Friday, September 11, 2009

Collection Seminar - Tri-City Property Management and Ekmark & Ekmark September 9th.

We had a nice turn out and actually had to turn reservations down for our first, in a series of seminars, on Collections. Penny Koepke, a partner with Ekmark & Ekmark met with various board members of our client communities to discuss the reality of collecting assessments in this down economy, the laws that we are governed by and the need to use good business judgment.

Our next seminar, with Carpenter, Hazlewood, Delgado & Wood is scheduled for Thursday, September 24th at 6:00 p.m. at their offices in Tempe. Please call Jean-Marie Bellington at (480) 844-2224, Ext. 131 or email at jbellington@tcpm.net to reserve your seat.

On Wednesday, October 14th at 10:00 a.m. and again at 6:00 p.m., at our office in Mesa, we will have a third seminar on Collections. The focus of this seminar is on alternatives to traditional legal means, when to use a law firm, when and how to choose the account to work on next and help your board make a more informed decision on methods of collections to be more successful. Again, to reserve your seat, please call Jean-Marie.

Thursday, September 10, 2009

Board Meetings – the “Hot Topic” in our office!

By Elaine Anghel

As we converse over our office lunches, and share our stories about our board meetings from the evening prior, we all learn from each other through our experiences and how we deal with them as your community managers…..

One common comment for sure is, that oftentimes board meetings can run entirely too long without getting any real business at hand accomplished!

How do we run effective board meetings? How do we keep them in order? How does one community get everything they need done and resolved within an hour when another takes three hours and gets almost nothing accomplished?

The answers to all of the above questions lie directly in the team efforts of the board and the manager, working together to run your community like a business. Your manager works hard to compile a thorough, detailed management report that gives you the status of all of your association issues. This report is then sent to each of you one week in advance of your board meeting, to fully prepare you for the meeting before you even arrive!

So, the key is preparation on both the part of the manager and the board, and also to maintaining order. This can be accomplished by adhering to the agenda items and limiting homeowner comments to a minimum!

This is a huge leap towards gaining control, maintaining respect, and achieving positive results – which relates to, in simple terms, getting things done and done quickly!

Here are some helpful hints in running effective board meetings:

Planning: as indicated above, planning is key! Being well prepared plays an important role in how your meeting is run.

Provide Notice of Meetings: pursuant to law, you must give at least 48 hours advance notice of a meeting. This pertains to not only notice of open meetings, but notice of executive meetings as well.

Establish a Homeowner Forum: set this time period at the beginning of a meeting and place time limits for the owners that wish to speak and adhere to those time limits. If you provide the owners with an agenda at the open forum and if the board follows the agenda items, you can close homeowner comments during the meeting, at the end of the open forum.

Utilize your Agenda: in doing so, you will train your homeowners in attendance that if their issues are not on the agenda, they will not be discussed. This will eventually accomplish one very key goal – the board will be aware of all issues in advance and will utilize the meeting time to discuss only those items on the agenda.

Open Meeting versus Executive Meeting Topics: hold your executive meeting just prior to the open meeting, so that those homeowners attending the executive meeting do not have to wait through the entire meeting to be heard. Below are the only items, pursuant to law, that can be discussed in an executive session. Do remember, that the board has the right, not the obligation, to go into executive session for the below items:
  1. legal advice from an attorney for the board or the association;

  2. pending or contemplated litigation;

  3. personal, health and financial information about an individual member of the association, an individual employee of the association or an individual employee of a contractor for the association; and/or matters relating to job performance of, compensation of, health records or specific complaints against an individual employee of the association or an individual employee of a contractor for the association who works under the direction of the association.

Proper Recording of Minutes: taking a proper set of minutes is very important! Oftentimes, there is too much information contained in minutes that is truly unnecessary. The minutes are the only official record of the actions or decisions of the board, committee or membership.

Tips on taking a proper set of minutes; they should reflect:

  1. Heading: note the type of meeting (regular, special, executive)

  2. Heading: association name

  3. Heading: date, time, and location

  4. Attendants Names (names of board members present, names of board members absent, the secretary or minute recorder, management representative, and any guest present).

  5. Call to Order

  6. Approval of prior Minutes (note whether they are approved as presented, or as amended, and note the date of the prior meeting minutes being approved).

  7. Officer and Committee Reports (reports made by management, committees, officers and board precede the regular business and are usually for informational purposes only – just stating the report was made is all that needs to be stated in the minutes, unless there are decisions being noted/ratified).

  8. Old/New Business (these items should follow the agenda).

  9. Adjournment

  10. Secretary’s Signature (recording secretary must sign the minutes, whether it is a board member or management representative).

Tips on Minutes:

  1. It is not necessary to list the names of homeowners present within the minutes.

  2. Minutes reflect board decisions, not what people say.

  3. Be brief and concise!

  4. Minutes are not official until they are approved at the subsequent meeting.

  5. Changes to the minutes are reflected in the actual minutes of the meeting, so that the final version reflects the correction (not simply noted in the subsequent meeting minutes where they were corrected and voted on).

  6. Executive session minutes are kept separately from open meeting minutes and are not made available to homeowners for review.

Monday, September 07, 2009

COLLECTIONS—THE GOOD, THE BAD, THE UGLY

By Jean-Marie Bellington

We hope that you or a member of your Association Board will be able to attend one of the seminars we are offering in September. In October, we will also be holding an additional seminar at our office to discuss alternatives for Collections, aside from the use of attorneys, when it just doesn’t make sense to spend GOOD money after BAD.

It really wasn’t that long ago when we were shocked to have one or two delinquent members. We certainly miss those days and know that you too are struggling with the lack of response to collection efforts that are being made.

