Tag Archives: Condos

Homeowners and Condominium Associations in Georgia


Landscaping

Real estate developers usually create a homeowners association to control the appearance and managing of common areas in the land being developed. Upon selling a preset number of homes in the developed residential subdivision, it is turned over to the homeowners of the subdivision. There comes a time though that this association would need some form of help from experts to make sure that the subdivision will be a great place to live in.

This is where HOA managers come in. If you are living in Georgia and you think that your homeowners association is in need of professional guidance, you are in luck as there are good HOA managers in the city.  When searching you might want to consider this helpful website.  Before you work with one though, make sure that they offer plenty of services that will satisfy the needs of the association and that you have a good understanding of what your associations needs are so you can communicate those clearly to the community association management company.

Common features include HOA managers attending annual board meetings. This way, they would be able to gauge properly the progress of the association in terms of obtaining its goals. It would also enable them to see in what facet is the association lacking in terms of focus. This would allow them to be able to provide enough input that the whole association would benefit from.

The annual budget of the homeowners association is a delicate matter and it needs to be properly managed. Thus, it would be a good thing to have an HOA management company that would be able to provide professional guidance to the board of directors in formulating the annual budget. This way, the association would be able to make the most out of its budget. With that in mind, all residents of the subdivision would be able to benefit greatly from the money they have put in the association.

On the meeting that HOA managers would attend, they also have to be able to present a recap of the past year’s budget and its appropriations. This would allow the members of the association to see where the money went. This would provide transparency which is a very important thing especially with money involved.

These are the most common things that you should look for in an HOA manager or HOA management company. They would be handling very vital functions and thus should have the right background for the job. Apart from having these most common features as part of their service, they should be able to provide you with enough proof that they have extensive experience in such endeavors.  Also ask them to show you the certifications the staff has from the industry educational organizations.  This educational experience will allow you to understand the time and energy the HOA property management company has invested to prepare to help your Homeowner Association or Condominium Association.

Riverside Property Management is a Homeowners association management company management company proudly serving Roswell, Alpharetta, Buckhead, Marietta and all of North Georgia. Riverside is also an expert Georgia condo association management company and high rise Atlanta association management company. To find out more about Riverside Property Management and why it is one of Georgia’s fastest growing property management companies, go to www.riversidepropertymgt.com. You’ll be glad you did.  (678) 866-1436

 

How To Increase Attendance or Participation in Home Owners Committees


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  1.     Make sure you understand and committee chairs can convey the role of the commission members, and that the president and members are up to date job descriptions.
  2.     Ensure proper orientation describing the organization and its unique services, and how the committee contributes to this mission.
  3.     Remember that your organization and its committees deserve support and participation. Do not fall into the view that “we are lucky to get just anybody.” Establish a standard for the best.
  4.     They have rules that support the participation and assistance. Review the basic rules that each meeting and post them on the bottom of the agenda.
  5.     Leave the “dead wood.” They often help to reduce the number of committee members rather than increasing them.
  6.     Consider using subcommittees to increase individual responsibility and focus on goals.
  7.     Annual assessments of the committee, which includes a clear evaluation process and where each committee member evaluates the other members, and each member receives a written report on their strengths and how they can improve their contributions.
  8.     Attempt to provide individual assignments to committee members.
  9.     Have at least one staff member to participate in each committee to help with administrative support and provision of information.
  10.     Monitor the quorum requirements for the entire plate (as set usually in the bylaws), or the minimum number of board members must be present for the Board to officially adopt business. This quorum, if not met, will serve as a clear indicator or signal that the card is in trouble.
  11.     Develop an attendance policy committee that specifies the number of times a member may be absent in consecutive meetings in total meeting time.
  12.     Generate minutes for each committee meeting to reach a conclusion on the issues and help members to understand the progress made by the committee.
  13.     In the Committee‘s meeting report, including signals that is present and absent.
  14.     Consider the possibility of low attendance members involved in some other form of service to the organization, for example, “friends of the organization,” or something, attending special events rather than ongoing activities.
  15.     They have a “summit meeting” with members of the committee to discuss the problem of low attendance, and the use of a panel method so that each person should speak with their opinions.
  16.     Turn to new members each year.

HOA meeting Seats


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Where you sit in a meeting that determines where you are. Foreign diplomats are particularly careful in choosing the shape of the table and sits next to who, from the slightest misstep can have disastrous results. King Arthur held their meetings at the round table so everyone can participate freely without the king dictating the debate. There are lessons to be learned from this experience that can be applied millennia to deal with HOAs and membership meetings. Each format requires different considerations seats.

