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3 Ways Outside Investors Could Hurt Your HOA (And 3 Simple Solutions) Mitch Drimmer

3 Ways Outside Investors Could Hurt Your HOA (And 3 Simple Solutions) Mitch Drimmer

  • Posted: May 24, 2022
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3 Ways Outside Investors Could Hurt Your HOA (And 3 Simple Solutions)

Anyone trying to buy a home right now knows that the market is a mess and that investors are their only real competition. The Washington Post determined that outside investors purchased a record share of sold homes across 40 major metropolitan areas in the US last year (1 in 7 homes sold!)  But this isn’t just hurting home buyers. That’s a huge number of absentee homeowners renting out space in condos and HOAs. A few long-term renters in your HOA or condo association aren’t a problem in the grand scheme of things, but rentals can get very out of hand very quickly if left unchecked.

Community Associations – It’s a Numbers Game

Keeping investors out isn’t a simple, or even always desired task. Because investors are not inherently bad. Especially in coveted vacation destinations, everyday people want to own a sweet little slice of heaven that they can use as they please and then rent out for the other half of the year. But too many investor-owned properties in your condo or HOA can alter the nature and even purpose of a community association.

The problem with investment properties becoming a significant percentage of your community association’s roster boils down to a potential lack of accountability. It’s kind of like one of those word problems you used to have in math class:

Let’s say you inherit a large garden space, and you are a watermelon lover. You share 500 garden plots with friends and neighbors so you can all grow watermelons to enjoy this summer. In the first year, you all grow delicious, beautiful watermelons, and life is good. But if the following year, 300 of the plot owners start letting people come in and use their soil however they like, the remaining 200 are stuck dealing with the potential consequences. One guy went and planted thistle, and the guy two plots away is planting lavender, and someone else planted cotton which would probably have been fine but now there’s a bull weevil infestation. Now the entire garden is suffering. If all 500 original gardeners were collectively responsible, it wouldn’t be such a challenge to face. But contacting absent gardeners to resolve the messes made by their amateur gardening buddies grows slimmer as the numbers climb– it’s just too much work for too few people.

In the story, your community is the garden, and the 200 who got stuck are the homeowners who are living in their own homes in the community. They are the ones left holding the bag when absentee investors do not respect the rules or engage with their community.

3 Ways Absentee Homeowners Can Hurt Your Condo or HOA

Making Quorum

Homeowner apathy has long been a thorn in the backside of HOAs and condo associations. From dismal meeting attendance to push-back on necessary assessment increases, condos and HOAs struggle when it comes to engaging with their residents. Now imagine half or more of your community’s homes aren’t owner-occupied or even human-owned if a business or conglomerate has bought them as an investment! Getting the votes to amend community documents, raising assessments, implementing special assessments–all of it becomes much harder, if not impossible, to accomplish. If homeowner delinquency reaches dangerous levels, coming back from those losses will be even more difficult to do successfully.

Community Comes Second

Especially when dealing with large, well-funded corporate investment entities, keeping your community, well, a community, becomes increasingly difficult. To a company, your community is a stream of revenue–it’s business! And that isn’t a bad thing on its own, but it can deeply impact everything that goes into creating a harmonious living space. Now it isn’t just about the maintenances that can’t get approved or the special assessments that are needed. Any changes to the community that help improve general camaraderie or success are likely to be shot down by those who are more concerned about their bottom lines than the welfare of families.

Investors Can Stage a Literal Coup

This is not a scare tactic or an “only in the right circumstances” situation we’re talking about–certain state laws, like Arizona’s Condo Act, include language that allows for Termination of Condominium in the event that a specified percentage of the units (80% in AZ) agree to terminate the community association. For investors, this means they could dissolve a community and force the remaining homeowners to sell their homes at “fair market value,” to be determined by an appraiser hired by the 80% calling for dissolution.

3 Ways HOAs and Condo Associations Can Push Back on Outside Investors

Keeping your community healthy is a necessity. Sometimes the best option is to stop potential nonsense before it has a chance to get out of hand. HOAs and condos have some options when it comes to weeding out the bad-faith investors and identifying the good ones that will contribute to your healthy community.

