Tuesday, May 29, 2012

Painting the Community Red

Recently, a homeowner submitted an architectural request to paint the exterior of his home a beige color and the shutters a dark brown. The request was denied by the ACH Committee, due to the fact that the colors too closely resembled those of the house next door. The Committee responded to the request and asked that the homeowner select different colors. The homeowner then submitted two tiny color sample squares, each about as big as a half dollar. The siding color appeared to be a light blue and the shutter color a dark blue.

The Committee initially felt these colors were too different from the rest of the community and wanted to remain more neutral. The homeowner claimed the colors were almost identical to what he currently had on his house (a grayish blue siding with dark blue/navy shutters). After much deliberation the Committee approved the second request, and the paint job was completed a few days later.

Immediately, the complaints and photos starting to roll in as neighbors questioned whether or not the homeowner had received the proper approval to paint his house. One of the paint colors turned out to be a very bright, bluish/purplish, almost fluorescent color…which looked significantly different than the small sample that had been submitted and approved. Surely these were not the colors that the Committee had approved??? Once the Committee went back and compared the samples to the house, they realized they were indeed the same colors approved…whoops!
The Board and the Committee then brainstormed to try to figure out what could be done that would be agreeable to both the homeowner and the Association. If the color remained, it could potentially reduce property values for all. Not to mention, the Board was getting complaints left and right. As a result, the Board ultimately decided that if the homeowner was agreeable, the Association would pay to re-paint the siding up to $750.

But the issues didn’t stop there. The Board and Committee then needed to find a vendor who would agree to do the job for around $750. Since the Association was relatively small (composed of approx 100 homes), they couldn't afford to repaint the house for much more than $750. To avoid additional angst, the Board did not want to inform the homeowner of the ongoing issue until they had located a vendor to complete the job. But, because the homeowner was not aware of the issue, the vendors could not get onto the property to get accurate estimates for repainting the home. What a mess!

Want to avoid putting yourself or your community in this position? In order to prevent this from happening, communities should establish an approved color palette, which homeowners can choose from when deciding to repaint their homes. Boards should consult with a professional paint vendor or design team when putting this together to ensure continuity and quality. If your community does not have this option, at a minimum require the homeowner to paint a small portion on the rear of the home for the Committee to review and agree upon before approving a request.

If and when your community does adopt a color palette, incorporate it into your Design Standards. Send these updated standards out to everyone in the community and post them on your community’s website. That way no one can say they never received the information, making your job easier and less stressful for your homeowners, too.

Tuesday, May 22, 2012

We Are Family

At Access Management we pride ourselves in developing long-term relationships with our clients through experience, knowledge, communication, and personable interactions.  The relationship we have with each of our Communities is extremely important to us.  This is why “We Manage Your Community Like It Is Our Own.”
Every community has its own unique set of requirements.  This is why it is important for each client to rely on the experience of Access Management Group to work through these to ensure a beneficial outcome for the community as a whole.
In addition to cultivating a relationship with the community as a whole, through homeowner interactions and property visits, Access Management Group has an even more in-depth relationship with the Board of Directors.  The Board plays a very significant part in the decision-making for the Association.  Such decisions are not always easy, so we thank these Board volunteers for the work they put in every day.
The relationship between a Board and Access Management Group needs to be one filled with knowledge and trust.  Each Community Association Manager at Access Management Group has put in the long hours of becoming a licensed manager as well as ongoing continuing education hours.  Combined with constant access to the Community Association Institute, as well as accredited attorneys for specialized in Community Associations, we are prepared for anything that should arise in your neighborhood. 

It is vital that each director understand his or her role as a Board member in the community.  There are several helpful articles to aid volunteers located on the Community Association Institute website or via Access Management.  To get started:  http://www.caionline.org/info/help/Pages/default.aspx.
If you are currently a member of your Board of Directors or are considering it in the future, please know that Access Management Group is probably your most important resource when it comes to managing your community.   Let us be your guide on the very eclectic task of running a Community Association.

Wednesday, May 16, 2012

Who Let the Dogs Out?

