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Tips for a Successful Condominium or Homeowner’s Association Turnover

Tips for a Successful Condominium or Homeowner’s Association Turnover

  • Posted: Mar 02, 2023
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While Developers are required by Florida Statute 718 and 720 to provide the following to the Association at turnover:

  • Record Set for all design disciplines (architectural, structural, mechanical, electrical, plumbing, fire alarm, fire sprinkler, site civil, pool, irrigation, and landscaping)
  • Recorded Declaration with the bylaws.
  • List of names and addresses, of which the developer had knowledge at any time in the development of the Condominium Association, of all contractors, subcontractors, and suppliers utilized in the construction of the Property.
  • Project specifications
  • List of written warranties of the contractors, subcontractors, suppliers, and manufacturers still effective.
  • Copies of any certificates of occupancy that may have been issued for the Property.

Several things that can be done by the Association prior to and immediately after turnover for the benefit of the community. This information will benefit not only any forensic engineering firm in performing a Property Condition Assessment Report, but the community operations as a whole.

  1. List of Known Issues: Utilize the community management staff as well as any recent property complaints to fill out a list. This can include items such as several past failed repairs of a singular item like a large pump, cooling tower, or generator. Water intrusion or flooding events from within units and also from exterior to units are extremely valuable to track. Photographs, videos, and handwritten notes are invaluable.
    This list can also be provided to the Developer prior to turnover in hopes of them correcting them. If that is the case, it is still important to retain copies of the repair procedure with photographs for the Association’s records. If repairs don’t occur, it is still valuable that now the Developer is aware of the conditions from a historical aspect.
  2. Repair Invoices: Going hand in hand with the above, repair invoices for items that may appear to be in excess of typical maintenance should be retained, organized, and eventually provided to the forensic engineering firm after turnover. Think of this as the community’s medical history record. If a large-scale component has failed and needs to be replaced, see if that failed item can be stored by the Association for potential future engineering analysis, if necessary.
  3. Record Set of Digital Construction Plans: There are multiple different plan sets during any development, starting from a bid set. Each set will get more and more accurate, until the record set, which is stored on record with the Municipality upon project completion. The record set is intended to truly reflect the in-field, built condition. If an Association is only operating with a construction set, there is no guarantee that, for example, certain shut-off valves or electrical panels will be in the depicted locations, which can add to a headache in an emergency. It is strongly recommended to have the digital version of the record plan set, ideally cloud-based, so it can be effectively accessed by the management team and supporting vendors whenever needed.

Finally, some recommended wish list items that can be requested from the Developer, while they may not always provide them:

  • Post Tensioning Shop Drawings
  • Glazing Shop Drawings
  • Railings Shop Drawings
  • Pool Shop Drawings

A Community Association turnover is certainly an event that should be planned out on either side (Developer and Association) such that effective documentation and tangible property transfer can take place. As a final reminder, reliance upon the Association’s Counsel and management company during this period is imperative to its immediate and future success.

article sent to us from: Florida Association News Blog

 

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Property Management Fees vs HOA Management Fees: How Different Are They?

Property Management Fees vs HOA Management Fees: How Different Are They?

  • Posted: Jul 16, 2021
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Property Management Fees vs HOA Management Fees: How Different Are They?

The Difference Between Property Management Fees and HOA Management Fees

Many people confuse property management and HOA management, but the two are starkly different. Property management is the daily supervision and management of a rental property — be it residential or commercial. HOA management, on the other hand, refers to the management of homeowners associations.

The tasks of property managers include but are not limited to the following:

  • Advertising vacant rental units
  • Conducting property showings
  • Overseeing tenant applications
  • Screening potential tenants
  • Handling the lease agreement
  • Ensuring compliance with lease terms
  • Collecting and depositing rent
  • Coordinating maintenance, cleaning, repairs
  • Resolving tenant complaints

The tasks of HOA managers include but are not limited to the following:

  • Ensuring the maintenance of common areas
  • Coordinating with vendors
  • Attending board meetings
  • Collecting dues
  • Helping with budget planning and execution
  • Sending notices on behalf of the board
  • Communicating with homeowners
  • Ensuring compliance with the law and governing documents
  • Advising the HOA board

That being said, the difference between property management fees and HOA management fees has to do with the service being paid for. Typical property management fees cover property management services, whereas HOA management fees cover HOA management services. Both types of services, though, can be performed by a company or an independent manager.