Set a floor.

Implementing rental minimums can be a huge help in staving off corporate investors. One popular option is imposing a minimum length for a lease. Dictating that leases must be over a certain number of days (30, for example) keeps away anyone trying to make a quick buck on pricey weekender rentals. You could also set a restriction on WHEN a tenant is allowed to begin leasing their units. Seven months is a common bar–it’s not so long that it turns away owners looking to have a winter or summer vacation property, but it’s longer than many corporate investors are willing to wait to begin renting a unit, especially when flips these days take so little time.

Set a ceiling.

Setting a bar on the maximum rental occupancy for the whole community is a brilliant way to stop investor encroachment. Limiting the rental percentage well below that 80% threshold we talked about is the simplest way to avoid investors taking over and dissolving your community out from underneath you and your homeowners. By setting a realistic, healthy rental percentage (which will vary by community size and location), boards can minimize the number of investors interested in buying property in the community.

Play to your strengths.

Your authority as the trustees of the community is likely the strongest asset you have when it comes to combatting absentee homeownership. Requiring board approval of all future tenants are one way of slowing short-term rentals. Requiring background checks on potential renters is another tool to utilize. They help protect the community, but also cost the landlord a nominal fee that really starts to add up the more tenants they bring in. And proper enforcement of your CC&Rs, like trash cans being left out too long or damages to community property, will make investors think twice about bringing in a high volume of unpredictable tenants.

Don’t Forget a Collections Plan

Outside investors are here to stay, for better or for worse. Sooner or later, they will have a space in your community, and when that happens, it’s important to consider what that means, and have plans in place to keep them in check. That includes a plan for community collections because even major corporate entities can fall behind on monthly assessments. Axela Technologies can help with any collections efforts your HOA or condo association has, including collecting from corporate investors. Call us today for your no-risk, no-cost consultation.

No matter what your goals are for your outdoor living space, Jansen Shutters & Specialties can help design exactly what you are looking for.

No matter what your goals are for your outdoor living space, Jansen Shutters & Specialties can help design exactly what you are looking for.

  • Posted: May 24, 2022
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The Jansen Family have been serving the homeowner and construction industry of the Florida Gulf Coast from Fort Meyers to North TampaTarpon Springs and the Islands since 1973. In 2002, Phillip Jansen and his son Travis opened Jansen Shutters & Windows with the intention of providing the best hurricane protection necessary to ensure the safety of your family and business.

As our company grew we expanded out product line to include, Out Door Living Products. Which includes our exclusive “Jansen Vista” Motorized Insect Screens, Fabrication, Louver, Pergolas and more. We are proud to say everything we manufacture is American Made. Our work does not stop at installation, we believe it is necessary to educate our customers about the products we provide. So you can pick the best products that fits your lifestyle and budget.

 

Providing Hurricane Protection, Storm Protection Products, Hurricane Windows and Entry Doors in Sarasota, Venice, Englewood, Boca Grande, Punta Gorda, Port Charlotte, Osprey, Nokomis, Long Boat Key, Bird Key, The Keys, Siesta Key, Casey Key, Manasota Key, Bradenton, Pinellas, Tampa, Odessa, Parrish, St. Petersburg, Clearwater, Anna Maria Island, City of Sarasota, Cape Coral, Tarpon Springs, and all surrounding areas.

On this home we installed rolling screens along with a large retractable awning to provide shade whenever needed.

Rolling shutters provides the ultimate security and protection for your home.
Jansen Shutters & Specialties manufactures two types of rolling shutters for your storm shutter needs. Give us a call to schedule your free estimate. West coast of Florida call (941) 484-4700 or east coast call (407) 686-4117.

 

 

If you are looking for a screen to install on your garage door opening, give us a call. In addition to replacing your garage door, we can also provide a custom insect screen that will allow you to use your space in your garage without worrying about pesky flying pests.

Give us a call on the west coast of Florida at (941) 484-4700 or on the east coast at (407) 686-4117.

 

 

Jansen Shutters & Windows

941-484-4700

It is our goal to shelter your family, protect your investments and secure your well-being.

