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HOA Board…Wake Up!


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. It is often not what most think it is. Here are some of the myths.

PRLog (Press Release)Sep 01, 2011

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.
http://www.youtube.com/watch?v=UayzInP1tp4

 

Riverside Property Management, Inc. offers this information for educational purposes only and not as legal advice. The information provided in this article does not create a client relationship between you and Riverside Property Management, Inc., nor is this article a substitute for legal advice. The contents of this article are subject to change without notice. You should not rely or act upon the contents of this article without seeking advice from your own attorney. Riverside Property Management, Inc. is not a law firm.

How Do I Form an HOA in Georgia?


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Home Owners Associations (HOAs) bring peace and civility to shared communities. Condominium or single-family home complexes may create an HOA to determine how common areas will be maintained, for example. In Georgia, as in most states across the country, bylaws and a board of directors must be established before an HOA is official. Talk to neighbors within your development to garner support for the HOA and commence with an expeditious launch.

Difficulty:
Moderately Easy

Instructions

    • 1

      Contact the Georgia General Assembly. Reach out to the offices of your House of Representatives and/or State Senator and ask for a copy of the Georgia Property Owners’ Association Act (GPOA). Review the GPOA to familiarize yourself with the rules and guidelines of the state for creating an HOA. Log online and visit the official Georgia General Assembly website to find the contact information for your respective representatives.

    • 2

      Form the physical HOA. Assemble residents of your community. Elect HOA leadership representatives including a president, vice-president, secretary, and treasurer. Establish any committees necessary to the function of your HOA — planning or policy committees, for example. Write the bylaws for the HOA. State how shared community areas will be overseen, who is affected by the rules and the amount members will pay for annual dues. Title the bylaws “Declaration of Covenants, Conditions, and Restrictions.”

    • 3

      Reach out to the Internal Revenue Service (IRS). Ask an IRS representative for all necessary 501(c)(4) tax documentation for creating an HOA. Filing for 501(c)(4) status makes the HOA an official non-profit organization. Submit all necessary forms and supplemental documentation — a copy of the bylaws, for example — required by the IRS. Consult IRS agents and the 501(c) (4) forms for instructions.

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.