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Why Money Judgments Don’t Work for Assessment – by Mitch Drimmer

Why Money Judgments Don’t Work for Assessment – by Mitch Drimmer

Why Money Judgments Don’t Work for Assessment

Mitch Drimmer of AXELA-TECH

Money judgments are not an effective way for an HOA to collect delinquencies. It’s often more effective for an HOA to work with delinquent homeowners to find a resolution that is mutually beneficial. This may involve setting up a payment plan or finding alternative ways to resolve the delinquency.

Foreclosure is a legal process in which an HOA takes possession of a delinquent owner’s property. The HOA then sells it to recover the money owed. While foreclosure should be a last resort for collecting past-due assessments, pursuing a foreclosure may be a better option than seeking a money judgment. Here’s why:

  1. Why get a judgment on a secured debt? The property is the collateral. Why get a money judgment and then go to court again to get a writ to collect?
  1. Recovery: Ever try to garnish wages or repossess assets to collect on a judgment? It’s not easy. People can, and often do, evade efforts to collect. You already have the best collateral for the debt – the property itself.
  2. Difficulty in enforcing judgments: Obtaining a judgment is only the first step in the collection process. The HOA must then take steps to enforce the judgment, which can be time-consuming and costly. This may involve garnishing wages, levying bank accounts, or seizing assets. When it comes to collecting,  you are on your own.
  3. Limited recovery: Even if a judgment is obtained, there’s no guarantee that the delinquent homeowner will be able to pay the amount owed. If the homeowner is unable to pay, the HOA may not be able to recover the full amount of the judgment.  The money spent to get the judgment was wasted. Negative impact on community: Pursuing a judgment against a delinquent homeowner may create tension and conflict within the community. This can be more difficult in a small community where residents may have close personal relationships. If the community has an ongoing wage garnishment on a resident, the animosity may drag on for years.

The overwhelming majority of the time, owners facing foreclosure pay before a sale occurs.  Foreclosure is the end of the road for the owner, and they almost always find the money to pay to stay in their homes. Starting a foreclosure does not mean the sale will occur, and from our experience, it seldom does.

Want some more reasons why foreclosure, while still a last resort, is better than a judgment?

  1. Stronger legal remedy: A foreclosure is a stronger legal remedy than a money judgment because it allows the HOA to take possession of the property and sell it to recover the unpaid assessments. A money judgment is a court order requiring the homeowner to pay the amount owed, but the HOA must still take extra steps to enforce the judgment and collect the funds.
  2. Quicker resolution: Foreclosure can be a quicker process than seeking a money judgment. It’s unusual for the foreclosure process to take more than a year, and in some states, that time is less than half. In contrast, obtaining a money judgment can be a lengthy process that may involve multiple court hearings and appeals.
  3. Higher recovery rate: Foreclosure is better for the HOA because the sale of the property can often cover the unpaid assessments, legal fees, and other costs associated with the foreclosure process. With a money judgment, the HOA may not be able to recover the full amount owed, and this is guaranteed if the homeowner is unable to pay.
  4. It’s a deterrent: Foreclosure may deter others in the community from defaulting on their assessments. This can help to keep the HOA financially stable and protect the value of the community.

Delinquencies are often settled when a new buyer purchases the property under “joint and several liability” doctrines. If you have eviscerated an amount of the debt and turned it into a personal obligation, it’s more difficult to collect when the property sells. The association has a judgment but must still work to collect on it even if the owner sells the property, when it could have been paid in full at the time of the sale.

During the real estate meltdown of 2008, associations foreclosed and took title to units that were underwater because everything was underwater. Then, they would refurbish and rent the units. The banks were not foreclosing, the units were underwater, and the associations had no choice if they wanted to be proactive. But times have changed, and there’s a record amount of equity in the housing market. The chances that the association will ever take title in these times of high property value and opt to rent the property are incredibly slim.

