QUESTION:

What if we do not have enough votes? 

ANSWER:

Proxies are good for 90 days in the state of Florida. I cannot attest other states. Therefore, what you would do at the end of initial meeting would be to reconvene rather than adjourn. You pick a date somewhere no more than 90 days out to meet again on this matter. This is called reconvening. Then you post that meeting properly and this will give the community volunteers more time to come up with additional support and proxies.  When the next meeting is called to order, the minutes should state that you are reconvening the meeting of xxxdate.

QUESTION:

We have recently turned over from the developer. There is a lot of language pertaining to the developer in our bylaws, articles, and such. How do we go about changing the documents to remove this unnecessary language? 

ANSWER:

First, since you indicate that the developer is no longer active, then none of the those portions or provisions apply and they can just be ignored. Some board members still want to remove them and if you are one of those associations, then here is the process. Your attorney will go through the documents and delete the provisions pertaining to the developer and any other provisions that no longer apply. The association well then mail this red-lined set of documents to the members along with a proxy which will allow folks to vote for the changes (amended documents). The board will them hold a meeting and determine if they have adequate membership support to make the changes based upon the percentage of ownership required in the docs. 

QUESTION:

What amount do you recommend for assessing fines? 

ANSWER:

We recommend a minimum amount of $50 per day per violation, but typically, I recommend the allowable legal limit of $100 per day. Bare in mind that you want to shock someone into compliance and get results quickly. By the time they get served with a fine, they have had at least two lettters and a month, ample opportunity, to either cure the problem or request an extension of time from the board. Bear in mind that the committee can always waive some or all portions of a fine once compliance is achieved.

QUESTION:

What about different amounts of fines depending upon the severity of noncompliance? 

ANSWER:

This process makes it difficult for the volunteers. Not only will they have to track the time that the violation is in non-compliance, but the rule is complicated in that they will also have to compute various fines. Furthermore, it could get very confusing if the levels are too detailed and there are gray areas.

QUESTION:

We have just created a new finding committee. The board cannot agree on how much to a fine people. Some board members want different levels of fines depending upon the severity of the infraction. We understand that per Florida statute, we can fine more. What do you suggest?

ANSWER:

First let's take a look at the purpose of the fine. It isn't to generate revenue as much as it is to encourage compliance with the covenants. Having said that, it surely makes sense to consider the amount of the fine. $10 a day might motivate some folks to take a action, however, I have never heard of an association charging this low of a fine. Whatever fine board agrees on, will require the time and energy of the fining committee to assess and monitor. It will be up to the committee to document the period  of noncompliance, say with date-stamped pictures of the violation. At $10 a day, the committee would be a very busy for 100 days because $1000 is the maximum amount of fine for anyone offense.

QUESTION:

Our board understands that the law has changed and even though our documents do not give us the authority to fine, and now, with the change of the law, we can now do so. What is the advantage of fining and what advice can you give us? 

ANSWER:

First, you will have to find three people other than board members, the manager, and board spouses to serve on the fining committee. If you get that far, next, you will need to or should do, depending upon state statute, would be for the board to announce their intention to fine to the members in writing, and hold a board meeting to approve the action, and appoint a committee. At that time, it would be a great idea to go over the rule rules that the association intends to enforce and stress to the membership that, the purpose of a fine is to encourage compliance with association rules and covenants.

Continued from last issue…

 

Preserving your community's resources makes sense, if your community has sufficient competent volunteers to do what a management company should do. Be it your manager or the board, the objective of management is to preserve or increase the property values of your homes. For that to make sense, consider the level of competency that management requires. The challenge of managing an association has little to do with a community's size. The challenges to the management of any community have to do with the complexity of that community's assets and their administration.

billionphotos-1651815Take a community whose sole assets are entry signage and entry landscaping.  This is a simple community that anyone could manage if they have enough common sense to take good care of their home and yard. Add entry lighting, irrigation, and decorative boundary walls to the mix, and the required level of competency increases. A small park with a bit of playground equipment increases the association's liability and exposure considerably. Did you know that there are companies whose primary business is the inspection of playgrounds? These inspectors carry the designation of Certified Playground Safety Inspector (CPSI). 

