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WEBINAR: HOA BOARD MEMBER CERTIFICATION

WEBINAR: HOA BOARD MEMBER CERTIFICATION

  • Posted: Jan 22, 2024
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WEBINAR: HOA BOARD MEMBER CERTIFICATION

01/23/2024  2:00 pm – 4:15 pm

Presented by GRS Management | Provided by Kaye Bender Rembaum (0005092) | Course # 9630140 | Instructor: Alan Schwartzseid, Esq.

This webinar covers the essentials of HOA board membership, and is updated regularly to remain current with Florida legislative amendments. In addition, this webinar satisfies Florida’s requirement for new HOA board members. It also serves as an excellent refresher course. Licensed CAMS will receive two (2) CE credits as IFM or ELE.

Enroll for free HERE.

 

Learn how to restore depth and prolong your lake’s lifespan with proactive solutions.

Learn how to restore depth and prolong your lake’s lifespan with proactive solutions.

  • Posted: Jan 21, 2024
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Why is My Pond Drying Up?

Why Is My Pond Drying Up?

We’ve all experienced the surprises and pain points that come with aging. Year after year, we undergo changes that impact our health and physical functions. This process is a natural and inevitable part of life that not only affects humans and animals, but also lakes and ponds. And just like people can expedite their rate of aging through unhealthy diets or lack of exercise, our water resources can age faster when exposed to excess nutrients, erosion, invasive weeds, harmful algal blooms, and pollution. As these factors compound, a waterbody will slowly fill in with muck, sediment, and debris, resulting in a loss of depth and volume. Over the course of 10-20 years, a pond can recede—or, seemingly, dry up—until it resembles nothing more than a marsh.

Once a waterbody has reached this point, dredging is one of the few solutions available to restore it to a healthier and more functional condition. Dredging is the process of physically removing hundreds or thousands of pounds of sediment and organic materials that accumulated over time.

Depending on the unique needs, budget, and characteristics of a property, professionals may recommend one of two styles of dredging:

 

mechanical-dredging

Mechanical Dredging

During mechanical dredging, a waterbody is completely drained to allow full visibility of the bottom. A long-reach excavator is used to scoop out excess materials, which are then removed from the site using semi-trucks and trailers.

hydraulic dredge - dredging - sediment removal - muck removal

Hydraulic Dredging

Hydraulic dredging does not require a waterbody to be fully drained. Instead, hydraulic dredges use a specialized tube to pump water and materials into a holding tank for filtration. The filtered water is then returned to the waterbody.

Though dredging is highly effective at resetting an aged waterbody, it is one of the largest expenses a community will ever face. Stakeholders should also be prepared to take swift and ongoing action to cultivate their new aquatic ecosystem once the project is complete. Without responsible management, they may see their water resource prematurely return to its prior condition.

 

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The Estoppel Fee Debate by Eric Glazer

The Estoppel Fee Debate by Eric Glazer

  • Posted: Jan 16, 2024
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When a unit owner wants to sell their home, the buyer wants to make sure that the seller does not owe the association money. You see, if the buyer buys the property without making sure the condo, co-op or HOA isn’t owed any money, the new buyer will be stuck with the unpaid bill if there is one.  So, the new buyer wants to get what’s called an “estoppel certificate” from the association stating precisely what is owed to the association on that unit.   This will be paid at the time of closing and the buyer can now sleep well, knowing they are up to date with assessments owed to the association.

So the question is……..who gets paid to prepare this “estoppel letter” for the new buyer and how much does it cost?  Well, for condominiums, HOAs and co-ops, there is a current statute that addresses this.   Florida Statute 718.116, 719.108 and 720.30851 respectively.

The statutes state that the estoppel certificate must contain all of the following information and must be substantially in the following form:

1. Date of issuance:

2. Name(s) of the unit owner(s) as reflected in the books and records of the association:

3. Unit designation and address:

4. Parking or garage space number, as reflected in the books and records of the association:

5. Attorney’s name and contact information if the account is delinquent and has been turned over to an attorney for collection. No fee may be charged for this information.

