Month: November 2007

 

Today is a special day to spend with family and friends and enjoy the festivities.

Were celebrating this Thanksgiving Day with a roast turkey, gravy made from the turkey drippings, roasted spaghetti & acorn squash, sweet potatoes casserole with mini marshmallows on top and homemade pumpkin pie.  We are certainly grateful for being able to enjoy this peaceful day.

We also hope Charlie Crist is enjoying his Thanksgiving Day. Here’s a little insight of our newly elected Florida Governor, it’s been just over a year. “Charlie Crist now serves as Florida’s 44th Governor in the State of Florida. He vows to work as “The People’s Governor” because he is working for the people of Florida—the people he calls his boss. Today, he is ready to lead Florida onward, to new opportunities and to Florida’s brightest future.”

Here is a another blurb regarding the State of Florida Citizens Property Insurance Company:

Property Insurance – Governor Crist praised the Legislature for continuing the work of lowering property insurance rates by ensuring affordability and consumer choice within Florida’s insurance market. Rates for homeowners insured by Citizens Property Insurance Corporation will not be increased until January 1, 2009, and consumers can qualify to purchase insurance from Citizens when comparable coverage from private insurers is more than 15 percent higher than Citizens rates. Private insurers will also be required to report their national profits when filing for rate increases, and no new Florida-only subsidiaries companies, will be permitted to insure property in Florida.

Here’s the problem, the Florida ran Citizen Insurance Company are not affordable. In fact in the South West Florida area, Citizen’s Insurance Company more than doubled in all Associations including our own. Since Hurricane Wilma some Association Insurance costs has almost tripled. All of us here in the State of Florida are spending a huge amount of money on property insurance. The high costs are mostly due to Wind coverage.

The legislation reports the rates will not increase until 2009: Our rate already more than doubled. The pledge of having our insurance not increases for a couple of years are insulting to us who live in South West Florida, not having an increase does not lower our costs. If a private company comes to Florida and offers just fewer than 15% for insurance, you can add another insult to injury. Lastly, private insurers are now required to report their national profits when filing for rate increases. This begs the question of how much did these insurance companies make before they left town and why is the legislation requiring such reporting? This pledge also doesn’t add any kind of significant changes to our insurance costs.

Aside from vacating Florida, here’s one attempt we can make to lower our insurance premiums. Write a letter. Don’t waste your time with emails, we’ve already tried and received no feedback. Below is a sample letter:

 

Your name
Your address
Name of your Association
Phone number or other contact information.
Today’s date

Charlie Crist
The Capitol, 400 S. Monroe St.
Tallahassee, FL 32399-0001
Phone: (850) 488-7176
Fax: (850) 487-0801

Regarding: High Cost of Insurance Premiums

Dear Mr. Crist:

It’s been a while now since you Charlie Crist have taken office with the promise of reducing our insurance rates. As you know Citizen’s, which is a Florida State insurance company is and had been charging enormous insurance premiums for our community. These high rates are causing a hardship for our members of our Association, especially those who are on fixed incomes. It has more than doubled since Hurricane Wilma.

So far the only relief from Citizen’s Insurance, is from having a mitigation inspection to our roofs. These inspections performed by a licensed contractor add additional costs to our association. The reduction is not significant and barely puts a dent in the amount we are charged by Citizen’s.

Speaking on my behalf and our Association, please take the necessary steppes in an expedient way to reduce our insurance premiums.

Sincerely,

Your name
Carbon copy: your association’s name

Happy Thanksgiving!!! (more…)

 

With budget season about coming to a close, here are a few more budget items to consider, if not already added.

Miscellaneous Pool Maintenance Costs:

• Annual operating pool permits expense.
• Artificial lighting. (Under water lighting costs $350 to $500.)
• Replacement of life ring, throw rope and Shepard’s hook.
• Pool signs.

Fire Safety:

• The replacement costs of fire alarms and maintenance.
• Annual fire extinguisher inspections performed by a state license inspector.
• The replacement costs of fire extinguisher and maintenance.