Board meetings are designed for regular business transactions for the care and welfare of millions of dollars frequency of active members. As such, they should be held at places and times conducive to business. Meetings held in someone’s home, be a challenge.

At Council meetings start. Members are entitled to attend board meetings as an audience, not participants in the discussion or vote. To facilitate this right, there should be seats for a reasonable number of them. If meetings are held in small rooms with space only for the board, guests are shut out and the impression is that they are welcome. They look for the house has wider to accommodate so much advice and guests.

Avoid the use of living rooms with the exception of guest seating. It is very difficult to juggle the documents or take notes while sitting in a Lazy Boy. Meetings should be held at a table large enough to extend the programs, reports and other documents without having to continuously mix the pile. If using a kitchen table, remove everything except items meeting. Turn off cell phones home and during the meeting because the sound is always interrupted the discussion and pull someone out of the company in question.

If a pit boss, the president should sit down and address the meeting. The head of the table is the historical place of authority and no reason to buck tradition. The secretary records should sit at the opposite end of the table so that all directors can be more easily seen and heard. Customers should not sit at the table meeting of the board as this is an invitation to participate actively in the business.

Avoid the temptation to have the board to guests as a “panel”. This format of seats also invites the participation of the guests and makes it difficult for the board to talk to each other.

Formal meetings of the Board Ideally the board should meet in a place that is designed for meetings. Basics include a large conference table, good lighting, bathrooms, climate control and room for guests. If none exists in the HOA, find meeting rooms in the area of ​​community centers, libraries and churches. They can be closer and cheaper than you think.

There are several advantages to advance “the kitchen” in a formal meeting. The potential for distraction is greatly reduced: no phones, food, television, children, dogs and neighbors. The business meeting takes a real “business” of nature. People are less likely to remain in this environment or get into long discussions. As with the meetings at home, the seats must be appropriate for the board and the guests together at the conference table and invited to one side.

Annual meetings of Owners Association. These meetings should be carefully choreographed. Always keep them in a formal meeting place large enough to accommodate all the owners. Usually take ownership of gallery style with the board on a table in the head unless your group is small enough to fit around a round table of King Arthur. Ideally, the head of the table should be “half moon” or “U” so that all managers can see each other and the audience. Prevent the board feel like panel unless the meeting is intended to be a question and answer session with the directors of the “line of fire.” Make sure you have adequate sound system, if the room requires it.

Seating meeting is very important when it comes to getting things done efficiently. Set your sites for successful meetings and do not forget to check out their swords at the door.

What do Board Members do anyway?


Some people might wonder what Board Members do. Hopefully, this will shed some light on their duties and responsibilities for your community.

Homeowners Association Board

Board Members have a set number of responsibilities when they volunteer for your community.  Remember, they volunteer! So make sure you thank them for what they do.

Board Members are challenged typically on a daily basis with different aspects from personalities and duties and responsibilities within the community.  They have a definite purpose and specific duties to fulfill for your community.

 

The role of the Board is to set policy, standards, budgets and procedures for the association.

Probably the most important duty is the fiduciary obligations to the association.  This can be characterized into two parts; the duty of loyalty and the duty of care.  The duty of loyalty is requires the Board Member to act in good faith always in the interest of the community.  Never acting in their own interest or in the interest of another person. The duty of care requires the Board Member to act in a reasonable, informed manner when participating on the Board and making decisions for the day to day community’s care.

Board Members are able to delegate the duties of the association, but not the responsibility of their positions. It is the Board that is ultimately responsible for the association even if the Board hires a management company.  They can direct actions on behalf of the association, but the Board is completely responsible to the community. 

The governing documents as well as state and federal statues outline the Board responsibility within the community.  Areas of responsibility typically include:

  • ·         Care, maintenance and enhancement of common areas including facilities and physical property.
  • ·         Management of community finances and any reserve funds.
  • ·         Community harmony.
  • ·         Any employment the association has and the human resources of the community.
  • ·         Interpretation, creation, enforcement of the rules and regulations of the community.
  • ·         Community insurance needs and making sure guidelines for such are followed in the declaration.

This is in no way a full compilation of everything your board members do, just an overview of some of their duties.

Source: http://www.hoamanagementdirectory.com/blog.html?action=more&id=79

CONDOMINIUM INSURANCE – WHO COVERS WHAT?


