Court Decision Upholding “Discriminatory” Rental Ban also Calms Industry Nerves

True or False:  1) Owner-occupants have more invested in the property and will be more concerned about maintaining it.  2) A large concentration of tenants in a common interest ownership community can threaten the value not only of the units they occupy but of the community as a whole.  You won’t find many owners or professionals in the common interest ownership world who would challenge either assertion. The assumption that owner-occupants are preferable to tenants is reflected both in secondary mortgage market policies that make a high owner-occupancy rate a condition for approving condominium loans and in the rental restrictions (or outright rental bans) that many communities have adopted. But this conventional wisdom was challenged last year when an Indiana Appeals Court ruled that a rental ban in one condominium community violated the federal Fair Housing Act.  Although the decision applied only in Indiana, it sent nervous ripples throughout the industry, because with a relatively small number of judicial precedents addressing condominium issues, it is not uncommon for courts in one jurisdiction to rely on the decisions of courts in others.  Fortunately, at least in the view of most industry practitioners, the Indiana Supreme Court has reversed this unsettling decision.  Read more

How to Help Fix HOA Problems, Before They Become Problems

Everyone knows that HOA’s and HOA Boards are often in a continual dance for “which one is right.” Sometimes that spills over into lawsuits, open revolts by homeowners, or worse. How can HOA Board members act proactively to stop some of that dance of near death? I am a big fan of The Fifth Discipline by Peter Senge. In the Chapter entitled “Does Your Organization Have a Learning Disability?” he mentions three problems I see might affect HOA Boards. Now, before you say, “that isn’t us,” read the next three paragraphs.   Read more

Condo Insurance Requirements Not Cookie-Cutter

"Given the great interdependence of the unit owners in the stacked unit condominium situation, mandating property insurance for the entire building is the preferable approach." This one explanatory sentence from the Uniform Condominium Act of 1980 forever transformed condominium association insurance programs.  Prior to the National Conference of Commissioners on Uniform State Laws' ("National Conference") adoption of this act, condominium associations customarily insured only a building's common elements and limited common elements; unit owners were charged with insuring real property unique to and within the individual unit. Beginning with the Uniform Condominium Act and continuing today in the Uniform Common Interest Act, condominium associations are advised by the National Conference to insure all real property regardless of location or classification, whether considered a common element, limited common element or part of the defined "unit."   Read more

HOA Turnover Showtime

Homeowner association managers are a critical part of the turnover process from developer to elected homeowner board. But the devil is in the details and there are plenty of them to get this process right. Developers, in their role as pre-turnover board president often hire homeowner association management companies to handle HOA business like collecting fees, paying bills, processing maintenance requests, enforcing rules and architectural restrictions. These tasks will continue after turnover so getting the routine down as early as possible is in the best interest of the HOA.  Read more

Minimize Your Community Risk Against Current Housing Trends

When the housing market encounters a downward trend, and most recently accelerated by the rapid decline of the mortgage industry, cash-strapped homeowners must balance whom to pay, whom not to pay, and what to pay for. Sadly, many have decided to relinquish the maintenance on their homes. In some cases, owners are abandoning their home, awaiting foreclosure. An abandoned home can directly impact the association and its members. Owners with no means of financial support are not able or willing to spend money on what they consider low priority – maintenance on their homes, which they do no expect to own much longer. Homes with pools are left without regular services, resulting in major health issues. Unkept lawns can result in brown grass, overgrown shrubbery, and trees untrimmed for many months. At times newspapers and junk mail accumulate on the property. A home in foreclosure can mean an empty house, which can then be a target for vandals. Owners, hoping to keep their property, may consider renters, who may not not have the same sense of ownership and pride in the community. Some renters can make it harder to enforce the rules and comply with community standards. Not only are maintenance problems an issue, but association dues may drop low on the priority ladder, maybe even being totally ignored.  Read more

Comparing Apples to Oranges?

Co-op apartment buildings were originally formed in New York City to allow building residents to buy into and have a say in how their building was administered, as well as who their neighbors were, and what those neighbors were allowed to do within the building. This is in contrast to condos, which are real property. As such, their owners are typically not subject to the intense scrutiny and regulation co-op shareholders can be. That being said however, some condo boards in the city have begun adopting more co-op-like rules and regulations in an attempt to exert more control over their building communities. This has caused some friction in certain building communities, and raised legal questions about just how much control a condo board can wield over its residents.   Read more

Cats! The Non Musical

Let’s assume that a Cat Committee (Cecy, Abe and Bea) was formed by a community association’s board of directors to review the association’s policy on the proper handling of cats in the residences and in the common area…and let’s look at cats through the eyes of the Committee:              

Cecy:  “I love cats.  I love everything about cats.  Cats are as good as people, and they have the same constitutional right to live happy, fulfilling lives.”              

Abe:  “I hate cats.  I don’t ever want to see a cat anywhere near my home…or anywhere else…except under my tires.”              

