Tag Archives: Financial Services

Think Before You Lease Your HOA Amenities to Outside-Residents


Many associations are considering a range of revenue-generating measures to offset ever-tightening budgets. But before you rent out your clubhouse or sell memberships to your golf course, pool, tennis courts, or other facilities to non-owners, keep a few critical rules in mind.

Think About It

1) Consider the liability. The biggest issue that keeps associations from renting out their facilities to non-owners is liability. Check with your insurance carrier to find out if injuries to non-owners and injuries caused by non-owners would be covered under your current policy. Chances are they won’t, and it’ll be much more expensive to expand your policy to include that coverage. Once you know the additional insurance costs, you need to weigh them against the potential new revenue to determine whether the financial gain adequately offsets the added cost.

2) Which facilities will you rent? Don’t automatically assume that you should rent all your facilities to the public. For example, you may find that it’s too expensive and the liability is too great to allow public assess to your pool, but the increased insurance costs and limited risk of personal injury in allowing non-owners to use your clubhouse is acceptable. Evaluate each amenity individually before making any decisions.

3) Who’s in, and who’s out? Ask yourself whether it’s necessary—and permissible—to place limits on whom you’ll allow to be guests. For instance, your association might be heavily populated by seniors who prefer not to lounge at the pool while children happily scream and perform cannonballs. But banning children might open your association up to family law discrimination claims, even if those claims end up being frivolous. Similarly, opening your golf course to novice and sometimes ill-behaved players may transform your residents’ peaceful round of golf into a high-tension activity. On the other hand, allowing an aerobics instructor to conduct classes in your gym or allowing personal trainers to use the same facilities to train nonresidents during certain hours may not bother residents—who may actually appreciate the convenience of those services. In addition, you may be able to require instructors or trainers to include your association as an additional insured under their liability insurance policy, which would limit your liability. Whatever the amenity, get residents’ feedback on whether they’ll feel comfortable sharing it with non-residents.

4) Know the laws that apply. Remember that once you allow the public to use your facilities, your association will be subject to new laws, such as the Americans with Disabilities Act (ADA). Do your facilities meet the requirements of the ADA? If not, what would it cost to bring them up to compliance, and do those costs outweigh the revenue? Also, renting out your clubhouse for such events as weddings and parties will open up the issue of liquor liability. You can require that guests not bring alcohol onto your property, but that rule can be hard to enforce, and it may limit the facility’s appeal. If you allow the consumption of alcohol, you’ll again have to check with your insurer to determine how that affects your coverage.

5) Don’t forget the added expenses. It sounds great to be able to supplement your association’s income, but how many people will sign up to use your newly available facilities if you don’t market them? You’ll probably have to pay a salesperson or marketing firm to advertise your facilities, so be sure to add those expenses into your cost versus revenue calculation.

There are so many issues to consider before allowing nonresidents to use your facilities that it’s unwise to make the decision without professional guidance. So be sure to run your ideas by an attorney or professional management association with experience on the issue. Reviewing these five questions with your board and researching insurance costs in advance will help you be prepared and minimize the time and money you spend to get that critical advice.

Source: http://www.communityassociationmanagement.com/facilities-a-maintenance/amenities/

Call Riverside Property Management of Kennesaw for more information!

678-866-1436 or www.riversidepropertymgt.com

Think Before You Lease Your HOA Amenities to Outside-Residents


Many associations are considering a range of revenue-generating measures to offset ever-tightening budgets. But before you rent out your clubhouse or sell memberships to your golf course, pool, tennis courts, or other facilities to non-owners, keep a few critical rules in mind.

Think About It

1) Consider the liability. The biggest issue that keeps associations from renting out their facilities to non-owners is liability. Check with your insurance carrier to find out if injuries to non-owners and injuries caused by non-owners would be covered under your current policy. Chances are they won’t, and it’ll be much more expensive to expand your policy to include that coverage. Once you know the additional insurance costs, you need to weigh them against the potential new revenue to determine whether the financial gain adequately offsets the added cost.

2) Which facilities will you rent? Don’t automatically assume that you should rent all your facilities to the public. For example, you may find that it’s too expensive and the liability is too great to allow public assess to your pool, but the increased insurance costs and limited risk of personal injury in allowing non-owners to use your clubhouse is acceptable. Evaluate each amenity individually before making any decisions.

3) Who’s in, and who’s out? Ask yourself whether it’s necessary—and permissible—to place limits on whom you’ll allow to be guests. For instance, your association might be heavily populated by seniors who prefer not to lounge at the pool while children happily scream and perform cannonballs. But banning children might open your association up to family law discrimination claims, even if those claims end up being frivolous. Similarly, opening your golf course to novice and sometimes ill-behaved players may transform your residents’ peaceful round of golf into a high-tension activity. On the other hand, allowing an aerobics instructor to conduct classes in your gym or allowing personal trainers to use the same facilities to train nonresidents during certain hours may not bother residents—who may actually appreciate the convenience of those services. In addition, you may be able to require instructors or trainers to include your association as an additional insured under their liability insurance policy, which would limit your liability. Whatever the amenity, get residents’ feedback on whether they’ll feel comfortable sharing it with non-residents.