6. Fee for the preparation and delivery of the estoppel certificate:

7. Name of the requestor:

8. Assessment information and other information:

ASSESSMENT INFORMATION:

a. The regular periodic assessment levied against the unit is $  per   (insert frequency of payment)  .

b. The regular periodic assessment is paid through   (insert date paid through)  .

c. The next installment of the regular periodic assessment is due   (insert due date)   in the amount of $ .

d. An itemized list of all assessments, special assessments, and other moneys owed on the date of issuance to the association by the unit owner for a specific unit is provided.

e. An itemized list of any additional assessments, special assessments, and other moneys that are scheduled to become due for each day after the date of issuance for the effective period of the estoppel certificate is provided. In calculating the amounts that are scheduled to become due, the association may assume that any delinquent amounts will remain delinquent during the effective period of the estoppel certificate.

OTHER INFORMATION:

f. Is there a capital contribution fee, resale fee, transfer fee, or other fee due?  (Yes)  (No). If yes, specify the type and the amount of the fee.

g. Is there any open violation of rule or regulation noticed to the unit owner in the association official records?  (Yes)  (No).

h. Do the rules and regulations of the association applicable to the unit require approval by the board of directors of the association for the transfer of the unit?  (Yes)  (No). If yes, has the board approved the transfer of the unit?  (Yes)  (No).

i. Is there a right of first refusal provided to the members or the association?  (Yes)  (No). If yes, have the members or the association exercised that right of first refusal?  (Yes)  (No).

j. Provide a list of, and contact information for, all other associations of which the unit is a member.

k. Provide contact information for all insurance maintained by the association.

l. Provide the signature of an officer or authorized agent of the association.

SO HOW MUCH CAN YOU CHARGE TO PREPARE AN ESTOPPEL LETTER?

An association or its authorized agent may charge a reasonable fee for the preparation and delivery of an estoppel certificate, which may not exceed $250, if, on the date the certificate is issued, no delinquent amounts are owed to the association for the applicable unit. If an estoppel certificate is requested on an expedited basis and delivered within 3 business days after the request, the association may charge an additional fee of $100. If a delinquent amount is owed to the association for the applicable unit, an additional fee for the estoppel certificate may not exceed $150.

So, as you can see, someone preparing an estoppel certificate can charge in some cases up to $500.00.  This fee is typically paid for by the seller of the unit or home.  Management companies and law firms both say ka-ching when they are asked to prepare an estoppel certificate.

Well, if that sounds unfair to you, it also sounds unfair to Florida Senator Jonathan Martin and Representative Persons Mulicka.  Each of them have now filed bills which would preclude associations from charging for estoppel letters whatsoever.  It has resulted in massive pushback from management companies and law firms alike, each of whom are the ones normally getting paid to prepare these estoppel certificates.

On the one hand, attorneys and management companies say that they deserve to get paid for preparing estoppel certificates because there are a lot of questions to answer and there is potential liability if they prepare it incorrectly. Moreover, they take the position that only the seller should pay for the estoppel certificate because only the seller is trying to sell their unit.  Why should that cost be put on every other owner in the community?

On the other hand, there is an argument that management companies are already paid to keep the ledgers of every owner.  It shouldn’t take more than a few minutes to let someone know what a unit owes.  Therefore, they shouldn’t receive an extra penny for preparing an estoppel certificate.

So which side is right?  I think there are good arguments on both sides and we can debate this forever.  You have to wonder though that if the fees that you’re allowed to charge were half of what they are now, would this ever have become a fight?  I don’t think so. I do think a compromise wouldn’t be bad here.

What do you guys think?

