Tuesday, May 31, 2011
The Wall Street Journal: Condo Associations Get Tough on Fees
Click here to be directed to a WSJ article on how some condo associations are handling rising deliquency and foreclosures.
Monday, May 30, 2011
What is this Thing Called Fiduciary Duty?
From time to time you may hear that the board of the association operates in a fiduciary capacity for the homeowners. Or you may read about the board’s fiduciary responsibility in the governing documents. Just exactly what does this mean?
Fiduciary duty simply means the board has an ethical and legal obligation to make decisions in the best interests of the entire association. That’s a small explanation for a very big responsibility.
Fiduciary duty includes a duty of loyalty to the association, which means that board members should never use their position to take advantage of the association. They should never make decisions for the association that benefit themselves at the expense of the association and its members.
Fiduciary duty also includes the duty to exercise ordinary care. This means board members must perform their duties in good faith and in a manner they believe to be in the best interest of the association, with such care as an ordinary prudent person in a similar position under similar circumstances would use.
In short, boards must act in the best interests of the association and act reasonably.
Board members fulfill their fiduciary duty by:
Developing and using a formal budgeting process
Establishing and adhering to budgetary guidelines
Making sure the budgeting process reflects the wishes of the association members
Promoting understanding and acceptance of the reserve accounts among the members
Collecting sufficient fees to adequately operate the association
Soliciting bids and negotiating appropriate contracts
Authorizing expenditures
Fiduciary duty simply means the board has an ethical and legal obligation to make decisions in the best interests of the entire association. That’s a small explanation for a very big responsibility.
Fiduciary duty includes a duty of loyalty to the association, which means that board members should never use their position to take advantage of the association. They should never make decisions for the association that benefit themselves at the expense of the association and its members.
Fiduciary duty also includes the duty to exercise ordinary care. This means board members must perform their duties in good faith and in a manner they believe to be in the best interest of the association, with such care as an ordinary prudent person in a similar position under similar circumstances would use.
In short, boards must act in the best interests of the association and act reasonably.
Board members fulfill their fiduciary duty by:
Developing and using a formal budgeting process
Establishing and adhering to budgetary guidelines
Making sure the budgeting process reflects the wishes of the association members
Promoting understanding and acceptance of the reserve accounts among the members
Collecting sufficient fees to adequately operate the association
Soliciting bids and negotiating appropriate contracts
Authorizing expenditures
Monday, May 23, 2011
Preparing for, Recovering from Fires
Everyone in our community should prepare themselves for the risk of fire (not just wildfires). Drought conditions persist across the country and many of our homes are in or near woodland settings. Wildfires in California and other places across the country and single home fires remind us to be prepared.
The association urges all residents to create an emergency contact system so you have a place where you or your family members can call or log into remotely for information. Plan multiple escape routes from your home and out of the community in case one way is blocked. Make sure your insurance coverage is adequate; take a detailed inventory of your home.
There may also be simple steps you can take to make your home less vulnerable. Check with our local fire department to see what you can do. Simple things such as keeping trees and bushes far enough away from your home, ensuring shrubs near your home are regularly watered and installing dual-paned or tempered glass windows can help.
If our association ever experiences such a disaster, it will face tough times and difficult decisions just like you. It’s the responsibility of the association manager and board members to make sure community standards are upheld when rebuilding, which will require adhering to the community’s governing documents. We may bring in a third-party architect and attorney to help you rebuild in accordance with those documents.
Check for more tips on fire safety from the U.S. Fire Administration and other government organizations at www.usfa.dhs.gov/citizens/index.shtm and www.firesafety.gov/.
The association urges all residents to create an emergency contact system so you have a place where you or your family members can call or log into remotely for information. Plan multiple escape routes from your home and out of the community in case one way is blocked. Make sure your insurance coverage is adequate; take a detailed inventory of your home.
There may also be simple steps you can take to make your home less vulnerable. Check with our local fire department to see what you can do. Simple things such as keeping trees and bushes far enough away from your home, ensuring shrubs near your home are regularly watered and installing dual-paned or tempered glass windows can help.
If our association ever experiences such a disaster, it will face tough times and difficult decisions just like you. It’s the responsibility of the association manager and board members to make sure community standards are upheld when rebuilding, which will require adhering to the community’s governing documents. We may bring in a third-party architect and attorney to help you rebuild in accordance with those documents.
Check for more tips on fire safety from the U.S. Fire Administration and other government organizations at www.usfa.dhs.gov/citizens/index.shtm and www.firesafety.gov/.
Tuesday, May 17, 2011
Register for Bike to Work Day 2011! May 20, 2011
The Washington Area Bicyclist Association and Commuter Connections invites you to join thousands of area commuters for a celebration of bicycling as a clean, fun and healthy way to get to work! Meet up with your neighbors at one of 49 regional pit stops, ride to work with an experienced commuter convoy and wear your FREE Bike to Work Day t-shirt at work with pride. Help the Washington region become a better place to ride. Bike to Work Day is a FREE event and open to all area commuters. There will be a raffle prizes, food, drink and more at all pit stops throughout the region.
