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What’s in Your Trash?

California’s New Composting Law

By Aaron A. Hayes, Esq.

This article first appeared in our Fall 2022 Communicator Magazine.

Green compost bins will soon join California’s familiar blue recycle bins along our curbs as the latest trend in waste management. While already familiar in some areas, Senate Bill ("S.B.") 1383 extends mandatory organic waste composting statewide as part of California’s comprehensive Short-Lived Climate Pollutants strategy.

S.B. 1383’s stated goal is to substantially reduce organic waste in landfills by requiring cities and towns to collect compostable waste separately from other refuse, then divert it to approved organic processing facilities. Although S.B. 1383 became effective January 1, 2022, local jurisdictions have until January 2024 to become fully compliant.

SIGNIFICANCE OF SB 1383 FOR COMMUNITY ASSOCIATIONS

Planned Developments

Planned developments consisting of single-family homes will likely see little...

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Why Balance Sheets Matter

By D.W. Haney, CPA (Retired)

Most HOA disputes, dysfunctions, and disruptions are due to financial and standard of care stewardship issues. Who pays what, when, and why? And unfortunately, HOA financial statements produced today are misleading and fail to reflect the community’s economic reality.

In general, HOA directors, managers, and advisors do not have the skill sets necessary to understand, analyze, and respond to the financial statement stories contained in GAAP (Generally Accepted Accounting Principles) compliant financial statements. These statements are a foreign language to most, who oftentimes do not seek the advice of financial translators and guides to help them on this important piece of the HOA journey.

One big piece in this puzzle is the Statement of Financial Position (balance sheet). Here we will examine the three different methods to tell the financial strength story: cash basis, full accrual, equity designation. (There is a fourth method on the scene...

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Investigating Suspicious Financial Activity in Your HOA

#hoas finance fraud Dec 15, 2022

By Joe Garza, CPA

Today, a homeowner’s association’s (HOA) board of directors depends on technology to store contracts, banking information, and other confidential documents. Unfortunately, while digitization increases efficiency, it also intensifies the potential for fraud and theft of community funds. Even with checks and balances, like collective oversight of a community’s financials from board members and community managers, an association’s money can still be at risk.

Managing an association’s account manually and collectively elevates the opportunity for mistakes to happen, making it crucial to differentiate human error versus ill intent. While it’s a board’s fiduciary duty to protect the financial health of its HOA, board members must also remain respectful, objective, and observant. If you see something, do something. Here are steps for investigating suspicious financial activity that may be going on in your HOA and tips for...

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BIAS in Our Communities: Strategies for Recognizing, Managing, and Eliminating Bias in HOAs (First in a two-part series)

Bias is a buzzword we hear often in today’s world, but for many it is difficult to understand or accept. Many approach the topic as though the goal is to "empty our minds" of bias (as if that were possible). However, the less we focus on and are aware of bias, the harder it is to recognize, identify, and control our biases so that they do not result in unintentional harm to others through unexamined discriminatory and prejudicial actions.

Here we will define bias and look at the way unintentional bias affects our behavior as individuals, community members, HOA members, directors, managers, and attorneys. We’ll consider the ways in which bias affects our communities in the form of laws, rules, policies, and documents and the way that we enforce these community covenants. We’ll consider the role of bias in our community interactions and how unlawful prejudice and discrimination resulting from bias exposes our communities to considerable legal risk. Finally,...

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When to Re-pipe Your Community and How to Fund It

By Eric Lecky

As Every Community manager and community association leader knows, building components begin to fail as they age—and your pipes are no exception. Depending on the material, a building’s pipes may begin to develop age-related cracks and leaks within a few decades of installation, sometimes less.

The question then becomes: When do you repair the pipe and when do you replace the entire piping system?

KNOWING WHEN TO RE-PIPE

Based on estimated useful life tables, some piping materials may begin to fail after 30 years, while others may not show signs of age until 50 years. Because pipe replacement is expensive, you could start assessing your piping systems periodically when your building reaches 20 years old, giving yourself time to reserve funds for a future re-pipe.

Unfortunately, most community managers and boards aren’t regularly testing their pipes, and so they first face the decision to repair or replace when their properties are already...

