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Thirdhand smoke: An unseen hazard might be affecting your home

Adopting smoke-free policies in condominiums and housing cooperatives can help make a community more appealing to potential nonsmoking residents. But what if there’s a lingering tobacco odor and yellowish stains on the walls of a unit being sold after its former occupant has moved out?

Both are indicators of residual contamination from cigarettes, cigars, and other tobacco products—known as thirdhand smoke. According to the American Nonsmokers’ Rights Foundation, a residue of nicotine, tar, and other carcinogens and heavy metals builds up on walls, ceilings, carpets, drapes, and other fabrics, HVAC units, and dust, posing a risk to health if inhaled or ingested.

Removing thirdhand smoke residue requires extensive cleaning beyond vacuuming or dusting—an expensive and time-consuming proposition for an association if the previous owner has already left. At a minimum, a thorough cleaning of the unit should include the following:

  • Wash walls and ceilings multiple times with hot water and detergent, using rags to avoid pushing residue around.
  • Remove carpeting and padding, and wash floors before replacing carpeting.
  • Replace curtains, blinds, and window coverings to prevent chemicals from being released back into the environment.
  • Clean out vents and replace filters to prevent HVAC systems from recirculating thirdhand smoke into the unit or around the building.
  • Repaint walls with two or three coats of paint once thoroughly clean.

Once the unit is rid of the majority of tobacco residue and ready to be inhabited, remember to ensure that new residents know about the smoke-free policy in your building. The American Lung Association recommends reminding residents that they are financially responsible for smoke residue in their unit, enforcing policy violations with a verbal warning or written notice before more serious penalties if the problem persists, and making it clear that residents need to inform guests of the building’s smoke-free policy.

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Affordable dream: Housing crisis policies could bring changes to your community

The American dream isn’t dead, but it is evolving.

For decades, the dream has meant owning a home, having a successful career, or having a better quality of life than your parents. Now, it’s more about freedom and family.

A pair of studies released earlier this year showed how the American dream is changing and whether people believe they’re on the path to living it.

When RealClear Opinion Research asked more than 2,000 U.S. registered voters across all age groups and political affiliations in February about the American dream, 37% said the dream was “alive, but under threat.” Another 28% said it is “under serious threat, but there is still hope.” Nearly seven in 10 respondents believe that the American dream “can be achieved by anyone in the U.S. if they work hard.”

The American Enterprise Institute also released a report in February after collecting more than 2,400 responses across demographic groups to a survey on social capital, civic health, and quality of life in the U.S. The public policy think tank discovered that 40% of respondents believe their family is living the American dream. Another 40% believe their family is on the way to achieving it.

The most essential factors of the American dream are having the freedom of choice in how to live one’s life (85%), having a good family life (83%), and retiring comfortably (71%), according to the research. While owning a home might not be as important as it once was, it is still a critical part of the picture; 59% called it essential.

Unfortunately, owning or renting a suitable home is increasingly out of reach for many in the U.S. Lawmakers, housing officials, and advocates are scrambling to find solutions.

Some states and municipalities are considering accessory dwelling units—also known as mother-in-law suites or granny flats. Some are interested in developing smaller homes on smaller lots in communities occasionally referred to as pocket neighborhoods. Zoning changes and new Federal Housing Administration lending guidelines for condominiums are expected to make a difference in the affordable housing crisis too.

Your community association could be impacted by one or more of these efforts.

Whatever the problem and solution, the American dream is more complex and individualistic than ever. It’s also sure to be a discussion point leading up to the presidential election—now less than one year away.

What does the American dream mean to you?

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Taking flight: What to consider when deploying drones in your community

Drones have rapidly become useful tools for commercial and recreational purposes, including search and rescue operations, surveying damage after natural disasters, and aerial photography. Community associations, whether in a high-rise condominium or a community of single-family homes stretched over dozens of acres, also could benefit from the visual advantages offered by drones.

Drones can document before-and-after conditions, which can assist with insurance claims, as well as normal wear and tear and exposure to the elements, helping an association become proactive about repair work before it becomes an emergency. They also can inspect infrastructure for code violations or gather photos and video to market the community when it’s looking its best, says Bill Holderby, owner and founder of Eagle Eye UAS in Naples, Fla.

