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By Bob Gourley
Comedian Milton Berle is quoted as saying “Attorneys practice law because it gives them a grand and glorious feeling. You give them a grand and they feel glorious”.
While attorneys may be on the receiving end of many jokes, the contribution they make to your community is no laughing matter. Depending on the size of your association and the challenges you are facing, chances are you have one or more attorneys performing crucial work on behalf of your association. Telling the story of the important work these professionals perform on behalf of your association is crucial to helping your community cope and thrive in the face of legal challenges.
Attorneys that specialize in the legal issues and challenges facing community associations are relatively abundant. The attorney you have chosen to represent your community is an important member of your team and a vital asset to promoting a healthy and harmonious community for your residents to enjoy. If you’ve ever taken the time to read through your community’s covenant, declaration, by-laws, and rule and regulations documentation, you have a first-hand appreciation of how complex those documents can be. In the litigious society in which we live, can you imagine having to stand by your own interpretation of those documents in a court of law?
Since 1993, Community Associations Institute has recognized excellence in the practice of Community Association Law. That is when the College of Community Association Lawyers, more commonly known as CCAL, was founded. Membership in CCAL is quite exclusive. Of the thousands of attorneys that practice community association law, less than 150 have been granted membership.You can learn more about the College of Community Association Lawyers at the CAI website – http://www.caionline.org/career/designations/ccal/Pages/default.aspx
What will your typical homeowner want to know about the attorney you have chosen to do the important legal work of the Board? Ideally, you will want to provide a biography from the attorney that details his or her involvement in the world of community association law. Many of these attorneys will be happy to provide articles of legal interest that can be included in your newsletters or posted on your website. Quite often, it is beneficial to have the attorney appear before the membership at an HOA meeting to address legal concerns held by members of the association.
In describing lawyers, John Quincy Adams said “Whoever tells the best story wins”. I couldn’t agree more. Choose your community association attorney wisely if you want to be the winner when your community’s story is told.
By Bob Gourley
Using your condominium newsletter to discuss CIOA with members of your community association can be a vital component to a sound overall communication program. Interestingly, CIOA laws are designed for the protection of individual homeowners. Yet, unless an individual homeowner is aware of the changes to the law or hires an attorney to bring suit against the association, the reality is that most residents are unaware of CIOA or how it impacts them. My advice to clients is to get ahead of the story and make sure your communication efforts are CIOA-compliant.
Before I begin, I need to point out that I am not an attorney. I make no representation as to the legal soundness of the advice in this article. I am an experienced HOA Board President and an expert in community association newsletters and communication products. You should always seek the advice and counsel of an experienced community association attorney when legal questions arise. My personal experience is with the CIOA laws here in Connecticut but there are similar laws in every state to protect the rights of homeowners and to assure that sound governance principals are followed within community associations.
A great deal of emphasis on open communication is stressed over and over in the CIOA laws. Meeting notes, financial data, vendor transactions are all subject to new levels of scrutiny from individual homeowners. It may make sense to get ahead of some of these inquiries and actually publish some highlights in your newsletter. I have always advocated full budget disclosures to homeowners. After all, it is their money and they should know where it is going and how it is being spent.
With all of this openness comes a new level of opportunity. If homeowners had previously felt shut out or sheltered from the activity of the Board, this is a great time to bring some fresh faces and ideas to the Board. We all know that informed residents become involved residents. Someone who takes an interest in the meeting notes may be a future candidate for Board Secretary. Someone who takes an interest in the association’s finances may be a potential Board Treasurer. Seize the day and don’t miss an opportunity to turn an inquiring mind into a productive volunteer.
Of course, CIOA laws bring challenges with them as well. In many instances, the communication requirements of the act will force communities to spend more on record-keeping and distribution. Fortunately, the act in Connecticut does allow for more electronic communications so it is a good time to look into email and website communications. Again, there are legal provisions that guide these activities so please be sure you understand the ramifications of going paperless with your communication efforts.
I wholeheartedly suggest you embrace the spirit of CIOA in your community’s communication efforts. I have included a link to the CAI CIOA reference page (http://caict.org/LAC_CIOAChanges.html) in the last several issues of my own community newsletter. I want my community members to know that their BOD is CIOA-compliant and that we are aware of the law. I can report that “so far, so good”. I’ll bet you get the same result.