If you go after somebody with a money judgment, they will evade you until they cannot. It can take years before you get to cash in, if ever. This is not about revenge; it’s about cash flow. When an HOA goes after a delinquent owner, you can be sure that the debtor would be more motivated to pay with a foreclosure over their head than a money judgment. A foreclosure is hard to get out of, if the HOA does it right. They may be able to circumvent or have exemptions not to pay a judgment.

It’s important to note that foreclosure is a last resort for collecting assessments. Before foreclosing, the HOA should work with a specialized and licensed collections solution like Axela-Technologies. Our services include client outreach, respectful phone calls, emails, mailed letters and notices, bank notifications, credit bureau reporting, and other legal and fair methods to collect. For a no obligation collections analysis, please Click Here and let us show you “How the Future Collects.”

 

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New Module: Inspections and Checklists by BuildingLink

New Module: Inspections and Checklists by BuildingLink

  • Posted: Feb 27, 2023
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New Module: Inspections and Checklists

by BuildingLink

We can’t think of a better time than the current environment to be introducing to you our newly released Inspections and Checklists Module! Whether you want to document all of the new practices in place because of COVID-19, or to lock down your existing routines for property inspections, employee daily task lists, or monthly/yearly PM (preventative maintenance), there is a new way to do it all:

Make A Checklist Out Of It!

The new Inspections and Checklists Module will help bring consistency and excellence to your daily routines. Your property managers can build checklists of any kind and length – and your staff can document existing conditions or completed tasks conveniently in the field, using the same BuildingLink GEO mobile app they already know and use every day!

This is a very feature-rich module! Be sure to read the below ‘Q & A’ to learn more about automated inspections via the built-in scheduler, or easily creating work orders during an inspection – and lots of other useful shortcuts and features!

We’ve released the initial version of our Inspections and Checklists module to most of our buildings, and are eager to hear your feedback! Managers can access the module under the “Maintenance” section of the left-hand navigation in BuildingLink. If you’re not seeing it, and want it released for your building, email us at support@buildinglink.com, or call 212-501-7117.

 

You’ve got questions? We’ve got answers!

Q: What types of checklists have buildings been creating so far?A: We are seeing lots of diversity here! For example:

  • Daily/weekly/monthly task lists
  • Lobby, common areas, and grounds walk-throughs
  • Move-in/move-out, in-unit inspections
  • Mechanical room and rooftop inspections and PM
  • Start-of-shift checklists
  • Amenities opening checklists (i.e. fitness center, pool)

Q: Is there a limit to the number of checklists, or number of items on a checklist, that can be created?

A: No, there is no limit! In addition, if you want to make multiple versions of a checklist with small changes (to reflect different apartment layouts or daily/monthly/yearly routines), there is a convenient “Clone a Checklist” function that you can use and modify, to save you time!

Q: What types of inputs are possible for each checklist item?

A: Obviously, a checkbox is added for you, and a textbox for comments from the person conducting the inspection. Finally – and most importantly – the ability to upload one or more photos that document the condition or space being checked.

Q: Is there a library of pre-built checklists that BuildingLink is making available?

A: There are currently three pre-built inspections checklists that a building can use or modify. More will be added in the coming weeks! Topics of pre-built checklists: Facility Exterior, Fire Prevention Checklist, Inspection Plan.

Q: Is there a “Scheduler” or “Assigner” function for inspection checklists that need to be performed on fixed intervals?

A: Yes! The module allows for the scheduling of checklists recurring at fixed intervals, or by specific employees. Any scheduled checklists not assigned to a specific employee, can be completed by any staff member.

Q: Can staff complete checklists “on the fly”, that have not been scheduled?

A: Sure! Any existing checklist can be selected and completed by your staff at any time – even if unscheduled.

Q: What if staff discovers items needing work or repair while completing an inspection? How can they flag it for further attention?

A: Glad you asked! From the in-progress checklist page, your staff can effortlessly generate a maintenance request for any checklist item – which flows directly into BuildingLink’s Maintenance Request Module! It is a one-step integration that allows staff to fluidly complete their assigned inspections and checklists, while still queuing up additional work to be done.

