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.

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OPEN HOUSE

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.

 


Replacing Condominium Windows Part IV

September 29, 2013

Part I

Part II

Part III

When you settle on a window, are happy with the construction and warranty, it’s time to select a contractor to perform the job.  We continue to harp on technology but its and important financial consideration.  Just ten years ago it wasn’t too terribly far fetched to have the entire building scaffolded to install windows.  Because the scaffold was an expensive and unsightly endeavor, new technology was created to allow windows to be installed properly, and within the building code, from the inside.

Selecting the right contractor for a massive window project should be done carefully.  Manufacturers of windows of this caliber should have a listed of certified contractors knowledgeable about their technology and installation process. It is imperative that a Board of Directors properly vet these contractors to ensure a) the job will be done right b) the job will be done with the least amount of inconvenience to owners and renters c) contractors employees behave d) they’ll stand behind their work.  It seems simple but its anything but.

One way to simplify the process of selecting a contractor is to ask for references. Contact those references and then go visit the project. If you can find an active project that would be ideal.  A Board contingent can then watch how the installation process works, determine how disruptive it is, and watch the contractor in action. Things to ask yourself would be are these guys professional, are they organized, are they efficient and are they respectful. Because lets face it, your letting a group of strangers into your home for a few days.  Would you let them into your unit to hang out with your wife and family?

Another solution is, if your association has a maintenance person, have him or her manage the project on the ground. If they are able, they can coordinate the installation and run interference between the owners, contractors and Board of Directors.  Your association management company may also perform this service for a fee. However, this is not a situation where the maintenance person or property manager can just pop in and out to check on things.  A project of this magnitude will require continuous oversight.  The money associated with the expense is well worth it in the end.

Selecting the right window for your project is only half the battle.  Finding the right contractor who is the right fit for your particular project is a significant part of the equation.  Ask lots of questions and trust your instincts.


Replacing Condominium Windows Part III

September 28, 2013

Part I

Part II

Part IV

As far as technology is concerned, there are a number of factors to be considered beyond the style. In recent years, efforts to improve the energy efficiency of windows has been a major concern. Other considerations for those along the ocean are wind resistance from tropical storms and hurricanes as well as proper window tint as it relates to sea turtles (sea turtles typically hatch on the full moon and are attracted to the water by the bright light. Bright lights on the land side have been shown to disorient the hatchlings causing them to move towards land instead of water).

The most recent technology for windows incorporates a high wind resistance (from flying debris), energy efficiency and thermal transfer and adequate tinting for sea turtle hatching. These windows tend to be heavy but once installed, wear well in the salt air.

Considerations for windows like this are the sash material, material used for movable parts (latches, springs, rollers for sliding glass doors) and ease of use. Because of the heavier window, elderly people may have a harder time opening and closing the window properly.  Rollers used for sliding glass doors (because those are really heavy) should be high quality stainless steel. The reason is because any other material, aluminum or steel, will corrode causing the door to not move properly along the track after just a few years. Springs are typically wearable items.  Your window should be constructed in a way that the springs can be replaced relatively easy should it be necessary. Your maintenance person should not have to remove the window entirely from the opening to replace a wearable item.

Windows of this caliber are expensive but have been shown to hold up for a very long time.  What you should consider when looking at these upgraded items is how long your window warranty is, what is covered under the warranty (wearable items are typically not covered) and what your costs for maintenance will be over the expected useful life.  If a window manufacturer wants to sell you a high end window but offers only five years on a warranty, continue looking for a better window.


Replacing Condominium Windows Part II

September 27, 2013

REFER TO YOUR GOVERNING DOCUMENTS REGARDING OBLIGATIONS OF THE CONDOMINIUM FOR SPECIAL ASSESSMENTS, COMMON ELEMENTS, AND MAINTENANCE OBLIGATIONS.

Part I

Part III

Part IV

We spoke in the previous blog post how Hurricane Andrew changed the face of the construction industry in Florida. Today we’re going to talk about the changes that occur in the window industry and how Boards of Directors need to stay current.

One aspect, albeit an important one, of condominium window replacement is architectural standards that are applied to window selection.  Although some condominiums require owners to replace windows at their own expense, the Board of Directors has color and design authority, meaning a window must conform to certain sizes and colors.

In the 1990’s, a popular window style used was a bronzed aluminum sash with insulated glass.  A number of condominiums used this style as a replacement since they were readily available and came in standardized sizes or custom sizes. But as we’re seeing 20+ years later, these windows are no longer available in the “square box” style used in the 90’s.  The bulky sashes have been trimmed down with different architectural styles added.  As a result, new bronze windows are no longer exact matches from the 90’s. Functionally, after 15 years or so, these windows would typically lose their interior seals (double pane insulated glass is two pieces of glass sandwiched together with a gas in between the panes, sealed around the edges). The result was windows that began to fog over and become opaque. Another issue for ocean front condominiums was the constant salt air and moisture exposure caused these windows to deteriorate.

The point is that members of the Board should address window standards for their condominium every five years or so.  Technology has changed dramatically over the last several years making windows made just 10 years ago obsolete. Improvements in thermal management, materials and impact resistance means Board members should stay (somewhat) current on the latest window improvements.  While not everyone will replace their windows simultaneously, a generalized standard should be adopted in terms of sash/frame size and color.  In short, select a high quality window with a reasonable warranty (10-15 years), that is state of the art and tested within the last 12 months, and most importantly, move forward with your window project in a timely manner before the technology you’ve chosen becomes obsolete. There are a number of instances where a proposed window project can languish for five years or more before a condominium Board of Directors decides to move forward, money being an important consideration. However, the longer you wait, the farther away from the latest technology you get.