Monthly Archives: June 2011

Energy Efficient Lighting

Saving Money Without Sacrifice

By Angelina Esposito

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The agenda for your monthly board meeting is to find ways to save money, and in the long run, increase the

building’s reserve fund. Each board member has been asked to compile a list of ideas on areas of possible savings. One board member suggests eliminating the fresh flowers in the lobby. Another proposes turning off the air conditioning in the laundry room. And on everyone’s list is the dreaded maintenance increase. As usual, everyone begins to argue. Then a third board member mentions energy efficient lighting and explains how the building can save money and cut back on energy consumption at the same time by replacing the incandescent lights with fluorescents. The room becomes silent and everyone is listening.

According to George Nunez, vice president of sales at Energy Saving Technologies, Inc., a full-service energy company that provides energy analyses for buildings, Co-ops and condos never really consider energy efficient lighting, they just buy new fixtures. We, on the other hand, look at the long-term results.

Energy Efficient Products

There are many different forms of energy efficient lighting and all offer significant energy and financial savings. Although they emit a very good quality of light and are used most often, incandescents are the least efficient light bulbs available. Fluorescents produce four times as much light per watt, meaning that a 40-watt fluorescent bulb gives more light than a 150-watt incandescent bulb. They are a little more expensive but last up to ten times as long. According to the National Lighting Bureau in Washington D.C., a fluorescent bulb has a life span of up to 20,000 hours, whereas an incandescent bulb lasts a maximum of only 2,500 hours.

The quickest payback is switching from incandescents to fluorescents, says Tom Sahagian, senior associate at the EME Group, a consulting engineering firm. In a cooperative corridor where two 60-watt incandescent bulbs comprise a light fixture, a 75 percent reduction of power and a savings of about $100 per fixture per year can be experienced if you install two 15-watt fluorescent bulbs, says Peter Berger, owner of Energy Saving Technologies. You can expect to save a little more than one dollar per watt per year in New York City if the fixtures are on 24 hours, he says.

Fluorescent lighting is typically used in hallways, mail rooms, laundry rooms and other service areas, but there are other potential locations for energy efficient lighting sources throughout the building. Replacing the existing bulbs used for the EXIT signs with LED (light emitting diode) bulbs can reduce the wattage from a 40-watt incandescent to a one-watt LED. Although these lights are on 24 hours a day, seven days a week, they do not need a lot of light. The LED bulbs burn out once every 25 years. According to Nunez, the LED bulb will result in a significant savings within only a year.

Exclusive to Energy Saving Technologies is the LESS System, a new technology installed in about ten Manhattan buildings. With this system, an occupancy sensor is installed in the fixtures in stairwells. When no one is in the stairwell the sensor will dim the lights to 20 percent illumination and when someone is in the line of sight, the sensor brightens to 100 percent illumination, reducing overall power consumption by 80 percent.

Outdoor lighting als ffb o accounts for a big expenditure of money and energy, especially if incandescents are used. HID (high intensity discharge) bulbs emit a very strong light and use a lower wattage consumption. The bulbs maximize efficiency and minimize operating costs and the number of fixtures needed. These lights cannot be used indoors because they emit a purplish hue, but are at least five times as efficient as incandescents.

Big Savings

Con Edison offers a rebate program for buildings that switch to more energy efficient lighting. According to a marketing representative for Con Edison’s enlightened energy services, buildings can experience a rebate of ten cents per watt of electricity saved when switching from either incandescents to fluorescents, from incandescents or fluorescents to HIDs or LEDs or from standard fluorescents to compact fluorescents. The rebate, which was offered at 25 cents, has been reduced to ten cents as of August.

Con Edison also offers a rebate of 60 cents per watt of electricity saved for outdoor security lighting. The cost for parts and labor for any rebate project is not covered by Con Edison. However, your bill will be reduced if the existing fixtures are replaced or converted. Eighty to 90 percent of existing fixtures can be converted to fluorescents, says Nunez. It’s a great time to upgrade and you can justify the costs by converting. As long as the building is a commercial customer and a customer of record it can qualify for the rebate. Contact Con Edison for an application.

Savings have been seen at The Pinnacle, a condominium in Forest Hills, since it replaced incandescent lighting fixtures with fluorescent lighting in the hallways about three years ago. The 926 fixtures each used two 40-watt bulbs, which were replaced with two ten-watt fluorescents that produce the same amount of light as a 60-watt incandescent bulb. The project reduced the daily energy consumption from 74,080 to 18,520 watts. It doesn’t make sense not to switch, says superintendent Angel Carregal. The savings can be seen within months, not just with Con Edison, but also because fewer bulbs are being purchased and less manpower is needed. The annual electrical costs for the 219-unit building dropped from about $159,000 to $129,000a savings of $30,00 per year.