Give us a call today and we can help you no matter what you are looking for.

Call us at (941) 484-4700 (West Coast FL) or (407) 686-4117 (East Coast FL).

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Attn: Our internet and phone systems are down due to construction next to our Main Office.

Attn: Our internet and phone systems are down due to construction next to our Main Office.

  • Posted: May 16, 2022
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Again we find ourselves without Internet and Phone System.

Our Offices were again impacted by a severed communication line, the neighboring construction has cut through a communication line four times in the last 2 months.  This morning speaking with the construction foremen he stated they would do everything they can to get the building back on line……but they have to have this repairs done by the communications company / Comcast.

Please contact us by Email:  membership@sfpma.com 

all phone lines (voip) are down through the internet.

Sorry for any inconvenience.

SFPMA

Facing South Florida: Condo Safety Concerns TV host: Eric Glazer watch it now!

Facing South Florida: Condo Safety Concerns TV host: Eric Glazer watch it now!

  • Posted: May 15, 2022
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Jim DeFede’s guest for Sunday’s show was Eric Glazer, one of the state’s leading condo attorneys who has been pushing for years to make condos safer.

Glazer has been warning about a tragedy like the one in Surfside.

The two discussed, among other things, why the legislature failed to pass anything during its session.

Glazer also said why he believes Gov. Ron DeSantis has refused to do anything to make condos safer nearly a year after the deadly building collapse.

Watch the Program NOW.

Join KBR’s Peter Mollengarden for delicious hot breakfast with awesome education (2 CEUs)

Join KBR’s Peter Mollengarden for delicious hot breakfast with awesome education (2 CEUs)

  • Posted: May 15, 2022
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Join KBR’s Peter Mollengarden for delicious hot breakfast with awesome education (2 CEUs)

The West Palm Breakfast Group!
Wed., May 18, 2022 | 7:30am | PBI Holiday Inn
Peter C. Mollengarden, Esq., from KBR, with also be there.
Not close to Palm Beach Airport, or know of someone who will benefit from this seminar?
Please feel free to share this email!
“These are Not Your Mother’s Appliances”
Course #: 9631376 | Provider #: 0007779 | 2 CE credits in OPP for CAMS
Courses presented by:
Fred Kaye | A-1 Appliance & Refrigeration Repair
Everyone who attends will get a FREE GIFT of charcoal for their refrigerators! Yes…charcoal! Come join us and find out WHY!
There will be a delicious, free hot breakfast and door prizes!
Airport (PBI) Holiday Inn: 1301 Belvedere Rd., West Palm Beach, FL 33405
Kaye Bender Rembaum | Visit Us Online
Pompano: 1200 Park Central Boulevard South; Tel: 954.928.0680
Palm Beach Gardens: 9121 North Military Trail, Ste. 200; Tel: 561.241.4462
Tampa: 1211 N. Westshore Boulevard, Ste. 409; Tel: 813.375.0731
Offices in Miami by appointment: 800.974.0680
Short Term Rentals A Neighborhood Problem. by Joseph E. Adams of Becker

Short Term Rentals A Neighborhood Problem. by Joseph E. Adams of Becker

  • Posted: May 05, 2022
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Short Term Rentals A Neighborhood Problem

Joseph E. Adams

Q: How can a homeowners’ association regulate owners renting out their houses to short term guests?  If the association were to enforce with a penalty, how can it collect on it? (E.H., via e-mail)

A: The place to start is knowing what your governing documents and local laws say about the subject. For example, some municipalities limit rentals in residential areas to a 30-day minimum, so violations could be reported to the local code enforcement agency.

Most documents limit the use of homes to “residential use.” These provisions have been extensively litigated in courts across the country and there is not a bright line test defining what activities constitute residential or commercial uses. However, courts have generally been reluctant to apply a residential use provision as a restriction on short-term rentals, and there is at least one appellate court decision in Florida to that effect.