Click here to register!
Click here to register!
Excuses, Excuses
Association members who pay their assessments late or not at all come up with some very interesting excuses. Here’s half a dozen of the most common, and why it’s smart not to use them.
Excuse #1: “I didn’t get what I paid for.”
“My building hasn’t been painted in five years! I’m not paying another cent until some basic maintenance gets done.”
“The power was out for three days during the storm. I’m withholding a pro-rated amount from my assessment check.”
You have a right to require the association to perform its duties, and various legal channels exist to accomplish this. Withholding assessments is not one of them. Your obligation to pay assessments has nothing to do with the association’s obligations to provide maintenance and service. If you withhold your check or pay a reduced amount, you’ll become delinquent, and that leads to late fees, and actually makes your situation worse.
Excuse #2: “You didn’t bill me.”
“I didn’t get an invoice.”
“You didn’t tell me I was behind in my payments.”
Many association governing documents neither require the association to send invoices nor provide advance notice of payments due or past due. However, associations are required to send the approved budget to each owner annually and we do just that. When the association approves and sends the budget each year to our members, it contains notice of the amount you must pay annually. If you’re ever unsure about the amount or the due dates, just call the management office.
Excuse #3: “You can’t do that!”
“These people have no right to make me pay for neighborhood upkeep.”
“If they think I’m paying those outrageous late fees and interest, they’re crazy.”
Actually, the association not only has the authority, it has a duty to all owners to collect assessments. This authority is established in the governing documents and the state’s common interest ownership statutes. When you moved into a community association, you agreed to abide by those documents—and that includes paying assessments.
Excuse #4: “I never use the recreational facilities.”
“I don’t play golf, and it’s an expensive game. I shouldn’t have to pay to maintain the course.”
“I’ve never been in the fitness center, and I don’t plan to ever use it. Why can’t you pro-rate my assessments accordingly?”
Admittedly, recreational facilities are expensive to operate and—for some associations—represent a good chunk of the budget. Nevertheless, most declarations specify that even if you don’t use the association’s amenities you’re still obligated to pay for their upkeep.
Many of our residents moved into this community specifically for the recreational amenities; they’re willing to pay for them because they take full advantage of the opportunities they provide. Even if you’re not using some of the amenities, they make the community more desirable and the homes in the community more valuable. If you’re not using the facilities, perhaps you should consider whether this community is the best fit for you and your needs.
Excuse #5: “I paid in full.”
Sometimes the association receives a check that says “paid in full” in the memo section—but it isn’t. Or the check will arrive with a letter or note, stating the check is “payment in full,” or it covers all charges through a certain date. Nice try. If you still have an outstanding balance, we’re not going to cash your check. We’re going to return it to you. This will put you further behind in your payments and just cause more late fees.
Excuse #6: “The fees are too high.”
Assessments reflect the actual cost of maintaining all common elements in the community. If you owned your home outside the association, you would have to pay individually for all the same expenses your assessments cover—trash removal, water, landscaping, and so on. In fact, you’re actually spending less on assessments because the association has bulk buying power, and you’re getting more because the common areas provide amenities that you likely could not afford on your own.
Legitimate Reasons, not Excuses
When association members lose their jobs or become injured or ill, the association board understands that arrangements need to be worked out for paying assessments. If you have a legitimate reason for falling behind and you need to work out a payment plan, please call the manager. The board considers each situation individually, and will to try to accommodate you special circumstances.
Excuse #1: “I didn’t get what I paid for.”
“My building hasn’t been painted in five years! I’m not paying another cent until some basic maintenance gets done.”
“The power was out for three days during the storm. I’m withholding a pro-rated amount from my assessment check.”
You have a right to require the association to perform its duties, and various legal channels exist to accomplish this. Withholding assessments is not one of them. Your obligation to pay assessments has nothing to do with the association’s obligations to provide maintenance and service. If you withhold your check or pay a reduced amount, you’ll become delinquent, and that leads to late fees, and actually makes your situation worse.
Excuse #2: “You didn’t bill me.”
“I didn’t get an invoice.”
“You didn’t tell me I was behind in my payments.”
Many association governing documents neither require the association to send invoices nor provide advance notice of payments due or past due. However, associations are required to send the approved budget to each owner annually and we do just that. When the association approves and sends the budget each year to our members, it contains notice of the amount you must pay annually. If you’re ever unsure about the amount or the due dates, just call the management office.
Excuse #3: “You can’t do that!”
“These people have no right to make me pay for neighborhood upkeep.”
“If they think I’m paying those outrageous late fees and interest, they’re crazy.”
Actually, the association not only has the authority, it has a duty to all owners to collect assessments. This authority is established in the governing documents and the state’s common interest ownership statutes. When you moved into a community association, you agreed to abide by those documents—and that includes paying assessments.
Excuse #4: “I never use the recreational facilities.”
“I don’t play golf, and it’s an expensive game. I shouldn’t have to pay to maintain the course.”
“I’ve never been in the fitness center, and I don’t plan to ever use it. Why can’t you pro-rate my assessments accordingly?”