In addition, The Pinnacle replaced the 75-watt incandescent lights in the lobby and banquet area with 15-watt screw-in fluorescents. The result was a daily energy savings of 4,620 watts.

At a small co-op on Central Park West, Nunez recently helped replace the 65 incandescent fixtures in the hallways with fluorescent lighting. What was once costing the building $75 per fixture per year, is now costing only $15 per fixture per year, for an annual savings of $3,900 per year.

Standard vs. Compact Fluorescents

While it is clear that significant savings result from switching to fluorescents, the switch from standard fluorescents to compact flourescents also results in savings. The standard fluorescent tubes, usually two or four feet long, use a magnetic or electronic ballast in or near the fixture which consumes a minimal amount of energy, usually two or three watts depending on the size of the ballast. The ballast is a device that provides the starting or stabilizing of the voltage needed in a circuit. If you still have the old fluoroscents, you can replace the larger bulbs that use a magnetic ballast with a smaller bulb that uses an electronic ballast. This will cut your electrical consumption in half, says Manuel Patino, director of project development at EUA Cogenex Inc., a nationwide company specializing in energy conservation projects.

The new compact fluorescent lighting is a smaller bulb, emits brighter light, comes with the ballast already built-in, uses screw-in bulbs and replaces incandescents. A seven-watt compact fluorescent can replace a 40-watt fluorescent.

An Interior Design Approach

George Stanton, vice president of Sygrove Associates, an interior design firm, recommends fluorescents in the hallways an c11 d service areas but not in the lobbies unless there is a ceiling cove. Lobbies should have a nicer quality of light, an intimate homey feeling you can’t achieve with fluorescents.

Over the years fluorescent lighting has become more attractive and it now comes in different temperature controls which offer different degrees of color and design. When Sygrove Associates designs a hallway, they use three fixtures with different fluorescent bulbs and hang up sample wall coverings and carpeting to see what light looks the best with the materials. There is a lot of flexibility and improved quality of light with the new fluorescents. The old ones are slowly being phased out, says Stanton.

Saving money is the driving factor for co-op and condo buildings, says Nunez. Some buildings have the same fixtures for years. But technology has come a long way. Switching will result in the same amount of light but a cheaper electric bill and less energy consumption, he says.


Old Ben Was Right

One of the earliest advocates of preventive maintenance was Ben Franklin. He wisely wrote: “A little neglect may breed mischief…for want of a nail, the shoe was lost; for want of a shoe the horse was lost…” Old Ben nailed what happens when relatively small repairs. Little things have major impact on homeowner association assets. For example, a small lack of flashing can lead to major dryrot, structural problems and major expense. Ka-CHING!

Preventive maintenance is critical to managing an HOA’s assets. When executed properly, it extends the useful life of buildings, grounds and equipment. Stretching out useful lives means stretching member contributions and reducing downtime from component failures. Preventive maintenance involves fixing something before it breaks. Here are five objectives for a every preventive maintenance program:

  1. To perform maintenance that keeps the property safe and functioning.
  2. To promote the most effective and efficient use of resources.
  3. To estimate the human resources needed for proper operation and maintenance.
  4. To determine long range funding requirements and project scheduling.
  5. To evaluate the effectiveness of the maintenance effort.

Preventive maintenance programs are common with elevators, HVAC and pool equipment, usually because there is a service contract. Other components, like paving, roofing, decks and paint require monitoring and planning.

Functional obsolescence is also a legitimate concern. Lack of parts, improvements in efficiency, computerization and changes in fire and building code can make equipment obsolete even though it’s working just as designed. This is particularly applicable to elevators, boilers, pumps and HVAC. Buying new equipment is often a great investment in reduced operating costs. For example, by replacing all common area lighting with compact fluorescent bulbs, the light level will be significantly increased, the energy consumption reduced by 70% and the useful life of each bulb extended by 10-15 times thereby saving an enormous amount of labor costs. Within 12-18 months, the cost will be recouped in energy savings and then, it’s money in the bank.

So, what is the best way to address major preventive maintenance? Two words: Reserve Study. A Reserve Study identifies all the significant components that the HOA is responsible to maintain, assesses current condition, cost of repair and replacement and charts a 30 year maintenance plan to keep the components in their best condition.

