Posted on

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.

The post Thirdhand smoke: An unseen hazard might be affecting your home appeared first on Ungated: Community Associations Institute Blog.

Posted on

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.

The post Taking flight: What to consider when deploying drones in your community appeared first on Ungated: Community Associations Institute Blog.

Posted on

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.

The post Crunching numbers: What goes into a community association’s budget? appeared first on Ungated: Community Associations Institute Blog.

Posted on

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. 

The post Welcome home? New FHA process could make condos available to more buyers appeared first on Ungated: Community Associations Institute Blog.

Posted on

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.

The post Common courtesy: How to promote civility in community associations appeared first on Ungated: Community Associations Institute Blog.

Posted on

Now hiring: Employment growth projected for community managers

Community association management is becoming a sought-out career for those entering the job market for the first time or those considering a change late in their professional lives. The role is expected to see growth for new hires in the coming decade, according to recent data from the U.S. Bureau of Labor Statistics.

There were about 363,000 property, real estate, and community association managers working in 2018 with employment forecast to grow 7% through 2028, faster than the average for all occupations. BLS attributes this growth to more people choosing to live in condominiums, cooperatives, planned communities, and senior housing.

“Community associations are a true economic engine, and there’s a need for talent at all levels,” says CAI’s 2019 President Cat Carmichael, CMCA, PCAM, who has made it her mission to open channels that can bring in talented individuals to common-interest communities. “We are striving to find new talent where the talent is and increase awareness of the benefits of community association service.”

Employers typically prefer to hire college graduates with a degree in finance, accounting, real estate, or public administration, but workers with a high school diploma and less than five years of relevant experience also can be considered for entry-level positions, according to BLS.

Employers also may require that community managers participate in training programs or workshops from professional trade associations (like CAI’s Professional Management Development Program) to develop their management skills and expand their knowledge on topics such as insurance and risk management, governance, homeowner relations, personnel management, and reserve funding.

BLS calculated the median pay for a community manager in May 2018 at $58,340 per year. This amount is higher than the median compensation reported by assistant community managers ($43,340) and portfolio managers ($52,500) in the Foundation for Community Association Research’s 2017 Community Association Manager Compensation and Salary Survey. Compensation increases significantly as managers gain more experience and responsibility. According to the Foundation’s research, on-site managers earn an average of $71,560, high-rise managers earn $86,500, and large-scale managers earn $100,000.

Community managers oversee the daily operation of residential properties. In addition, BLS lists some important skills that community managers should have to excel in their role:

  • Communication. Managers must understand contracts and real-estate documents to clearly explain the materials and answer questions raised by residents or board members.
  • Customer service. Managers must provide excellent customer service to keep homeowners happy and expand their business with new clients.
  • Interpersonal. Because community association managers interact with people every day, they must have excellent interpersonal skills.
  • Listening. Managers must listen to and understand residents to meet their needs.
  • Organizational. Managers must be able to plan, coordinate, and direct multiple contractors at the same time, often for multiple properties.
  • Problem-solving. Community association managers must be able to mediate disputes or legal issues between residents, homeowners, and board members.

The post Now hiring: Employment growth projected for community managers appeared first on Ungated: Community Associations Institute Blog.

Posted on

Aging America: How older adults hope to age in place

More and more, older adults favor aging in place, preferring to remain active and independent beyond middle age while still having access to transportation options and healthcare services they can use as their needs change.

About 77% of Americans age 50 and older say they would like to live in their community as long as possible, but just 59% anticipate being able to remain in their current home or a different place in the same community, according to AARP’s 2018 Home and Community Preferences survey. While most adults age 18 and older—63 percent—own their homes, about one-third expect having to make major modifications to accommodate their aging needs, AARP says.

Because of changing attitudes related to affordability, accessibility, and mobility, the survey finds many adults age 50 and older are willing to consider alternatives such as home-sharing (32 percent), building an accessory dwelling unit (31 percent), or residing in communities that provide services to enable aging in place (56 percent).

For example, the Jefferson, a 55-and-older condominium in Arlington, Va., offers older adults a unique option as they age in place: the ability to own their unit plus independent living, skilled nursing, and continuing care. High-end amenities, numerous activities, a maintenance-free lifestyle, and quick access to the cultural highlights of Washington, D.C., add to the community’s appeal.

