If you are interested in long range financial planning and supervised maintenance of community assets, our services will be of benefit to your association.

Developers will find our company invaluable when planning a new construction or conversion project. Reserve studies, maintenance plans and operating budgets required for all newly formed associations are available from our company.

For more information about Riverside Property Management and the services we offer please take the time to browse our website and feel free to call our offices to speak with a licensed representative of our company.

(678) 866-1436
info@riversidepropertymgt.com

Creating A Board for Your HOA, POA or Condominium Association

WHO SHOULD BE ON THE BOARD?
The board should be composed of a diverse group of individuals who are interested in working toward the organization’s mission and have the particular skills that will help to contribute to a well-run organization. For instance, you may want to seek out people with financial, marketing, or legal backgrounds. You may want to consider bringing on someone with an entrepreneurial
background, or someone who is proficient with emerging technologies. You may
also want to recruit members who have influence in the community, work at similar types of organizations, or are representative of the community you are serving. Having this collective knowledge from the beginning will help you make informed decisions. You will also find that as your organization matures, your board composition needs may be very different from those of your founding board. The role of the board tends to change over time as the organization
develops and matures. Early in an organization’s life, the primary need for the board may be individuals who are prepared to give a great deal of time and energy. Later, you may find that as paid staff are brought on, the board focuses primarily on the governance functions of the organization and is less involved with the smaller details of bringing the organization up to speed.
HOW BIG SHOULD THE BOARD BE?
Boards can vary in size from three to more than 50 members.  Each state has regulations that determine the minimum size of the board, but the optimum number of people who sit on the board should be determined by the needs of the organization. Assess the list of tasks that the board needs to accomplish and plan your board around the jobs that need to be done. There should be enough meaningful tasks for the board to accomplish without leaving board
members feeling overburdened or uninvolved.
HOW OFTEN SHOULD THE BOARD MEET?
As with the size of your board, the number of board meetings each year should be determined by the work that needs to be accomplished. For logistical and practical reasons, larger boards often meet less frequently, leaving much of the work to the board’s committees.
Regular attendance at board meetings is one of the individual responsibilities of board members. Your organization’s bylaws should include an attendance policy that clearly states the number of meetings that can be missed by an individual board member before he or she is asked to leave the board. Develop an annual schedule of meetings determined a year in advance. Circulate clear and thorough information materials, including an agenda, to all members
two to three weeks before each meeting. Maintain complete and accurate minutes of all meetings, and keep meetings brief and well focused. An organization’s bylaws should also state the number of board members required to constitute a quorum. Without a quorum, the board is unable to conduct its official business.
WHAT KIND OF TERM LIMITS SHOULD BOARD MEMBERS SERVE?
There are no hard-and-fast rules for determining board members’ tenure. Many organizations
do, however, limit members to two consecutive terms and require a hiatus of one year before a
board member may be reappointed. Many organizations also stagger terms of service so that
one-half or one-third of board members are elected every one or two years for terms of two to
six years. Such policies encourage institutional renewal because a board can profit from the
experience of veteran board members while welcoming the fresh perspective that new members
offer. Board members on hiatus can remain active in committee service or serve in an
advisory capacity. Term limits are a painless mechanism for rotating inactive or ineffective
members off the board. These policies should be written into the organization’s bylaws.

Protect HOA Operating and Reserve Accounts

I know anyone that has any affiliation with an HOA or Homeowners Association has heard of someone stealing or trying to steal money from the Community. The scams are often as simple as writing a check to themselves, either as an administrator, treasurer or president. This is the one constant to which no one paid much attention. Now, with the vast majority of the Associations tax year ending, here’s your chance to make sure that does not, and is not going to happen. Whenever the economy takes a hit, and particulary when it both an extended and bad one, you need to pay special attention to the deep pockets, your association’s bank and reserve accounts.

First – GET AN AUDIT – not an opinion, not a compilation, but a real, honest-to-god audit. Only an audit of the CPA will unearth evidence which, in turn, could be fraud or embezzlement. Yes, an audit is more expensive, but considering the huge increase in financial crimes against associations, this is not the time to spare. Remember, every person trusted the people who were scamming from the Association funds. The fact that the treasurer is a good person, does not mean that they are not having personal financial problems.

