Category Archives: Education

What to know before you buy in a community association

People choose to live in community associations for numerous reasons. Many owners value the inherent benefits of community associations, which are designed to manage common areas of the property, manage the property interests of owners, provide services for owners, and develop a sense of community through social activities and amenities. Yet community association living isn’t for everyone.

Do your due diligence by learning all you can about a community before you buy or rent a home in it.

First, ask your real estate agent to see copies of the governing documents, including the bylaws or Covenants, Conditions and Restrictions (sometimes referred to as CC&Rs).

Next, take the time to talk to people who live in the community. Find out how they feel not only about the neighborhood, but also about how the community is governed and managed. Ask to talk to the president of the association, members of the elected board, or the professional who manages the community.

Don’t forget to check out the common areas. Are the amenities—pools, tennis courts, and playgrounds—well-maintained? Is there ample parking?

You should be able to answer the following questions before you buy or rent:

  • How much are the assessments? When are payments due? How much are they likely to increase? What do they cover? What don’t they cover?
  • Does the community have a viable reserve fund for major projects in the future?
  • Are there renting restrictions?
  • Do the architectural guidelines suit your preferences?
  • What are the rules with respect to pets, flags, outside antennas, satellite dishes, clotheslines, fences, patios, and home-based businesses?

While assessments, rules, and regulations are important, don’t overlook other fundamental questions: Is it the right kind of community for you and your family? Does it fit your lifestyle and sense of community? Does it provide the amenities you want? Is it a good investment? The more you know in advance, the more likely you’ll enjoy your new home and community association.

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An unbiased, unfiltered guide to 2018 midterm election signs

Getty Images/Alexeys

The 2018 midterm elections are less than two weeks away, which means, of course, campaign signs are popping up like dandelions in yards and along roads.

These signs become a particular pain point for community associations every election season. Without fail, some communities end up on the evening news or in the local newspaper for attempting to enforce their covenants on signs.

We asked James A. Gustino, a community association attorney in Winter Garden, Fla., to provide some guidance on the subject. What should associations do about the signs? This is what he had to say:

Strict enforcement of association sign prohibitions, particularly as they relate to political signs on an owner’s property during the election season, is almost always unwise.

Check your state’s highest court rulings and the specific “freedom of speech” verbiage in your state’s constitution. Most federal and state courts currently don’t protect political signs from association enforcement. However, the New Jersey Supreme Court issued a pair of decisions in 2012 and 2014 protecting political speech. These opinions could influence other state courts considering similar legal issues in the future.

Covenants restricting signs often incorporate exceptions for security, developer, “for sale” and other board-approved signs. Under such circumstances, an association actively enforcing bans against political signs is unnecessarily exposing itself to charges of selective or arbitrary enforcement. When a ban on signs is universal but an association permits residents’ holiday decorations—another kind of speech—it also exposes itself to claims of selective or arbitrary enforcement. This nuance is often overlooked.

Practically speaking, political signs usually are posted for just a few weeks. By the time the typical association cycles through its standard three noncompliance notifications, the signs will likely have been removed.

Lastly, political beliefs and affiliations—like religious beliefs—tend to produce strong feelings that lead to costly and time-consuming litigation. Even if litigation isn’t the end result, is it sensible to pursue actions that invite unnecessary friction?

I recommend that my clients permit political signs but enact reasonable time, place, and manner restrictions. For example:

  • They can only be placed on the property for 45 days prior to an election
  • They must be removed within three days after the election
  • They cannot contain any profanity
  • They must be limited in number
  • They cannot create a sight obstruction or other safety concern.

I also advocate involving community members to help craft the association’s specific restrictions and then prominently posting (via email blasts, special notices on your website and at entry signs) the rules to encourage compliance.

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HOAs, BOTs, CC&Rs, and more: Defining community association terms

Today, 70 million Americans live in 344,500 common-interest communities. Even if you haven’t lived in a condo, co-op, or HOA, chances are you’ve at least heard of these communities. Admittedly, those who live in, volunteer in, and work for common-interest communities tend to throw around terms like “ARC,” “CC&Rs,” “D&O” or “CMCA” that make things sound more complicated than they really are. So let’s pull back the curtain on some important terms related to living in and working in community associations.

Types of communities

CA: Community Association

CID: Common-Interest Development

Co-op: Cooperative

Condo: Condominium

HOA: Homeowners Association

PD: Planned Development

POA: Property Owners Association

PUD: Planned Unit Development

TOA: Townhouse Owners Association

Community leadership, governance and operations

ARC: Architectural Review Committee

BOD: Board of Directors

BOT: Board of Trustees

CC&Rs: Covenants, Conditions and Restrictions

D&O: Directors & Officers liability insurance

E&O: Errors & Omissions insurance

RFP: Request for Proposal

SOP: Standard Operating Procedures

General CAI terms

CAI: Community Associations Institute

CAMICB: Community Association Manager International Certification Board, a sister organization to CAI.