Elevator Service:

• Annual certificate of operation costs, issued by the DBPR, which is usually framed with a transparent cover.
• Quarterly costs of service maintenance contract for routine maintenance. (Special note, any change of maintenance service contract must be reported to the DBPR. Also, any injury or death must be reported within five (5) days of incident.)
• The cost of cleaning the elevator’s bottom well could also prove to be another significance expense.

Pest Control:

• The costs of routine building pest control; these are high costs because of state requirements. A licensed Florida Department of Agriculture and Consumer Services shall only perform fumigation in individual residences.  Also, Community Associations should never have unlicensed or uncertified personnel perform pest control services in individual units or in common areas. Furthermore, pest Control businesses must maintain insurance coverage. 
• Fungicides and chemicals for pest control of shrubs, ornamentals and turf must only be performed by State licensed and insured pest control personnel and must carry an identification card. These services are high costs maintenance due to strict regulations.

Security Guards:

• Bathroom supplies and cleaning materials are usually purchased by a cleaning service and are not included in their service contract. Check the contract for any unknown costs.
• Security guard contracts should never be increased before a new annual budget begins. All costs of maintaining operation should be included in the security guard contract. Here are a few items to consider:
• The security agent must have a “class D” license. The agency must also be licensed. The contract also should state the dates of biannual license renewal.
• License employees should wear uniforms with the patch identifying the employing agency.
• Armed security officers must have both Class D and Class G licenses.
• Security guards must contact the local police for any criminal acts and must not use force or try to make an arrest. Only law enforcement is granted the use of police powers.
• The Department of State, division of Licensing, regulates security officers.

After the proposed budget has been reviewed and accepted by all Board of Directors, it’s time to prepare for mailings.

If not written in the governing documents, Condominium and Cooperative require a minimum of a fourteen (14) day written notice with attached proposed budget prior of budget meeting. Homeowners associations required a minimum of at least seven (7) day before the meeting with proposed budget attachments.

An executed affidavit is required for compliance of State requirement of Condominium and Cooperatives. For proof of evidence, executing an affidavit for homeowner associations are also recommended. The affidavit should be filed in official records of the association. (more…)

Voluntary Compliance is by far the best result of a violation.

The three (3) strike rule:

The “three strike rule” gives three warnings before a fine or other disciplinary actions taken by the Board of Directors.

Verbal Warning: not recommended. There are many reasons why property managers will not give a verbal warning. One reason, the warning could be mistaken as a personal threat or construed as confrontational.

All warnings should be in writing: If a Board of Director gave a verbal warning, tangible proof would not exist and there would be no record of notice. Although a verbal warning may seem to be a considerate method, a written notice can be just as affective. Below is a sample first notice:

Associations Name
c/o Management Company
Management Companies Address
Phone, Fax & Email
Website Address
December 13, 2007

Name of Person
Address
City, State & Zip

Re: The Address of the person being sought after

Dear Mr. Person:

The Board of Director of “Name of Association”, believe you may not be aware that you are in violation of the “Condominium or Homeowner” documents.

If so, we ask that you please correct the following violation:

(State the Violation.)

(Provide an opportunity for the owner to correct the problem.)

It is the intention of the “Association’s Name” Board of Director’s to ensure that the common grounds retain the aesthetic beauty that will continue to reflect the high quality of living within our community.
If you have any questions in regards to this letter, please contact “Management Company” at the address above.

Sincerely,
Property Manager, CAM, for the Board of Directors of  “Associations Name”.

There should be no “Carbon Copy” for the first letter.

• The board should never discriminate between owners and renters, therefore all notices are sent to the homeowners of record and never to the renters address.
• Enforcement should be equal to all residents and never be selective. The right of the board to enforce the Covenants could be revolted if enforcements are not consistent or conducted in a timely manner.
• A fine may not be levied without allowing for an opportunity of a hearing of a committee of unit owners. If the committee does not agree with the fine, the fine may not be imposed. If the Board does not follow these procedures, then the Association would be subject to disciplinary actions in a Civil Court.
• The collection of fines is through small claims court. A lien could never be placed on a property due to a nonpayment or noncompliance of a fine or violation. (more…)

 

Do you have a New or self manage association? Is your association being turned over by a developer or would it be interesting to see comparisons?  Gulfshore Property Mgmt. offers free services.