Therefore, the most effective way to address rental restrictions is a specific provision in your declaration of covenants setting forth permissible and impermissible rental durations. Many declarations contain such a provision, while some do not. If your declaration does not contain a rental limitation, it would have to be amended in the manner set forth in the declaration. Most declarations require some level of super-majority approval for amendment, two-thirds and 75% being the most common standards. Some declarations require the vote be calculated based on all eligible voters, and some provide that the calculation is based on those who vote at a duly noticed meeting at which a quorum is established.

You should also be aware that the Florida Homeowners’ Association Act was amended in 2021 to limit the ability of homeowners’ associations to amend rental rights. The retroactive application of that statute to pre-existing associations is a complicated and open legal question. The new law provides that amendments limiting the duration or frequency of permissible rentals is only applicable to those owners who vote in favor of the amendment, those who vote against the amendment or don’t vote are “grandfathered,” but the amendment would be binding on their successors in title.

Importantly, Section 720.306(1)(h) of the Florida Homeowners’ Association Act does permit amendments that prohibit rentals for a term of less than six months or prohibit rentals of less than three times during a calendar year to be applied to all parcel owners if the declaration is properly amended, whether an owner voted in favor of the amendment or not.

Once you have determined what the actual rule is, the next question is how you enforce it. As stated above, if the rental violates local ordinances, referring the matter to code enforcement may be an effective and inexpensive way to seek redress.

Fining and suspension of common area use rights are one avenue, but probably not the most effective for this kind of violation. Many homeowners’ associations do not have the level of amenities where suspension of the right to use them deters violations. Fines are capped at one thousand dollars in the aggregate for ongoing violations, unless the governing documents permit a higher amount. There is also a somewhat detailed notice and hearing process that must be followed to impose a fine or suspension.  If a fine is properly levied, it can be a lien upon the home if it is for one thousand dollars or more and the language of your documents may also come into play. Otherwise, the venue to collect a fine is small claims court, and the prevailing party in a suit to collect a fine is entitled to recover their attorneys’ fees from the losing party.

The better approach for this type of violation is direct legal action by the association against the owner seeking a court order (injunction) to enforce the rule against short term rentals. Well-written documents may give you additional leverage in a court action. Generally speaking, the winning party can collect their legal fees from the losing party. The association’s lawyer should be brought into the picture early in the process, so he or she can advise what pre-suit steps may be necessary to protect your ability to enforce the restriction.

Joseph E. Adams is a Board Certified Specialist in Condominium and Planned Development Law, and an Office Managing Shareholder with Becker & Poliakoff. Please send your community association legal questions to jadams@beckerlawyers.com. Past editions of the Q&A may be viewed at floridacondohoalawblog.com.

Securely store and share all of your community documents online with our File Sharing feature.

Securely store and share all of your community documents online with our File Sharing feature.

  • Posted: May 05, 2022
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Securely store and share all of your community documents online with our File Sharing feature. Documents, files for owners, meeting minutes, forms, by-laws, photos, and even videos can be shared with permission-based access.

  • Uploading and distributing documents and images is very easy with our simple drag-and-drop system.
  • Keep all your community files organized in a centralized location.
  • Upload an unlimited number of various file types including .pdf, .doc, .xls, and many more.
  • Increase security by determining exactly who sees what with our permission-based controls.
  • Sending out a blast to residents? Easily include a file from what you’ve already uploaded with just a couple of clicks.
  • Don’t waste time searching aimlessly for a file ever again. Use the quick search functionality to find specific files or folders in an instant.
BOOK A MEETING

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Maria Desforges, Property Manager

J&W Condominium Management

Book a meeting with me now and let me show you how you can deliver superior resident experiences with our Resident Experience Management portal.
Best Regards,

Charlote Alvarez

Business Development Representative — Concierge Plus
T: 305-850-7676 x114
charlote.alvarez@conciergeplus.com
Kaye Bender Rembaum is a full service commercial law firm dedicated to the representation of community associations throughout Florida.

Kaye Bender Rembaum is a full service commercial law firm dedicated to the representation of community associations throughout Florida.

