Combating vandalism

December 26, 2012

Vandalism has been an issue with both condominiums and homeowners associations for as long as there have been condos and HOAs.  I recall, quite vividly, the continued vandalism to a community pool that was so out of control that eventually the homeowners association closed the pool down, essentially deconstructed the entire area.  That endeavor ended up costing the association close to $10,000-in 1998.  What could have prevented this continued vandalism to the common areas?

Some communities have researched the possibility of installing closed circuit video monitoring but the cost and constant monitoring required made it prohibitive.  But with significant improvements in technology, installing closed circuit video monitoring is more attractive than ever to control maintenance and repair costs related to vandalism.

Closed circuit cameras can now video record on demand, when a motion is detected.  With these smaller, less cumbersome cameras with built-in communication devices you can create a significant deterrent to would be vandals and possibly recoup some of the damage costs if someone can determine who the vandal is.  If your cameras are monitored, talk-down technology enables the monitoring service to talk to the vandals to let them know police have been dispatched to the area.

The cost associated with new CCTV technology is no longer the deterrent it once was.  Considering the costs associated with night time security and training personnel on your particular communities procedures for your amenities, CCTV could be a viable option.  Vandalism can cost an association several thousands dollars each year and diminish the aesthetics of your common areas and the community as a whole.  If your Board of Directors has been hesitant in the past to engage in this type of security, maybe its time to reconsider.

If managing your community is becoming a burden to you, contact the association management professionals at Property Management Systems, Inc.  With over twenty years of association management experience in Northeast Florida and Southeast Georgia, PMSI can make your community a pleasant place to live again.  Give us a call today.


That beautiful lake

December 18, 2012

That beautiful lake that your home backs up to is actually referred to as a storm water retention pond.  Storm water retention systems are designed to percolate storm water runoff from areas back into the aquifer.  Clean water is one of Florida’s most valuable assets as continued development threatens to deplete this natural resource.

When a land developer decides to purchase a parcel of land for construction of residential or commercial homes, county and state permitting departments usually require a storm water retention or detention area of some type.  Even municipalities are subject to these requirements.  If you were to drive down the recently widened Brannan Field/Chaffee Road extension into Oak Leaf Plantation in Jacksonville/Orange Park, you will notice several retention ponds to the west side of the road.  These ponds are collection points for rain water that runs off the road.

In your own community you will notice the inlet drains along the curbs of your street.  This is the collection point for runoff from the yards, driveways and streets in your area.  There are several located throughout the community, each one directing water flow to a pond or detention area.  This means that during a rain storm the runoff carries pollutants from your lot into the pond, such as fertilizers recently put down on your lawn, oil and grease from your driveway and/or leaves and grass clippings.  While not detrimental to the overall health of the storm water system, over time these pollutants can accumulate and cause problems.

One of the most problematic issues with the retention system occurs in the spring and that is an algae bloom.  These algae blooms are the result of fertilizers that enter in to the pond from a number of yards after a heavy rain.  In essence, all of this additional fertilizer has fertilized the algae causing it to proliferate and bloom.  The next part of this cause and effect issue is when algae blooms occur it depletes the oxygen from the pond (as the algae is consuming it during the bloom) causing a “fish kill” if your pond has fish in it.  Fish kills are unpleasant and yes, they smell.  But the only solution is to retrieve what you can and dispose of them.

Other noxious weeds have a tendency to take up residence in ponds causing problems.  The one that comes to mind is cattails.  While cattails in small amounts are not a nuisance, their pollination process can cause your cattail population to multiply exponentially causing issues in your retention pond.

Excess dirt and grass clippings that flow down the retention system will have a tendency to accumulate at the mouth of the spillway at the waters edge creating a “delta” of sorts.  This delta or sediment will cause a proliferation of weeds and grass to develop which can ultimately cause flooding as water back up in the drainage system.

If your HOA has a contract for lake maintenance the service company will come out, usually each month or as needed, to treat the lake for noxious weeds and algae. It is important that the company can access your lake by boat, if needed, to perform this spraying. Monthly treatments will usually keep your retention pond looking presentable.

You can do your part by reducing the pollutant runoff from your property into the street.  Clean up any oil spills or spots on your driveway, try not to fertilize your lawn before a big rain is expected and bag or recycle your lawn clippings to prevent them from enter the storm water system.

Some additional points

While these ponds perform a necessary function, it is not advisable to swim or consume fish caught from them. Practice catch and release.

Ensure that curb inlets at the street level are free from obstructions to reduce flooding potential.

Every five to ten years, contract out cleaning of the curb inlet drains.  This will remove any excess debris that got into the drain but is unable to get to the pond.


Insurance for your condo

December 11, 2012

Owning a condominium has its benefits.  For a fee each month your grass is mowed, the pool is maintained and the building is insured among numerous other things.  But what about the inside of your unit?  Just because the building is insured does not mean the inside of your unit is insured. Before you assume that the inside of your condominium unit will be repaired if something catastrophic occurs, consult with your association manager and insurance agent.

Catastrophic damage to the inside of your condominium is not limited to hurricanes or fire.  A ruptured water line or hot water heater from units adjacent to or above you can and will cause significant damage to the interior of your unit costing thousands of dollars.  Over the years here in North Florida, we have even experienced damage from ruptured water lines associated with freezing temperatures.

Generally speaking, a condominium building policy only insures the building, unit studs and drywall. To determine exactly what the association is obligated to cover under their policy, refer to the Declaration of Condominiums.  If you own a condominium you should insure your unit with an HO-6 Condominium Unit Owners Policy, even if your unit is a rental unit.  Most HO-6 policies offer dwelling coverage and contents coverage.