Gulfshore Property Mgmt. will evaluate your association assets, income & expense and develop and/or create a proposed budget for free. Sometimes associations who are self managed may find themselves behind schedule or being rushed to complete a budget in a timely manner. To research all the utilities, cable, and necessary companies for your community takes a considerable amount of time and these companies only offer a guestimate of next years projected costs. Reserves can also be a painstaking task. Whether it’s roofing, paving resurfacing, asphalt seal coating, building paint, elevator replacement/repairs, pool equipment replacement, water pumps, fountains and Chickee hut or seawall replacement. With the array of all Marco Island and Naples proven vendors and by comparing prices and services, Gulfshore Property Mgmt. already has these projections ready for you.

Occasionally a Homeowner or Director is not sure if the budget reserves or the income and expense are regulated correctly. Or simply do not understand what “Owners Equity” is and why it applies to their association. Even landscape companies can be confusing because of hidden costs. There are costs associated with fungicide, pest control, fertilizer, and sprinkler repair. Every year there should be a plant replacement program for basic care and maintenance of the common grounds. These costs may or may not be in the landscaping contract. Here is a list of other considerations, if not already to include in a basic community association proposed budget:

• The costs to maintain all assets.
• The priority and costs of maintenance.
• The costs of required frequency of maintenance.
• The time it takes for required maintenance.
• Establish criteria of the level of maintenance required.
• The cost of preventive maintenance.
• Any other costs associated with emergency procedures and plans.
• Routine Maintenance: Requires maintenance costs. (Examples: landscaping, pool and building up-keep.)
• Preventive Maintenance:
  Cost of maintenance to preserve assets which can prevent breakdown. (Examples: Dryer vent, sewer and other drainage cleaning. Rebuilding of air/con, heater and pool equipment.)
• Emergency Services Maintenance: Requires available funds to respond to emergencies. (Examples: Water leaks such as broken pipes, roof leak and sewer stoppage etc.)
• Corrective Maintenance:
  These are costs of non-emergency, but are necessary maintenance. (Examples: Eradication of rat and other pest nests. Or the removal of ant, bee or wasps nest.)
• Schedule Replacements:
  The costs of wear and tear should already be evaluated and executed in the budget. (Examples: These are costs already in the reserves or line items in the operating budget.)

Pool Maintenance Requirements, Fire Safety, Elevator Service, pest control and security guard all have Florida State requirements and should be evaluated carefully while considering a budget. (More on these subjects in a later post.)

With a simple phone call or email, a professional property manager will answer any questions regarding your community. Even if it’s only for comparison purposes, we are friendly, considerate and are happy to assist. (more…)

Since all community associations are legal entities or corporations, a duty to properly maintain common grounds is appropriated through the use of a financial plan called a budget. A budget is a creation of a financial plan and is funded by collection of quarterly assessments. The results of the creation of the financial plan starts with a proposed budget and ends with a financial reporting of the fiscal year. Not all but most associations fiscal year ends December 31.

A copy of the annual financial report should be provided to each member of the association or a written notice that a copy of the financial report is available upon request at no charge to the member. A majority of associations will use the latter approach and include the notice in the proposed budget agenda.

The community documents will dictate if the Board or the members adopt the proposed budget. In most documents, the Board of Director adopts the annual budget. Condominium and Cooperatives require a fourteen (14) day written notice with attached proposed budget prior of the meeting at which the budget should be approved. Homeowner associations’ should consult in their governing documents. The minutes of the budget meeting validates the adoption of the annual budget.

