Governing Board Duties Increasing

As many cities, including Detroit, experience financial difficulties, some homeowner associations have assumed control of various duties for the associations they serve.  The nature of HOA communities has shifted to include property maintenance, trash collection, and other duties that were once performed by local governments.  As a result, it is becoming increasingly difficult for board members of HOA communities to take care of the day-to-day operational tasks of managing the communities they represent.  According to USA Today, 75%-85% of HOA communities perform their day-to-day activities with the assistance of an experienced property management company, while the other 15%-25% are still self managed.  

As the residual effects of the housing crises continue, governing board members of HOAs are required to take on more and more responsibilities.  This ranges from daily operations like dealing with contractors, bookkeeping duties like paying invoices, and collecting delinquent association fees from fellow members  These tasks can prove to be daunting without the assistance of a professional management company, such as LandArc.

Click on the following link to read more:

http://www.usatoday.com/story/money/business/2013/03/03/hoas-pick-up-duties-left-by-struggling-cities/1960671/

HOA "Shakedown"

In a homeowner association, decisions are made with the entire community in mind rather than individuals.  As a result, there are some instances where homeowners feel that since they pay their dues, they have a right to get their way.  So in some cases, homeowners start withholding dues in order to “shakeup” the board and get their desired outcome.  When this happens, the source listed below states that it is important to gain an understanding of the situation in a personal manner (a phone call from a board member as opposed to an email or letter).  

If the homeowner’s request is reasonable, then the situation could be resolved along with possibly waiving any late fees that have been incurred.  If the request is not reasonable, then explain the reasons why.  In many cases, withholding fees could simply be the result of financial difficulties.  If that is the case, the homeowner might be able to receive accommodations such as a payment plan based on their situation.  To read more about this topic, click here.

Presentation Dinner

Now that winter is underway, it is time to think about preventive maintenance.  We can help.  LandArc is holding a presentation on Tuesday, February 26 at 6:30 pm. Among the topics that will be discussed are: routine preventive maintenance, handling delinquencies, and saving money. This event will take place at the Station 885 at 885 Starkweather, Plymouth, MI, 48170. Dinner will be included. 

Call (888) 646-9888 or email rcomins@landarc.com to register.

A drawing and giveaway will be held at the conclusion of the evening.

Delinquency Tips

Delinquencies.   This one single word causes every homeowner association board member to shudder.  And for good reason.  In the current economical environment, money is tight for everyone, but when homeowners fall behind on their payments, the entire community suffers.  Even those who stay on top of their payments are forced to make sacrifices to fill deficit gaps caused by delinquencies. 

According to the source listed below, the best way to keep an HOA community running smoothly is to have clear, decisive delinquency policies.  By applying a concrete, uniform policy situations caused by delinquencies are kept fair for everyone.  It also helps to have an experienced property manager to help collect delinquencies.  LandArc has long experience in taking appropriate measures to handle homeowner delinquencies. Collection agencies have proven very effective partners in this process, and attorneys are also needed in select cases. 

For more information about this topic, click on the following link: http://realtytimes.com/rtpages/20120919_hoadelinquencies.htm

National HOA Bank Acquired

First Associations Bank (FAB) serves the financial needs of HOA communities. The Texas company has served communities across the United States since 2007. FAB announced a few days ago that they had entered into an agreement with Pacific Premier, which will acquire FAB. Following the acquisition, FAB will operate as a division of Pacific Premier. For more information, click on the following link:


http://www.heraldonline.com/2012/10/15/4338456/pacific-premier-bancorp-inc-announces.html

Budget Seminar Update

FYI: the date for the budget seminar has been changed to Wednesday, October 24. The time and place are still the same: 6-8 pm at the Royal Park Hotel: 600 East University Drive, Rochester, MI 48307. Dinner will be included with the budget seminar. Invitations will be mailed out by next week at the latest. If you are a governing board member at a homeowner association and do not receive an invitation by October 10 but would still like to attend, please email rcomins@landarc.com to register. We will accept registration for the budget seminar until October 15. LandArc strongly recommends that association board members attend this event in preparation for the upcoming budget season.