Then make sure your insurance covers the Community Association if the money is lost. All too often association’s think that fidelity bonds that the management company has protects them – it doesn’t, it only protects the management company if an employee steals from them.  Whether its a bond or crime insurance, make sure the association is covered for ANY loss, no matter who is  lining their pockets.  This can be done with Directors & Officers Insurance or D & O.

Always make sure the bank or any financial institution that holds your money, sends a second statement, an original for someone other than the person who writes the checks or books. The crooks got away with their scams for long periods of time because they were the only one receiving the bank statement, and then delivering a retouched statement to the Board of Directors. Someone else must have an authentic, original – that can,  in fact be compared to the one presented in the financial report.

Periodically, hold a test of invoices. Ask one of your contractors to review their bills with you. A basic scam is a book of false invoices for work that was never completed, and then write a check for that amount to the scoundrel himself. Unless you’re reviewing canceled checks or verifying proof of the bill, it is quite easy for the thief get away with it. Each time you have a supplier or contractor that is going over budget or contract, this is likely to be the output.

Make sure nobody can get to the reserve accounts easily to withdraw or transfer funds. Talk to any institution that is holding the funds and ask them for the best way to ensure that nobody can reach them without going through a lot of checkpoints.

Basically, you should make sure you have all the necessary protections in place and they are, in fact, actually being followed. There are plenty of articles about how to do this, and that’s a good place to start. But remember, it is the entire process to be followed – not just a part will protect your Property Owners. For example, you can utilize the recommendation to require two signatures on checks, but in reality, banks no longer see or verify the signatures, so that alone will not protect you.

Why go through all this? I’m no lawyer, but if I were a Home Owner and someone was to abscond with a lot of money from my Association, I believe that the board would had failed in its fiduciary responsibilities and should be held accountable for that failure.

Membership Benefits for HOA and Condo Board Members in Georgia

Georgia Chapter of:

Click Here for an APPLICATION and INFORMATION!

•Educational Seminars

These seminars provide association board members and homeowners that provide valuable information on issues affecting associations.

•The Community Association Volunteer Leadership (CAVL) Workshop

Designed for association board members and homeowners, this comprehensive training program provides a great overview of the different aspects of running a community association.

•Mini Expo Tradeshows and Educational Programs

Each year we are excited to offer Mini Expo tradeshows in conjunction with our homeowner programs, which offers an opportunity to network with other association leaders and professionals in the industry.

•The Georgia Commons

Our quarterly magazine provides up-to-date information on the operation of associations.

•The CAI Service Directory

Our membership directory features a complete list of service suppliers and professionals who work with associations. We have over 750 members and are growing every day!

•Educational Seminars

These seminars provide association board members and homeowners that provide valuable information on issues affecting associations.

•The Community Association Volunteer Leadership (CAVL) Workshop

Designed for association board members and homeowners, this comprehensive training program provides a great overview of the different aspects of running a community association.

•Mini Expo Tradeshows and Educational Programs

Each year we are excited to offer Mini Expo tradeshows in conjunction with our homeowner programs, which offers an opportunity to network with other association leaders and professionals in the industry.

Audit the Associations Books?

Audits are Expensive and Should Be Done Selectively.

An audit is an extensive and methodical examination of all of the books, records and accounts that support the financial statements.  In most circumstances, they are costly and time consuming.  However, it is often prudent to audit the HOA books and records whenever a developer turns over a community to the homeowners to verify that the developer has fulfilled its obligations to the association, and won’t leave unit owners holding the bag for any unpaid fees.  Or an audit may be need if misappropriation of funds by an association or management company is suspected or a community is transtioning from self-management to a management company and experiencing extreme financial hardship.    In those case, a forensic audit must be performed to determine exactly where the money has been going.

A Review is a Less Expensive Alternative to an Audit.

A review is a report of limited assurance stating that the accountant is not aware of any material modifications that need to be made to the financial statements in order for them to conform with Generally Accepted Accounting Principles (GAAP). The accountant must perform sufficient inquiry and procedures to give a reasonable basis for that conclusion.  A review is a more affordable alternative for most associations and should be sufficient in most cases.

When governing documents talk about “audit,” it generally refers to some level of independent review of the books by a CPA.   Depending on the size and complexity of your HOA, an audit may be overkill and may not be warranted.   Rather than perform an annual audit, the Board may elect to perform an annual review.