Governor Deal has recently signed a change to the law regarding dog bites. This change not only affects pet owners, but also HOA boards regarding how they address pets within their communities. We think its an important topic to discuss, the ensure that Boards are aware of both the issue and the recent changes to the law. 

 Georgia has historically been more pro-pet owner than other states, permitting a first-bite rule (one free bite) and requiring proof that an owner was aware of his/her pet being dangerous before being held personally responsible for an attack.

 Among the changes by House Bill 685 to section 4-8 of the Georgia Statutes:
  1. Anyone with a classified dangerous dog must register annually with the local authority, and only one dangerous pet per domicile is permitted.
  2. The owner is required to carry liability insurance.
  3. Signage, micro chipping, and securing of premises is required.
  4. Dangerous pets may not be transferred to new owners – but must be euthanized if the current owner chooses to give them up.
  5. A second violation of the pet law is a felony resulting in 1 to 10 years in prison and possibly a $5K to $10K fine.

You may be wondering what makes a dog "dangerous." A dog may be classified as dangerous if:

It causes a substantial puncture (not just a nip).

It aggressively acts to a point that a person(s) reasonably believes an imminent threat of serious injury would occur (not just growling or barking or showing teeth) whether or not they are successfully attacked.

It kills another pet.

All Boards should be reviewing how this legislation interfaces with their community rules on pets, and as always they should contact law enforcement or animal control to handle these issues - rather than attempting to enforce state or federal regulations on their own.

Tuesday, May 8, 2012

Don't Budge(t)

It is interesting to take a look back to see how communities handled the transition into the "Great Recession" - from the booming mid-2000's to today. The following information is based on a study analyzing the budget behaviors of 125 homeowner associations / condominiums located in 13 counties and 40 cities scattered throughout the Atlanta metro area. 

While nearly every community did see a rise in delinquencies over the last four years, those communities that invested more funds in their communities through higher annual operating budgets saw the lowest delinquency increases: 

·         Those consistently increasing the budget by 10% or more had delinquencies rise by 5% or less, with an average March 2012 delinquency rate of 10% or less.
·         Those who chose to freeze all budget increases experienced an average 7% increase, with the final March 2012 rate at 14% or higher.
·         For those who chose to slash their budgets, final March 2012 rates ended at 17% or more, in some cases going over 40% of the community not making payments.
·        Lowering dues did not encourage delinquent owners to pay, and the loss of services or deferring maintenance actually increased the number of individuals choosing not to pay.
·        Legal collections expense as a percent of total budget, when at least 5%, had the most impact on delinquency rates.  Those communities that chose to spend very little in collections suffered huge delinquencies increases, jumping up 15% points or more from levels in 2007.  This makes sense, as homeowners sitting on the fence of whether or not to pay assessments were looking to see how serious the Board was in pursuing collections.
The average annual operating budget numbers reveal the story behind Board-planning behaviors, displaying on one or more of the following attitudes:

Pie-in-the-Sky – acting as if in a perfect world, with no contingencies, a belief in 100% collections, and a neighborhood that required little upkeep to make it “# 1” in the eyes of potential purchasers.

Counting Your Chickens – projecting revenue streams from unreliable revenue sources, such as rentals, attorney fees, interest income, fines, etc.

Squeeze ‘em ‘till they Bleed – deliberately choosing to play hard ball with the community to artificially increase fines income, or hiking rental or utility rates.

Shell Game – similar to the one above, the Board reallocates revenue streams to mask the need for an increase in the standard operating assessments, and pads shortfalls from money set aside for capital repairs, setting up the community for a major special assessment in future years.
Don't look behind the Curtain – imposing charges not authorized or supported in the governing documents, such as transfer or initiation fees. 

Save Us, Super Developer! – the community relies on developer subsidies, resulting in artificially reduced assessments for several years, rather than building up a capital reserve fund.
Steady as She Goes – a Titanic mentality of having the band play while the boat slowly sinks, with the Board refusing to raise rates at any point year after year.

What Me Worry? – same result as the above, this Board doesn’t give a thought to budgeting at all, and the governing docs require an automatic duplication of the prior year’s budget, year after year after year.
Planning to Fail – the Board deliberately plans on imposing special assessments rather than raising rates, resulting in the loss of a lifeline when a true emergency emerges.