By Bob Gourley
Condominium newsletters have advanced rapidly in recent years. Gone are the days of typewritten and photocopied newsletters. Today’s condominium associations are publishing their condominium newsletters in vibrant colors, complete with stories and photos. No longer limited to printed materials, modern condominium newsletters are designed for both print and electronic distribution. Instead of posting a piece of paper to a clubhouse bulletin board, today’s condominium newsletter is more likely to be posted to the condominium’s website or Facebook page. Condominium residents don’t just check their mailboxes for the latest issue of their condominium newsletter; they check their cell phone, their Blackberry, their IPhone, or other PDA. They check their Facebook News Feed and they check their Twitter subscriptions. More than ever, condominium residents are connected to their communications.
MyEZCondo brings the cutting edge of technology to its clients. It has never been easier to communicate with condominium residents. Because of this, it has never been more important to use your condominium newsletter and other communication efforts wisely. There is tremendous competition to get and keep your audience’s attention. A high quality condominium newsletter from MyEZCondo is just the tool you are looking for. Talk to us today about a condominium newsletter that is the perfect fit for your community.
By Bob Gourley
How many times have you tried to get an important message across to your community members only to find yourself frustrated with the feeling that nobody is listening?
I hear many listening-related complaints from condominium management professionals. These are the items that ail them. Do you suffer from any of the following symptoms?
The community website is rarely accessed.
The association newsletters aren’t very well read.
Mailed notices are going unnoticed.
Posted signs are being ignored.
Meetings are poorly attended.
Apathy is a sure sign that your community is not listening.
There are more sources of information bombarding your audience then ever before. TV, radio, billboard, newspapers, internet – our society is filled with a seemingly endless supply of banter aimed at getting the attention of your community members. You are competing with all those distractions when you try to get your message across. To be effective you must be creative.
What can you do?
Take a cue from the world of corporate advertising. Your message needs to stand out. Differentiate yourself from the crowd. Tell your story well and tell it often. Make your messages fun or dramatic. Develop a flare for promotion. Get help if you need it.
Think about some of the more successful communication stories in the world today and learn from them. “The Apprentice” has become a top-rated TV phenomenon. Even if you’ve never watched the show, you probably know who Donald Trump is and have you heard the show’s catchphrase “You’re fired!” way too often. Bad hairdo and oversized ego aside, Mr. Trump is a master of self-promotion. Yet you have something over him when it comes to communicating with your homeowners. You know where they live, how to reach them, and the specific items that they will find interesting. It’s time to put on your game face and show “The Donald” whose really got the right stuff.
I am not suggesting that you invoke the wrath of homeowners in your communities by firing anyone. What I am suggesting is that you learn how to compete with their other interests and speak to them in ways that they will take to heart. If you have not already done so, this would be a great time to take a look at branding your message. Branding is the concept of message consistency in all of your communications. Can you imagine any Donald Trump project without his name all over it? He wouldn’t stand for it because he knows the images invoked by his name help sell his products. Your branding efforts should be just as strong and consistent. Advertising agencies base entire campaigns around this concept and corporations pay millions of dollars for it. You can do it for free! Take that, Donald!
No one wants to be lectured to. Make sure your communications are upbeat. Take your cue from the political “spin doctors” out there who turn lemons into lemonade for a living. Let’s take that age-old problem topic for community associations everywhere – pet waste. Sure you can lecture until you’re blue in the face about fines and pooper-scoopers but it may not solve your problem. One association I work with recently addressed its pet waste problem with a friendly reminder mailed to home owners. The letter reads, “We love your pets but not their waste. Please clean up after your pet. The best way to have good neighbors is to be a good neighbor.” That’s a much nicer way to ask pet owners to behave responsibly than the stern warning of “Pick it up or pay a fine!”
The bottom line is that it doesn’t matter what you are saying if nobody is listening. If nobody is listening, you should reconsider your message and your message delivery methods. You can make a difference and your message will be heard. Are you listening to me?