  • Posted: May 05, 2022
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Kaye Bender Rembaum is a full service commercial law firm dedicated to the representation of community associations throughout Florida. Under the direction of attorneys Robert L. Kaye, Esq., Michael S. Bender, Esq., and Jeffrey A. Rembaum, Esq. Kaye Bender Rembaum provides its clients with an unparalleled level of personalized and professional service regardless of their size and takes into account their individual needs and financial concerns. They have offices in Pompano Beach, Palm Beach Gardens and Tampa, and in Miami-Dade by appointment.

The associates of Kaye Bender Rembaum establish relationships with clients to understand their needs and goals. Kaye Bender Rembaum assists clients in all matters of Association representation including, but not limited to, collection of assessments, contract negotiation, covenant review and amendment, covenant enforcement and construction defect claims. Kaye Bender Rembaum also keeps clients up-to-date on new developments in the law and how they personally affect them. The firm provides prompt, effective, high quality, cost-efficient and understandable legal advice and services to a diverse client base. Associates strive to help clients operate and administer their communities better and to educate them on their responsibilities and duties under Florida law and their governing community documents. Robert Kaye, Michael Bender and Jeffrey Rembaum are industry leaders who are often sought out by public policy makers and the media for advice and commentary on community association law.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation. Thank you for your interest in Kaye Bender Rembaum.


Practice Areas

Kaye Bender Rembaum is dedicated to providing clients with an unparalleled level of personalized and professional service regardless of their size and takes into account their individual needs and financial concerns. Our areas of concentration include:

  • Assessment Collections
  • Construction Defect Claims
  • Contract Drafting and Negotiation
  • Covenant Enforcement
  • Fair Housing
  • Land Use and Zoning
  • Litigation and Arbitration
  • Master / Sub Association Issues
  • Pre and Post Turnover Planning
  • Review and Amendments of Covenants

Contact Us

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Statutory Meeting Requirements by Becker

Statutory Meeting Requirements by Becker

  • Posted: May 04, 2022
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Statutory Meeting Requirements

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Many condominium and homeowners’ associations’ activities are required to have a certain amount of transparency. One way that association activities are made transparent is through statutory provisions requiring most kinds of meetings to be open and noticed to the membership. In fact, applicable laws governing the operation of condominium and homeowners’ associations allow board members to communicate by email but prohibits them from voting on issues by email.

Notably, a gathering of a quorum of board members to conduct association business is considered a board meeting (whether taking place in person or by real-time electronic means) and is required to be noticed and open to association members. However, two important exceptions apply. Namely, meetings of the board or an association committee at which the association’s attorney is participating for the purpose of rendering advice upon proposed or pending litigation are not required to be open to association members. Similarly, board meetings held to discuss personnel matters are also not required to be open to association members.

Association members are entitled to speak at open meetings on “designated items” (HOA) or an item on the agenda in a condominium. However, the rights of members to speak at meetings is subject to any rules adopted by the association governing the frequency, duration, and manner of member statements. The right to attend open meetings includes the right to tape record or videotape them, as long as such recording activity is not disruptive. Furthermore, the Division of Florida Condominiums has adopted rules regarding recording condominium association meetings (found in Fla. Admin. Code Rule 61B-23.002(10)), and the Homeowners’ Association Act provides that homeowners’ associations may adopt their own pertaining to recording homeowners’ association meetings.

As such, there are statutory meeting requirements that must be followed for board meetings which must be kept in mind when an association is adopting or changing its procedures. Failing to follow the basic statutory requirements may result in problems. Questions about board meetings, committee meetings, which have their own set of requirements, and members’ meetings should be directed to legal counsel for guidance.

 

 

 

 

As leaders in Community Association Law, we not only helped write the law – we also teach it.

Did you know Becker provides over 200 educational classes per year throughout the State of Florida on a variety of topics ranging from board member certification to compliance, and everything in between? Our most popular classes are now available online!

To view our entire class roster, visit:
beckerlawyers.com/classes

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Ron DeSantis and the Florida Legislature could reduce insurance rates right now. A giant insurance company is standing in the way.

Ron DeSantis and the Florida Legislature could reduce insurance rates right now. A giant insurance company is standing in the way.

  • Posted: May 04, 2022
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Ron DeSantis and the Florida Legislature could reduce insurance rates right now. A giant insurance company is standing in the way.