The dwelling portion of the policy covers additions and alterations, succinctly put, anything screwed or glued.  This is includes (but not limited to) sheetrock, cabinets, baseboards and floor coverings (wood flooring or carpet).  The contents portion of the policy includes (but not limited to) anything portable such as drapes, pots, pans, bedding, dressers. For specifics on the HO-6 condominium policy, please consult with your insurance agent.

The likelihood of your condominium being damaged by ruptured pipes or hot water heater is greater than that of a hurricane, fire or flood.  When it does happen it can sometimes go undetected for days, if your unit is vacant, causing significant damage.  It is not uncommon for a unit to be damaged to the extent that a complete renovation, including kitchen cabinetry and tile flooring, has to be undertaken to restore the unit to its previous condition.

Results of a ruptured water heaterCabinet damageHot water heater on its last leg

If you have a condominium unit and do not have unit coverage because you think the association’s policy will cover your unit, think again and contact your insurance agent.  The association’s policy does not cover the inside of your unit, regardless of fault.

Thanks to Leah Hall of 8 Flags Insurance with your guidance and direction.


How to read a financial report

December 4, 2012

So you’ve received your bill and had that overwhelming urge to kick puppies because you feel that nothing is ever done in your homeowners association except harass you about your boat.  You feel that maybe its time to take a closer look at the comings and goings of your homeowners association.  To get a clear picture of the financial standing of your association, request a copy of the association’s financial.

Depending on the conditions set forth by your Board of Directors (pertaining to cost and availability), everyone that pays fees in the homeowners association or condominium association is entitled to a copy of the financial and budget.  Whether there is a fee for copies and postage depends on your association and your state’s directive regarding copies.  The cost is nominal, $o.25-$0.50 per copy plus postage.

But you’ve never read a financial statement and don’t quite understand what all of these numbers mean.  Well you’re in luck because today we’ll learn how to read the financial statement.

The financial statement is a cummulative monthly report identifying exactly what has been spent on behalf of the association up to that point.  Its not terribly complicated and is an accurate reflection of the finances of the association.  However, the income/expense statement is only as good as the book keeper entering the information.  In this computer age we live in, everything is automated.

For starters, an HOA financial statement is a simple cash in/cash out financial.  There is no creative accounting or deferment of income or anything else.  Its all pretty straightforward. Financials should be simple and easily read.

Your balance sheet shows how much money is in the bank at the close of the last business month.  Your checking balance is noted as well as any other accounts that the association has, including money markets and CD’s.  These are the association assets.  The income/expense statement shows what has been spent year-to-date on that specific line item.  Some accounting software can show how much a specific line item varies each month against the year-to-date budget as well as the annual budget.

INCOME

The income line item will show what association fees were taken in for that particular month, compared to what should have been collected for that month as well as what has been collected year-to-date, what was budgeted to be collected year-to-date and what the annual budget is.  Additional income that is generated though finance charges, late fees and interest on money market accounts and CD’s are also displayed.  However, because no one knows exactly what interest rates will be, who will be late with their assessments, etc., etc., this is just considered additional income with no annual budget attached to it.

EXPENSES

Each association and association management company will set up the hierarchy of their expense statement differently but the same  thing holds true-cash in/cash out.

Administrative expenses include fees to an accountant (a tax return must be filed each year), insurance (association liability and officers and directors errors and omissions policy), filing of the corporate annual report to your state, office supplies (there is a cost associated with copies, stationary and postage-for large associations it can be significant), and legal fees if the association is involved in any litigation.

Utilities are common area electric and water service that is paid to your local utility company.  If there is more than one meter, the association Board of Directors could choose to assign the utility charge to the maintenance line item such as the electric meter, water and sewer for the pool area.  By paying close attention to utility bills, your association manager, book keeper or Board president can spot a possible problem i.e an unidentified water leak causing a spike in water bills if they notice the monthly usage is too far away from the year-to-date budgeted funds.

Contract services usually stay pretty close to what was actually budgeted for.  Unless there is a mid year contract negotiation, all of your contract service line items should coincide directly with the year-to-date budget.

Maintenance and repairs is a line item that can possibly get out of hand and should be the one area of the financial to keep close tabs on.  If your association budgeted $6000 for unexpected repairs and maintenance beyond what is covered under your contract services, the Board of Directors and association management company should work hard to stay within that budget.  A general rule of thumb when addressing repair and maintenance issues is to bid out the work if you anticipate the price being in excess of $500.  By looking at previous years financial statements you can get a feel for how much is being spent for repairs.  Something that comes to mind when people think of repair and maintenance items is the costs associated with vandalism.  If vandals are wrecking havoc every weekend, the costs associated with cleaning up and repairing the damage can add up over a year.  In short, don’t spend all of your allocated money for repairs and maintenance in the first quarter of the year.  If vandalism is a serious problem, ask the police to cruise through at night on the weekends to show a presence.  If there is a police officer in your neighborhood, ask him or her to park their marked cruiser near the sight of the vandalism as a deterrent.

If your association is responsible for the upkeep of streets, there could be a line for the monthly contribution to the reserve that will fund the repaving, if the Board of Directors has decided there should be funding.  Any other capital expenditures that come around every 10-15 years can also be placed in this reserve funding line item.

The Board of Directors and the association management company maintain a list of delinquencies but this information is rarely communicated to the membership.  However, you can ask for the dollar amount of delinquencies, just not the names.  Sometimes mistakes happen, someone pays their assessment and the checks cross in the mail after financials are prepared.  To keep peace and harmony it is better for the general membership to not know who has paid or not paid.

Phew, we’re done now.  To recap, everyone in the association is able to request a copy of the financial statement.  Take the time to understand all of the facts and figures of the financial statement and monitor your association spending.  If you have a particular skill that could come in handy for your association, volunteer your time to serve on the Board of Directors.