What kind of Board member are you?

January 31, 2013

You and your neighbors have finally decided that “volunteering” to be the neighborhood bad guy wasn’t as grand as it may have seemed at the time and have committed to hiring a professional management company.  You’ve searched, asked friends for recommendations and requested quotes from management companies.  The Board of Directors has made the decision and have selected ABC Association Management. It’s time to start enjoying your life again.

As the title suggests, what kind of Board member are you going to be now that you’ve hired a professional management company?  Are you going to be the micro-manager that over analyzes every specific detail of your community?  Or are you going to take the non-communicative approach and never let your intentions be known?

Understanding the role of the management company is important when interacting with your association manager.  The association management company

  1. Enforces the restrictions as set forth in the Declaration of Covenants, Conditions and Restrictions
  2. Solicits competitive bids for contract services
  3. Prepares annual (biannual, quarterly or monthly) statements sent to all owners and collects all association fees
  4. Prepares and annual budget,
  5. Serves as an intermediary between residents and the Board of Directors
  6. Provides monthly financial statements to the Board of Directors and keeps all association accounting in order. 

Refer to your specific management contract for more details, but as a general rule, that’s what a management company does.

The best relationship between the Board of Directors and the association manager occurs when the Board President or designate interacts routinely with the association manager.  This interaction could be twice weekly at the beginning to monthly once an association gets settled in to its routine.  Exceptions to this are when there’s an issue that needs to be addressed in a timely fashion such as a covenants violation or financial issues.  A good association manager will perform routine inspections of the community, review the financial statement to note the financial status of the association and when needed, solicit competitive bids for services, most all of this is done without the Board members being aware of it. All of this information will then be given to the Board of Directors for them to render a decision.

That’s your role as a member of the Board, to make a decision at a properly called meeting of the Board of Directors (refer to your association documents).  Your association manager has done all the grunt work-they’ve collected the bids, they’ve written the letters, they’ve threatened the legal action.  Its now time for the Board of Directors to make a decision.  That decision is then relayed to the association manager and it will now be their job to execute the decision of the Board of Directors, be it proceeding with legal action for a delinquent owner or chronic violator of the deed restrictions, or contracting for new landscape maintenance.

Association managers are only as good as the directives they receive from the Board members. Managers want well thought out directives with clear instructions so they may deliver exactly what the Board of Directors is looking for.  Developing an open line of communication, either by telephone or email, helps to keep your association running as smoothly as possible.


Architectural Review-How do I get approval for my fence?

January 22, 2013

We’re coming to the time of year when tax refunds are being used for home upgrades.  We touched on the architectural review process earlier but let’s review since there’s usually a large influx of improvements at this time of year.

Every homeowners or community association typically has a volunteer architectural review board in place to handle requests for improvements to your home or lot. Sometimes, for smaller communities, this is handled by the Board of Directors.  For larger communities, it is a committee hopefully with at least one person with a background in construction and/or design.  For developer controlled communities, it can be the developer or someone he/she appoints.

Before you begin the process of making any exterior improvements to the exterior of your home, find your boundary survey.  Your boundary survey was, most likely, given to you at closing and is among your closing documents.  All property add-ons, fences, pools, screen enclosures and building additions must be shown on the boundary survey when submitted for architectural review.  Below is a sample of a boundary survey.

boundary survey

As we usually say here, check your Declaration of Covenants, Conditions and Restrictions for specifics on what you can and can’t do with regards to property improvements.  Today we’re going to address fences-their styles and how to request approval.  We’ll also give you some insight into things your architectural review board has to consider when granting approval.

There are several different styles of fences available today.  What you choose is up to you and what is allowable in your documents.  Some communities state wood or vinyl, others say vinyl only and still other will say aluminum.  Generally speaking, nearly all communities restrict chain link fencing (check you documents).  Here are the most prevalent of fence styles.

Wood stockade fence

Wood stockade fence

Wood shadowbox fence
Wood shadowbox fence

Board on board
Board on board

While vinyl fencing

While vinyl fencing

Aluminum fence

Aluminum fence

 

 

These are just examples of fence styles.  You and your fence contractor can come up with ways to dress up or improve the appearance of your wood fence.  With vinyl and aluminum fencing, you have your choice of a myriad of styles, sizes and accessories.  