Rebound – a new Board comes in and does a dramatic decrease, only to discover disaster and have the rates bounce back the following year, plus some to cover up for the short-sight.
Machine Gun Kelly – rates are all over the place with the reapplication of zero-line budgeting year after year, rather than doing zero-line once followed by historical budgeting from then on.

Slash ‘n Burn - cut all services in the name of reducing rates, with the consequence of deferred maintenance that costs twice as much to address in following years.  It’s always more cost effective to maintain annually than to permit deterioration that requires capital outlays several years down the line, to say nothing of the damage to the community’s reputation with sales agent.
Value Added - appropriate inflationary increases to match vendor costs due to things such as oil prices, plus proactive planning for improvements.  Definitely the only attitude permitted under the Board’s fiduciary duty to the community.

Earlier this year the federal case Colony Beach & Tennis Club Association, Inc. concluded that a condominium association could not avoid its obligation to maintain common elements by refusing to vote to impose special assessments necessary to fund repairs.  Combine this with homeowners who now more than ever are inclined to sue, with the Association’s insurance provider refusing to defend the Board, and voilĂ  a ready-made court-ordered assessment far more costly than if the Board had done its job.
Associations doing their job had funds in hand during the economic downturn to take advantage of deep discounts for capital improvement projects.  Those who failed to save, or had not maintained their communities prior to the downturn, were left scrambling.  They lost opportunities to differentiate their community from others when it came to attracting new homeowners taking advantage of suppressed housing market prices. 
Prospective buyers are savvier than before the economic crisis, many looking at budgets and reserves more closely when deciding desirability.  Communities with deteriorated common areas, or that have had to special assess, will turn away quality homeowners, and only attract the types of buyers who contribute to a downward spiral.  Bottom line...how a community's board chooses to handle the budget drives the value of of the community.

Tuesday, May 1, 2012

Community Connections

“To understand the heart and mind of a person, look not at what he has already achieved, but at what he aspires to.”  Khalil Gibran

It is the eternal struggle:  Low neighborhood participation in committees or social events. This can be made even more frustrating when you consider the great backgrounds of potential volunteers.  Knowing someone’s aspirations is difficult, while finding a way to match these aspirations to community needs is the real challenge.

Tapping in to Aspirations

Most individuals have a subconscious social modeling system. Simply put, we have a tendency to repeat what we see others say or do. Everyone can probably recall something that they have been told in the last week that they have then passed along to someone else.  We actually repeat everything we hear, at an uncontrolled sub vocal level. And like anything else, repetition of a message heard over and over will “stick” – this is why the same radio and TV ads are played so frequently (you are probably all too aware of this if you have ever watched daytime TV…the workers compensation attorney ads seem to appear every 5 seconds!)
However, the same message will only match aspirations in a few people.  The key is to provide various messages for the same volunteer need, to resonant with a larger number of neighbors:  People are only motivated if the community’s need matches something they have already internalized.

Implementation Example
The typical perception is that a pet committee is a venue for pet owners and pet complaints.   This combination is enough to even drive away even the most pet friendly community residents! 

To push past this preconception and involve even those without pets, messaging could emphasize the following:
·         The need to socialize pets

·         Recognizing that for some, a pet is as important as a child, and providing resources with this in mind

·         It’s a great opportunity for prospective pet owners to discover preferred breeds

·         Annual pet carnival (pet costumes!) with food / music
·         Employment networking opportunity

·         A session of free obedience training/counseling

·         Environmental impact of pets and owner habits

·         Health benefits

·         Pet-tolerant landscaping

·         Neighborhood Watch / group walks
We are touching on items normally associated with other potential committees - which might form later if enough interest grows.  For now, stick with developing one healthy committee. 
Don’t be discouraged if individuals you’ve approached don’t respond – an invitation, perhaps from a different person, may reach your neighbor as goals and aspirations develop over the following year.  The key is to keep up consistent and varying messages, so that when change does come, your prospective volunteer will have confidence in the durability and potential of your committee.