Q: How does management know when a checklist is completed (or not completed)?

A: Managers are notified by email once a checklist is completed and, from their Inspections Dashboard within BuildingLink, they can review the results, export to PDF, or print! On the inspections dashboard, managers can also see scheduled inspections that are overdue.

Q: I have more questions about this module. How can I learn more about it?

A: Visit our help section for more information about the Inspections and Checklists Module!

For more info, contact us at support@buildinglink.com, or give us a call at (212) 501-7117.

BuildingLink

407-529-6063

BuildingLink is currently used in over 5,000 properties in the U.S. and worldwide, offering efficient management, seamless communication, and an enhanced living experience for residents.

BuildingLink is the gold standard for property managers looking to upgrade the experience of managing, working and living in a luxury residence, our clients can be found near and far – in New York, Boston, Miami, Dallas, and San Francisco, but also in Toronto, Melbourne, Tokyo and Singapore.

 

Streamline maintenance and operations.

BuildingLink works like magic to save your employees time, delight your residents, and give you the insights on your building that you need to tackle issues and avoid costly mistakes. Our central dashboard lets you track, search, and monitor everything that matters:

  • Service tickets
  • Inventory levels
  • Employee performance
  • Legal documents
  • The latest shift
  • Your resident’s preferences and requests.
  • And even more management tools!

 

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HOA Architectural Committees Required Statutory Procedures Requirement For Published Standards Required Self Help

HOA Architectural Committees Required Statutory Procedures Requirement For Published Standards Required Self Help

HOA Architectural Committees

Required Statutory Procedures, Requirement For Published Standards and Required Self Help.




REQUIREMENT OF FORMAL PROCEDURES

There are strict legal requirements that a homeowners’ association’s (HOA) architectural review committee (ARC) must follow, most especially if the ARC intends to deny an owner’s request. As this author has witnessed countless times, it is likely that many ARCs do not conduct their activities in conformity with Florida law such that an ARC denial may not withstand judicial scrutiny. If these legal requirements are not followed, and the ARC denies the owner’s architectural request, then it would be quite easy for the owner to challenge the ARC’s decision and prevail. Upon prevailing, the owner would be entitled to their prevailing party attorney’s fees and costs, as well. It is so easy to avoid this outcome, yet so few associations take the time to do it right.

Pursuant to §720.303(2), Florida Statutes, a meeting of the ARC is required to be open and noticed in the same manner as a meeting of the association’s board of directors. Notice of the ARC meeting must be posted in a conspicuous place in the community at least 48 hours in advance of the meeting, and the meeting must be open for all members to attend. Further, pursuant to §720.303(2)(c)(3), Florida Statutes, members of the ARC are not permitted to vote by proxy or secret ballot. Also, bare bone minutes should be taken to create a record of ARC decisions—especially denials.

We often hear from many HOAs that the ARC does not meet openly and does not notice their meetings. This leaves decisions made by the ARC vulnerable to challenge. If the ARC denies an application but fails to do so at a properly noticed board meeting, the owner can challenge the denial, claiming that it is not valid because the ARC did not follow proper procedure. In such cases, the ARC’s denial of an application is not valid because the ARC failed to comply with the procedural requirements for the meeting even if an application violates the declaration or other association-adopted architectural standards. However, by complying with the provisions of Chapter 720, Florida Statutes, your HOA can work to avoid this debacle.