FCAR: Foundation for Community Association Research, also a CAI affiliate

CCAL: College of Community Association Lawyers

LAC: Legislative Action Committee

PMDP: Professional Management Development Program

Designations, Certifications, and Accreditations
AAMC: Accredited Association Management Company

AMS: Association Management Specialist

CIRMS: Community Insurance & Risk Management Specialist

CMCA: Certified Manager of Community Associations

LSM: Large-Scale Manager

PCAM: Professional Community Association Manager

RS: Reserve Specialist

Whatever the acronym, all community associations—CA, condo, HOA, POA, TOA, etc.—share a few essential goals: preserving the nature and character of the community, providing services and amenities to residents, protecting property values and meeting the established expectations of owners.

Stumped by other acronyms or industry terms? Ask a question in the comments below.

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What do community associations look like in China?

Shanghai urban skyline, China

Picture this: A place where community associations aren’t legally able to have their own bank accounts, property management companies can retain ownership of common areas and rent them out without homeowners’ consent, and developers interfere with board elections because they are opposed to the formation of community associations. While this might seem improbable, situations like these occur frequently in China.

In the U.S., the community association housing model has become commonplace. According to the latest figures from the Foundation for Community Association Research, there are roughly 344,500 common-interest communities across the country. CAI has chapters throughout the world, including Canada, the Middle East, and South Africa, and relationships with housing officials in Australia, Spain, Saudi Arabia, and the United Kingdom. But how prevalent are community associations elsewhere in the world?

They’re a recent development in China, emerging shortly after housing reforms in the 1990s. Previously, urban housing was mainly provided by danwei, or place of employment. Danwei were organized by occupation and were both a physical space where people lived and a system whereby the government could regulate residents’ decisions and actions. With economic and political reform, this system largely became obsolete, leading to significant housing changes.

In response to property rights violations by developers and property management companies, community associations began to emerge. Developers have been faulted for failing to give homeowners their deeds and using them as collateral for loans, understating the area of the home, or not providing promised amenities. Unlike in the U.S., where community associations are usually formed by developers and membership occurs upon purchase of a home, associations in China are a grassroots effort spearheaded by residents to preserve their rights.

From a cultural and political perspective, community associations are novel in the single-party authoritarian regime that is the People’s Republic of China. In a 2008 dissertation by Feng Wang, at the time a Doctorate of Philosophy candidate at the University of Southern California, local governments often looked down upon associations as “an unstable social force that interrupts the establishment of a harmonious society.”

In China, a community association needs to form a preparatory group before it can officially establish—a difficult process. Residents need a representative from their developer and management company. Without their participation, local governments easily strike down the burgeoning association. The group also must meet a voting threshold for approval, and appeal to the management company or developer for a list of residents’ names and contact information to generate participation. Causing further complications, the initial vote is determined by property percentage. This gives developers an opportunity to vote to block its formation if they still own unsold units.

Despite the difficulty in forming and managing community associations, some have achieved commendable success in the country. In 1998 (before some important reforms), residents in one housing complex in China staged a coup and successfully disbanded their HOA after discovering that their management company had falsified a neighborhood mandate giving them permission to form the group. New leadership was voted in, and an HOA with community approved leadership was formed. The group was even able to successfully negotiate lower fees with the management company.

The residential conflict commonly reported in the media in community associations across the U.S. seems trivial compared to the conflict between developers, property managers, and homeowners in China. One might even wonder at the seeming lack of internal disputes among Chinese residents. In fact, according to a survey conducted by Wang, 92 percent of homeowners rate conflict among themselves as a serious issue, but only 25 percent of community associations focus efforts on addressing these issues. It is precisely because of the focus on exterior challenges, rather than internal conflict, that many community associations in China have flourished despite an unfavorable environment.

Through transparency, inclusion, and mobilization of homeowners in China, associations have made huge gains for the rights of residents. Whether in China or the U.S., community associations cannot lose sight of their goals: to elevate residents’ standard of living and protect property values.

Read more about homeowners association in China in the following:

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27 million reasons why a condo would ‘deconvert’

 Lake Michigan from the North Shore, Chicago

In a deal worth $27 million, Edgewater Beach condominium owners in Chicago plan to sell their lakefront building to Greenstone Property Group, a New York- based real estate investor that will convert its 188 units to apartments.

Almost 80 percent of unit owners accepted the offer in a vote over the summer. Under Illinois law, bulk con- dominium sales must be approved by 75 percent of unit owners. The sale is expected to close this year.