 

Factors That Affect Property Management Company Fees

Property management is not a one-size-fits-all type of service. When it comes to property management fee calculation, there are a number of factors that can increase or decrease the amount.

  • Location. A luxury apartment located in a high-end neighborhood will naturally command a higher rental rate. As such, a property manager may adjust their fees accordingly.
  • Size. It is harder to manage a large rental property, so the fee tends to be more expensive the bigger the place.
  • Type. Some companies or managers charge a different rate depending on the type of property — single-family home, commercial property, condo unit, apartment, etc.
  • Condition. Older properties usually require more maintenance and repairs, thus equating to a higher fee.
  • Services. Companies and managers offer a wide variety of services. If you only need select services, you may end up paying a lower fee. The reverse is true if you need a more comprehensive extent of services.

All of these factors, except maybe the condition of the property, can also affect HOA management fees. Homeowners association management can come in the form of full-service management, remote management, or simple consulting services. Obviously, full-service management is more expensive than the other two.

Companies also tend to charge a lower price if you have more properties for them to manage. This is because of how certain administrative tasks scale, allowing companies to charge a discounted price for 10 properties or more.

 

What Is the Average Property Management Fee for Rental Properties?

How much you ultimately pay each month for property management services will also depend on the company’s fee structure. Some companies or managers charge an ongoing flat fee, while others take a portion of the monthly rent.

 

Percentage of Rent

This is the most widely used structure among property management companies. In exchange for their services, a company will charge you a certain percentage of the rent. Average property management fees structured this way sit between 8 and 12 percent of the gross rent.

For instance, if the monthly rent for one rental property is $10,000 and the rate is 6 percent, then according to the property management fee calculator, the company gets to keep $600.

Of course, there is a difference between charging a percentage of the rent collected and rent due. Rent collected is the actual amount the company collected from tenants, while rent due is the monthly rent that tenants should pay. Your contract should specify that the fee is for rent collected. Otherwise, you would need to pay your property manager even if tenants fail to pay their rent.

 

Flat Fee

In contrast, there are some companies or managers that charge a flat rate. When you go with flat fee property management, you will need to pay a set amount every month. A single-family home may command $100 a month, though it will really depend on the extent of the services, the size of the property, and other factors.

 

Other Home or Condo Property Management Fees to Know

Apart from the actual management fee, companies and managers may also charge separate sums for extra services. Some will try to hide this breakdown from you and intentionally skirt the topic. Many homeowners only find out about these extra fees after they have signed the contract. Thus, it is essential to ask each candidate for their full property management price list.

Here are the other fees you should look out for:

 

Initial Setup Fees

Some companies will charge you an initial fee designed to cover the costs of setting up an account with them, inspecting the property, and notifying tenants of the change in management. You should expect to pay about $500 or less for the initial setup fee.

 

New Tenant Placement Fees

Tenant placement fees cover the costs of marketing your vacant property, screening tenants, constructing the lease agreement, and so on. As with the ongoing management fee, this can come in the form of a flat rate or a percentage of the rent — usually 50 to 100 percent.

 

Vacancy Fees

If you hire a property management company to manage a vacant unit, they may charge you a vacancy fee. This can range from $50 per unit to as much as an entire month’s rent.

 

Maintenance Fees

Some management companies have in-house workers who perform maintenance work. In that case, look out for a maintenance fee in your contract. This fee can cost you $20 to $45 per person, typically not including the cost of materials and supplies.

 

Eviction Fees

Evictions are common in the rental property realm. But, if you want the company or your manager to evict a tenant for you, it will cost you a few hundred dollars. That does not include any court expenses, too.

 

Early Termination Fees

Contracts have set lifespans. If you try to end your contract earlier than specified, the company may charge you an early termination fee. This can range from the cost of one month’s services to the cost of the services for the remainder of the contract. Some companies may even take legal action against you for breach of contract.

If you want to avoid such a situation, make sure to check your agreement thoroughly before signing it. See if you can negotiate your way out of an early termination fee. You should also consider shortening the length of your contract to one year. That way, you have the option of renewing it annually.

 

How Much Are HOA Management Fees?

If you plan on hiring an HOA management company, here are the fees you should keep in mind.

 

Initiation Fees

Similar to property management companies, an HOA management company may charge you an initiation fee to get the ball rolling. This can cost you a few thousand dollars up to a whopping $30,000. Of course, it really depends on the size of your association and the services you require.