Most condominium association‘s “Declaration of the Condominium” (hereinafter referred to as declaration) follow the wording of Chapter 47C of the North Carolina Condominium Act with regard to the definitions of “common elements” and “units”.  The Declaration specifies what insurance is to be provided by the association and what insurance is to be provided by the unit owners.In the statute, 47C-2-102, Unit boundaries it says: “Except as provided by the declaration:

(1)   If walls, floors or ceilings are designated as boundaries of a unit, then all lath, furring, wallboard, plasterboard, plaster, paneling, tiles, wallpaper, paint, finishes flooring and any other materials constituting any part of the finished surfaces thereof are a part of the unit; and all other portions of such walls, floors, or ceilings are a part of the common elements.

(2)   If any chute, flue, duct, wire, conduit, bearing wall, bearing column, or any other fixture lies partially within and partially outside the designated boundaries of a unit, any portion thereof serving only that unit is a limited common element allocated exclusively to that unit, and any portion thereof serving more than one unit or any portion of the common elements in a part of the common elements.

(3)   Subject to the provisions of paragraph (2), all spaces, interior partitions, and other fixtures and improvements within the boundaries of a unit are a part of the unit.

(4)   Any shutters, awnings, window boxes, doorsteps, stoops, decks, porches, balconies, patios, and all exterior doors and windows or other fixtures designed to serve a single unit but located outside the unit’s boundaries are limited common elements allocated exclusively to that unit (1985 (Reg. Sess., 1986), c.877, s.1.)”

The Declaration of most associations specify that the association shall provide coverage for “common elements” and each unit owner must insure his “unit”.  This would suggest that a unit owner would need to include Coverage A Building under the standard condominium unit owners HO6 to cover the elements of the unit that are actually part of the building (contrasted to “contents” such as clothing, TV‘s, etc.).  The parts of the “unit” which cause concern are building type items such as floor covering, wall covering, built in cabinets and appliances, and interior non-load bearing walls and partitions.

Under 47C-3-113, Insurance (a), “Commencing not later than the time of the first conveyance of a unit to a person other than a declarant, the association shall maintain, to the extent available:

(1)   Property insurance on the common elements insuring against all risks of direct physical loss commonly insured against including fire and extended coverage perils.

47C-3-113 (b) “In the case of a building containing units having horizontal boundaries (multi-story buildings) described in the declaration, the insurance maintained under subdivision (a)(1), to the extent reasonably available, shall include the units, but need not include improvements and betterments installed by unit owners.  This seems to imply that the master policy should include all that comes with the unit at the time of purchase (with standard) allowances.  The unit owner would need to insure the value of any upgrades under the Coverage A Building part of his HO6.

An attorney who has much experience in preparing Declarations has responded to an inquiry as follows: “In response to your memo, please note that, per section 47C-1-104(a) of the Condominium Act “Except as specifically provided in specific section of this chapter, the provisions of this chapter may not be varied by the declaration or the by-laws.”  Section 47C-3-113 (the insurance provision to which your memo refers) states that it may be varied or waived “in the case of a condominium all of whose units are restricted to nonresidential use.”  Accordingly, regardless of what the declaration or by-laws say, unless the insurance is not “reasonably available”, if the condominium contains residential units with horizontal boundaries, the insurance must include the units (but need not include improvements or betterments installed by the unit owners.)

Therefore, we conclude that the Association master policy must cover these described items and the amount of insurance selected should reflect these values.

Another issue is the association policy deductible which can be as much as $10,000.  Perhaps the individual unit owner is uncomfortable with such a large deductible.  A solution would be to purchase an amount of Coverage A Building under the HO6 equal to the cost of his upgrades plus $10,000.  The association policy is primary but it does not cover “upgrades” nor anything under $10,000, so the solution suggested will work.  Also, the HO6 building coverage is not subject to a coinsurance clause.

In order for this solution to work, the association Declaration must follow 47-C-113 (b) of the statute.  The alternative method is to say in the Declaration that the associations will provide coverage on the “common elements” only and each unit owner will have to cover all parts of the unit (including walls, floor coverings, built-ins, etc.)  This method calls for the developer/builder to inform each unit owner as to what the replacement cost of such items is so that the proper amount of Coverage A Building coverage can be obtained by each owner.  Not only is this a cumbersome method, but it appears to be contrary to what is dictated by the statute.

Energy Efficient Lighting


Saving Money Without Sacrifice

By Angelina Esposito

Full Color Brochure

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.

Source: http://cooperator.com/articles/199/1/Energy-Efficient-Lighting/Page1.html

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

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.

FINDING A FIX

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.

PROBLEM SOLVED

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.

“Grandfathered” Rules


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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.'”

Source:  http://www.communityassociationmanagement.com/rules/violations-and-enforcement/2461-qgrandfatheredq-rules.html