“I think owners were beginning to realize that if we don’t sell, we will be required to raise several special assessments to fund crucial deferred maintenance issues, many of which are not prepared for,” says Shawn Swift, president of the Surfside Condominiums board. “We felt it was important that all owners have the choice to decide the building’s fate collectively, rather than a board of directors’ decision to move forward with $3–$4 million in special assessments over the next two years.”

Owners will receive approximately 40–50 percent more on average for their units than if they were to sell on their own, explains Swift, and without the worry of paying hefty assessments in the future.

“We have also negotiated favorable leaseback terms for any owners who wish to stay in their units post-closing,” Swift adds. “The buyer will honor any cur- rent leases in place between an owner and their tenant. About half the building is currently being rented.”

The sale will be one of the largest condominium-to- apartment conversions—also known as deconversions—in the city’s history, according to the Chicago Tribune.

“Condominium deconversions became popular a few years ago because of the increased rental rates in Chicago,” says Patrick T. Costello, a shareholder at Keay & Costello law firm and a legislative liaison to CAI’s Illinois Chapter Legislative Action Committee.

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Electric scooters: Is the newest commuting solution bringing chaos to community associations?

Move over Uber, Lyft, and bike shares, dockless, electric scooters are the newest mode of transportation taking over cities, and controversy has already come to some community associations.

The scooters, which can go a maximum of 15 mph, provide a relatively cheap and convenient commuting solution for riders, according to the Los Angeles Times. Riders download an app, provide payment, and then use the app’s GPS to find an available scooter, which they unlock with their phone. Once riders reach their destination, they re-lock the scooter with the app. Riders are supposed to park the scooters on the side of the road or sidewalk so they don’t block vehicle or pedestrian traffic, but that’s not always the case.

In Los Angeles, where the scooters have gained a lot of traction, community associations are finding abandoned scooters within their gates, including in their driveways, on sidewalks, and near entrances, which presents a safety hazard. Some residents even describe the scooters as “sidewalk litter.”

Cities across the country have started to regulate where the scooters can be ridden (ideally, in bike lanes) and where they can be left. A Los Angeles proposal would require that the scooters and dockless bicycles be parked in the outer edge of the sidewalk and locked to something, such as a bike rack or a parking meter, according to reports.

The scooters have become such a nuisance in San Francisco and Santa Monica, Calif., that officials have been sending cease-and-desist notices and holding emergency meetings, The New York Times reports. Some cities have filed charges against the scooter companies.

Have you noticed dockless, electric scooters on your condominium or community association property? Will you consider developing rules on this new mode of transportation? Tell us in the comments below.

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Talking ‘Bout Your Generations

Four distinct generations—matures, baby boomers, Gen Xers, and millennials—own homes in community associations and are in today’s workforce. The mix of characteristics and diverse workstyles of these generations has the potential to lead to miscommunication and discord. It’s little wonder board members and managers are looking for guidance on how to create more compatible and efficient living, governing, and working environments.

An acclaimed expert on generational differences, Cam Marston provided some of that guidance in a presentation during CAI’s 2018 Annual Conference and Exposition in May.

Marston, the author of Generational Insights, identifies clear behaviors in each demographic.

The matures (also known as the silent generation; born between 1928 and 1945) and baby boomers (born between 1946 and 1964), for instance, favor collaboration, teamwork, and hierarchy. They tend to arrive early, stay late, and embrace plenty of meetings.

Gen Xers (born between 1965 and 1980) are independent and self-sufficient. They are also technologically adept and well-educated. Because of their independence and resourcefulness, Gen Xers believe the best way to manage people is to get out of the way and have as little contact as possible.

Millennials (born between 1981 and 1996) are multitaskers and comfortable with both group and individual interaction. They are generally adept at social media and prefer to text than call or email, Marston says. Like their baby boomer parents, the millennials embrace teamwork and like building relationships. However, unlike the boomers, millennials value work-life balance over career.

Marston believes the biggest leadership gap is with the Gen Xers. Their “reluctance to get involved” can get in their way of being strong, effective managers, he says. Yet they need to start getting a handle on the millennials. “As a group, the millennials are like a huge boulder barreling down hill, and the Gen Xers need to learn how to engage now to be able to guide and lead these workers in the future,” he says.

Those who want to create high-performance workplaces, whether within a management company or an association board, should learn “to recognize their own inherent workstyles as well as those of their colleagues” and then set their own workstyle aside, Marston says. Doing so demonstrates an understanding of generational differences and motives that can help people connect with each other.

Marston recommends treating colleagues at work or peers on boards as if they were people from another country or culture. Making one change in how you interact with each other could lead to better relationships. “Usually, one change creates momentum,” he says.