Free Budget Seminar

Budget time for HOA communities is upon us once again. Did you know that there are two independent budgets that are vital to the continued growth of home associations? These are the operations budget and the reserve budget. Both are the driving force behind all HOA communities. LandArc is committed to providing the associations we manage with the tools necessary to succeed. That is why we are offering a free budget seminar for association board members in about a month. This event will take place on Tuesday, October 23rd from 6-8 pm at the Royal Park Hotel: 600 East University Drive, Rochester, MI, 48307. Allow us to have a positive impact on your community.


Source: http://www.mesquitecitizen.com/viewnews.php?newsid=2848&id=77

Community Woes

Residents who live in an HOA really have a high stake in the effectiveness of both their governing board and their property management company. If either one does not perform their job properly then it is the homeowners that reap the consequences. In the link below, a homeowner living in an HOA sends a letter asking what is the proper way to remove an ineffective president from their governing board. The president here arrived to a board meeting drunk and belligerent, which is no way to represent a community. The response to that letter (also included in the link below) states that a board member position should be one of little power where the board devotes their time and actions in service of the community they represent.


A second letter is included that asks about the proper conduct of a property management company. This letter and the response discusses how property managers should always act professionally by not discussing community related business in a public restaurant or excluding other members of the board in favor of one member. The writer of the response to this letter stated that property management companies lose their “objectivity,” in cases such as that.

To view both letters and their responses, click here: http://www.pe.com/local-news/local-news-headlines/20120910-hoa-homefront-presidential-problems-and-communication-with-management.ece.

Board President Steals $500,000 from HOA

The president of a Florida Homeowners Association is charged with stealing more than $500,000 from the community he was supposed to serve. While David Meadows claims that the charges are beyond his comprehension(see source below), his actions during the past four years leave a lot of questions. Money intended for the HOA community Meadows' administered went, instead, to a number of other places, ranging from Meadows’ own mortgage to businesses he used to run. And if that wasn’t enough, there’s the structure of the board itself. Instead of the traditional officers, the only board members in charge of this community were Meadows and his wife. Allegations show that Meadows did not manage this HOA, he ruled it. Due to his ownership of multiple units in the community, he controlled the votes performed. The property management company performing services to the association also belonged to Meadows. Many community owners also complained about receiving outrageous fines from the association ranging from possessing satellite dishes to having bent screens on their homes. These violations would cause Meadows to charge these homeowners $100 a day. Meadows allegedly used these fees to pay back money he owed through the companies he managed. The homeowners in this HOA can only hope that justice will be served.

Click here to view the source used in this post: http://www.newschief.com/article/20120912/NEWS/209125007/1021/NEWS01?p=1&tc=pg

Could This Happen in Your Community?

The regulation differences between states can often be difficult to follow, especially if you live in an HOA community that receives services from a different state. Issues can also arise from conflicts of interest between public organizations and HOA communities.
Here is a recent instance of a legal dispute between a public organization and an HOA community: a property in Virginia has a gravel road winding right through the center of their land. Three years ago the owners barred public access to this road. An action that caused a non-profit public organization to file a lawsuit against the property owners. The dispute here was whether the road running through HOA community was public property by right. For information about the particulars to the dispute, click here: http://newsmanager.commpartners.com/cailaw/issues/2012-08-15.html
At first, the property owners were ordered by a trial court to remove the gates barring public access to the road. However, the HOA community appealed to the State of Virginia Supreme Court, which found fault the trial court’s decision and reversed the previous ruling. This barred public access to the road running through the property of the HOA community once again. Is this something that could happen in your community?

Builders: How to Hit a Moving Target

Controlling expenses for the condo or HOA is tough during the sales and construction period.  The disclosure or “at full” budget is of little value during the sales and construction period, yet many managers rely on this budget for their financial reports.  Using this budget in your income statement prior to the community reaching completion gives a false sense of security.  Of course you’re under budget on everything… the common elements are only partially complete! 

LandArc has a practice of creating annual operating budgets in partnership with our builder/developer customers.  These budgets forecast anticipated additions to the common elements, projected sales, and expected deficit funding requirements.  This is an essential tool for managing the developer’s funding obligations throughout the sales and construction process.

After an annual operating budget is adopted, LandArc’s systems produce a monthly update that contrasts cash against the forecast.  This system tracks revenue and expense projections against reality and recasts the expected deficit for the year.  This is a sophisticated piece of software, not a manually updated spreadsheet, but it is invaluable in creating accountability for association expenses throughout the sales and construction period.