PUBLISHED STANDARDS

Often a top priority for an HOA is ensuring that homes in the community maintain a harmonious architectural scheme in conformity with community standards and guidelines, and because the ARC is at the frontline of owners’ alterations and improvements to their homes, it is instrumental in ensuring that the community standards and guidelines are met. Pursuant to §720.3035(1), Florida Statutes, an HOA, or the ARC, “has the authority to review and approve plans and specifications only to the extent that the authority is specifically stated or reasonably inferred as to location, size, type, or appearance in the declaration or other published guidelines and standards.” But not every owner request is typically addressed in the declaration or other published guidelines and standards. If not, then the association may not be in a good position for proper denial. Therefore, the ARC is only as effective as the objective guidelines and standards (set forth in the declaration and other published guidelines and standards) are inclusive. So, what is the association to do when the ARC receives an owner’s application for an alteration to the home, but the association does not have any architectural guidelines or standards regulating the requested alteration?

While not court tested yet, a possible solution for this conundrum is to include a “catch-all” provision in the declaration to proactively address those ARC applications where a member may request a modification that is not directly addressed by the governing documents. Such a “catch-all” provision stands for the proposition that, if such a request is made, then the existing state of the community is the applicable standard by which the ARC application is to be judged. For example, imagine if an owner applies to the ARC to paint the owner’s house pink. If there are no architectural guidelines or standards that address what color a house must be, and there are no pink houses in the community, then the existing state of the community may provide a lawful basis for the ARC to deny the request because there are no existing pink houses in the community.




THE TROUBLE WITH SELF-HELP PROVISIONS

What if an owner refuses to maintain the owner’s property, such as pressure washing a dirty roof, despite the HOA sending demand letters, levying a fine, and perhaps even suspending the owner’s right to use the HOA’s recreational facilities? What is the HOA’s next step? Is it time to file a lawsuit to compel compliance? Well, Chapter 718 (governing condominiums), Chapter 719 (governing cooperatives), and Chapter 720 (governing HOAs) of the Florida Statutes authorize the association to bring an action at law or in equity to enforce the provisions of the declaration against the owner. Additionally, many declarations contain “self-help” language that authorizes the association to cure a violation on behalf of the owner and even, at times, assess the owner for the costs of doing so. These “self-help” provisions generally contain permissive language, meaning the association, may, but is not obligated to, cure the violation. Sadly, in this instance the word “may” means “shall,” and to find out why, read on.

There is a general legal principal that, if a claimant has a remedy at law (e.g., the ability to recover money damages under a contract), then it lacks the legal basis to pursue a remedy in equity (e.g., an action for injunctive relief). Remember, too, that an association’s declaration is a contract. In the context of an association, the legal remedy would be exercising the “self-help” authority granted in the declaration. An equitable remedy would be bringing an action seeking an injunction to compel an owner to take action to comply with the declaration. Generally, a court will only award an equitable remedy when the legal remedy is unavailable, insufficient, or inadequate.

Assume that the association’s declaration contains both the permissive “self-help” remedy and the right to seek an injunction from the court. Accordingly, it would appear the association has a decision to make—go to court to seek the injunction or enter onto the owner’s property, cure the violation, and assess the costs of same to the owner. However, recent Florida case law affirmed a complication to what should be a simple decision. In two cases decided ten years apart, Alorda v. Sutton Place Homeowners Association, Inc., 82 So.3d 1077 (Fla. 2nd DCA 2012) and Mauriello v. Property Owners Association of Lake Parker Estates, Inc., 337 So.3d 484 (Fla. 2nd DCA 2022), Florida’s Second District Court of Appeal decided that an association did not have the right to seek an injunction to compel an owner to comply with the declaration if the declaration provided the association the authority, but not the obligation, to engage in “self-help” to remedy the violation. Expressed simply, this is because the legal contractually based “self-help” remedy must be employed before one can rely upon equitable remedy of an injunction. Therefore, even though the declaration provided for an optional remedy of “self-help,” it must be used before seeking the equitable remedy of an injunction.

In Alorda, the owners failed to provide the association with proof of insurance required by the declaration. Although the declaration allowed the association to obtain the required insurance, the association filed a complaint against the owners seeking injunctive relief, asking the court to enter a permanent mandatory injunction requiring the owners to obtain the requested insurance. The owners successfully argued that even though they violated the declaration, the equitable remedy of an injunction was not available because the association already had an adequate legal remedy—the “self-help” option of purchasing the required insurance and assessing them for same. The Court agreed.