The addition of a swimming pool or a clubhouse, a street with crumbling asphalt, and several owners that require liens, and foreclosures increases the required competency of volunteers again. The point to take from this is that sufficient competency is always required of association volunteers. However, in the more complex examples above, i.e. playground equipment, road and asphalt remediation, and collection issues, volunteer competency is not enough; the services of professionals are called for. The question you need to ask is are we qualified in those professions to adequately meet the neds of the task at hand.

The greatest disservice a self-managed board can do to their association is to rely upon their inexperience and lack of professional judgment when they should be calling upon an expert. If I had half of the money wasted by boards without the sense to call in an expert, I could have retired comfortably ten years ago.

And this happens because…? Boards want to save their association money.

With technology, there are respectable ways to save your association money without breaking the bank and creating financial waste. Furthermore, with technology a board can decrease their legal exposure, personal exposure, and limit the liability of the association. Did you catch the word ‘personal’ in the last sentence? Exposure of one’s personal assets exists when they do not use the prudent judgment in managing the resources of othersTo . Manthe management services required, one must keep in mind the adage, 'don't be penny wise and dollar-foolish.'

Since management fees are a material line item in the budget, The greatest saving  I now is a good time to deal with  It is in part from your feedback that this article will address technology. Protecting and saving your personal time is the one major benefits of technology.

QUESTION:

If I am renting our association foreclosed home, what happens when a bank forecloses against us?

ANSWER:

The association will receive a notice well in advance of the upcoming court date that the bank foreclosure will take place. Assuming that the FC goes through on that date, the tenant well have a approximately 90 days to vacate the property. This may vary from state to state, and there may be legal notifications or actions required. The easiest approach to leasing association property is to find a good leasing agent. They'll provide the application, screen, show the property, get you the best dollar, and will know your rights with regard to tenancy and termination of lease. Their commission is small compared to the amount of service and convenience that they provide.

The topic of this article is one near and dear to every board member’s heart. It is about saving money. 

Before proceeding, I thank you for the many kind words in your emails and I value and appreciate your thoughts and comments. My company, Vanguard Management Group, manages well over one hundred associations. We offer board certification training, a mandatory requirement of the Department of Business Regulation in the State of Florida. In that we do not charge for it, hundreds of board members and volunteers of both managed and self-managed associations register for it. Like you, their primary concern is having funds sufficient to meet the demands of day-to-day expenses  as well as having the long-term financial resources to und their reserves. Therefore, in that saving money is of vital concern to boards everywhere, I wrote this article. Because of your suggestions and the concerns of boards everywhere, this article addresses saving money.

billionphotos-1905103The desire to save is innate and biological. In days of old, we put up veggies for the winter, squirls hide acorns, and bears store fat for winter. Furthermore, frugality is a logical mindset of board members based upon the following factors. Board members are usually older and more conservative. With the advance of age, people tend to think of their future in light of waning income as they near retirement. Add to this the downturn in our economy. Recessionary symptoms appeared in 2006 and continue through today. This has added an additional financial strain to many associations by way of delinquencies and foreclosures. Sadly, most of us know someone who is unemployed. In addition, many of us cannot but help to worry about our own livelihood. With these factors in mind, it follows that boards’ primary concern is saving money.

Continue reading

QUESTION:

Our association has recently taken title to a foreclosed home. Can we sell it? 

ANSWER:

You can attempt to sell the property, but your success will depend upon clear title. If there is no mortgage holder, it may have a clear title and will be easier to sell. If there is a mortgage on the property, then the lender will eventually come for it and this makes attempting to purchase it impractical. However, you do have possession of the property, and if it is inhabitable, you can lease it and your association keep the proceeds until such time that the lender forecloses against you.

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