Arizona’s unemployment rate for July rose to 9.2%. Homes are worth less than their mortgage and the members can’t get their homes refinanced. Then you throw in the investors who wanted to capitalize on the housing boom that has now gone bust.

If you were faced with paying your mortgage, car payment, electricity or your assessments and you don’t have enough money to pay them all, what are your options? Typically, the mortgage, if you are trying to keep your home, has a high late payment and the impact on a late payment can be severe. You need your car to get to work or to look for employment and it too has a high late payment penalty. Of course, you don’t want to have your utilities shut off.

Your assessments have a relatively low late fee; the failure to pay the assessment on time won’t result in a negative report on your credit and won’t have as much impact. Now, add to that the owner who is being foreclosed upon and may not even live in the house.

Now, also consider the person who has been foreclosed upon and owes a personal debt to the Association. The Association should be content with getting a new member into the home that will make their assessment payments, write down the debt and park the debt with an attorney (personal judgment) or a collection agency and get the debt reported to the national credit bureaus and just wait.

In a year or two, or maybe even three, when the world settles back down and your prior owners want to try to get their lives back on track, that old debt will still be outstanding and the Association may find itself as the beneficiary of that old member wanting to clear up their credit rating.

Yes, it is an UGLY outlook, but it is reality and for those smaller debts, it may be the only way to go.
__________

COLLECTION SEMINARS


Wednesday, September 9th
Collections – Legal Options for Associations
6:00 p.m.
Ekmark & Ekmark
Penny Koepke
6720 N Scottsdale Rd.
Suite 261
Scottsdale, AZ
85253


Thursday, September 24th
Collections – Legal Options for Associations
6:00 p.m.
Carpenter, Hazelwood, Delgado & Wood
Javier Delgado
1400 E Southern Ave
Suite 400
Tempe, AZ
85282


Wednesday, October 14th
Alternatives to Help Save Legal Expenses
An Open Discussion
10:00 a.m.
and
6:00 p.m.
Tri-City Property Management Services
Tri-City Prop. Mgmt. Staff
760 S. Stapley Dr.
Mesa, AZ
85204


Space is Limited
RSVP to Jean-Marie Bellington
(480) 844-2224, Ext. 131 or by email at
jbellington@tcpm.net

Saturday, September 05, 2009

New Legislation 2009

By Elaine Anghel

During this past legislative session, only one law passed affecting homeowner associations, which will become effective on September 30, 2009. This law is an extension of the already-existing law on “for sale” signs. It simply expands to properties with deed restrictions other than planned communities and condominiums.

You have already been provided the details and if you would like to have a copy of prior years’ laws for reference, please feel free to ask your manager. We have a library of reference materials that you may have access to!

Friday, September 04, 2009

FANNIE MAE & FREDDIE MAC REQUIREMENTS

By Jean-Marie Bellington

Recently your Community Manager provided you with information on changes in Fannie Mae and Freddie Mac lending requirements. You may have thought, “What difference does this make to our Association”. The reality is that it can make a difference in the long term stability of your Association and the members it is able to attract and maintain. We all know that the mortgage companies messed up. They were greedy and so was the consumer. The banks didn’t actually qualify the buyer or the property, they disregarded their own lending requirements, and everyone thought the bubble was never going to burst in the housing market.

Every one of our client communities are plagued with owners that are upside down on their mortgages and are letting homes go back to the bank and/or filing bankruptcy. There is currently no end in sight and we need to focus on “letting go” of the things we cannot change. We need to focus on new members that can pay their mortgages and assessments.

A buyer is going to be attracted to a community where a lower interest rate loan can be obtained. If your community can meet the stringent Fannie Mae and/or Freddie Mac criteria, then the buyers won’t have to resort to a conventional mortgage with higher interest rates. Conventional mortgages require a higher FICO score from the borrower, but a better qualified buyer is likely to balk at those higher rates and turn to another community in the area to buy into.

These new requirements also affect your current owners, who want to refinance. They too will find it difficult to get the more favorable funding.
Many of the items listed in the prior handout are not difficult to obtain.
  • Items such as higher fidelity bond coverage to match your documents or if they are silent, the general rule of thumb is 3 months assessments and your reserve balance. Verify your building coverage, if your association carries the individual units/lots in the Association’s controlled policy. You can lower your premiums by raising the deductible and maintaining adequate building coverage for those really big catastrophes, like a fire.

  • Current Reserve Study AND funding your Reserves. This is actually a great recommendation and one that we include in our annual recommendations to all Associations.

  • Owner occupancy vs. rental occupancy rates. We just provided you with several options on how to determine your disclosed number of renters. Using a government website is certainly a safe way to provide the number of renters.

  • Writing down all personal debts of previous owners will help reduce the amount of reportable assessments due to the association. Technically those assessments have been written off to bad debts and are now a personal debt of a previous owner.
If you look at the requirements, it is obvious that the mortgage company is protecting the investment in the home, and wants to insure that the association is solvent and being run in a businesslike manner.
We hope that you had a chance to look at the handout and will take steps to meet these new requirements.

EMPLOYEE OF THE QUARTER—BRENDA CAMPBELL

Each quarter, an employee is selected to be the recipient of this recognition.

Brenda Campbell, Administrative Assistant, has been chosen as “Employee of the Quarter”…..AGAIN!!!

Brenda was awarded the Employee of the Quarter recognition in June 2008 and continues to excel time and time again. There is no challenge too great, nor is one ever tackled without a bright, rewarding smile. Along with that comes her attitude of enthusiasm and confidence. She deserves a tremendous “thank you” for all of her efforts.

Congratulations, Brenda!!