The HOA Annual Meeting

October 29, 2013

We talked in the last post about preparing the annual budget and things to consider. Today we’ll talk about the HOA meeting and what to expect at the meeting.

For starters, if your community is still controlled by the developer, don’t anticipate an annual meeting. Because the developer still retains control of the Board of Directors of the association, most see no need to have a meeting. Annual meetings are held to elect a Board of Directors and to review the budget for the coming year. Since developers have control of both aspects, meetings are typically not held.

For homeowner associations that are not controlled by the developer, annual meetings are held annually to elect Board members and review or approve the budget for the coming year. However, these meetings routinely do not meet the required quorum and therefore, most Board members are appointed by the existing members of the Board.

What is a Quorum?

Quorum, defined by Websters, is the smallest number of people who must be present at a meeting in order for decisions to be made.  What does this mean for your association?  It means for elections to take place, a certain number of homes must be represented at the meeting, in person or by proxy.

What is a Proxy?

A proxy is a person who is given the power or authority to do something (such as to vote) for someone else.  Properly completed and returned proxies are counted towards the quorum number in order for business to take place at an annual meeting.

So How Does all this Work?

For business to be transacted at an annual meeting and elections to take place and quorum must be present at a duly called meeting. This means the notice for annual meeting was sent out at the appropriate time (consult your documents for specifics), usually no longer than 60 days and no shorter than 14 days. In the meeting notice packet there will be the meeting notice, date, time and place, and a proxy. If you do not plan to attend the meeting or are unable to, complete the proxy and return it to the management company or the point of contact that sent the notice. This proxy will count towards the quorum. Quorum is dictated by the governing documents and can range from 25% up to 75%. If the required number of people are not at the meeting in person or by proxy, the meeting then turns in to an informational meeting.  Volunteers for the Board of Directors will be solicited from those in attendance and if approved by the remaining Board members, appointed to the Board.

The Budget

We talked in the previous post about how to prepare the budget. What we’ll discuss here is budgets that have an increase in the annual fees. Governing documents will usually have a cap on how much a budget can increase each year, anywhere from 5% to 20%. Ideally, association fees should increase each year to keep pace with inflation and to keep sticker shock down.  Provided the Board of Directors does not exceed the allotted percentage increase, a budget can be adopted with little fanfare.  However, there are times when increases need to exceed the percentage allowed by the documents.  At this time, the membership will have to approve the increase at a meeting having a quorum of owners in attendance.  But there are instances where these increases are allowable provided certain conditions are met-these conditions were put in place by State Legislatures to keep HOAs financially solvent.

We covered a lot here about annual HOA meetings.  We’ll continue to discuss the annual meeting process and what you should expect, both as a Board member and as a homeowner.



October 28, 2013

Please join us for an Open House on Wednesday, October 30, 2013, from 4:00 P.M. to 6:00 P.M., as we celebrate 30 years of providing community association management services to Northeast Florida and Southeast Georgia.

‘Tis the Season

October 28, 2013

For preparing proposed budgets that is.  Annual budget preparation doesn’t have to be a chore. If you haven’t started the process for the annual billing for your association, now is the time.

First, review your contracts for services such as landscape maintenance, pool maintenance (if you have a pool) and retention pond maintenance. If the Board of Directors would like to check the existing prices against competitors, now is the time.  If you’ve been unhappy with your service in the previous year, take the time to place your services out for bid. There’s a possibility that the Board could save the association money or improve the level of service provided.  Once the Board has settled on contract services for the year, begin putting together your budget.

001It’s not much different than a household budget.  List your expenses, don’t forget the costs associated with being a business such as filing of state required forms each year (In Florida, its called the Corporate Annual Report), federal tax return (its best to have accountant handle this for you), costs associated with copying and mailing bills, newsletters, etc.

A significant factor to take into account is the number of delinquencies you plan to have for the year. In a perfect world, every association would be able to collect 100% of association fees. But, as you know, we don’t live in a perfect world. Plan to have at least 10% of your owners not pay their fees.  For some communities, mostly starter homes, that number could be as high as 20%. Don’t leave the association short by not anticipating these delinquencies.

Most communities plan for an annual meeting at this time of year to present the proposed budget to the membership. Refer to your governing documents to see if there is a specific date required and if there is a specific time allotted for notification of the owners. Some associations require a 30 day written notification, others are mute on the topic. If your documents do not state a specific time, refer to your State’s requirement for non-profit entities or consult an attorney.  For the State of Florida, the default notification is 14 days.  Your state could be different. For condominiums, the rules are entirely different so please refer to your Declaration of Condominium for specifics.

In our next installment, we’ll talk about the HOA annual meeting and some things to expect.

Replacing Condominium Windows Part V-Maintenance

October 6, 2013

Now that the windows throughout the condominium have been replaced, proper operation and maintenance begin immediately. Not because there is anything wrong with the windows but because the association has just invested a large chuck of change into a quality window.

One of the things that should have been done with the previous windows of your condominium to prolong their life was routine maintenance. On the ocean front, salt accumulates with dirt and grime which will sit in the tracks of the windows facing the ocean. The debris will a) cause corrosion of the frames b) cause weep holes to become obstructed and c) cause a premature deterioration of the window.

Getting ahead of the maintenance curve now will prolong the life of the windows and keep a small job from turning into a big job.  If you are fortunate enough to have a maintenance person for your condominium, this is a project that can be reserved for down times.

The maintenance is as simple as vacuuming the debris from the track, flushing the tracks (usually with the sliding glass doors) with clean water and wiping the salty condensation away. At the same time, lubricate springs and other wear items. A silicon spray will provide a protective barrier to metal hardware that is aluminum or steel.  Perform a window inspection to ensure all latches are intact and functioning properly and screens are in good condition.

The frequency of this routine maintenance should be experimented with over two years or so. If you find that grime accumulates on the bottom four floors more frequently that the top floors, perform the maintenance on the bottom floors every six months. Make the maintenance for your new windows flexible, do it when it needs it.