When contracting with a drone operator to provide services for your association, Holderby recommends making sure the operator has a Federal Aviation Administration Part 107 license, which shows compliance with safety requirements for commercial operations. All pilots who fly drones for a living must have taken and passed an FAA test, along with a background check by the Transportation Security Administration.

Holderby also suggests asking the operator about their experience flying drones; if they keep a flight log; how they handle emergency situations; who owns the images/video/data from the flights, how it’s stored, and for how long; and how they handle safety.

A community should do some due diligence on drone rules too. Hillary B. Farber, a professor at the University of Massachusetts School of Law, and retired attorney Marvin J. Nodiff, a fellow in CAI’s College of Community Association Lawyers, recommend the following:

  • Have some guidelines in place. Make sure that both hobby and commercial drone operators are cleared or approved to fly in the community.
  • Address privacy concerns. No drone operator should be flying outside of a resident’s window or over the pool, for example, unless they’re contracted specifically to do that work.
  • Communicate with homeowners. Before any association-approved drone operation, inform your residents what the project is, where flights will occur, and when you’ll fly.
  • Mitigate risk factors. Potential concerns include electronic component failure, hijacked controls, hacked video feeds and homeowners’ personal data, operator negligence or loss of control, and invasion of privacy.
  • Consider insuring against claims of bodily injury, property damage, or personal injury. Standard commercial general liability policies don’t cover aircraft, including drones. The board would need a separate aviation policy or endorsements for bodily injury and property damage, and personal and injury liability, which would cover claims such as invasion of privacy. Any person who operates the drone should be covered as an insured party. In addition, an operator should have specific liability insurance for flying the drone. Most will have a $500,000 to $1 million liability policy.

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Crunching numbers: What goes into a community association’s budget?

Budgets are crucial to a community association’s financial operation. Just like for-profit businesses, association boards should work diligently to develop annual budgets that estimate revenue and expenses for the upcoming fiscal year. A properly drafted budget can help prevent reduced services, deteriorating property, or special assessments.

Many state statutes and most governing documents impose a legal obligation on boards to develop an accurate budget and collect sufficient assessments to cover expenses. A detailed budget helps residents understand why assessment amounts are reasonable and how their money will be used.

Community associations have two types of budgets: an operating budget and a reserve budget. Operating budgets have unrestricted funds that are used to run the association through the fiscal year, while reserves have restricted funds saved for expenses that will occur in the future.

The board is tasked with gathering the necessary financial information to project potential sources of income and expenses, including conducting a reserve analysis, looking at bids for contracts, projecting utility or service increases, and comparing past years’ budget trends.

Certain line items constitute expenses that associations are required by law or contract to pay and should be allocated for first. An association also should allocate contingency funds, separate from the reserve budget, for unanticipated expenses such as extreme weather, economic conditions that could increase fees for products or services, emergency repairs, and lawsuits.

Here are some of the most common expenses that associations should include when drafting the operating budget.

Maintenance. Allocate line items that protect and enhance the community’s property. A maintenance schedule should be developed or amended annually for budget considerations, and service contracts should be checked to anticipate potential increases or to negotiate a better rate.

Taxes. While assessments are not taxable, other sources of income, such as interest earnings, facility rental income, and income from goods and services, likely will be taxed. Other taxes that associations may need to pay include personal property, payroll (if it hires salaried employees), or real estate tax.

Utilities. Associations should measure past consumption of electricity and water to anticipate any increases. Conducting a professional utility audit can ensure meters and other equipment are functioning properly. The audit also can help an association determine if it can reduce expenses by installing energy-efficient systems.

Insurance. An association should ask its insurance professional to audit current property and liability coverage and recommend appropriate protection that fits its needs.

Administrative costs. These include expenses for professional services provided by consultants, reserve specialists, attorneys, and accountants, fees for banking and collecting delinquencies, as well as the costs of maintaining an office, including equipment, supplies, and phone and internet service.

Once your budget is drafted, share it with homeowners so they can review before the annual meeting.

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Welcome home? New FHA process could make condos available to more buyers

Millions of homebuyers could benefit from new guidelines issued by the U.S. Department of Housing and Urban Development that streamline the Federal Housing Administration’s condominium project approval process. The guidelines, which went into effect yesterday, now allow single-unit approvals, extend the lifetime of approvals, simplify recertification, and more.