Bea:  “I love cats.  They should be protected and fed.  But I hate cat screeches; I hate cat claw marks; I hate cat smells; I hate cat droppings; and I hate cat dander.”    Read more

The Ten Commandments of Internal Control for Associations

1. Thou shalt not sign blank checks, nor leave blank check stock unsecured.
2. Thou shalt deposit all checks in a timely manner (preferably daily). If a deposit is not made daily, then the undeposited funds should be adequately secured.
3. Thou shalt not accept cash. If absolutely necessary to accept cash, then do so only with 2 witnesses, and then generate a receipt for the files.
4. Thou shalt not make checks payable to “Cash”.

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Building "Community" Within Your Community

Community spirit means pride in a community.  Building community spirit creates an emotional equity allowing residents to have an invested interest in their community.  The key to having a spirited community doesn’t rest in the size or the wealth of the association, but rather the enthusiasm and energy of the residents.  Community associations throughout the country rely on resident volunteers who exhibit these traits to bring their community together.   Read more

Roof Warranties: Advice for Managers

More than anyone else in facilities, maintenance and engineering managers understand the importance of roofing systems. Their departments receive the first call if a leak develops, their staffs inspect and maintain the systems, and they are key players when organizations must decide whether to repair or replace a roofing system. So why, roofing systems manufacturers wonder, do so few managers — and even fewer owners — seem to understand the warranties that dictate everything to do with installing, inspecting, repairing, and replacing this most vital building component?   Read more

Let's Talk About Sex:  Do Women Make Better Managers?

Typically, when comparing managers, men have a command-and-control style approach, and women tend to have a more team-building or consensus approach.  It is extremely clear that there is an increase in the number of women managing community associations who are very successful professionals.  There is a popular saying, "Women have to work twice as hard to be considered half as good".   Read more  (PDF)

A Fine Mess: When Boards Try to Fine You Without Authority

The Landmark Colony at Oyster Bay condominium complex is comprised 33 units in eight buildings. According to Blumberg vs. Albicocco, decided June 13, 2006, the plaintiff Blumberg and her husband had conducted a two-day garage sale at their 14 Adams Court condo in 1999. The Landmark Colony Homeowners Association (HOA), fined Blumberg $250 for each day of the sale for violating the association's "Declaration of Covenants, Restrictions, Easements, Charges, and Liens." That provision stated: "No nuisance shall be allowed upon the property, nor shall any use or practice be allowed which is a source of annoyance to residents or which interferes with the peaceful possession and proper use of the property by its residents." Blumberg refused to pay the fine, and sought declarations that the imposition of a fine was null and void. (Her lawsuit also sought unrelated relief for HOA's alleged failure to maintain and repair the common areas associated with the Blumberg unit.) The HOA, in addition to denials and defenses, included a counterclaim for $4,237.60 for homeowners' dues, common charges and late fees.   Read more

Going Green – What Can We Do and Why We Should Do It?

It seems as if every time we turn on the TV or radio, or open our newspaper or a magazine, there are stories encouraging us to “go green”. Al Gore has warned us about global warming and most of us think we should do something. But we don’t know where to start. In 2007, there were almost 300,000 community associations in the United States, representing more than 20 million homes. If each of our associations encouraged their owners to take some minor steps to conserve energy, the impact would be substantial. If we start with the common areas of a community and initiate some of the suggestions below, think of the impact it would have. Not only would the community save energy by going green, it would save money. For starters, we can have an energy evaluation performed by the energy provider. These are usually offered free of charge and the results can be amazing. Following are some ideas for savings at the clubhouse and around the common area.   RRead more

Grill Burgers, Not Your Home

For years, New York City has prohibited propane barbecue grilling on a balcony, terrace or roof. Residents can barbecue with charcoal on a balcony or terrace provided there's sufficient clearance and a source of water to douse any flare-ups.  Last year, Washington State began banning open-flame gas or charcoal barbecues on certain multifamily housing balconies where there's no overhead sprinkler. And beginning this year, Silicon Valley placed a permanent ban on charcoal and gas fired grills on multi-family housing balconies made of wood or other combustible materials, if there is no sprinkler overhead. Propane tanks heavier than one pound are forbidden on such balconies -- sprinkler or not. Residential barbecue bans amount to gustatory purgatory for a growing number of barbecue fans who have to wait get their thrill from a grill away from home   Read more

Keeping on Their Toes

If a unit owner has trouble making mortgage payments, can non-payment of condo fees be far behind? In what feels almost like a “tough love” scenario, experts are encouraging condo boards to be proactive about collecting late fees, even though New England communities have not been hit as hard as those in other parts of the country. David A. Levy, CPA, of Brookline, Massachusetts, advises condo boards to “keep a close eye on ‘aging reports’” that reveal how long it is taking to collect the revenue needed for regular maintenance as well as long-term, capital expenditures. He is personally observing situations where “an association may be on-budget, but receivables are growing… from 30 - 60 days out to 60 - 90 days.” This trend has not been as severe in New England as in other regions, he says. “I’m reading about it [foreclosures] but I’m not seeing it first-hand.” He contends that condominium communities in this area may be more well-established, and notes that, “owners with a lot of equity are not going to default on their mortgages.”   Read more