The Reserve Study can provide for cyclical preventive maintenance so components achieve their optimal lives. For example If cracks, minor repairs and sealcoating are performed at least every five years on asphalt paving, major repairs will not be required for 20-30 years. If this relatively inexpensive preventive maintenance is not done, significant and costly major repairs will be required much sooner. Pay a little to save a lot.

A Reserve Study will also guide the board how to systematically accumulate funds without special assessments. A full funding plan will have all owners contribute a fair share relating to the benefits received. A fair contribution plan means no one will get a better deal than anyone else and the money will be there when needed. The Reserve Study is absolutely the best way to prepare for a future which will certainly come to pass.

Remember Old Ben’s nail analogy. Little things have a way of causing great things to happen. But rather than fail in the little things, plan for them and hit this nail right on the head.

by Richard Thompson

A Blog From a Proud Parent

Off to Parris Island

I normally utilize this venue to bring advice to HOA’s and other community associations.  Tonight, my Son came home from his first ROTC Camp.  He is an “inside boy” who loves the computer and XBox.  He is heavier than most of the 14 year-olds (yet taller) that are in his school.

He amazed me over the past 8 days, just to say the least.

It started out being just a “Summer Camp“; man it became more than that.  My Son came back a Man.

Not only did he overcome the fact the he was overweight, under-strength and had a lack of trust for fellow students; he overcame battles that not even he understood.  And, on top of it all, he won an award for the “Most Improved” cadet at the entire camp.

I am so thankful for sending my Son to this Camp.  And I am so thankful for a Man that I just met…Commander Santana.

Source:  Proud Mom.

On the Fence

Fences provide privacy, boost safety and security and can add just the right aesthetic touch to the landscape.  But they also require maintenance, repair and replacement.

Fencing can be an ongoing problem for all associations, especially as communities and their features begin to age. Associations must budget for the care of these integral structures. Deciding when and how to repair your fencing, replace worn down or rotting parts or hire someone to handle maintenance can mean the difference between meeting or exceeding your annual budget. Fence

When faced with aging fencing and the high costs of replacement, community associations have to form a strategic plan of action to ensure a cost effective use of operating funds, while at the same time employing an effective use of reserve funds. The case study that follows demonstrates how investigation into a current maintenance process can result in better service for residents, cost savings, improved budget forecasting and an increase in reserve funding levels.


A community of approximately 700 single-family homes located in North San Diego, Calif, was recently faced with the challenge of developing a long-term strategy for managing its fences. Like many communities, this association had been allocating resources for fencing only through reserve funds, and solely on the basis of major component replacement and repair.  The existing wrought iron fence was installed in 1990, and originally was painted with two-part epoxy paint that lasted about nine years. Subsequently, the fence was painted in 1999 with Frazee Am-Plate paint, which did not last as long and is currently deteriorating.

In reviewing its procedures, the association sought to find a long-term, sustainable process for managing its fence maintenance and repair budget. With the assistance of its management company, the association conducted a study and analysis to review the fencing asset and refurbishing project.

The association had been using a deferred maintenance-only approach for the community’s 28,000 linear feet of fencing, which comprises approximately 2,600 four-by-four wooden posts and nearly 3,200 iron panels. The fence was being repaired only when there was noticeable damage or paint erosion, which is often costly and inefficient.

Under the deferred maintenance and replacement approach, which was dictated by a previous reserve study, fencing was broken into four categories: phases one, two and three and pool fencing.  All fencing components had a remaining life of two to seven years with a total replacement cost of more than $1.6 million. All the wrought iron fencing was slated for painting costs of $180,000 every five years using reserve funds. Until recently, the association did not incorporate into the operating budget a proactive annual maintenance component to coincide with strategic designations of reserve capital.

There’s a better way to maintain fences. You wouldn’t repair your car only once every seven years; you perform ongoing maintenance. The same logic can be applied to repairing and maintaining the association’s fencing.

The other issue for the association had been response time. Previously, when a homeowner submitted a request for fence repairs near or around his or her home, the process from initial review of the request to completion usually took two months or more. To begin to resolve the inherent problems in that approach, the association needed to investigate the costs related to a broader scope offence overhaul and repairs.

The association collected three bids to bring the fence to like-new condition using reserve capital and then funds from the operating account for ongoing maintenance. The association’s reserve study analysts deemed the funding strategy acceptable upon the premise that the maintenance program would be reviewed on an annual basis.