Residents have the option to purchase their home without any buy-in fees beyond the price of the unit, the only senior community in the area with this distinction, notes Executive Director Juli Swanson.

“All of our competitors are either a continuing-care retirement community or a life-care community. That’s just a very different structure than what we have here with the condo,” explains Swanson, who has worked at the Jefferson for the past eight years. “At all those other places, you don’t get to own your home. Here at the Jefferson, you do. That’s one of the biggest selling points, after location.”

Making itself a community where older adults can live long term is something that the Jefferson has made a priority for its residents, who feel that the frequent socialization is one of the main aspects that allows them to feel at home.

“You never feel lonely here. It’s just so wonderful when you sit down to eat with different people, and they tell you their life story,” says 84-year-old retired nurse Julia Jeffries.

And Therese “Terri” Rae, a 75-year-old retired psychiatric nurse who has lived at the Jefferson for the past two years, perfectly captures what it’s like to live in the community: “We have independence, and if we want company, we’ve got it. And that’s the best thing.”

The post Aging America: How older adults hope to age in place appeared first on Ungated: Community Associations Institute Blog.

Posted on

Be ready: How to prepare your community for a natural disaster

Hurricane Dorian devastated the northwestern Bahamas and has unleashed heavy rain, strong winds, storm surge, and tornadoes as it has tracked along the East Coast. While the Atlantic hurricane season officially runs from June to November, the peak of the season is now—from mid-August to late October.

With September being National Preparedness Month, Americans can take action to promote emergency planning and disaster relief in the event of hurricanes, wildfires, and floods, which have caused an estimated $414.4 billion in damage across the U.S. from 2013 to 2018, according to data from the National Oceanic and Atmospheric Administration. As natural disasters become more frequent and destructive, it’s important that community associations adopt a comprehensive plan to prepare, respond, and recover from these extreme weather events.

Community association residents and leaders also should be aware that the Federal Emergency Management Agency does NOT reimburse community associations that remove debris from private roads. CAI strongly encourages board members and managers to review the guidelines for removing debris.

In addition, here are some guidelines to prepare your community against a natural disaster.

Hurricanes

  • Gather supplies in an emergency kit to last at least three days, including food, water, flashlights, batteries, cash, first aid supplies, and medications. Also gather supplies for pets, if any, and store important documents.
  • Bring inside loose, lightweight objects that could become projectiles in high winds (e.g., patio furniture, garbage cans) and anchor objects that would be unsafe to bring inside (e.g., propane tanks).
  • Take refuge in a designated storm shelter or in a secure room inside your home that is windowless and not at risk of flooding.
  • Cover windows with wooden panels or storm shutters.
  • Document any property damage with photographs. Contact your insurance company for assistance.

Floods

  • Know the types of flood risks in your area by visiting the Federal Emergency Management Agency’s Flood Map Service Center.
  • Purchase or renew a flood insurance policy through the National Flood Insurance Program. Homeowner’s insurance policies do not cover flooding.
  • Keep important documents in a waterproof container. Create password-protected digital copies.
  • Protect your property. Move valuables to higher levels. Declutter drains and gutters. Install check valves and consider a sump pump with a battery.
  • If trapped in your home, go to its highest level. Do not climb into a closed attic, as you may become trapped by rising floodwater. Go on the roof only if necessary and signal for help.

Wildfires

  • Fireproof your home by covering outdoor vents, removing dry leaf and tree debris, mowing and watering lawns regularly, and using fire-resistant materials to make repairs or replacements.
  • Keep fuel sources at least 100 feet away from your home.
  • Keep important documents in a fireproof safe and make digital copies.
  • Designate a room that can be closed off from outside air. Close all doors and windows. Set up a portable air cleaner to keep indoor pollution levels low when smoky conditions exist.
  • Review insurance coverage to make sure it is enough to replace your property. Document damage with photographs.

For tips on how to make an emergency plan fit for your community association and prepare for other types of disasters, visit CAI’s Community Disaster Preparedness & Relief page and Ready.gov.

The post Be ready: How to prepare your community for a natural disaster appeared first on Ungated: Community Associations Institute Blog.

Posted on

A place to call home: Americans favor homeownership over renting

Despite a competitive housing market and current concerns about housing affordability, 70% of Americans still see owning a home as a clear sign of success in adulthood, according to Wells Fargo’s 2019 “How America Views Homeownership” survey.