Lawmakers have a way to save Florida homeowners $150 a year but State Farm doesn’t like it

Written By: Jason Garcia
In January, Gov. Ron DeSantis and the Florida Legislature had a chance to save money for Florida homeowners who are struggling to afford the soaring cost of property insurance.
Members of a key committee in the Florida Senate were presented with a plan that could have cut the price of homeowner’s insurance by an estimated $150 a year. And it would have done so without simultaneously imposing hidden costs on homeowners — like insurance policies that won’t cover the cost of replacing a roof or legal changes that make it much harder to fight back against a big insurer in court.
The plan involved expanding a public insurance fund known as the “Florida Hurricane Catastrophe Fund.” And it had support from a broad spectrum of industry interest groups and a bipartisan coalition of elected officials.
But the Big Business lobby hated it.
At Cohen Law Group, It’s About Justice!
It’s more than a slogan, it’s our firm’s mantra. We are zealous in protecting your rights. We offer 24-hour availability through our answering service. Call us today.
(407) 478-4878

 

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Is your community association prepared to raise dues 10-15% or more in 2023?

Is your community association prepared to raise dues 10-15% or more in 2023?

  • Posted: May 04, 2022
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Is your community association prepared to raise dues 10-15% or more in 2023?

Inflation is currently at its highest level in 40 years. And it does not appear to be going down anytime soon. Last year, the inflation rate hit 7% and by February of this year it increased to 7.9%. Consumers have seen prices of everything from gas to groceries increase.

As you can see from the chart below, we have been very fortunate with inflation rates hovering around 2% for the last 10 years, as represented by the green line.  While in the last 30 years, we have rarely exceeded 4%, as represented by the red line.  Now, we are faced with 8%, which again, we have not seen in over 40 years.

Inflation has already affected many community associations with many raising their dues between 3-5% for the 2022 budget year. But that increase was not enough especially with the continued impact of insurance, labor, and material increases. Most community associations need to be prepared to raise dues 10-15% in 2023 to combat inflation.

Homeowners are usually not happy when dues go up. However, as expenses for communities increase, so does the need for an increase in the dues. Now is the time to prepare your residents for an increase in dues in 2023 so they are not blindsided.

Here are some of the items in most community associations that are increasing in cost:

  • Landscaping costs – Prices for materials, gas and fertilizer have all increased causing landscape companies to raise prices. Supply shortages fueled by the Ukraine-Russia conflict (Russia is one of the main suppliers of fertilizer around the world) have caused fertilizer prices to go up 30%.
  • Property Management – Labor shortages for maintenance, janitorial and even admin and property manager positions mean the cost of labor has gone up as property management companies try to attract talent with higher salaries and better benefits.
  • Labor costs – The great resignation has played a major role in the rising cost of labor. Legions of workers, especially those in low-wage positions leaving their jobs means employers need to pay more to get workers to show up.
  • Maintenance and repair costs – As a direct result of the global supply chain shortages, prices have soared. Associations need to factor in higher costs for the regular maintenance of their communities. Outside vendors such as pool companies have raised their prices and many parts are simply much more expensive than they used to be.
  • Premiums for insurance – Insurance increases are on the rise; where there is an incumbent on the deal, we are seeing 15-30% increases on insurance. And, where there is a replacement carrier required, we have seen rate increases in the 50-100%+ range. Click here to view a recent webinar we held on the current insurance market.
  • Project costs – There is no doubt that any large projects your community needs to get done are going to cost more. Material prices overall are up 20.3% since 2021. Add in the labor shortages and supply chain constraints and not only are projects going to cost your association more, they are also going to take longer to complete.

For most community associations, the budget for 2023 will reflect higher anticipated expenses, which means dues will need to increase. Now is the time to prepare your residents for this increase. This year is unlike any other year. You CAN NOT rely on “standard” budget raises and expect to be able to pay your bills in 2023. You should NOT wait until the end of the year, hoping this will change. You need to start planning NOW and letting your owners know NOW.

Throughout the remainder of 2022, we will have a blog post each month discussing this inflation storm and offer tips for your association to ride it out.

by Ashley Dietz Gray, VP Marketing