By Bob Gourley
I am often asked about the difference between a fact and a benefit as it pertains to preparing a community association newsletter to tell the story of a community enhancement, such as a new roof. Community association members buy benefits but before they do, they want to know the facts. In construction and maintenance issues, the facts often describe the tangible details of the project such as the cost, the materials used, the contractor chosen to perform the work, how long the project will take and things of that nature. While those items are newsworthy, they won’t help you win over critics or skeptics. For that task, you will need to discuss benefits.
Benefits, quite simply, will help you tell your maintenance and construction story in such a way as to show your residents what is in it for them. Benefits are far less tangible but far more effective in explaining the need for a project and the reason to spend the association’s money. If you think about the last major purchase you made, you will most likely remember that why you bought the item is more important than what you paid for it or what you actually purchased. The same mentality applies to maintenance and construction projects like new roofs.
A roof replacement has many benefits to homeowners. However, many benefits will go unnoticed unless you point them out. Let’s take a look at a few facts and benefits to see if we can find the best way for you to tell the story of roof replacement in your community.
News Item: New roof installed.
Fact: Shingles carry a 30 year warranty.
Benefit: The community won’t have to do this again for quite some time. The new roof looks great and enhances curb appeal!
News Item: Old roof was failing.
Fact: The association is charged with protecting homes from the damage of the failed roof.
Benefit: Interior of homes stay dry; association meets its obligation to homeowners.
News Item: Old roof reached the end of its useful life.
Fact: Old roofs will fail. It’s not a question of if but rather when.
Benefit: By taking proactive measures, the association will save additional money by not having to pay for repairs from a roof that will fail.
In most instances, money spent on today’s new roofing project benefits all members of an association with lower costs in the future. Any time you maintain, protect or enhance common elements of your association, you do so for the benefit of your members. People want to “know” the facts but they “buy” the benefits. Use the power of benefits to keep your residents happy and informed about all of your construction and maintenance projects. You won’t just build a better property. You’ll build a better community!
Bob Gourley is founder of MyEZCondo, a communications firm that produces newsletter and website content material for condominiums and homeowner associations throughout the USA. He also serves as board president of his local HOA.
By Bob Gourley
Over the past few years, I have been advocating that community associations add a new line item to their budgets – Delinquency. Did you heed my advice? Did you help protect your community from facing new financial consequences by preparing for the inevitable delinquencies and financial shortfalls caused by missed common fees and increased foreclosure expenses? If you did, then I congratulate you on your far-sightedness and prudent planning to avoid a budget delinquency. If you didn’t, then I guess you’re budget is delinquent, see?
Joking aside, delinquency is no laughing matter. Successful implementation of adding the line item to your budget is not an easy sell. If you are not already communicating the problem to your residents, I suggest you use your condominium newsletter, HOA newsletter, bulletins, websites, and any other communication tools to do so.
The facts are really quite simple. The country continues to have a high unemployment and underemployment rate. Property values have decreased in many communities so it is not uncommon to have individual homeowners within a community holding mortgages that exceed the liquidation (foreclosure or short sale) value of their unit. If any homeowner gets behind in their mortgage or common fees, the foreclosure process is likely to begin and the community will incur a delinquency in the form of uncollected common fees and/or increased legal expenses to try to collect those fees.
Unless your budget includes money set aside for these occurrences, that delinquency will directly impact your ability to pay for other items that are in your budget. Since I live here, let me use Connecticut as an example. In December of 2010, Connecticut had a foreclosure rate of .073%, resulting in 1050 filings. Granted, not all of these filings made it all the way through to foreclosure but many did. If you had one or more foreclosures in your community, you already know the bittersweet process of filing a claim to collect your share of the proceeds and figuring out how to cover the deficit created by delayed or lost revenue. It is at best a burden, at worst a disaster, to any community’s budget.
So how do you stop delinquency from crippling your budget? Education is always your first line of defense, so why not start by explaining how the budget process works in your community association. I maintain that community association budgeting is part math, part guess, and part crystal ball. I begin with the known factors, based on last year’s historical records. I work with my property manager to make a best guess as to what things are likely to cost this year. Then I consult with my crystal ball, that is, I take a good look at outside factors that may influence what goes on within my community. Foreclosure rates, local economy issues, etc. are all considered before the final budget is prepared.