Written by Eric Glazer

A Road Map to Your Ideal Waterbody by SOLitude

A Road Map to Your Ideal Waterbody by SOLitude

  • Posted: Jan 16, 2024
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A Road Map to Your Ideal Waterbody

Navigating Your Lake Management Journey

As any lake owner or manager knows, maintaining a waterbody is hard work. At best, you may experience a few hiccups every now and then like small mats of algae or cloudiness. At worst, you may face toxic blooms of cyanobacteria, severe erosion issues, or flooding. Achieving the lake or pond of your dreams is not a linear process; it’s a journey. Whether you’re new to water management or well into your quest, it’s never too late to reevaluate your trajectory and make sure you’re taking the safest and most efficient route toward your waterbody goals.

Identify your goals and stakeholders

In order to achieve the goals you’ve set for your lake or pond, it’s important to visualize them. Maybe you desire a small backyard pond for swimming, fishing, and kayaking with friends and family. You may need a stormwater pond that efficiently collects rainwater while providing aesthetic beauty. Perhaps you oversee a large lake or drinking water reservoir that requires safe, clean water for the public. With the support of an experienced Aquatic Expert, HOA managers, property owners, municipal leadersgolf course superintendents, and other decision-makers can develop a detailed roadmap tailored to their unique needs and budget, as well as to the one-of-a-kind characteristics of their waterbodies.

testing-water-quality-in-lakes

Conduct lake water quality testing

One of the most important steps when navigating your journey is establishing baseline knowledge about your aquatic ecosystem. Professionals conduct visual surveys and advanced water quality testing to learn about the physical and chemical properties of an aquatic ecosystem. Parameters like dissolved oxygen (DO), nutrient levels, pH, and turbidity provide valuable context by allowing professionals to identify potential imbalances, predict future problems, and develop a timeline to implement short- and long-term management solutions.

Plan ahead to prolong your lake’s lifespan

In lake and pond management, every waterbody has a countdown. Over time, sediment, debris, animal waste, and other organic materials accumulate at the bottom of all lakes and ponds. As an ecosystem becomes more shallow, it loses its capacity to hold water, which can increase the risk of flooding during storms and severely damage shoreline areas. Eventually, dredging services will be needed to physically remove these materials and restore the waterbody to its original depth and volume. Though this is a natural occurrence, it can be expedited by human activities such as construction and urban development, agriculture, and recreation. Luckily, by planning ahead, stakeholders can cruise past these dead-ends, ensuring a smoother journey.

Proactive management helps you stay ahead of water quality issues

If dredging is a dead-end street on the roadmap towards the waterbody of your dreams, proactive management solutions are shortcuts. By implementing preventive measures and sustainable practices, you can sidestep the need for extensive restoration efforts, as well as smaller roadblocks like nuisance weeds and algae. Shoreline managementnutrient mitigation, biological bacteria, fountains and aeration, and ongoing water quality monitoring can help you cultivate a healthy, beautiful, functional waterbody – and enjoy it for as long as possible.

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Elevate your pond management plan with new technologies

Furthermore, advanced technologies and solutions like professional dronesbathymetric mapping, and electrofishing can serve as navigational tools on your management journey. These technologies help stakeholders better understand depth, underwater features, and even fish populations, allowing them to use their time, attention, and resources more efficiently.

Achieve your ideal waterbody with help from experts

Lake and pond management is never smooth sailing. Water is in a constant state of change, impacted by weather conditions, wildlife, land use, and countless other factors. Navigating these complexities requires a proactive approach that incorporates as much knowledge and innovation as possible. With an experienced Aquatic Expert as your guide, you can enjoy each milestone on your journey while keeping your goals firmly on the horizon.

A reminder that we have a Condominium Association Board Member Certification webinar coming up Wednesday (Jan. 17) afternoon at 2pm Est. Alan Schwartzseid, Esq. will teach the class. It provides the certification required for new board members

A reminder that we have a Condominium Association Board Member Certification webinar coming up Wednesday (Jan. 17) afternoon at 2pm Est. Alan Schwartzseid, Esq. will teach the class. It provides the certification required for new board members

  • Posted: Jan 16, 2024
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Condominium Association Board Member Certification webinar

Wednesday (Jan. 17) afternoon at 2pm Est.