In a statement, HUD Secretary Ben Carson says one goal of the new process is “to open more doors to homeownership for younger, first-time American buyers as well as seniors hoping to age in place.” HUD data shows condominium unit mortgages currently account for fewer than 2% of all FHA-insured mortgages. 

One important element in the agency’s updated approval guidelines includes single-unit approvals on up to 10% of mortgages in condominiums without FHA approval provided that they are financially stable. The other changes include increasing the concentration rate so that FHA can insure up to 75% of unit mortgages in a condo project and lowering owner occupancy rates from 50% to 35% based on financial and operational stability. 

In addition, the new procedures extend FHA approvals for condominiums from two years to three, simplify recertification to only requiring updates to information instead of resubmitting all information, and ease restrictions on mixed-use condominiums with up to 45% commercial space. 

HUD estimates that between 20,000–60,000 condominium units may now be eligible for FHA-insured financing annually, and that around 7,000 new condominium projects could be built thanks to wider availability of mortgages.

The new guidelines “take some of the pressure off boards” to spend association time and money to certify a condominium project for FHA financing, says Jeffrey A. Beaumont, vice chair of CAI’s California Legislative Action Committee and an attorney with Beaumont Tashjian in Woodland Hills.  

The changes should allow greater access to FHA financing and ultimately result in a greater pool of homes for prospective purchasers to choose from, says Beaumont, a fellow in CAI’s College of Community Association Lawyers. 

CAI supports the actions and has made a balanced, data-driven approval process a public policy priority. “Following the housing crisis in 2008, the FHA condominium approval process severely impacted access to FHA-insured mortgages, which hurt homeowners and household formation,” says Dawn M. Bauman, CAE, CAI’s senior vice president of government and public affairs. “The changes mark a return for FHA as a key long-term partner for condominium associations.” 

Credit-worthy first-time homebuyers who have been prevented from achieving condominium homeownership could now benefit from the new guidelines. About 40% of the nation’s 27 million community association households call a condominium home, accounting for approximately 10% of the nation’s housing stock, according to the Foundation for Community Association Research.  

>>Read more about the updated process at www.caionline.org/FHA.  

Pamela Babcock, a writer and editor in the New York City area, contributed to this article. 

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Common courtesy: How to promote civility in community associations

Contributed by Donna DiMaggio Berger, Esq.

Raised voices, reddened faces, and angry gestures. You might think you are watching a congressional hearing on C-SPAN, but you are at your community’s board meeting.

The erosion of civility in our society has begun to manifest itself in private residential communities. This comes in many forms—from rudeness and disruptive behavior at meetings to more dangerous and escalating actions.

While it is impossible to legislate civility, the proximity of a multifamily dwelling or a community with shared amenities heightens the impact of these behaviors and creates myriad legal issues and operational challenges for volunteer boards and their managers.

Perhaps the most difficult legal issue is the determination of when a lack of civility requires action in the form of regulation, enforcement or, in egregious circumstances, additional security measures.

Boards find the quality of life and the ability to conduct business diminished as limited time and resources are increasingly devoted to the personal interactions between residents and staff, instead of the operation of the community.

It is difficult to attract and retain good staff and contractors and, most importantly, no one will want to serve on the board or a committee.

Given the obligation of the association to protect the person and property of the residents, there is a point where regulatory and enforcement action is required.

  1. Run a businesslike meeting. The more organized and businesslike the board members are, the less opportunity for disruption.
  2. Have your board members set the standard for civility. Some communities even require board members to sign and adhere to a code of conduct to set the proper example and tone for the community. Most associations have bylaws that are decades old. In the last few years, I have updated countless sets of documents to provide operational and communication standards for directors and owners.
  3. Adopt and enforce board rules regarding the manner in which residents treat each other, the staff, and the contractors on the property. While this is subjective, most of us recognize truly unacceptable behavior when we see it.
  4. Operate with transparency and solicit input from the community. Some communities fracture because of a sense of secrecy and some fracture because of generational differences in the approach to maintenance and improvement of facilities. It is unlikely that every owner will agree that certain projects are necessary or that reserves should be fully funded yearly, but boards are elected to make tough decisions, not just popular ones.

Boards that address these issues and send a message that uncivil behavior is not tolerated will do a service to their communities.

Unlike that hearing on C-SPAN that you can turn off, discord in a community association cannot be stopped at your front door. Community association residents should realize that “living together” requires a level of civility and respect that we hope will flow upward at some point.