In preparing last year’s budget, I decided that 5% was a reasonable number to use for our Delinquency line item. That meant that after the Annual Budget was completed, I added 5% to the bottom line and called it Delinquency. Of course, that meant a majority of all unit owners in attendance at the Annual Meeting had to agree that they and their neighbors would fork up an additional 5% to their common fees for the entire year. They may not have been happy about that but when one of our homeowners went into foreclosure, we found ourselves consistently running a 5% shortfall over predicted revenues each month. Thankfully, our advanced planning for delinquency meant we still had money to pay our bills and the increased legal fees to chase the uncollected common fees that were owed us.
We may not think of ourselves as salesmen when it comes to serving our communities but I can assure you that the successful implementation of adding a Delinquency line item to your budget will require a certain degree of salesmanship as well as conviction on your part. You first need to sell yourself on the idea that your budget needs to address the likelihood of Delinquency striking within your community. Then you need to tell the story well and often, using your condominium newsletter or HOA newsletter to your fellow homeowners so that they accept the need as well. You can turn Delinquency into Opportunity and your community will be reaping the rewards that come from prudent financial planning.
By Bob Gourley
Have you ever had to foreclose on a neighbor? The word “foreclosure” strikes a note of fear and panic in most people. Typically, foreclosure is only considered when all other possibilities have been considered and no other solution can be found. It is the final remedy an association has to fix a problem that could otherwise financially cripple a financially sound community.
If you’ve ever seen the classic film, “It’s a Wonderful Life”, then you can easily picture the antagonist, Mr. Henry Potter (portrayed as the perfect villain by Lionel Barrymore). Mr. Potter was an evil banker, ready to foreclose with joy on any home owner who has fallen behind in his monthly payments. While most of us will find no enjoyment when the time comes to foreclose on a fellow unit owner, we would be well served to remove our compassion from the equation and appreciate the importance of this legal and business transaction for the necessity it has become.
The financial and legal obligations of the association are clear. Almost every association has rules and by-laws in place that describe a default by a unit owner to pay common fees and the actions that will be taken to collect any delinquent monies. The challenge for Board members, especially in smaller community associations, is that the foreclosure action isn’t against an unknown business entity. It involves the Board, representing the association, making a decision that will ultimately evict a neighbor. It is a human conflict of the highest order, the kind that can keep you awake at night if you allow it to.
In my experience, making policy is relatively simple compared to implementing policy. It is far easier to agree to foreclose on any unit owner who falls more than two months behind in their common fees than it is to watch a neighbor lose a job and struggle to make ends meet. It is not uncommon for people to live paycheck to paycheck. The topsy-turvy economy has created huge amounts of unemployment and underemployment in our region. All of us know someone who has lost their job. It is simply human to show empathy for our fellow human beings. It is even more so when it is someone close to us, like a neighbor.
My advice is to take a good look at your association’s collection policies. Delinquent collection of common fees is crippling many communities in our state. If you haven’t already done so, now would be a great time to consider alternative payment methods. For instance, my association began taking credit cards this past year, which helped a few owners get current. You may also need to review your collection procedures and make sure you are giving your association members every opportunity to keep current with their common fees.
When all else fails, foreclosure may be your final option. If you have been diligent in offering solutions along the way, you need not feel like Mr. Henry Potter when the time comes to foreclose. It is simply the final action the association needed to take so that all of the other residents who are paying their fees on time can enjoy their own “Wonderful Life”.
By Bob Gourley
Did your community get a new roof this year? Was your parking lot repaved? Was the pool filtration system overhauled? Were your decks replaced? Chances are pretty good that your community either underwent or will soon undergo a major construction or maintenance project. Don’t miss this opportunity to tell the story of your project or you may just be leaving money on the table!
I am often asked about the difference between a fact and a benefit as it pertains to preparing a community newsletter. As a former sales and marketing guy, you can bet I know the difference between a fact and a benefit. In construction and maintenance issues, the facts often describe the tangible details of the project such as the cost, the materials used, the contractor chosen to perform the work, how long the project will take and things of that nature. While those items are newsworthy, they won’t help you win over critics or skeptics. For that task, you will need benefits.