Alan Schwartzseid, Esq. will teach the class that provides the certification required for new board members.

ALSO offers two (2) IFM credits for licensed CAMS in Florida. Here is the link to enroll for free:This webinar covers the essentials of condominium board membership, and is updated regularly to remain current with legislative amendments to Florida’s Condominium Act. In addition, this webinar satisfies Florida’s requirement for new condominium board members. It also serves as an excellent refresher course. Licensed CAMS will receive two (2) CE credits as IFM or ELE.

https://us02web.zoom.us/webinar/register/WN_umc0gbrIQDuT-pqj0fSWgQ#/registration

A few other events this week.

Condominium Board Member Certification (2 IFM/ELE & Board Cert)

Wednesday, Jan. 17 | 2:00pm Est | Zoom

Enroll for Jan. 17 at 2pm

Electronic Voting & Virtual Meetings with guest Kaye Bender Rembaum

Thursday, Jan. 18 | 12:00pm Est | Luncheon in city of Orlando

Enroll for Jan. 18

Join us Jan 15, 2024 11:00 AM while we discuss the intricacies of employee management in an association

Join us Jan 15, 2024 11:00 AM while we discuss the intricacies of employee management in an association

  • Posted: Jan 14, 2024
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Join us Jan 15, 2024 11:00 AM while we discuss the intricacies of employee management in an association

Employee Management for Boards

Date & Time   Jan 15, 2024 11:00 AM 
Description     Course # 9632457 | Provider # 0009134 | 1 CEU in IFM or Elective Presented and instructed by Leslie Alvarez, PCAM, Community Ace. Guests: Nicole Johnson (Partner, Dir. of Operations; Hafer CPAs & Consultants) and Jeffrey Rembaum, Esq., BCS (Kaye Bender Rembaum).
Managing employees is not an easy task, especially in an association. Board members are not usually experts in human resources. Join us while we discuss the intricacies of employee management in an association. We will cover a review of the actual costs of an employee, costs of turnover, managing performance, ensuring your compensation and benefits is competitive in today’s market, and maintaining a positive work environment.
Only a licensed, structural engineer can provide accurate assessments and solutions for a home buyer or seller.

Only a licensed, structural engineer can provide accurate assessments and solutions for a home buyer or seller.

  • Posted: Jan 10, 2024
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Many engineering firms do not offer residential services. But United Professional Engineering (UPE) does.

We understand the residential market and the homeowner and we value their business. Only a licensed, structural engineer can provide accurate assessments and solutions for a home buyer or seller.

 

Residential Structural Inspections

Many engineering firms do not offer residential services. At UPE, we understand the residential market and the homeowner. We value their business and our team is proud to service this sector. Most of the work that we perform for residential homeowners begins with an onsite engineering assessment. Our licensed, structural engineers make a site visit to the property. We survey the areas of concern and assess the severity of the structural problems in question.

After a site investigation is conducted, our structural engineers prepare a structural engineering report outlining onsite findings, identifying probable cause of the structural issue and recommendations for remediation of any structural deficiency uncovered. We provide our clients with a photograph log documenting existing conditions at the time of the site visit. Only a licensed, structural engineer can provide accurate assessments and solutions for a home buyer or seller. Give us a call today!

 


United Professional Engineering (UPE)

Provides a unique “one-stop-shop” for all your structural engineering needs in Palm Beach and Broward County. Our South Florida area founded firm has been in business since 1999 and we have a diverse team; from licensed designers and structural engineers to inspectors and general contractors. For that reason, our projects range from designing and restoration to structural inspections and more!

We understand how valuable your time is and we are committed to providing our industry leading expertise to your next project. Our team welcomes any and all challenges to ensure a smooth and cost effective project for all our clients and everyone involved. Your journey with us is important, and we take pride in making it memorable!