In Mauriello, the declaration contained similar language as in Alorda but involved the issue of the owners failing to keep their lawn and landscaping in good condition as required by the declaration. The association filed a complaint seeking a mandatory injunction ordering the owners to keep their lawn and landscaping in a neat condition. However, the facts were complicated by the sale of the home in the middle of the suit when the new owners voluntarily brought the home into compliance with the declaration. The parties continued to fight over who was entitled to prevailing party attorney’s fees with the association arguing it was entitled to same because the voluntary compliance was only obtained after the association was forced to commence legal action. The owners, citing Alorda, argued that the complaint should have been dismissed at the onset because the association sought an equitable remedy (injunction) when a legal remedy was already available—the exercise of its “self-help” authority. The Court considered the award of attorney’s fees after the dismissal of the association’s action for an injunction. Ultimately, the Court held that the owners were the prevailing party as the association could not seek the injunction because it already had an adequate remedy at law.

Accordingly, if your association’s declaration contains a “self-help” provision, and your association desires to seek an injunction against an owner rather than pursue “self-help,” the board should discuss the issue in greater detail with the association’s legal counsel prior to proceeding. Also, remember that if the association wants to enforce architectural standards, then they must be published to the membership; and always remember to notice ARC meetings and take minutes.

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RECOGNITION OF PRESIDENTS? By Jan Bergemann on Condo and HOA Blog

RECOGNITION OF PRESIDENTS? By Jan Bergemann on Condo and HOA Blog

RECOGNITION OF PRESIDENTS?

By Jan Bergemann on Condo HOA Blog




I know that there are many good presidents who are working hard for the good of the community, keep open books and openly communicate with the members of the association.

But then there are lots of presidents, drunk with power and full of themselves. You wouldn’t believe the many ugly stories I’m hearing daily about presidents behaving like Joseph Stalin, Adolf Hitler or Fidel Castro. With the help of greedy attorneys and community association managers they create dictatorships that make living in community associations a living nightmare. They are even willing to ignore arbitration and court rulings and continue their evil doings even after being officially removed by elections or recalls. They are even willing to waste the association’s money on ridiculous appeals court filings.




The real reason why this can even happen in a so-called “civilized” country like the USA: The unwillingness of our government to enforce the many laws legislators create every year.

Many of these laws turn out to be just a waste of paper because too many of the so-called “specialized” community association attorneys are willing to help these dictatorial presidents to circumvent these laws, telling owners, who stand up at meetings to challenge actions of the board that violate the laws, to “sit down and shut up since they don’t have the money to sue the board anyway”!

Living in a community association isn’t something you can just enjoy by not participating, willing to ignore to happenings in the neighborhood until it’s too late. Apathy of owners allows these dictatorships to be created in the first place. Don’t let apathy destroy your community.

REMEMBER: EVEN THE BEST COMMUNITY IS ONLY ONE ELECTION AWAY FROM DICTATORSHIP.

Jan Bergemann

Jan Bergemann is president of Cyber Citizens For Justice, Florida ‘s largest state-wide property owners’ advocacy group. CCFJ works on legislation to help owners living in community  associations. He moved to Florida in 1995 – hoping to retire. He moved into a HOA, where the developer cheated the homeowners and used the association dues for his own purposes. End of retirement!

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Beachfront is thrilled to be working with The Bridges, a luxe Delray Beach community surrounded by 299 acres of sparkling lakes, pristine landscapes, and cascading waterfalls.

Beachfront is thrilled to be working with The Bridges, a luxe Delray Beach community surrounded by 299 acres of sparkling lakes, pristine landscapes, and cascading waterfalls.

Beachfront is thrilled to be working with The Bridges, on all of their Painting needs, its a luxe Delray Beach community surrounded by 299 acres of sparkling lakes, pristine landscapes, and cascading waterfalls.