Admittedly, recreational facilities are expensive to operate and—for some associations—represent a good chunk of the budget. Nevertheless, most declarations specify that even if you don’t use the association’s amenities you’re still obligated to pay for their upkeep.
Many of our residents moved into this community specifically for the recreational amenities; they’re willing to pay for them because they take full advantage of the opportunities they provide. Even if you’re not using some of the amenities, they make the community more desirable and the homes in the community more valuable. If you’re not using the facilities, perhaps you should consider whether this community is the best fit for you and your needs.
Excuse #5: “I paid in full.”
Sometimes the association receives a check that says “paid in full” in the memo section—but it isn’t. Or the check will arrive with a letter or note, stating the check is “payment in full,” or it covers all charges through a certain date. Nice try. If you still have an outstanding balance, we’re not going to cash your check. We’re going to return it to you. This will put you further behind in your payments and just cause more late fees.
Excuse #6: “The fees are too high.”
Assessments reflect the actual cost of maintaining all common elements in the community. If you owned your home outside the association, you would have to pay individually for all the same expenses your assessments cover—trash removal, water, landscaping, and so on. In fact, you’re actually spending less on assessments because the association has bulk buying power, and you’re getting more because the common areas provide amenities that you likely could not afford on your own.
Legitimate Reasons, not Excuses
When association members lose their jobs or become injured or ill, the association board understands that arrangements need to be worked out for paying assessments. If you have a legitimate reason for falling behind and you need to work out a payment plan, please call the manager. The board considers each situation individually, and will to try to accommodate you special circumstances.
Wednesday, May 11, 2011
Tracking Down Air Leaks
Air leaks are one of the biggest saboteurs of your energy bill. They cause your heating and air conditioning units to work overtime. But, you can increase the efficient use of energy by tracking down and eliminating sources of air leaks in your home.
How to Check for Indoor Air Leaks
Close your unit as tightly as possible—shutting doors, windows, flues, anything that vents to the outside. (Leave inside doors open.) Turn on the exhaust fans in the kitchen and bathrooms. This pulls air out of the house or unit and draws outside air in through the leaks. A common way to identify air movements is to hold a lighted incense stick near a suspect area. The smallest movement of air will cause the smoke to move. Another method is to simply hold your damp hand near potential leak sites. Air movement will feel cool.
Where to Check for Air Leaks
Any place one surface joins another (even if it appears closed) is a potential place for air to move in or out of your home—for example, where floor and walls come together, such as around baseboards or carpet edges.
Small spaces don’t allow much air leakage individually, but collectively they can eat up a significant amount of energy. Check all spaces where any type of opening exists such as electrical outlets and switch plates, fireplace dampers, around pipes, attic hatches, mounted air conditioners and mail slots.
Also, be sure to check caulked edges. Don’t assume they’re still air tight. Caulk dries over time and shrinks. Another application might be needed.
Doors and windows are in a category of their own. If they rattle or if you can see daylight around them, they leak. Fortunately, they’re easy to fix with caulking or weather stripping.
Making the Fix
Weather stripping is the simplest and least expensive means to eliminate air leaks around doors. Foam insulation is a variation on caulking that is available as an aerosol spray. It’s well suited for filling large gaps like the holes where pipes or wires enter your home. (Use with caution, however; it expands significantly and can be unsightly if overdone.) For just about everything else, standard caulking is all you need. Once the job is done, test again to make sure you stopped the leak completely.
How to Check for Indoor Air Leaks
Close your unit as tightly as possible—shutting doors, windows, flues, anything that vents to the outside. (Leave inside doors open.) Turn on the exhaust fans in the kitchen and bathrooms. This pulls air out of the house or unit and draws outside air in through the leaks. A common way to identify air movements is to hold a lighted incense stick near a suspect area. The smallest movement of air will cause the smoke to move. Another method is to simply hold your damp hand near potential leak sites. Air movement will feel cool.
Where to Check for Air Leaks
Any place one surface joins another (even if it appears closed) is a potential place for air to move in or out of your home—for example, where floor and walls come together, such as around baseboards or carpet edges.
Small spaces don’t allow much air leakage individually, but collectively they can eat up a significant amount of energy. Check all spaces where any type of opening exists such as electrical outlets and switch plates, fireplace dampers, around pipes, attic hatches, mounted air conditioners and mail slots.
Also, be sure to check caulked edges. Don’t assume they’re still air tight. Caulk dries over time and shrinks. Another application might be needed.
Doors and windows are in a category of their own. If they rattle or if you can see daylight around them, they leak. Fortunately, they’re easy to fix with caulking or weather stripping.
Making the Fix
Weather stripping is the simplest and least expensive means to eliminate air leaks around doors. Foam insulation is a variation on caulking that is available as an aerosol spray. It’s well suited for filling large gaps like the holes where pipes or wires enter your home. (Use with caution, however; it expands significantly and can be unsightly if overdone.) For just about everything else, standard caulking is all you need. Once the job is done, test again to make sure you stopped the leak completely.
Subscribe to:
Posts (Atom)