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Beyond the Water: Effectively Managing Lake and Pond Shorelines

By Trent Nelson

Imagine taking an evening walk as the sun sets across the beautiful lake or pond in your community. The sky is pink and orange, crickets are chirping, and a warm breeze blows across the water. Now, imagine looking down at the steep shoreline in front of you, finding that it’s bare, crumbling, and so unstable that you’re wary to venture to the edge. Not only is this an unsightly and even dangerous distraction, but it can make residents question the management priorities of their association and deter new homeowners from settling down in the community.

Even the most well-cared-for lakes and ponds are incomplete without regular shoreline maintenance. Preventive management is necessary to support the health and longevity of the overall ecosystem, and management efforts can vary for each part of the shoreline. However, before jumping into implementing proactive and ongoing strategies, existing erosion issues must be addressed.

The most effective solution...

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The CID Outsiders

Co-ops, Airspace Condos, Non-DS Elections, Lake Communities, Public Facilities, and More
By John D. Hansen, Esq. & Becky Jolly, CCAM 

This article is about the unusual topics that apply to common interest developments (CIDs), but are not often discussed in articles and presentations. Here we will share our knowledge and experience with those who deal with these "outsider" CIDs as we examine co-ops including mobile home parks, airspace condos, elections that do not use secret ballots, communities with water features that have unique issues, and CIDs that maintain public parks and facilities.

CO-OPS

A cooperative (co-op) is one of four CID types in California. Members and subleases are approved by committee or board through an application process. Primarily mobile home parks, they can also include condo-style developments that are similar to apartments. A member has a membership in the corporation, coupled with a right to occupy a space or residence. Members do not...

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3 Common Lake and Pond Management Misconceptions

By Trent Nelson

As An Aquatic specialist with more than a decade of experience, I’ve assisted hundreds of property managers with their lake and stormwater pond management needs over the years. Despite the diverse types of lakes and ponds they oversee, I’ve noticed that many clients have the same set of concerns or misconceptions about their waterbodies. These often come to light as we work together to design a freshwater management program. Let’s take an in-depth look at some of these common assumptions. 

1. LAKES AND PONDS ARE PERMANENT FIXTURES IN THE LANDSCAPE

While lakes and ponds can be long-lasting features in our communities, they are not permanent. They fill with sediment that erodes from the shoreline or flows in during rainstorms. Weed growth and decomposition may lead to the development of muck. And trash, tree branches, and other pollutants can build up over time.

The aging of a lake or pond is a natural phenomenon, but can be highly...

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Water Heater Leaks

Common, Costly and Concerning
By Steven Fielding

THE GOVERNING BOARDS of condominium associations worry about many things. Reserves, rules enforcement, insurance costs, maintenance, pets, parking, and COVID are on a long list of things that keep trustees and association managers up at night. Water heaters probably are not, but they should be. Here are a few hard – or soggy – facts:

  • Water damage is one of the two leading property damage risks faced by homeowners, representing nearly one-third of all homeowner claims filed annually, exceeded only by wind and hail damage.
  • One in every 50 insured homeowners files a water damage claim every year; the average claim cost is about $7,000, adding up to more than $2.5 billion in insured losses annually, according to the Insurance Information Institute.
  • There are no statistics on how many of those claims are attributable to water heaters, but 75 percent of all water heaters will fail – usually without warning...
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Leading Five Generations in the Workplace

By Kelly Zibell, AMS, PCAM

Demographic changes are taking place both in the workplace and in community associations. Seventy-five percent of the workforce will consist of millennials by 2025, but more than 97 percent of homeowner leaders are traditionalists, baby boomers, and Generation Xers, according to an analysis from my company. This means that strategies for leading employees and working with residents and homeowner leaders should take generational differences into consideration.

Each generation in the workplace or in a community – from traditionalists to Generation Z – has distinct work or volunteer motivations, aspire to diverse career goals, and require specific types of communication, engagement, and management styles. The table shows a summary of attributes that distinguish each of these five generations.

Management company executives and association boards must learn how to address the changing needs of a multigenerational workforce or membership to...

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