At UPE, we understand it is hard to find a service provider you can trust and count on and we are here to change that.

Today, one of the largest investments is building a structure and how to maintain its lifespan. Structural integrity, environmental factors, atmospheric elements, and maintaining aesthetics are all important factors that we evaluate very carefully, when working on a project.

Our highly qualified licensed designers, engineers and general contractors promises to ensure your investment is protected. We believe it’s important to exhibit and maintain an open communication network, while working towards each of our client’s best interests, as well as everyone involved.

We are committed to structural safety and serviceability, identify equilibrium conditions, resolve limitations and utilize preventive and corrective maintenance behavior. UPE is here to help accomplish each milestone of your project, together!

Give us a call today!
📱(561) 582-1733
💻 upefl.com

Find us on the Members Directory on SFPMA.com

LinkedIn:  Find us on LinkedIn

 

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30/40 Year Building Recertification: Your Property Depends on it.

30/40 Year Building Recertification: Your Property Depends on it.

  • Posted: Jan 10, 2024
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30/40 Year Building Recertification: Your Property Depends on it.

Building inspections are crucial for maintaining the safety and integrity of buildings. This is particularly true here in South Florida due to our region’s unique climate and environmental conditions. High humidity, Salt Air, extreme heat, and the hurricane season can all cause damage to building’s structure and envelopes over time. These are some of the reasons why building recertification has become mandated in South Florida every 30 or 40 years, depending on the building’s age.

 

Identifying Hidden Problems

Building inspections are essential to identify underlying problems that may not be readily apparent to residents. For instance, buildings may develop foundation cracks, leaks in the roof, or other issues that can pose significant risks to the property’s structural integrity. Regular inspections can catch these issues early and detect severe problems that may cause serious water damage or building collapse.

Building inspections can prevent these situations, uncover hidden issues, and allow for prompt repair or replacement. Identifying problems early on can also save property owners money and time by preventing more severe cases from developing. Deterioration in coastal environments is a progressive problem that will cost more to address as time passes. By addressing these problems, property owners can promote their buildings’ safety and structural integrity.

 

Cost Savings

Building inspections can provide property owners with significant cost savings in the long run by identifying potential issues early on. Often, structural engineers can find problems during an inspection that can be repaired immediately at a lower cost than if they were allowed to escalate into more significant issues.

For example, if a building inspector discovers a small leak in the roof, the property owner can have it repaired before it causes more extensive damage to the interior of the building. If left unattended, this leak could cause extensive water damage, resulting in costly repairs and possible damage to the building’s structure.

Inspectors may identify areas in the building that could be more energy-efficient. In this case, the property owner can upgrade the building’s insulation, HVAC, or lighting systems—leading to significant savings in energy costs and reducing the property owner’s overall operating expenses.

 

Experience and Expertise

Structural Workshop has extensive experience conducting building inspections. Our experienced engineers and inspectors work closely with clients to help them keep their buildings safeand well-maintained. Whether you are a property manager, building owner, or homeowner, we can help you navigate the complexity of building inspections. Please get in touch with us today to schedule a recertification or learn more about our services.

 



If your company needs marketing please contact our member
Jessica Vail
Vail Marketing Solutions
(908) 528.4087
www.vailmarketingsolutions.com

 

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When are Budgets due?

When are Budgets due?

  • Posted: Jan 04, 2024
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Within 90 days after the end of the fiscal year, or annually on such date provided in the bylaws, the association must have prepared a financial report on the financial activities of the preceding fiscal year.

Within 21 days after the financial report is completed, but no later than 120 days after the end of the fiscal year, the board must provide each member with a copy of the financial report or, at a minimum, provide written notice that a copy of the financial report is available upon request, at no charge to the members.