Seven in 10 respondents of the survey of 1,004 adults 21 years and older say that owning a house is on par with having a career as a sign of a successful adult. Those surveyed note that they see homeownership as a clearer sign of success over getting married (32%) or having children (34%).

Close to 90% of the respondents say that the benefits of homeownership outweigh the drawbacks. If they could do it all over again, current homeowners say they would still choose to buy their home (93%) instead of continuing to rent, and nearly all (95%) note that owning a home is a better financial decision in the long run than renting.

Affording a down payment is seen as the primary hurdle to buying a home, according to 27% of those surveyed, with 38% of aspiring millennial homeowners naming it their biggest challenge to achieving homeownership. Wells Fargo notes, however, that some mortgage lenders allow qualified buyers to put as little as 3% down on a home.

Nearly 8 in 10 homeowners would be willing to move to a smaller city or town to afford their home, and 74% say that they would consider buying a smaller home with fewer amenities.

First-time homebuyers frequently look to condominiums as a lower-cost housing option. Roughly 40% of the 347,000 community associations in the U.S. are condominiums, according to the 2018-2019 National and Statistical Review for Community Association Data from the Foundation for Community Association Research. Recently updated requirements from the Federal Housing Administration should make lending easier for condominium unit buyers.

More than 73 million U.S. residents currently live in a community association—up from 62 million in 2010. Community associations are growing due to the value of collective management, privatization of public maintenance services, and the expansion of affordable housing options.

The post A place to call home: Americans favor homeownership over renting appeared first on Ungated: Community Associations Institute Blog.

Posted on

Safeguarding finances: 9 steps to prevent fraud and embezzlement in your HOA

Community associations fall victim to theft and embezzlement too frequently. Board members should know the warning signs and institute preventive measures before the community is left with a difficult recovery. Combining these safeguards should help to keep your association and homeowners from being victimized.

1. Know the association’s Federal Tax Identification (FTI) number. Use it to obtain periodic listings of all bank accounts and account numbers, and make sure they are all under the association’s name and FTI number.

2. Use a lock box system for deposits. A lock box allows owners’ payments to be mailed or transferred directly to the association’s bank accounts. This reduces the chance that the association’s money will be deposited into the wrong account.

3. Safeguard your association’s reserves. Like checking accounts, the reserve account(s) should be under the control of at least two people. Do not give one board member total control over reserve accounts.

4. Require duplicate operating and reserve accounts statements be sent every month. One statement should be sent to the management company (or, if self-managed, to the treasurer or bookkeeper) and the duplicate to a board member who does not have authority to sign the checks or make any type of transfer or withdrawal.

5. Check invoices against checks paid and the original receipts for credit card accounts, if any. If the association has professional management or a bookkeeper, the board treasurer should conduct this review. If self-managed, a board member without access to the bank accounts or credit card privileges should check for any unauthorized use.

6. Shop around for bank services. Unfortunately, some banks do not enforce dual-signature requirements or prohibit electronic transfers between accounts, despite being under different FTI numbers. If the bank wants your business, demand that it demonstrates the safeguards it has in place to minimize theft, especially through electronic transfers.

7. Insure the association’s money. Obtain fidelity coverage on the board members and the management company or bookkeeper, if any, in an amount that equals or exceeds the association’s reserve fund and several months of operating funds. Even with coverage through the association’s insurance carrier, the board should require evidence that the management company carries its own fidelity coverage, which would provide the first line of recovery in the event of theft by one of its employees.

8. Make sure the management agreement includes specific terms to require these safeguards. A professionally managed association should have its legal counsel review the original agreement and any renewal prior to execution, so the agreements are not riddled with lopsided terms that are detrimental to the association.

9. Regularly have an independent certified public accountant conduct an audit. While it may be too costly to conduct an audit every year, the board should commit to having one performed every few years. In the interim, the association should have an annual review performed, with the stipulation that the bank balances be independently verified.

This article was originally published on HOAResources.com, which provides information and tools to community association members living in condominiums, homeowners associations, and housing cooperatives. Read the full version here.

The post Safeguarding finances: 9 steps to prevent fraud and embezzlement in your HOA appeared first on Ungated: Community Associations Institute Blog.