Beginning this year, the association started using an immediate portion of reserve funding-approximately 25 percent of the $1.6 million estimated for complete replacement-to update its fences. The association allocated enough reserve funds to add a buffer to all of the contractor bids, which were substantially below the allotted amount. It wanted to allow enough room in case there were rising costs. In addition to the earmarked funds to replace the fencing, all of the bids included quotes to maintain the fencing in a like-new condition for an indefinite period of time. The maintenance includes 40 hours per month, allocating $1,600 in labor costs and $600 per month for materials. This monthly maintenance strategy allows the association to implement ongoing, proactive fence maintenance rather than the reactive, deferred maintenance-replacement approach that was so problematic.

In addition, the association allotted $100,000 every eight years in reserve funds as a strategic designation of capital that allows for catastrophic fence failure or other needs. In total, the association will designate approximately $1.6 million for fence repairs over the next 30 years. This new program shares the cost between reserve funds and the operating budget. It’s the most cost effective and desirable way to maintain the fence for the life of the homeowners association. The association will put out a secondary bidding process in the future to account for up-to-date considerations and cost changes.

The new fence maintenance program addresses several major issues that the association had been facing. First, the program allows for improved service to residents by greatly reducing the need for delayed emergency repairs. Next, the program will save the association more than $500,000 in maintenance costs over 30 years. Finally, by allocating fence repair and maintenance costs to both operating and reserve funds, rather than the previous reserve funded-only “major component and repair” line item, this approach has raised the association’s reserve funding level more than 30 percent.

Atlanta Property Management Recommendations « Atlanta HOA and Condo Association Reviews

Riverside Property Management, Inc. Press Room

HOA Neighborhood Watch Instructions � Atlanta Professional Association Management

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(678) 866-1436
Crime Prevention
“The primary object of an efficient Police(service) is the prevention of crime”
Sir Richard Mayne, 1829

New! Business Watch Video

Crime Prevention is of the highest priority with the Cobb County Police Department. It is our goal to provide our citizens the best possible service available and through our Crime Prevention Unit we are committed to reaching that goal. We believe by actively promoting citizens participation we can reduce crime in our county.

The Crime Prevention Unit through our community education program offers various programs to meet the needs of our ever-changing and growing county. Assigned personnel conduct seminars and training on crime prevention methods, visit schools to lecture on various topics, distribute crime prevention material, coordinate our Neighborhood Watch Program, and assist specialized units when crime prevention needs arise.

We are here to serve the citizens of Cobb County and believe by working together we can reduce crime.

What you and your neighbors can do

Entering Autos-

The primary cause for the rate of Entering Autos is individuals leaving valuables in their unlocked vehicles. Preventing items being stolen from your vehicles requires 2 things; taking everything of value out of your vehicle and lock it. Leaving valuables in clear view in a locked car will most likely result in a broken window. Please do not leave firearms inside vehicles. Laptop computers are in high demand and very valuable on the black market. Other highly sought items include IPODs, Satellite Radios, GPS Navigation systems, purses and wallets. Leaving them in your car will subject them to theft

Thefts at fitness centers-

If you must take your valuables such as purses, wallets or laptops with you, secure them in your trunk prior to arriving at your final destination. Doing so after you arrive, only announcing to everyone what you are doing.

The other theft problem at fitness centers involves thefts from lockers while the victim is working out. Sometimes the lockers are left unlocked but another tactic used by the perpetrator is to remove the victim’s lock, take items from their locker and then replace the lock with a different one. This tactic buys them time to use stolen credit cards before the victim can discover that they have been taken.

The only real solution to the above incidents would be to not even take valuables to the fitness centers.

To start a neighborhood watch, please take the following steps:

Download the Citizens Awareness Program brochure from this Web site.
Get at least 50% of the homeowners or apartment residents to sign the Neighborhood Watch Petition, which is included in the above mentioned brochure. (The petition needs to include the name, address and phone number for each petitioner).
Fax the completed petition to 770-852-3290 to the attention of the Crime Prevention Unit; or
Mail the completed petition to 1220 Al Bishop Dr. Marietta, GA 30008 (Attn: Crime Prevention)
Call or e-mail Officer M.W. Bowman or Officer C. J. Mabe to schedule your startup meeting. *Preferred meeting times are Tuesday or Thursday nights at 7 p.m.

Officer M.W. Bowman – 770 499-4134 – E-Mail

Officer C. J. Mabe – 770-499-3909 – E-Mail
Contact Information Monday – Friday 8am – 4pm

If you are interested in scheduling a Crime Prevention Presentation please contact either Officer Bowman or Mabe.