 

Some things to consider:

  • Don’t delay – Start the process as early as possible so that you don’t miss items that could significantly impact your budget. Now is the perfect time to start preparations if your budget starts January 1.
  • It is a monotonous task, but a vital one. In this day and age, assessments will more than likely have to increase due to increases in insurance, utilities, and that never ending “wish list.” Have a budget plan. Look at the goals for the community. What does the Board want to achieve?
  • Review past budgets and the final year performance. If you overspent more years than not, obviously you need to make some changes.
  • Pet projects don’t always make the cut. Be realistic about what can be achieved.
  • Go over all contracts. You should have a spreadsheet of all contracts with expiration dates, whether they are auto renewed unless you send a cancellation notice, what is the cancellation timeline, does auto-renew have an increase and how much.
  • Ensure you are funding enough for your reserves.
  • Get a Reserve Study, or at least an updated Reserve Study to ensure you have accurate numbers.
  • Have a well-funded maintenance program. The disasters of the recent past is an indication of just how important it is to keep up even the most mundane maintenance. Proper maintenance may help delay some of the replacement items in your reserve study.

 

The financial report must consist of a complete set of financial statements prepared in accordance with generally accepted accounting principles. The level of financial reporting that must be prepared by the board is based on the total annual revenue (including reserves) of the association, as follows:

 

  1. An association with total annual revenues of $150,000 or more, but less than $300,000, shall prepare compiled financial statements.
  2. An association with total annual revenues of at least $300,000, but less than $500,000, shall prepare reviewed financial statements.

  3. An association with total revenues of $500,000 or more shall prepare audited financial statements.

  4. An association with total annual revenues of less than $150,000 shall prepare a report of cash receipts and expenditures.

 

Interestingly, if the board desires to raise the level of financial reporting, it may be increased without membership approval by board action alone, unless the governing documents provide otherwise. In addition, if the board is not inclined to approve a heightened level of reporting, but the members want to do so, then upon twenty (20%) percent of the parcel owners petitioning the board to increase the level of financial reporting from that required by Statute for that fiscal year, the board must notice and hold a membership meeting within thirty (30) days of receipt of the petition. To raise the level of financial reporting, a majority of members present at such meeting must cast their vote in favor of doing so.

 

However, lowering the reporting threshold is a different matter entirely because only the members can make that decision. To accomplish this, a majority of members present at a properly noticed membership meeting must cast their vote in favor of lowering the level of financial reporting. The meeting must take place prior to the end of the fiscal year in question.

 

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4 Things to Consider Adding to Your Budget For an Amazing Resident Experience by BuildingLink

4 Things to Consider Adding to Your Budget For an Amazing Resident Experience by BuildingLink

  • Posted: Jan 04, 2024
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If you’re like most multifamily communities, August marks the beginning of your budgeting season. To create an amazing resident culture, property managers need to get ready to sharpen their pencils. In today’s competitive environment, however, that means more than just nailing down your expense forecasting for the new year.

 

 Residents these days expect more than ever from their community’s amenities and services, reflecting broader changes in their lifestyle and work habits. With the continued trend of working from home, many residents are now looking to their apartment amenities to serve as extended living and working spaces. This presents an exciting opportunity to create an outstanding culture and experience that drives them to renew their leases and recommend the property to others. In this post, we share four things that property managers should consider adding to their budgets this planning season.

 

1. Community Events

If you haven’t already considered hosting community events, now is the time. By hosting fun and exciting events for your residents, you’ll help them form connections with their neighbors and engage with the property. These connections can create a sense of belonging and mutual support, leading to a happier and more harmonious community. The increased engagement between residents can also foster a culture where residents take better care of shared spaces, since they have a stronger sense of pride and ownership within their surroundings.

The scale of your community events can range from more casual gatherings, such as coffee hours in the lobby, to more elaborate occasions, such as holiday parties or outdoor movie nights. Budgeting for these events may vary accordingly. A small-scale event can be executed with a minimal budget, while a larger-scale event may need a more significant budget allocation to factor in food, entertainment, and decorations.