After completing a clubhouse refresh, we’re now offering homeowners a special group rate for exterior painting for its 590 single-family residences. Residents who wish to have their homes painted, or who would like more information about the project, can contact Jim Wolff,

Business Development Manager, at jim.wolff@beachfrontpainting.net or 772.789.7915.

Our team is honored to have been selected to help maintain the beauty and luxury expected at The Bridges. We have a lot of painting ahead of us. Stay tuned for “after” reveals in the coming months

Our Services:

Painting

 From single-family homes to shopping centers to high-rise condos, Beachfront combines quality workmanship with competitive pricing to give each client a meticulous paint job that lasts. Preparation is critical to our success and includes pressure washing, priming, and patching as needed.

Waterproofing

 At Beachfront, we make sure buildings are watertight. Our mastery of vertical and horizontal waterproofing extends to glazing and sealants, expansion joints and waterproof deck coatings.

Roofing

Through Beachfront Roofing, Inc, we repair, re-cover, and replace flat and sloped roofs no matter the material—metal, tile or shingle. We’re licensed applicators of Truco, Sika, PM, Karnak, Uniflex, Tropical, Henry and Gaco coatings. Our goal? To extend the useful life of your assets.

Restoration

We’re experts in concrete restoration and can quickly address issues like cracking, spalling and buckling. Whether surface repair or intricate strengthening project, clients count on us to keep their structures safe and sound.

Sealants

Beachfront specializes in sealant replacement and repair. Sealants are integral to the waterproofing process, serving as a water barrier in all types of exterior applications. We perform all of our sealant projects with precision using only the finest products available.

Pressure Cleaning

Regular pressure cleaning helps protect homes, hardscaping, decks and fences from damage and deterioration. Our low-pressure cleaning devices rid clients’ properties of dirt, oil, grease, algae, mold, rust and staining.

 

  Contact Us at
BeachFront Painting and Waterproofing

561.557.8534
info@beachfrontpainting.net

5840 Corporate Way, Suite 102
West Palm Beach, Florida 33407
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5 Potential Risks to Your Business If You Have Poor Security

5 Potential Risks to Your Business If You Have Poor Security

Every business is susceptible to threats, hacking, vandalism, etc. which is why prioritizing security for your business can help reduce the implications of these situations. The risks of having poor security can far outweigh what you’d invest in for a good system, so keep these 5 potential risks in mind when considering the security (or lack thereof) at your business.

No Procedure to Handle Incidents

Security breaches and theft does happen, but what’s worse is not having any sort of procedure to handle the issue. And without a proper security procedure, it’s likely incidents will happen more often. It’s better to be prepared for something that could happen then to be surprised and ill-equipped for when something does, so it’s essential for your business to have a clear security procedure.

Legal Liability

As a business owner, you not only have to protect your brand, but you have the responsibility of protecting the safety of your customers, clients, and vendors’. If that information is not secure and something were to happen, these people could lose trust in you, or possibly pursue legal action that could heavily impact your business. It’s important you are following regulations and complying with routine security checks to ensure your business is safe and running efficiently, and so that information is safe and secure under your account. Taking the right steps to safeguard data and regulate personnel allowed access to this information will help your business improve security and reduce liability.

Increase of Theft and Vandalism

Unfortunately, no business is safe from theft or vandalism, and a lack of security only makes you more vulnerable. This can delay business growth and without action, lead to an increase of incidents. Poor security at your business can cost you stolen goods or assets that can’t be replaced, which can affect your profits, and employee’s safety and trust.

There are a few ways to act on these incidents. First, get a security assessment to help you determine your company’s current state of security, and what needs to be improved upon. Then you can figure out an acceptable security system to be installed, to ensure you’re taking the right precautions to safeguarding your property.

