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The opportunity an HOA can capitalize on is negotiating a cell tower lease agreement that ensures consistent rent for years, often decades, to come.

The opportunity an HOA can capitalize on is negotiating a cell tower lease agreement that ensures consistent rent for years, often decades, to come.

  • Posted: Oct 04, 2017
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Companies like AT&T, Verizon, T-Mobile and Sprint continue to explore options to meet their wireless customer demands, and part of this search includes the construction of new cell sites across the United States. Cell sites come many sizes, from a traditional tower that is big enough to climb, to an antenna that sits hidden on a rooftop, only seen by those flying over.

Cell phone usage has skyrocketed to the point of near saturation in the US. According to Pew Research Center, 95% of adults have a cell phone & a growing share of Americans now use smartphones as their primary means of online access at home. In 2016, wireless subscribers’ connections hit 377.9 million, with over $1.4 trillion (yep, trillion with a “t”) having been invested globally in the last 18 years. This is BIG business & there are opportunities for landowners to capitalize.

The opportunity an HOA can capitalize on is negotiating a cell tower lease agreement that ensures consistent rent for years, often decades, to come. There are certain pros and cons that an HOA or Condo Association must ponder if a cell tower company or wireless carrier approaches them about putting a tower on their property.
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Its Budget time

Its Budget time

  • Posted: Feb 21, 2016
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Its Budget Time, and that means it is that time of year for boards of community associations everywhere to prepare next year’s association budgets. A good budget is reflective of good financial planning. In practice, it is anything but an exact science. When examining the community association budget process, there are a few subtle nuisances and a couple of glaring distinctions between those budget related laws set out within Chapter 720 that governs homeowner associations (HOAs) as compared to Chapter 718 that governs condominium associations (CAs). Let’s take a look.   Notice Requirements: • HOA board meeting notices must include a statement that assessments will be considered and, as per statute, “the nature” of the assessments. There is no definitive advance HOA board budget meeting notice requirement set out in Chapter 720, so be sure to check your HOA’s bylaws for any specific requirements. (As an aside, please do not confuse this with the special assessment procedures where it is required for any meeting at which special assessments will be considered that written notice mustbe mailed, delivered, or electronically transmitted to the members and parcel owners and such notice must be posted conspicuously on the property or broadcasted on closed-circuit cable television not less than 14 days before the meeting. • At least 14 days before any CA board meeting at which a proposed annual budget of an association will be considered, the board must hand deliver to each unit owner, or mail to each unit owner at the address last furnished to the association by the unit owner, or electronically transmit to the location furnished by the unit owner for that purpose 1) a notice of such meeting and 2) a copy of the proposed annual budget…

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ASSOCIATION BUDGETING FOR DUMMIES

ASSOCIATION BUDGETING FOR DUMMIES

  • Posted: Dec 12, 2015
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ASSOCIATION BUDGETING FOR DUMMIES Read the article in the December Florida Rising Magazine – http://joom.ag/F5Sp by Steven J. Weil, PhD, EA, LCAM, Royale Management Services, Inc.   A “dummie,” in this case, is a first-time association member and/or someone with little or no association budgeting experience who wants to know more about how and why the budget is created before they vote on it.   Is it really necessary to go through all that work year after year? The first answer is, yes, because it’s the law. Florida law (718.112 (2) (f) 2) requires that annual budgets be prepared and, further, that reserve calculations be made by using a formula that estimates useful life and replacement cost. The real answer is that the budget is a tool used by the association’s board to determine how much owners will be required to pay in maintenance costs for the coming year in order to keep the association financially stable. The budget is a financial plan, a guide; but the process is an art, not a science. That’s why it’s important to leave room for unplanned expenses. A shortfall may result in an assessment, which will not make anyone happy. The only thing owners hate more than a maintenance fee increase is a special assessment that is necessary because the budget does not adequately cover the ongoing operating and maintenance costs. The tricky part of the process is to balance what is required with the often competing interests of those who want the lowest possible increase with those who are willing to pay more for better services, better amenities or other improvements.   There are two parts to every budget: the operating budget and the reserve budget. • The operating budget should include all the necessary regular and recurring expenses that are expected in the coming year, no matter how small, such as repairs, maintenance, payroll, utilities, supplies, insurance and administrative costs.   • The reserves are designed to accumulate funds for major ongoing repair and replacement. Statutes make it mandatory that reserve budgets first include estimated expenditures for roof replacement, building painting and pavement resurfacing at a minimum.   Aside from what the law requires, a good reserve budget also covers other large capital items that will wear out and need to be replaced over the life of the association, such as: elevators, windows, common area air conditioners, docks, generators, et al. Projected estimates take into consideration the cost to replace each item, prorated over the years of its estimated life. A common mistake in estimating this value is the failure to take into account the rise in replacement costs that occurs over time.   Reserve funds cannot be used for purposes other than those intended without a majority owner’s vote of approval in advance.   How do you build a budget that works? The big secret is to start months before your current budget year ends! 1. Step one is the information-gathering process, including a review of long-term contracts, upcoming expected maintenance and repairs, details of possible fee increases and a “wish list.” This time-consuming step includes getting quotes from vendors, examining recurring contracts for things like insurance policies, lawn and landscaping, trash removal, etc. Sometimes closely-scrutinized contracts can be renegotiated to save money. It’s also important to use caution when reducing maintenance and repairs numbers to delay an expense outlay. That could result in increased costs in the long run.   2. Step two is to compare and, using a spreadsheet or special budget software, enter into the appropriate columns the year-to-date income and expenses — projected through year end — with the budget for the current year, to review for increases, and show the percent of difference.   3. Step three: compare projected expenses for the coming year with “other” income (non-assessed) — such as laundry income, application fees, clubhouse rental, dock rental and any other items for which the Association collects fees other than maintenance fees. Using those figures, it is then possible to calculate the maintenance fees needed to fund the budget for the coming year. These required maintenance fees are calculated by subtracting the total projected “other” (non-assessed) income from the total projected expenses. This number is then allocated by the formula shown in the association documents. (The number is often based on the number of units or on square footage.)   According to the Statutes, owners may petition the Board if it adopts a budget where assessments rise more than 15% over those for the prior year. The budget must be in keeping not only with the State Statutes but also with the association’s documents, which may be more stringent. Final approval by the board where the proposed budget is adopted must be done at a properly noticed budget meeting. A notice of this meeting, along with a copy of the proposed budget, must be sent to all owners at least 14 days prior to the meeting. Only association members may vote to waive or reduce the budgeted reserves through full or partial funding. Failing to fund reserves at all puts everyone’s future at risk. If owners can’t afford the monthly cost how are they going to come up with the money when the roof, elevator or other capital component needs replacing? Often this is done by borrowing, making monthly maintenance payments higher because of what is required to pay back a loan, creating a double whammy of current debt repayment for past depreciation and creating an excuse not to meet current obligations. In some buildings this can create a death spiral….

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