And before you get too comfortable with these four generations, the iGen is on its way. Individuals born after 1997 will be joining the workforce in large numbers and could become homeowners in a few years.

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What a Gem

You might be able to guess the fastest-growing state in the U.S. is out West. But did you know that it’s Idaho?

According to the U.S. Census Bureau, the Gem State’s population increased 2.2 percent to 1.7 million from July 2016 to July 2017. Nevada (2.0 percent), Utah (1.9 percent), Washington state (1.7 percent), and Florida and Arizona (both 1.6 percent) saw the next largest percentage increases.

Idaho’s capital of Boise is seeing the largest growth in the state. The city’s low cost of living, strong economy, and developing tech sector has made it a sought-after city for young professionals to work in and call home.

The state’s population spike can be attributed mostly to domestic migration. One in four people who moved to Idaho came from California, according to a 2015 state-to-state migration report from the Census Bureau. Washington state and Oregon residents also are flocking to Idaho.

Idaho’s 1.7 million residents live in nearly 3,000 incorporated community associations, according to the Foundation for Community Association Research.

Those communities have seen increased regulation. In recent years, the Idaho state legislature has addressed community association homeowner account statements, the disclosure of association transfer fees, rental restrictions, and rule violation fees, among other changes.

Idaho’s population growth, emerging housing market, and increased regulation were the catalysts behind creating CAI Idaho.

Until now, the state’s community association volunteers, managers, and business partners didn’t have an organized voice to advocate in the legislature.

“One of the things we had happen this year was another piece of legislation came to town because somebody had a representative and was able to bend his year,” says Mike Madson, CMCA, president of MGM Associations Management and a CAI Idaho Chapter founding board member.

The bill passed, and no one asked community association experts anything about it because “we don’t have an organized group that (legislators) can get one voice from,” Madson says.

CAI Idaho is the state’s first and only professional association representing community associations, condominiums, and housing cooperatives. It is CAI’s 64th chapter.

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Clarifying the Community Manager’s Role

Community managers have two primary responsibilities: to carry out policies set by the board and to manage the association’s daily operations.

Some residents expect a community manager to perform certain tasks that just aren’t part of their job description. When the community manager doesn’t meet those expectations, residents are unhappy. The following should help homeowners better understand a community manager’s role:

A community manager is trained to deal with conflict, but they will not get involved in neighborhood quarrels. However, if association rules are violated, the community manager is the right person to call.

A community manager works closely with the board, as an advisor—not a member of the board.

A community manager is responsible for monitoring contractors’ performance but not supervising them. Contractors are responsible for supervising their own personnel. If you have a problem with a contractor, notify the manager, who will forward your concerns to the board. The board will decide how to proceed under the terms of the contract.

A community manager inspects the community regularly, but even an experienced manager won’t catch everything. If residents know about a potential maintenance issue, report it to the community manager.

A community manager does not set policy. If residents disagree with a policy or rule, contact the board.

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How to handle pest problems

Last month, a Florida woman was awarded a $5 million settlement from her homeowners association and community management company for not warning residents about a snake problem in the community. When stepping out onto her back patio in July 2015, a water moccasin bit her toe. The woman was lucky to live, but her leg had to be amputated below the knee as a result of the venomous snake’s bite.

According to a University of Florida study, running into a water moccasin, also known as cottonmouths, is 8.6 times higher in the community than in the Everglades, which are nearby. Especially during the rainy season, snakes are known to seek drier ground, which sometimes includes residents’ property. The Florida community now posts signs warning residents about venomous snakes.

It’s not uncommon for conflict with wildlife in community associations. So, how can association boards protect themselves from incidents like this?

“As with any potential common area hazard, the board and management should pay attention to complaints or reports of a potential problem,” says Kelly G. Richardson, cofounder and managing partner of Richardson Ober in Pasadena, Calif., a fellow in CAI’s College of Community Association Lawyers (CCAL), and a CAI past president. “The key is to respond reasonably to known issues.”

In this particular instance, a simple warning to residents could have been enough.

Richardson also recommends contacting an appropriate service provider to investigate potential problems and recommend solutions. Associations should rely on that expert advice when implementing solutions. For example, a pest control expert might be able to identify architectural or landscaping features that contribute to or allow pest problems to grow.

Associations also should review their rules, explains Richardson. If residents are feeding animals or birds outside, that, in turn, could attract more wildlife and pests. A rule prohibiting residents from feeding animals or birds might help.

Lastly, Richardson stresses that associations have ample liability insurance. “If the injury is bad enough, even the most careful association could have a hard time opposing the sympathy factor from a severely harmed plaintiff,” he adds.

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