For those wrapping up the end of summer with a resident event, our blog, “Six Resident Event Ideas: Summer Edition,”can provide some great inspiration.

2. Concierge Services

For many, concierge services are one of the first things that comes to mind when you think about high-rise lavish apartment home living. Providing services that make residents’ lives easier is a huge draw that can drive satisfaction up and enhance their quality of life.

Don’t worry if your property can’t afford a full-time concierge to work as a front desk associate. You can choose to provide select key services that can be managed within your budget. Package tracking is an excellent example, as it eliminates the stress of missing deliveries for residents. Similarly, a reliable key management system can provide residents with peace of mind regarding access for guests, cleaners, pet sitters, and more.

Pro Tip: To optimize your front office and concierge services, consider using a platform such as ConciergeLink. From enhanced incident report management to paperless shift logs and time tracking, you’ll know your property is always running smoothly.

3. Fitness & Wellness Amenities

In today’s health conscious society, providing fitness and wellness amenities within your property is an excellent way to improve the culture, allowing residents to stay active without needing to leave the property. Consider budgeting for updated exercise machines, spa facilities such as a sauna, or meditation areas to help residents unwind and relax. If your property is limited in physical space, consider establishing a partnership with a local wellness center or gym as an alternative solution. You may be able to offer residents discounted gym memberships or wellness services adding value to their residency.

Providing ways for residents to take care of their physical fitness does more than improve their individual quality of life. It also helps create a vibrant community culture that residents can enjoy and take pride in, positioning your property as one that truly cares for and invests in its residents.

4. A Branded Mobile App

Leveraging a branded mobile app is a powerful way for property managers to improve communication with residents and enhance their overall living experience. These branded apps can serve as a centralized platform for residents to access important information, receive communication, request service fixes, and more. With a mobile app that reflects your property’s branding, you can foster a stronger sense of belonging and familiarity among residents.

BuildingLink offers custom mobile apps for both iOS and Android platforms. You can customize the app to your property’s logo and colors, providing your residents with a seamless and professional look that aligns with your brand identity. Learn more about our custom mobile apps here.

Partner With BuildingLink

Trusted by condos, co-ops, HOA’s and multifamily properties around the globe, BuildingLink helps property managers deliver superior resident experiences while streamlining maintenance and operations. We offer tools that will simplify your record-keeping and administration, communications, maintenance, and front desk operations.

When you’re ready for smarter property management, book your BuildingLink demo today.

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COAs must prepare operationally and financially for new legislation by Jim Weaver, Market President – First Federal Bank

COAs must prepare operationally and financially for new legislation by Jim Weaver, Market President – First Federal Bank

  • Posted: Jan 04, 2024
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 COAs must prepare budgets operationally and financially for new legislation by Jim Weaver, Market President – First Federal Bank

 

It would seem in today’s world the life of many Condo Associations are financially battling a 3headed dragon known as Insurance, Milestone Inspections and Structural Integrity Reserve Studies. Alone, any one of these could result in a substantial financial blow to an Association but being impacted by all three could result in a financial crisis. To dissect this “dragon” from a Banker’s perspective, let’s look at a highlevel overview of each of these:

 

Insurance:

Many Associations (and homeowners in general) are aware of the growing insurance crisis in the State of Florida and anticipated their premiums to increase but not to the levels many have experienced in 2023. After discussions with several property managers, most Associations were told in 2022 that they should expect increases in the neighborhood of 25% – 50% year over year. Although, at the time, these appeared shockingly high, the reality for many in 2023 has been increases of 100% to as much as 400% of their 2022 premiums. It is safe to say that even the most conservative of budgets and the best prepared Associations were not financially prepared for this hike. Many Associations have been forced to either finance their premiums through their insurance company or look to their bank partner for lines of credit to supplement what they had assumed would be sufficient reserves. While legislation is pending to assist with this problem, it is unlikely a return to the “old normal” will ever occur and financing of insurance premiums will become the “new norm”.