Whether your HOA decides to do a review, a compilation, or a full blown audit,  we think it is a good idea to do on an annual basis.   Some HOA governing documents require it, others are silent on this point.

There are a variety of qualified CPA‘s in the Atlanta area that can do this work for your Atlanta HOA. Why is this a good idea? The easiest answer is a simple one: it’s smart, prudent policy. Even if you are confident in your Atlanta HOA management company, it is a good idea to do this as it shows the membership that you are being thorough in your desire to ensure the HOA’s funds are tended to in an appropriate manner. Regardless of whether you do an audit, make sure you review the financial reports you get from your property management company each month.

We are happy to provide financial report training to any of our clients. We’ll explain what the GAAP rules are and why we adhere to them in your financial reporting. We’ll also explain the rules of double entry and much more. If you are interested in getting more information on our financial report training webinars please contact us by going to our website at www.riversidepropertymgt.com.

Can We Enforce Parking Rules?

Reblogged from Riverside Property Management Insider:

Towing it Away

In this day and age, owning a vehicle is a necessity and it seems that every family owns a minimum of two vehicles. Due to this trend and the limited number of parking spaces available in many communities, many associations have adopted parking rules and restrictions. Unfortunately, it is not unusual for owners and their guests to…

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How to Run an HOA Board Meeting

The Secret to Good Board Meetings.

Board meetings should be productive, efficient meetings where the board conducts business.  Are your board meetings productive and efficient? Does the board meet to conduct business or socialize? Are you getting the most out of your meetings?

Consider doing a few of these things:

Prepare a Realistic Agenda. Five page agendas with 50 objectives set out may be impressive but they are unrealistic and counter-productive.  You need to set a list of priorities for each meeting and focus on those issues.  If you have 50 issues you want to address, spread them out over the course of the year.  You will be more efficient and see better results if you are able to manage your agenda.

Set an end time to your meetings. Meetings should last no more than an hour.  Start the meeting when it is scheduled to begin and get straight to business. If you collectively have the focus to get done in an hour you’ll be amazed with how much you can accomplish. If you have no time limit, the meeting will typically drag on and a lot of time will be wasted. When time is wasted at a meeting then people are less likely to volunteer because they feel their time is wasted.  One hour meetings have a major impact on volunteers. Associations that hold focused, one hour meetings have more people volunteer. It’s also important to note that those volunteers stay active the in the community for much longer. Length of your board meetings may seem like a trivial matter, but it really does have a large impact on how the volunteers of the association view the organization and, in turn, how they view their role.

Be familiar with the Covenants and Bylaws. Key elements with which board members should familiarize themselves are the association’s governing documents that define the board’s authority. If you have a management company, they should provide guidance on your role as a board member, your fiduciary responsibility, specific board responsibilities from decision-making to administrative tasks, and how to conduct and participate in board meetings. Other vital information will include how to avoid personal liability, professional conduct at meetings, parliamentary procedures, the operating and reserve budgets, federal, state and local laws that impact your community, and appropriate insurance coverage.

Come prepared. Be familiar with the issues that will be addressed at the meeting.  If you have questions, ask them prior to the meeting so that your manager (if professionally managed) can have ample time to find the answers. This will help the meeting be more effective and brief. There is nothing more frustrating to those attending the meeting than for fellow board members to come unprepared and want to discuss issues at great length.

Make the meeting a time for action. Next, hold action oriented HOA board meetings.  Don’t just discuss issues, make decisions. Every item up for discussion should end in a vote to move forward in some way or table the issue with a clear understanding of why the item is being tabled and when it will be revisited. When taking action on an item make sure it is clear who will be responsible for getting that task completed. Ambiguity cripples a board.

Don’t be confrontational. Board members should recognize they are part of a team and not take a confrontational position with fellow board members or their management company. No one should have to work or conduct business in a hostile environment. Realize that at times you will not always agree, but take the position that even disagreement can bring compromise and consensus. Be concise with your opinion and thoughts and then be sure to listen to others. Always be respectful of your fellow board members and staff, as well as the homeowners. The tone of the board can set the tone of the community. So, if you want to have a healthy, vibrant and successful community, you should reflect that image as a board member.