4) Know the laws that apply. Remember that once you allow the public to use your facilities, your association will be subject to new laws, such as the Americans with Disabilities Act (ADA). Do your facilities meet the requirements of the ADA? If not, what would it cost to bring them up to compliance, and do those costs outweigh the revenue? Also, renting out your clubhouse for such events as weddings and parties will open up the issue of liquor liability. You can require that guests not bring alcohol onto your property, but that rule can be hard to enforce, and it may limit the facility’s appeal. If you allow the consumption of alcohol, you’ll again have to check with your insurer to determine how that affects your coverage.

5) Don’t forget the added expenses. It sounds great to be able to supplement your association’s income, but how many people will sign up to use your newly available facilities if you don’t market them? You’ll probably have to pay a salesperson or marketing firm to advertise your facilities, so be sure to add those expenses into your cost versus revenue calculation.

There are so many issues to consider before allowing nonresidents to use your facilities that it’s unwise to make the decision without professional guidance. So be sure to run your ideas by an attorney or professional management association with experience on the issue. Reviewing these five questions with your board and researching insurance costs in advance will help you be prepared and minimize the time and money you spend to get that critical advice.

Source: http://www.communityassociationmanagement.com/facilities-a-maintenance/amenities/

Call Riverside Property Management of Kennesaw for more information!

678-866-1436 or www.riversidepropertymgt.com

Think Before You Lease Your HOA Amenities to Non-Residents


Many associations are considering a range of revenue-generating measures to offset ever-tightening budgets. But before you rent out your clubhouse or sell memberships to your golf course, pool, tennis courts, or other facilities to non-owners, keep a few critical rules in mind.

Think About It

1) Consider the liability. The biggest issue that keeps associations from renting out their facilities to non-owners is liability. Check with your insurance carrier to find out if injuries to non-owners and injuries caused by non-owners would be covered under your current policy. Chances are they won’t, and it’ll be much more expensive to expand your policy to include that coverage. Once you know the additional insurance costs, you need to weigh them against the potential new revenue to determine whether the financial gain adequately offsets the added cost.

2) Which facilities will you rent? Don’t automatically assume that you should rent all your facilities to the public. For example, you may find that it’s too expensive and the liability is too great to allow public assess to your pool, but the increased insurance costs and limited risk of personal injury in allowing non-owners to use your clubhouse is acceptable. Evaluate each amenity individually before making any decisions.

3) Who’s in, and who’s out? Ask yourself whether it’s necessary—and permissible—to place limits on whom you’ll allow to be guests. For instance, your association might be heavily populated by seniors who prefer not to lounge at the pool while children happily scream and perform cannonballs. But banning children might open your association up to family law discrimination claims, even if those claims end up being frivolous. Similarly, opening your golf course to novice and sometimes ill-behaved players may transform your residents’ peaceful round of golf into a high-tension activity. On the other hand, allowing an aerobics instructor to conduct classes in your gym or allowing personal trainers to use the same facilities to train nonresidents during certain hours may not bother residents—who may actually appreciate the convenience of those services. In addition, you may be able to require instructors or trainers to include your association as an additional insured under their liability insurance policy, which would limit your liability. Whatever the amenity, get residents’ feedback on whether they’ll feel comfortable sharing it with non-residents.

4) Know the laws that apply. Remember that once you allow the public to use your facilities, your association will be subject to new laws, such as the Americans with Disabilities Act (ADA). Do your facilities meet the requirements of the ADA? If not, what would it cost to bring them up to compliance, and do those costs outweigh the revenue? Also, renting out your clubhouse for such events as weddings and parties will open up the issue of liquor liability. You can require that guests not bring alcohol onto your property, but that rule can be hard to enforce, and it may limit the facility’s appeal. If you allow the consumption of alcohol, you’ll again have to check with your insurer to determine how that affects your coverage.

5) Don’t forget the added expenses. It sounds great to be able to supplement your association’s income, but how many people will sign up to use your newly available facilities if you don’t market them? You’ll probably have to pay a salesperson or marketing firm to advertise your facilities, so be sure to add those expenses into your cost versus revenue calculation.

There are so many issues to consider before allowing nonresidents to use your facilities that it’s unwise to make the decision without professional guidance. So be sure to run your ideas by an attorney or professional management association with experience on the issue. Reviewing these five questions with your board and researching insurance costs in advance will help you be prepared and minimize the time and money you spend to get that critical advice.

Source: http://www.communityassociationmanagement.com/facilities-a-maintenance/amenities/

Call Riverside Property Management of Kennesaw for more information!

678-866-1436 or www.riversidepropertymgt.com

 

Association Boards, Things You Should Have Learned From the News


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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

Protect the HOA Operating and Reserve Accounts


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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.