 

Milestone Inspections:

A milestone inspection is an on-site review of all the primary structural components within the condominium building(s). The inspections must be completed by a licensed architect or engineer. The initial Phase 1 inspection is a thorough visual examination. If no signs of “substantial structural deterioration” is found, no further investigation is needed. If there are signs of “substantial structural deterioration”, a Phase 2 milestone inspection must be performed. This inspection will be as limited or extensive as required to complete the investigation into the problem areas as identified in the Phase 1. If necessary, the inspector could require destructive testing on portions of the structure to complete the report. Upon completion of the Phase 2, the report should provide guidance for remediation/repair of distressed areas of the building.

Milestone Inspection reports are required for all condominiums three or more stories in height which aged 30 or more years by July 1, 2022; the initial milestone inspection must be completed by December 31, 2024. If the condominium reaches 30 years of age on or after July 1, 2022 and before December 31, 2024 the initial inspection must be completed before December 31, 2025. All others must have their initial inspections completed in the year in which the reach 30 years old and in all cases, every 10 years thereafter.

While the cost for these inspections may not present a financial crisis, the cost of needed repairs could. Well reserved and monitored Associations may have little or minor needs for additional funds, but others may have an immediate need to raise significant funds for near term required repairs.

 

Structural Integrity Reserve Study:

All condominium buildings of 3 stories or more are required to perform a Structural Integrity Reserve Study. This is performed to ensure proper availability of funds at the time of anticipated needed structural repairs or replacement as per the study. This study must cover the following:

Roof

Structure including load bearing walls and all primary structural members

Fire proofing and fire protection systems

Plumbing

Electrical Systems

Waterproofing and exterior painting

Windows and Exterior Doors

Any other item that has a deferred maintenance expense or replacement cost that exceeds $10,000 and the failure to replace or maintain such item negatively affects the items listed above.

At a minimum the study must:

1) Identify each item of the condominium being visually inspected

2) State the estimated useful life and estimated replacement cost or deferred maintenance expense of each item of the property being visually inspected

3) Provide a funding reserve schedule with a recommended annual reserve amount that achieves the estimated replacement cost or deferred maintenance expense of each item.

As of December 31, 2024 it is mandated that Associations may not vote to waive or provide for reserves in an amount less than full funding for those items included within the Structural Integrity Reserve Study.

 

For many Associations who have historically partially funded or waived reserve funding, the requirement to fully fund for items included in the study will have an immediate and impactful shock to their financial structure moving forward. Depending upon the findings, Associations may need to raise large sums of reserves in a relatively short period of time. Fortunately for most Associations, the full impact will not be felt until the 2025 budget; however being proactive in 2024 will help prepare for the inevitable impact.

Disclosure: The commentary above should not be considered a legal opinion and does not encompass the full requirements of the legislation of Senate Bill 154 as discussed above. It is strongly suggested that any Association confer with their Attorney and/or CPA to understand the full requirements and impact of the legislation well in advance of any deadlines specified in the bill.

Authored by:

Jim Weaver

Market President

First Federal Bank*

Weaverj@ffbf.com

*First Federal Bank is available to serve financial needs of their local markets. Visit FFBF.com/locator to find the nearest location.

 


Find First Federal Bank on the Members Directory

First Federal Bank is a community-based bank offering consumer and commercial banking solutions, services, and loans through banking offices in Florida’s Panhandle, North Central and East Florida, and coastal South Carolina.

Mortgage, SBA and USDA customers are served through lending offices across the Southeast and Midwest.

First Federal is headquartered in Lake City, Florida with assets totaling over $3.6 billion. First Federal has received a “5-Star, Superior” financial rating from BauerFinancial, Inc., of Coral Gables, Fla. for more than two decades and was recognized by Newsweek as “Best Small Bank in Florida” in 2020 and 2021. For more information, visit http://www.ffbf.com.

 

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