Education Courses We Offer
(Brochure’s Require Acrobat Reader or Equivalent to View)
(Most Brochure’s are in excess of 1MB and may take a several minutes to download)

The following courses are offered without charge to Cobb County residents.

PERSONAL SAFETY – subtitled “How to avoid becoming a victim”. This course describes simple, yet effective methods to ensure one’s safety in the home, office, car, or “out and about”. This course is appropriate for all above sixteen years of age. This is a one hour course.
“Apartment Safety” Brochure – Download Here
“What Is Suspicious” Brochure – Download Here
“Carjacking Prevention” Brochure – Download Here
SENIOR SAFETY – This is a variation of the personal safety class with an emphasis upon crimes specifically perpetrated against the elderly. This class is 45 minutes in duration and is appropriate for all senior citizens.
“Senior Citizen Safety” Brochure – Download Here
NEIGHBORHOOD WATCH PROGRAM – Our goal is to educate members of a community about crime, criminal patterns, and what to do if you are a victim, or a witness to a crime. The neighborhood is then organized into a system of observers trained in “watch” procedures. This program lasts approximately 1 hour and begins a continuing liaison with the Crime Prevention Unit. Neighborhoods will need to have at least 50% of homes participating to establish the Watch Program.
“Citizen Awareness Program” Brochure – Download Here
Citizen Awareness Program “Guidelines for Block Captains” – Download Here

BUSINESS WATCH – This program is an adaptation of the Neighborhood Watch Program designed for stores in shopping malls and complexes. The Crime Prevention Unit helps the mall management train the tenants of the mall. This program was recently launched by the Cobb County Police Department’s Crime Prevention unit. The program is aimed at training business owners, managers, and employees in recognizing and reporting suspicious or criminal activity.

Cobb County businesses are encouraged to sign up for the Business Watch program and become linked with others in the business community who share information regarding potential threats to their business, employees, or customers. Business Watch Video
BUSINESS ASSESSMENT – A Crime Prevention Officer will inspect your business and assess your risk of burglary, patron safety and employee safety. There are many suggestions and considerations we can make which may increase the safety of your business.
BUSINESS ASSESMENT – A Crime Prevention Officer will inspect your business and assess your risk of burglary, patron safety and employee safety. There are many suggestions and considerations we can make which may increase the safety of your business.
BICYCLE SAFETY – Coordinated by the Crime Prevention Unit and taught by our Ranger Unit – children will learn the laws involved with safe riding and instructions will be offered to parents about organizing a “Bicycle Rodeo”.
“OFFICER FRIENDLY CONTACTS” – Coordinated by the Crime Prevention Unit. These programs are designed for children and teens. For many young children, it may be their first introduction to an uniformed police officer. They are taught about the 9-1-1 system, the police officer’s equipment, firearm safety, seatbelt use and other topics. The program lasts 20 to 30 minutes. This course is appropriate for children five years of age and above and is taught at schools, churches, scout meetings, etc. Additionally, officers may be asked to present programs to teens in Middle and High School. (Topics should be discussed with the Crime Prevention Unit prior to scheduling).

Please be aware that many of these programs are coordinated with actual beat officers and are subject to availability.

The Crime Prevention Unit is ready to assist you. Please call 6-8 weeks ahead to avoid scheduling conflicts. For information on any program contact the Cobb County Police Department Crime Prevention Unit at (770) 499-3909 or (770) 499-4134.
Crime Prevention
Citizen Program Feedback

Please use the online form link below to tell us the strengths/weaknesses of the presentation and provide us with feedback that will allow our department to better serve you and the citizens of Cobb County.

Brought to from the Cobb County Government via


“Grandfathered” Rules

OK, your HOA’s changing some rules. But the gall of some owners! They want to be exempt from your new rules, or “grandfathered in.” Should you grant their request?

Here, we discuss the pros and cons of creating exceptions for rules, give four examples of when it’s smart and not smart to grandfather residents in, and provide tips to ensure the grandfathered rules don’t last forever and are enforceable.

When to Grandfather? It Depends

“I think it’s a great question,” says David Mercer, a partner at MercerTrigiani in Alexandria, Va., who represents more than 500 associations in Virginia and Washington, D.C. “The answer depends on the specifics of what you’re trying to accomplish. It depends on how serious the problem you’re addressing is and how difficult it’s going to be for residents to change their behavior to comply. Each factual situation you confront brings different issues to the grandfathering clause.”