Benefits, quite simply, will help you tell your maintenance and construction story in such a way as to show your residents what is in it for them. Benefits are far less tangible but far more effective in explaining the need for a project and the reason to spend the association’s money. If you think about the last major purchase you made, you will most likely remember that why you bought the item is more important than what you paid for it or what you even bought. The same mentality applies to maintenance and construction projects. Here are a few examples:
Item – New Roof Installed
Fact – Shingles carry a 30 year warranty
Benefit – Interior of home stays drier
Item – Blacktop Sealing
Fact – Creates a waterproof barrier
Benefit – Underlying pavement lasts longer
Item – New Pool Filtration
Fact – More fuel efficient
Benefit – Saves money
Item – New Decks Installed
Fact – Made of Artificial Material
Benefit – Lasts longer, looks better
In many instances, money spent on today’s maintenance and construction project benefits all members of an association with lower costs in the future. Any time you maintain, protect, or enhance common elements of your association, you should do so for the benefit of your members. People want to “know” the facts but they “buy” the benefits. Use the power of benefits to keep your residents happy and informed about all of your construction and maintenance projects. You won’t just build a better property. You’ll build a better community!
By Bob Gourley
I went to see a fortune teller recently. She took me into her reading room and asked me to gaze into her crystal ball. She then predicted my future. “I see wear and tear on your buildings. I see a new roof will be needed. I see aging windows that need replacing. I see… a depleted reserve fund!”
Silliness aside, it really doesn’t take a fortune teller to predict that common elements in any community are going to age and need replacing. It also doesn’t take any magic to predict that communities with more amenities are likely to incur greater expense when maintaining and preserving their community’s assets. So, why is it that so many communities are so far behind in their goals for achieving a sound reserve fund for tomorrow’s expenses?
There are many reasons that reserve funds are not at their proper levels. First and foremost, in my opinion, is the fact that the “here and now” expenses are far easier to comprehend than tomorrow’s expenses. Has your community undergone an assessment recently? Was it for an emergency or one-time expense or was it for a routine expense that could have been easily predicted 5, 10, or even 15 years ago? The term “deferred maintenance” has become all too familiar in the language of community associations. Simply put, when a community doesn’t have the funds available to handle a routine maintenance item, they defer the maintenance until such time as the funds are available. Provided a plan to raise those funds is executed, that may or may not be a problem. More times than not, the path of deferred maintenance leads to the slippery slope of unfunded capital reserves.
How do you steer your community away from the path of depleted reserves and heavy assessments for routine items? The first step is to develop or review your association’s reserve study. Ideally, this job will be handled by a professional reserve study analyst. If your association does not have or cannot afford a reserve study, the Board of Directors should appoint a committee to take inventory of those items which the community holds in common. These items include common elements like grounds, paved roads, amenities (pools, tennis courts, club houses, etc.) and items routinely handled by the association (i.e. – roofs, building exteriors, windows). These items will vary by community so there is not a “one size fits all” approach to this. Once all of the items are inventories, the committee should evaluate each of those items to determine the element’s useful life. A roof that lasts fifteen years that has been in place for five years, still has ten years left. Roads that were paved 25 years ago may need replacement sooner rather than later. This list will ultimately yield the items that a reserve should be able to fund. For communities that have never done this exercise, the results can be a real eye opener.
The next step is to begin to estimate replacement costs for the common items. Inflation will have taken a toll over original costs so be prepared to factor that in. At the conclusion of this process, a realistic budget for a reserve will begin to emerge. At first glance, many of these numbers may seem too large or unmanageable. My advice is to use a technique called “reduce to the ridiculous” to help make the accounting a little easier to swallow. A reserve study that calls for $20,000 per unit to be raised over the next five years may sound better at $4,000 per unit per year or better yet at $333 per unit per month or $77 per unit per week.
The final step is to sell the concept to your fellow homeowners. None of them want to live in a rundown, outdated community. Poorly funded capital reserves will not only affect the quality of their lives but it will very likely damage their ability to attract buyers should they decide to sell their home. Community members need to be “told and sold” the value of a healthy capital reserve and a long range plan of how those reserves will be used. Tell them about the plans for how the money will be used and sell them on the idea of how it is in their best interests to keep the reserve fund healthy. You will be rewarded with a fiscally vibrant community that is never caught off guard without the funds it will need to flourish.