Your next step is to fill out your architectural review information, for communities managed by Property Management Systems, Inc., you can get your architectural review forms and questions HERE. Submit that information with a copy of your boundary survey with the fence location clearly marked on it.  CAUTION: For property that is on a retention pond, there are separate requirements for the style and height of fence along the lake bank.  Some communities have specific requirements so consult your documents and if you have further questions, contact your Board of Directors or association manager.  CAUTION 2: Around a retention pond, there are easements for access to the retention pond. If you are on an easement it will be your responsibility to allow access to the pond for maintenance through the easement.  You may choose not to install a fence through the easement however you and your neighbor are still responsible for the maintenance of the area not fenced. 

Other considerations to keep in mind when purchasing a fence and having it installed:

  • Do not bring the fence all the way to the front corner of your home.  Most architectural review committees will not allow it.
  • Wood fences usually have a 8-10 year life span in Florida before needing replacement. Vinyl and aluminum usually have lifetime warranties.  Things to consider when making your fence purchase.
  • Some communities forbid stockade fencing but allow shadowbox and board board styles-always check your documents.
  • If you are on the retention pond, look at other fences, do the fences continue to the lake edge or does it stop at the top of the bank. Bear in mind, water levels rise and fall depending on rain conditions.

These are just a few tips when submitting a fence for review to the architectural review board.  For the specifics for your community, contact your association manager or your Board of Directors.

For information on professional association management for your community, contact Property Management Systems, Inc.


Rental Nation

January 15, 2013

The unfortunate fallout from the mortgage crisis of 2008/2009 was that suddenly we became a nation of renters.  Which means we now have two classes of home occupancy, we have owners and renters.  So how does that work exactly in a homeowners association and who is obligated for what?

LANDLORD

Bear in mind, this is only informational, this does not supercede any contracts negotiated between the landlord and tenant.  Having said that, the landlord’s obligation to the homeowners association or community is to pay the annual association fee and to ensure the property is in good condition such as lawn kept up and home maintained.  How you have negotiate the latter with your tenant is entirely up to you.

TENANT

Beyond your rental agreement, you have access to all community amenities as a renter.  However, you also have the obligation to abide by all of the Covenants, Conditions and Restrictions for the community.  Examples would be no boats, trailers or RVs in driveways, no parking on the street, no vehicles in disrepair, no disruptive activities (parties) until the wee hours of the morning.  The tenant cannot serve on the Board of Directors for the association as Board members must be property owners.

The property owner is ultimately responsible for all the activities of the renters and the condition of the property and the owner will be notified of any violations with a copy of the notice being sent to the tenant.  However, if the tenant fails to abide by Declaration of Covenants, Conditions and Restrictions and begins to incur fines, then liens because of noncompliance, it is the property owner that will be held responsible.  How this impacts your individual rental agreement is between the landlord and tenant.

Unfortunately, just because you are an upstanding tenant and comply with all rules and regulations does not mean everything goes according to plan.  There have been numerous instances of banks or homeowners associations foreclosing on homes either from a mortgage default or nonpayment of association fees.  As a result, the tenant is sometimes left out in the cold with little to no explanation and no recourse.

THINGS TO CONSIDER

There are some communities, mostly in South Florida, that have age restrictions, retirement communities.  If you are considering renting  out your home, check your association documents for clarification or seek out the advice of an attorney familiar with community association law.

Some communities have restrictions in place for commercial vehicles, signs on vehicles, etc.  It is important to read and fully understand the Declaration of Covenants, Conditions and Restrictions prior to executing a rental agreement.

Check the Declaration of Covenants, Conditions and Restrictions for limits on rental activity such as duration.  Some neighborhoods frown upon short term rental activity.

For both the landlord and tenant, its important to understand the requirements of living in a deed restricted community.  If there are any questions pertaining to rental activity, engage the services of a real estate attorney to help in the navigation process and to provide interpretation of the governing documents.

If you’re looking for a change in management companies, contact the professionals in community association management, Property Management Systems, Inc.  PMSI has provided communities in northeast Florida and southeast Georgia with association management for over twenty five years.  Contact them today for a free community evaluation.