Tainted Business Reputation

If employees and clients are susceptible to your poor security measures, the reputation of your business could sink. Customers and employees could possibly seek other places to feel safe, exposing you to harsh reviews and a decrease in business. People and workers want to interact with a business they trust, this can include having latest technology, and security systems such as cameras or alarms. On the flip side, a business that is growing should increase their security, as there are more visitors, employees, or important data that needs to be protected. You should want your business to be a safe and trusted establishment for all involved, which is why having a good security system is vital for your reputation.

Employees Feel Unsafe

The safety of your employees and company data should be the upmost of importance to your business, so if you’re employees are aware of your poor security, it’s likely they will feel unsafe at work. Security issues, limited regulation of the building, or outdated technology can show a lack of interest in the company’s security precautions, which can contribute to a negative work environment and high employee turnover rates. As mentioned previously, this can also harm the reputation of your business, so having a strong security system is the best way to ensure a sense of safety and reliability for your business.

Contact:

John Libby
Regional Manager
United Security, Inc.
950 South Pine Island Road-Suite A 150
Plantation, FL 33324
Mobile: (407)-675-7960
JLibby@usisecurity.com

 

  United Security Inc. (USI) provides contract security solutions and investigation services to a select group of vertical markets. For the past 30 years, USI has created safe, secure environments for commercial and government employees and customers by investing in our people, innovation and relationships. USI is committed to delivering:

  • Responsive management and security personnel
  • Continuous quality improvement and training
  • Consistent, client-focused service and performance

 

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The mandatory funding of all the required reserve funds will make living in these hi-rises very interesting in the next two years

The mandatory funding of all the required reserve funds will make living in these hi-rises very interesting in the next two years

  • Posted: Oct 28, 2022
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  • Comments: Comments Off on The mandatory funding of all the required reserve funds will make living in these hi-rises very interesting in the next two years

MANDATORY RESERVES

By Jan Bergemann

Finally the Florida Legislature got the message they should have gotten 20 years ago: FULLY FUNDED RESERVES ARE MANDATORY!

And even if the legislature gave condo owners a reprieve until December 2025, condo owners should start now to consider their options:

Will they be able to afford the much higher maintenance fees they will have to pay monthly in the future or will these much higher fees break their household budget?

Let’s just face it: For most of the years past condo owners waived reserves in order to keep maintenance fees artificially low – meaning that many of the associations at this point don’t have any reserves worth talking about. Remember: According to media reports the Champlain Tower South had only $700,000 in reserves, but needed about $16M to pay for the necessary repairs.

That will have to change real fast and the fact that many of the required inspections will have to be followed up by costly repairs and maintenance high special assessments are on the horizon for many hi-rise buildings (buildings higher than three floors).

As much as this change to the Florida statutes was long overdue it will definitely price quite a few families out of their homes. But in all reality there is really no other way around it and the fact that many condo owners used the loophole in the statutes that allowed waiving the funding of reserves is now coming back to haunt the owners who in former times dismissed the idea of funding reserves.

We already see condo owners protesting against boards about the problems that are visible in these buildings. The big question in these cases: Does the association have the necessary funds to take care of the needed maintenance and repairs or are the owners willing and able to pay the special assessment the board might have to levy in order to pay for the contractor?

The mandatory funding of all the required reserve funds will make living in these hi-rises very interesting in the next two years – and we will have to see how strong the government agencies tasked with overseeing these new provisions in FS 718 are enforcing these provisions.

Our Blog ( Industry Articles ) can be found on SFPMA.com – between our writers and all members of sfpma we have been for over 15 years keeping our industry up to date with the right Legal, Business and Services Articles. SFPMA sends and publishes these and sends to over 230,000 emails keeping everyone informed.

Look for our article upcoming on Condo Funds and Investments, on SFPMA

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The Infinite Game in Condo Governance by Mitch Drimmer of Axela Tech.

The Infinite Game in Condo Governance by Mitch Drimmer of Axela Tech.

In 1986, Professor James P. Carse presented the concept of finite and infinite gaming. He said, “there are at least two kinds of games: finite and infinite.