Prior to the budget meeting, the Board should have a pre-budget or a budget workshop meeting. This is where the budget is initially prepared. The Treasurer, other Board and committee members work and finalize the proposed budget. All Board members should receive a draft of the pre-budget finalized copy. If any changes are to be made, they should be made prior of notice of the annual proposed budget meeting. The time not to change the budget is at the annual budget meeting. If the dollar amount is changed at an annual budget meeting for any reason, the whole process starts over and the result would be a waste of association funds due to administrative and mailing costs. For this reason, it is important that all Board of Director are in a 100% agreement before the annual budget notices are sent to the members. If an error is discovered at or before the budget meeting, then let it be shown is the minutes and a mailing of the corrected budget should be sent to all members. 

Some of the newer associations seem to make budgets a stressful event. Budgets are really an easy practice of forecasts projected through actual and reasonable predictions. A budget merely provides a guide for disbursing funds. Since no one can really predict the future, a line item for contingencies should be added. If unknown expenses occur that exceeds the budget, then associations will have to rely on special assessments or could even take out a loan to cover costs of such damages. See Florida Statute 718.112 part (e) below: (more…)

These procedures are set up for Homeowner Association’s. The Condominium provisions are less strengent. For more information, see Florida Statute section 718.303 below: 

1. Establish three (3) resident homeowners from the same Association were the violation occurred. The Board of Directors of the same community appoints these three members. For this purpose they could be called a Regulatory Hearing, Fining or an Ad hoc Committee. The Committee cannot be officers, directors, or employees of the association, or the spouse, parent, child, brother, or sister of an officer, director, or employee.
2. A fourteen (14) day notice is required giving the person sought to be fined an opportunity to a hearing by the Committee. The notice shall state the date, time and place of the hearing.
3. At the hearing the Committee shall give the person a clear opportunity to dispute the reasons why they should not be fined. After hearing the dispute, the Committee can excused the person or persons involved and determined if or if not a fine shall be imposed.
4. A fine may be levied on the basis of $100 a day but not to exceed $1,000 per violation.
5. If the Committee, by majority vote, does not approve the proposed fine, a fine may not be imposed.
6. At the next duly called Board of Director meeting, the Committee will recommend a fine and dollar amount based on their majority vote. The Board should strongly consider the Committee’s recommendations.
7. By a majority vote, the Board may imposed a fine and a reasonable amount of time for payment. (Fines are enforecable by small claims court and cannot be a lien on property.) (more…)

The Regulatory Council of Community Association Managers for the State of Florida, understand that not everything in the Declaration, Articles and Bylaws describe all the essential clarifications of an Association. Therefore the creations of the Rules & Regulations were made. Along with most Association governing documents, there should be an attachment called the Rules & Regulations. These Rules & Regulations (R&R’s) are usually initiated by the development company and passed on after turnover to the preceding Association.

In the rare case of document conflicts, the governing law shall take precedence. The order of priorities of laws and documents is as follows:

• Federal Law (Constitution, Statute then Administrative Rules)
• State Law (Constitution, Statutes then Administrative Rules)
• City or Counties (Building & Zoning Codes, Ordinances and other applicable laws)

Community Association Documents:

• The Declaration of Covenants Conditions & Restrictions (for Homeowners) or Declaration of Condominium
• The Articles of Incorporation
• The Bylaws
• The Rules and Regulations (R&R’s)

The Association may also add reasonable rules and regulation for the operation and use of the common elements, common areas and recreational facilities serving the Association.

The rules adopted by the Board should only clarify, not modify the formal documents.

Example: if the documents allow for common use for the purpose of furnishing personnel property, the rules may establish reasonable times and days permitted, but cannot prohibit common use for these purposes.

To be valid or enforceable in a court of law, the Rules & Regulations should be reasonable within the scope and powers of the Board’s authority.

In most governing documents, the Board of Directors are responsible for the interpretation of the applicable documents. The interpretations are binding upon all parties unless wholly unreasonable. In most cases, if a legal counsel renders the interpretation to be reasonable, then the Board’s interpretation shall be valid.
These areas of clarification and interpretation can be critical and tricky. If any discrepancies arise to the Rule & Regulation change, the Association should consult with a Community Association Attorney. (more…)