Tips for your short term rental condo

January 9, 2013

If you own an oceanfront condominium you probably have considered at some point, or are actively engaged in, a short term or long term rental program.  As with any endeavor, there are high points and low points associated with generating income from your rental property.  If you have a condominium on the short term rental market, consider some of these tips to make your unit more desirable.

1. Make your furniture comfortable and your unit attractive.  Nothing screams “I’m in it for the money” like white walls, contractor grade flooring and bland furniture.  Dress up your unit as you would your own home by adding some colored walls, throw pillows and rugs.

Orange Beach Ala

2. Commit to freshening up your unit after each summer rental season.  If your unit received a high rate of occupancy over the summer months you very well may find some broken or soiled items, missing pots and pans or malfunctioning appliances.

3.  Deep clean upholstery, drapes and area rugs and carpets after the season to give your unit a fresh smell and appearance.

4.  Avoid wall to wall carpets and opt for wood flooring or tile floors with throw rugs.  While wall to wall carpet might be ideal for your personal home, rental condominiums can and will have excess sand and dirt brought in from the beach, spilled items and who knows what else.  Inexpensive throw rugs are ideal as they can be thrown away if they’re beyond saving.

5. Never leave anything of value in your rental unit, be it monetary value or sentimental value.  There is a high probability it could be stolen or broken.

6. Consider contracting with a friend, relative or outside company to perform a monthly inspection of your unit to ensure your rental company to protecting your interest.  If you live far away and visits to check on your unit are few and far between, this could prove to be invaluable as your rental company wants the income and could tell you anything.  An ounce of prevention is worth a pound of cure.

While Property Management Systems, Inc., does not actively engage in rental management, a significant number of condominiums we provide association management for are on the rental market.  With nearly 30 years of association management experience, we have seen, heard or experienced a number of issues.  If you would like more information on our condominium management programs, please feel free to contact us today.


CDDs or Community Development Districts

January 2, 2013

There are several communities here in North Florida that are part of community development districts or CDDs.  There are numerous instances where people purchase a new home and are unaware that there is a CDD in place and you will pay for the privilege of living there.

CDDs or Community Development Districts are a growth management tool implemented by the State of Florida under Chapter 190 of the Florida Statutes. Here is a simply worded snippet of information from credit analyst, Dr. Jay H. Abrams, describing the purpose of the CDD:

Here’s how they work: A real estate developer identifies a piece of land to develop into a new housing project. To build this project, including the roads, water service, clubhouse and other amenities, the developer needs to find a source of funding for all the things that make the housing project a community. The city or county in which the development is to be built doesn’t want to increase taxes or fees on existing residents since they wouldn’t benefit from the new infrastructure. If existing residents were to bear the costs of these improvements, they would likely reject the project.

Another choice the developer could make would be to build the cost of the common infrastructure into the prices of the homes that will be built. However, this approach could make the cost of housing too high for the targeted potential home buyer, i.e., first-time purchasers or retirees, while making the cost of housing uncompetitive with rival housing developments.

Instead, the more popular approach since the late 1970s has been to create a governmental district whose boundaries are coterminous with the housing project to be built. This special district serves as the entity to issue debt for, build, and then own the infrastructure necessary for development of the housing project. The bonds are repaid by the residents who directly benefit from the infrastructure improvements, and not by those who live in other neighborhoods. Further, by spreading the bond payments over many years, subsequent homeowners who will benefit from the project’s roads and wastewater system also share in paying the cost for the benefits they receive as well.

That’s pretty much it in a nut shell.  Currently in Northeast Florida there are 28 CDDs, nearly all of them outside of Duval County.  The benefit is that CDDs have created larger communities with more amenities.  But all of these come at a cost such as increased property taxes.

CDDs are usually managed by specialty companies, specializing in the different governmental tasks associated with bond issuance and management.  These specialized management companies typically manage the amenities that the bond money paid for such as drainage, roads, amenity centers and other recreational facilities.  The management boards that direct these services are put in place by the developer to protect their interests until a majority of the lots have been conveyed to private owners.

If you reside in a Community Development District and want to gain a better understanding of their operation, meetings are held routinely and are governed by Florida’s Sunshine Laws. A quick internet search of a few CDDs indicates that most of the Northeast Florida CDDs have an online presence where you can view dates for upcoming meetings.

For your association and condominium management needs, contact us at Property Management Systems, Inc., for more information.