Is your community struggling with civility? What solutions have you tried? Comment below.

Donna DiMaggio Berger is a board-certified specialist in condominium and planned development law, a shareholder with the law firm of Becker, and serves as the executive director of the Community Association Leadership Lobby in Florida. She is also a fellow in CAI’s College of Community Association Lawyers. Article originally appeared on Sun-Sentinel.com and is reprinted with author’s permission.

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Passing the torch: Why succession planning is essential for community association professionals

Do you know what happens to your company once you’re no longer able to work? Have you determined who will take charge after you’re gone? For any business today, the importance of having a succession plan is critical for a company’s long-term success.

Succession planning involves creating an arrangement for someone to either own or run your business after you retire, become disabled, or die.

The need for a strategic succession plan was the leading topic discussed by more than 200 community association management company CEOs and executives at the 2019 CEO-MC Retreat hosted by the Community Associations Institute (CAI) in La Quinta, Calif.

As the growing industry is witnessing a changing of the guard, its pioneers—those who spent the past 40 years building thriving management companies and businesses that support community associations—are looking for ways to successfully pass the torch to the next generation of leaders.

Today, there are more than 7,000 community association management companies and nearly 55,000 community association managers, according to the Foundation for Community Association Research’s 2018-2019 National and State Statistical Review for Community Association Data. Acquiring the next generation of talent to manage and lead these companies is no easy task.

When asked if their company has a succession plan, more than half (54%) of the CEO-MC Retreat attendees reported that their firm does; 43% do not.

CAI President Cat Carmichael, CMCA, PCAM, challenges executives to avoid the expectation that a family member will be the one to step up and lead the business in the event of an absence, a dangerous assumption many business owners share today. Carmichael added that it’s essential to think of current employees and the value they bring to the company’s future.

“Developing succession plans helps to ensure business continuity if and when an executive or a key employee leaves. Every business should be thinking about its ‘transferable value’—that’s the value of the company when the executive no longer works in it full-time,” says Carmichael. “Elevating current staff value will not only add business value because of the quality and reliability of the workforce, but it will assure that monthly recurring revenue continues.”

Carmichael adds that there’s no better time than the present to deal with the unexpected and protect the businesses that have been built over the decades. A strategic succession plan will ensure the company’s culture is maintained and reduces stress on staff during the transition. It also means the company retains knowledge, history, and business relationships.

Learn more about building a succession plan from the Small Business Administration.

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Frost Fight: Brace your community for winter

While the fall foliage has yet to appear in parts of the U.S., western states had their first taste of winter just a week after summer’s official end, with a storm that dumped up to 3 feet of snow in some areas and brought record-low temperatures, strong winds, and blizzard conditions.

Although weather forecasts are never 100% accurate, this may be the beginning of a freezing winter for two-thirds of the country, according to the 2020 Farmers’ Almanac’s winter forecast, which calls for a “polar coaster” of cold conditions from the eastern part of the Rockies all the way to the Appalachians.

“The biggest drop—with the most freefalling, frigid temperatures—is forecasted to take hold from the northern Plains into the Great Lakes. The Northeast, including the densely populated corridor running from Washington to Boston, will experience colder-than-normal temperatures for much of the upcoming winter,” reads the forecast, which predicts that the coldest outbreak of the season will come during the final week of January and last until the beginning of February.

Snow lovers might be shivering with anticipation, but it’s important that community associations encourage residents to winterize their homes before the brunt of the season hits. Here are some items to consider.

Indoor winterizing

  • Examine doors and replace weather-stripping as needed
  • Inspect window caulking and reseal where needed
  • Check vents and repair where needed
  • Clean chimneys and flues
  • Remove items near heat vents
  • Place nonskid runners or door mats outside to help keep water, sand, and salt out

Outdoor winterizing

  • Cut tree branches and shrubs that hide signs or block light
  • Examine outdoor handrails and tighten if needed
  • Turn off electrical breakers for outdoor equipment
  • Close hose bibs
  • Clean out gutters and downspouts
  • Clear yard drains
  • Spray outdoor locks and hinges with lubricant
  • Stake driveway and walkway edges that may be difficult to find under deep snow

Don’t forget to stock up on supplies such as ice melt, sand, generator fuel, and snow shovels. Ready.gov also has tips on how to stay safe during a winter storm.

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