Robert Galvin, a partner at Davis, Malm & D’Agostine PC in Boston who specializes in representing condos and co-ops, has one absolute. “Never grandfather specific units or people,” he says. “Also, grandfathering isn’t something you do very broadly. Usually, if a rule is a good idea, nobody should be grandfathered. But there are instances where it’s appropriate.”

Here are a few examples:

1. Rental Restrictions

A change of use is a good barometer of when to grandfather, says Kristen L. Rosenbeck, a partner at the Mulcahy Law Firm PC in Phoenix, which represents associations. “I typically want to recommend grandfathering if we’re changing a use,” she says. “Let’s say it’s a rental restriction. That’s a large issue and a change in use. So let’s grandfather owners already renting out their unit and make the rule apply to future owners from this point forward. Some clients want to have the rule take effect when current renters leave. We have case law that says that’s sufficient. But because that change is controversial, I’d recommend clients say the rental would continue until ownership changes.”

2. Color Scheme

Rosenbeck doesn’t think the same reasoning applies to a change in a neighborhood’s color scheme. “We can change the scheme, and that’s not tied to ownership,” she says. “So we could grandfather the current scheme and have it be acceptable until you have to paint your house again.”

3. Pet Rules

“Assume your association is a pet community, so when a condo owner bought, he could have pets,” explains Mercer. “He recognized the condo rule could be changed if, say, 66 and two-thirds of his neighbors voted to change it. Now they’ve voted to change into a no-pet community. The board should want voluntary compliance, but it’s very unrealistic to expect people with pets to move or get rid of their pets to be in compliance. But it’s reasonable to expect that if you grandfather pets in and say, ‘For starters, you need to register your pets. Only those pets will be allowed to stay, and they can’t be replaced when they die.’ Now you’re working toward total, voluntary compliance in several years without the disruption, adversarial approach, and disenfranchisement of people.”

4. Smoking Bans

“There should be no grandfathering when there are safety concerns,” says Rosenbeck. Example? “If you take a health issue like smoking, and you want to ban smoking in the entire property, that gets a little more traction if you say, ‘Except in your unit, we’re banning smoking in all areas,'” adds Mercer. “Still, you might want to consider an area in the common elements that would be restricted as a smoking area rather than going cold turkey on all areas.”

“Every time I’ve been involved in a change that alters the fiber of a community, the association has provided grandfathering,” says Mercer. “It’s difficult enough to get an amendment that you risk it not being passed without grandfathering. The analogy I make is that of a local government authority that wants to change zoning and prohibit a light industrial use in a particular zone. The government can’t just say to someone, ‘And by the way you can’t run your business anymore. But it can say, ‘You can’t sell or change your business use, and once you end the business, it’s done.'”


Atlanta Association Property Management

Good Collections Practices in Hard Times � Atlanta Condominium Management

Don’t Throw Good Money After Bad!
Atlanta,GA–Our country’s recession has affected all aspects of life in our country, and homeowner associations have taken the brunt of some of the worst of it. The majority of associations throughout the country are now having to deal with increases in past-due assessments, foreclosures, bankruptcies, and short sales. Homes are losing equity, banks are afraid to lend, and owners find themselves having to pick and choose which bills they will pay, as the threat of losing their houses looms over them. The refinancing options-once homeowners saving grace-are no longer available to these struggling home owners. These factors all lead up to the obvious result of nonpayment of assessments, leading to foreclosures and bankruptcies; this contributes to suffering association budgets. On top of these difficulties, many associations are dealing with costs for construction defect litigation and repairs on thirty-some year-old buildings, which often equal large special assessments.
Everyone in the industry is sharing in the pain of the associations. Managers and association relationships are being strained as managers scramble to come up with quick solutions to enduring problems. Boards get easily upset with managers as they are now paying more attention to accounts receivable and budgets. Both the board and managers want their attorneys to be able to collect faster than they are doing. Meanwhile, attorneys are trying to satisfy all of their clients, while seeing a dramatic increase in collection activity.
We are all, essentially, trying to milk a dry cow. There are situations where there is no money to be collected. However, if associations act quickly and creatively, they place themselves in a situation where there is the hope that money will be collected at some point, allowing associations to get their accounts receivables current.
It is important for attorneys to explain the collection process to both the board and managers. Managers need to realize that, with this economy, boards cannot count on all the debt to be collected. Managers need to set realistic time-lines and help boards come up with manageable budgets, while factoring in bad debt. It is time to start thinking creatively. The proven method of demand letters and liens are not as effective as they used to be. There are things that both boards and managers can do to help prevent a bad situation from turning worse.