A finite game is played for the purpose of winning, an infinite game for the purpose of continuing the play.” Sports games, like football and baseball, are clearly finite games. They have specified chunks of time in which one is expected to do better than the other. An infinite game has no winners and no time length. Instead, it’s just a set of rules and expectations you must continue to participate in without end.

Simon Sinek took this game theory and applied it to the planning and continued success of a business enterprise. Businesses are not time-restricted games. You don’t have a year or five or ten in which to complete some kind of final objective. Sure, there are benchmarks and points of obvious success, but there is no end to business.

Now apply that kind of thinking to the HOA and condo industry: community associations, and in particular, condo governance. A condominium should be run with an “infinite game” mentality, with the goal of the structure being maintained to reach the ripe old age of eternity. Can a structure last infinitely? Maybe not, but even so, that is how it should be governed. There is no shelf life on a condominium building.

Keeping Score in Condo Governance is Playing a Finite Game

Condominiums all too often live on a budget-to-budget basis (or a special assessment to special assessment basis) with very little regard for the future. This kind of condo governance manifests itself in an inadequate capital improvement plan or a functioning preventative maintenance protocol.

Many condominiums are run by a seat-of-the-pants mentality–the pinnacle of finite thinking. This budget-to-budget, board-to-board, manager-to-manager mentality is destructive and a clear blueprint for a condominium’s demise. It pits past, present, and future against one another, each one keeping a score of who did what and who should be responsible for what comes next. Often, this means everyone is passing the buck, and no one is actually accomplishing anything. Managers and board members need to think in terms beyond their tenure with the community and consider the far future in their planning and attitude.

Recently, we have witnessed the results of a condominium playing a finite game. Could there be a better example of misguided short-term planning than what happened in Surfside, Florida? Reports all indicated that the board of directors thought about only the short-term struggles–their time in office, the quickly-mounting immediate expenses, the inconvenience of a serious construction project–and played a finite game with disastrous consequences.

But the board is not alone in their fault. They had no direction from their law firm (which was fined $31 million dollars), which should have known better. This tragedy did not happen in a vacuum.

Sustaining Through an Infinite Game

As extreme as an example Surfside is, the thinking remains endemic. It is not an anomaly, it is only the worst-case scenario and a scenario many buildings are facing after so many years of neglectful condo governance.

It all begins with a reserve study. A quality reserve study can start the process of future planning for a condo building. Ideally, the results will physically lay out what the future may hold. It won’t be perfectly spot-on, but it is at least there as an initial guide.

This is how communities play the infinite game–a good reserve study is not a one-and-done event. A proper reserve study requires long-term maintenance and updating as inflation, and other infrastructural issues inevitably erode the previous year’s budget. Playing an infinite game in condo governance will ensure its longevity, value, comfort, and positive residential experience.

Start Playing an Infinite Game

A condominium that has a good reserves program, maintains an honest budget, pursues delinquencies, seeks out stability in management, and continues to embrace new technologies to reduce expenses is playing the infinite game.

It’s election season for boards of directors, so why not campaign on governing with an infinite mentality? Govern and manage your building like it is supposed to last forever. For more advice on condominium fiscal management and collections, contact us today.

 

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Lake Management: Lake Turnover and Fish Kills The science behind it….

Lake Management: Lake Turnover and Fish Kills The science behind it….

Lake Turnover and Fish Kills

The science behind it….

Lake turnovers generally occur in the fall but can sometimes occur in the summer. During the hot weather, the surface water of a lake warms much faster than deeper water. This results in a temporary layering effect, with warm water on top and cool water underneath. Scientists refer to this as stratification.
Because the top layer has constant access to the atmosphere, it tends to have more oxygen than the bottom layer-even though it’s warmer. If a heavy wind or cold rain should occur during these conditions, the stratification may be broken, causing the two layers to mix. Once this happens the mixing action can result in low dissolved oxygen levels throughout the water column, and can potentially cause a fish kill.
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