HOA Cash Management Programs


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Cash management programs for Community Associations

Council members have a fiduciary responsibility not only to track revenue and expenses of the association, but also to use procedures that provide security for the assessments collected from homeowners and cost control. If your community association or management company has not recently revised its payment processing and cash management systems, you may not be aware of the innovations that can make your Board more efficient, save money and help increase your investment earnings.

Lockbox services designed for Community Partnerships
Does your staff still handles accounting manual assessment payments? If your association or management company is the opening of envelopes, posting payment information, preparing deposit slips and bring them to the bank, these activities consume a significant amount of management time and also increase the risk of theft and error . There is a solution: an automated treatment.
Automated processing services include a lockbox. A “lockbox” is a cash management tool that is a cost effective way to outsource most of the obligations associated with payment processing, saving time and money partnership.
Lockboxes have been available since the 1930s. They were designed to expedite the processing of payments by mail. Payments were sent to a PO box, closed and a delivery service could collect payments and transport it to their customers. The delivery of the contents of the box directly to the association eliminated the time lost by the post office to sort and deliver the payments. Computer imaging technology improved the process dramatically in the 1990s, making possible the creation of electronic payment files.
Today, the assessment payments are mailed directly to the lockbox, not the office of the association or management company. The controls are read by electronic scanners that reduces read errors, and payments are processed faster than it would be manually. Payments are credited to the account faster for the homeowner as well. The department of the association or management company accounting can upload files directly on your payment of accounts receivable system, eliminating manual entry of payments. The payment information is available to you online immediately.
Using a lockbox, associations often find they are able to reduce the time spent in processing payments and may be able to use staff to work on other tasks necessary to meet the daily needs of the association . How to find a lockbox service that meets the needs of your association?

1. Get recommendations from other professional associations or management companies what works for them and why.

2. Ask detailed questions about the technology used by the lockbox. The answer “using the latest technology” is not enough. Your questions should focus on specific services offered by the lockbox:
• Do you see a diagram and picture coupon?
• Are your electronic files compatible with your accounting system?
• Is the lockbox in use of their own software or licensed by third party? The costs are usually higher if the lockbox does not use its own software, because they must pay licensing and maintenance fees.
• What is the cost, if any? Most banks do not charge for the service in exchange for maintaining certain balances in checking and / or savings accounts.

3. Ask specific questions about what is working with the vendor to ensure that lockbox services fits your needs. Lockbox is held within the company or outsourced? How to handle errors? What kind of reports do you offer? How do you handle payments with on-line services to pay bills?

Cash Management Services Associations
It is important for all associations to ensure that financial institutions use to understand their needs. If they do, you may not be receiving advice and guidance you need to maximize the profitability of the funds of the association. In reviewing the cash management process, which should ask the following questions:

Are my reserve accounts performing as well as they could be?
I’m making the maximum rate of return on my money market accounts?
Do I have FDIC coverage on my CDs?
Do I have an investment manager we can trust to recommend investments that meet the regulations of my association and the investment policy?
Are all financial institutions that hold money for my association ensuring the highest level of protection of the funds?

If you are unsure, look for a financial services company specializing in industry owners’ association and work closely with them to implement an effective program management for an effective and efficient partnership.

Sound the Alarm for the Homeowner’s Association Board


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The board of a homeowners association has several different tasks. To understand what these tasks should be, it is essential that the Board understands that the HOA “thing” is. And it is often not what most think it is. Here are some of the myths.

Monthly fees are kept low.

The board is elected to the HOA to maintain assets properly. There is a difference between being a good administrator and a tightwad. Stingy boards skip routine maintenance services and tend to erode the value of homes. It takes money to make things right and the board should spend the money necessary to accomplish tasks.

Volunteer Councils are not subject to the same standards as professional property managers.

Volunteers they are, yet are saddled with the task of conducting business for the Owners Association in an informed and businesslike manner the same way a community manager would. This means that they should be taking care of things in a timely manner, planning to anticipate problems, receiving and acting on good advice.

The HOA is small and so are the needs.

The lower the HOA poulation, planning is more-so important because the cost increases for the smaller owner’s association.

We are too small to professional management.

In areas such as financial management and enforcement, all homeowner associations should have the professionals out front. Collecting money from neighbors and control of their antisocial behavior is bound to cause problems for a volunteer. It’s even worse when you live next to the abuser. There are professionals who perform these tasks management 24 / 7 and get paid for it.

The board is chosen to be the director.

The board is elected to hire and supervise competent service providers. When properly organized, the work of the general meeting should only take a couple of hours a month.

The board is responsible for most valuable asset most people own. The responsibilities of a HOA board are not unlike those of any Fortune 500 board. In both cases, physical and human assets are maintained by the board. Careful planning and effective communication to shareholders (owners) is needed.

Is your board is asleep?  Does it understand the true scope of Board Member work?

So, heed this wake-up call, and call Riverside Property Management, TODAY! (678) 866-1436 or (404) 788-7353.