 

Monthly Management Fees

Since managing associations usually means managing communities with numerous properties, monthly fees typically rely on a rate per unit. On average, an HOA management company will charge you $10 to $20 per unit per month. They may offer you a discounted price, though, if you meet a certain number of units.

 

Early Termination Fees

This works similarly to early termination fees in property management contracts. The key to avoiding having to pay this sum is to lock yourself into a shorter contract period. Instead of signing a management contract good for multiple years, start with one and renew from there.

 

Other Fees

Some companies don’t offer all-inclusive packages. This means they will charge a separate fee for certain services, such as a fixed amount for each time a manager attends a board meeting. There is also something called a transition fee, which covers the cost of transferring from one company to another.

 

Is Paying Property Management Fees Worth It?

Property management is certainly a difficult undertaking for many homeowners. As such, many choose to outsource the task to a professional. And, with professional services come professional fees. Property management fees may seem unaffordable to you now, but they can be worth it in the end.

As for HOA management, it can be an equally challenging endeavor. If your HOA board wants to seek expert help, start looking for an HOA management company in your area today. Use our comprehensive online directory for fast and accurate results!

 

 

What is “Transition or Turnover?”

What is “Transition or Turnover?”

  • Posted: Oct 20, 2015
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“Transition” is the term of art describing the multi-step process to transfer responsibility for the Community Association to the homeowners/unit owners.

Transition is a process, not an event. At the end of that process, control of the Community Association is ultimately turned over to the owners.

 

For condominiums, the Declaration establishes a “Period of Declarant Control” based upon statute. For property owners’ associations, the Declaration may establish such a period, but currently, the declarant control period is is not addressed by statute.

During the Period of Declarant Control, the Developer appoints members of the board of directors for the Association; hires and has contact with the Association’s management company; and is the architectural control committee. At the expiration of the Period of Declarant Control, the Developer resigns its board of director positions. The owners hold a meeting to elect a new board of directors comprised of owners. The Developer turns over the Association’s books and records, and relinquishes control of the Association to the owners.

How do we begin the transition process?

As transition nears, it is time for the Declarant and the owners to initiate discussions on the transition process, and for owners to become familiar with the governing documents. There are several suggestions to help get the process started in earnest. For example, owners can propose adding one or more homeowners to the Board prior to transition; can set up a transition committee or advisory committee; can schedule a community meeting to explain that control of the Association will soon be turned over to the owners; and can seek volunteers for the transition committee. Some of the owners may have experience and expertise in the issues the community may face, and these owners can be very helpful druing transition.

 

Conclusion

Transition requires a thorough review and understanding of all aspects of your Association, including knowledge of financial issues; maintenance and engineering needs; the need to transfer common area (in non-condominium associations); insurance policies and needs; management responsibilities; covenant enforcement; and so on. Without knowledgeable guidance from an independent attorney experienced in common interest communities, owners can be overwhelmed with the immense responsibilities. Start early with your transition committee and contact a knowledgeable attorney to begin the process with your association.

 

Stop us if you’ve heard this one before: You announce an HOA election providing proper notice, yet only a handful of owners show up to vote. You end up short of your quorum requirements, and you have to start all over again with your fingers crossed that next time, your luck will be better, and your election will be successful. Or instead, you hold your election, get definitive results—you think—but then the election gets challenged.
We can help you do better!  many community association lawyers who’ve devoted their extensive—and impressive—careers to solving the challenges HOAs face every day. You’ll learn from members valuable, workable tactics you can implement immediately to make your election process smoother, more successful, and less contentious.
You’ll learn:

1- How to determine the specific steps your HOA must follow to conduct proper elections
2- Details on the most common mistakes boards make from election start to finish, and the most likely challenges to your election—and how to nip them in the bud
3- Information to help you identify your quorum requirements and creative tactics to ensure you get a quorum
4- Common rules governing who can run for your HOA board, along with insights on the pros and cons of changing your eligibility requirements—and tips on how to do it if you decide you should
5- Suggestions for general rules your board may want to consider passing to make holding elections easier
6- Tips to provide effective notice—and undercut any attempt to unwind your completed election based on claims of insufficient or improper notice
7- What you must know about proxies
8- Techniques you can deploy on the day of the election to avoid on-the-spot glitches
Plus much more!
It’s just an hour of your time, but you’ll walk away much wiser and better prepared for your HOA’s next election.

 

 

contact KBRLegal.com They are the experts in Association Law in South Florida. The Courses they give monthly can help you with understanding what is needed as a board member and your community.

 

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