Treat your Community Manager with Respect. Your community manager is your agent, not your employee. They act on behalf of the board and facilitate the decisions of the board.  Remember that they are professionals and should be treated as such. It can be detrimental to a board and its community to consistently be at odds with their management company. They are there to offer their expertise based on their experience, training and education to ensure that the board doesn’t compromise their fiduciary responsibility. A board should trust and rely on their management company’s vast experience and unlimited resources.  If your board has lost trust in the management company, have a frank discussion with the company’s CEO regarding whatever problems exist. Perhaps a different manager can restore your trust, eliminating the need to start all over with a new company.

Be a Team Player. If you recognize that, as a board member, you are part of a team of volunteers and management experts, you will be rewarded when you use those resources to make decisions that are based on sound business judgment. This, in turn, will inspire others to serve and build a team of future leaders who will want to emulate your leadership. By doing so, you will find serving on the board is not a burdensome chore, but a rewarding experience that you will value for years to come.

Be determined to have one of the best HOA’s in Atlanta by having an HOA management company that focuses on helping you have effective meetings.

What is the average cost for an association management company in the Atlanta area?

HOA management companies often work under a contract for a monthly fee. But how is that the amount calculated? In general, it is based on the estimated time needed to perform the tasks outlined in the Management Contract. There is often a workload of tasks that are not considered routine.

So what goes into the monthly management fee? There are fixed costs such as rent, phones, copiers, computers, insurance, and the internet. The workforce is based on the estimated time needed to perform the prescribed work. Total fixed costs and labor plus profit margin are equal to the monthly management fee. It is common to divide this number by the total number of units / lots. (In Georgia, the average is between $ 10-25/door for condominiums.)  Size and staff required matters: HOA’s pay less per home.

Typically, an Owners Association will be assigned a manager, an accountant, a maintenance supervisor, and possibly an administrative assistant to the account. The administrator can manage 10-15 accounts.

Staff salary levels can have a major impact on management fees. If a Homeowners Association wants experienced professionals, there is a price to pay. A qualified HOA manager attends seminars, has credentials and professional designations and focuses exclusively on HOA management. The Homeowners Association will benefit from this training and experience so expect to pay accordingly.

Managers spend much of their time to prepare and monitor Board and Annual meetings. For a typical board meeting, the manager gathers information and prepares  reports, reviews the financial statements and relevant correspondence.  The Board puts together packages or emails messages to each member.

Most Board and Annual meetings are held in the evenings from Monday to Friday at the Homeowners Association so that the manager is not required to work weekends; which costs money to Homeowners Association, this is incorporated into the contract. After the meeting, the Community Association Manager has a long list to follow-up on which occupies most of the following week. A manager can spend many hours on business related to the meeting.

Another cost savings is in charge of managing insurance claims and damage reconstruction. Insurance inquiries can take many hours of a manager’s time. If the management contract specifically provides that the insurance claim work is an additional cost to the HOA, the management company can collect the insurance claim by the time it takes to manage a claim and the renovation work. A similar principle is the time spent on collections or legal action against a delinquent account. This time, management will be charged to the HOA.
Are disclosure statements provided to homeowners who are selling their homes and lenders to buyers? The management company  bills owners and buyers so that the Homeowners’ Association does not assume the costs.

These are just some ways that management costs can be cut. Be sensitive to the time of your manager and not pile on unnecessary tasks that ultimately increase the costs. While it is important to get what you pay for, it is equally important to pay extra for additional services. The best approach is to establish an alliance with the management company and adjust the time and workload demands.

HOA managers are dedicated and waiting to serve. Put them to work for your homeowners association and actually rejoice in the carefree lifestyle advertised in the brochure.

9 DOCUMENTS THAT CAN SAVE YOU MONEY ON YOUR TAXES

Reblogged from Great Estates with Glynis:

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Technically speaking, April 15th is tax day.

But for Americans who expect a refund – including many homeowners who want to cash in on real estate-related tax perks – filing sooner holds the promise of getting that check in hand, stat.

If you count yourself in that number, here’s a handy guide for 9 pieces of paper you should be sure to round up as you prepare to file, in order to reap every penny of the tax rewards you’ve earned by virtue of owning a home.

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Sam Massell to Deliver State of Buckhead Address – Buckhead, GA Patch http://ping.fm/ZBsFg