July 2013

Connections

THE OFFICIAL PUBLICATION OF THE APARTMENT ASSOCIATION OF SOUTHERN COLORADO

Weidner Apartment Homes

2011 Peak Awards

Winner for Best Management Company

Spring 2013 Edition

■ The Financial Impact of Health Care Reform ■ Apartments Contribute $1.1 Trillion to National Economy ■ Drought Persists in Colorado

The Peak Awards Thursday, June 6, 2013 Presented By

CONNECTIONS MAGAZINE

Contact

APARTMENT ASSOCIATION OF SOUTHERN COLORADO Office Address:

2790 N. Academy Blvd. Suite 227 Colorado Springs, CO 80917

P: 719.264.9195 F: 791.264.9198 www.aaschq.org

Executive Director:

Laura Nelson | laura@aaschq.org | ext. 12

Director of Member Services:

Stephanie Miller | stephanie@aaschq.org | ext. 10

Director of Education & Events:

Kelly Leggett | kelly@aaschq.org | ext. 14

Director of Marketing & Advertising:

Channing Brooks | channing@aaschq.org | ext. 13

Contents

5

The President’s Message

6

Quarterly Updates & Estimates

8

10

12

22 ADVERTISING DIRECTORY

Thank you to the following member companies for supporting Connections magazine.

16

ADVERTISER PAGE

TransUnion Smart Move 9 Update Printing 9 All State Insurance 11 RiteCorp. 11 BluSky 22 AWL Roofing and Contracting Inside back cover All Around Maintence Inside front cover The Paint Doctor Backcover

24

President: Past President: Supplier Council Chair: Treasurer: Secretary: Legal Council: Board Member: Board Member: Board Member: Board Member: Board Member: Board Member: Board Member: Board Member:

Robert Carr, Weidner Apartment Homes Shelly Kueker, A Buzz Property Management Jack Foster, Rocky Mountain Fire Specialist Robin Boddy, Weidner Apartment Homes Lauriza Dishion, Weidner Apartment Homes Vic Sulzer, Tschetter Hamerick Sulzer PC Rick Cordova, Arlun, Inc. Sandy Thrash, Mesa Ridge Apartments Becky Deeter, Bella Springs Matt Pacheco, Arlun, Inc. Hannah Delagardelle, Cheyenne Mountain Resort Joslin Hobart, Riverstone Residential Group Cycely McMillan, Dove Tree Apartments Kris Goraczkowski, Alternative Resurfacing

By Robert Carr, Weidner Apartment Homes

By UCCS

Selling Yourself is Most Important

By Terri Norvell

The Financial Impact of Health Care Reform

By Andry Gibbs, Peliton

AIMS Update

By National Apartment Association

How To Manage A Difficult Property Management Employee

By Ernest F. Oriente, The Coach

43rd Education Conference & Expo with Maintenance Mania RECAP

By Channing Brooks, AASC

Ask the Lawyer: What To Do With Unclaimed Security Deposits

27

Droughts Persist in Colorado

28

Apartment Industry and Residents Contributed $1.1 Trillion to the Economy

2012-2013 BOARD OF DIRECTORS

SPRING EDITION 2013

29

By Mark N. Tschetter, Tschetter Hamrick Sulzer PC

By Colorado Springs Utilities

By NMHC

Apartment Rents Climb to Another Record High in Springs

30

Connect With NAA

By Rich Laden, The Gazette

By Alexandra Jackiw, NAA

FACEBOOK TWITTER

www.facebook.com/aasc1970 www.twitter.com/AASChq 900 Likes 67 Followers

LINKEDIN www.linkedin.com/in/aasc1970 909 Connections

2012-2013 COMMITTEE CHAIRS Developing Professionals Network: Hannah Delagardelle, Cheyenne Mountain Resort; Robin Boddy, Weidner Apartment Homes Expo/Maintenance Mania: Kris Goraczkowski, Alternative Resurfacing; Keith Pierce, Reconstruction Experts Inc. Fun-Raising: Amanda Hoffmann, All Around Maintenance; Sandy Thrash, Mesa Ridge Apartments Education: Dianne Diaz-Guerrero, The Retreat at Austin Bluffs Golf: Rick Cordova, Arlun, Inc. & Jack Foster, Rocky Mountain Fire Specialist Legislative Action Committee: Robert Carr, Weidner Apartment Homes; Ken Greene, Apartment Realty Advisors Meetings: Sheridan Carter, Terra Vista Properties Supplier Council: Jack Foster, Rocky Mountain Fire Specialist Spring Edition | 2013

Calendar of Upcoming Events

Meet the Management Thursday, April 11, 2013 Featuring Riverstone Residential Group 4:00 - 6:00pm

Murder Mystery Dinner Wednesday, April 24, 2013 1920’s Speakeasy Chicago-style 5:30 - 9:00pm

Where: The Peaks at Woodmen Apts.

6750 Alpine Currant View

Colorado Springs, CO 80918

FREE Event to Supplier Members

Where: The Phantom Canyon Brewery Tickets - $35 per person 2 E. Pikes Peak Avenue

Colorado Springs, CO 80903

Legislative Update Thursday, May 23, 2013

AASC’s Quarterly Luncheon 11:30 - 1:30pm

Where: The Antlers Hilton Hotel Members - $35 | Non-members - $52.50

4 S. Cascade Avenue

Colorado Springs, CO 80903

2013 Installation & Peak Awards

Thursday, June 6, 2013

Annual Golf Tournament

Friday, June 28, 2013

Where: The Double Tree Hotel 6:00 - 9:00pm 1775 Cheyenne Mtn. Blvd. Members - $50 | Non-members $75

Colorado Springs, CO 80906

Where: Cheyenne Shadows Golf Club 7:30am - 4:30pm 7800 Titus Blvd. Golfer - $125 | Foursome - $500

Fort Carson, CO 80913

E!!!

SAAVVE DA VEE TTH HEE D DAATTE TE SSA The Arlun Golf Classic 2013

Presented By

T T T S S

Friday, June 28, 2012 At Cheyenne Shadows Golf Club 7800 Titus Blvd., Fort Carson, CO 80913

Check-in at 6:45am Shotgun at 7:30am $125 per Golfer $500 per Foursome

CONNECTIONS MAGAZINE

SPRING EDITION 2013

President’s Message

I scraped ice off my windshield this

morning and turned the AC on this after noon. It must be springtime in Colorado!

Am I the only one who struggles with the

concept of layering and business attire? It does feel good to see the days lengthening allowing us to make it home before dark now and then. Soon we will see flowers start to bloom and leaves begin to bud but I have noticed a lot of other things growing out of the ground lately. The new multi-family construction around town is exciting, and at the same time, a little a nerve-wracking. It is exciting to add these beautiful new properties to the housing stock in our city and to showcase the best in apartment home living. It is exciting to see people at work in construction and to see neighborhoods fill in with quality housing.

Will our market absorb all these wonderful new apartments? So far it looks like it will, if we can just keep the specter of sequestration and base realignment at bay!

to get involved with the Apartment Association. There are great education classes going on now including classes on the new Legal Handbook, a must for all communities and managers. CAM and NALP classes have recently wrapped up releasing a new crop of smarter, better educated and more capable professionals back to their properties. CPO classes are just around the corner, a sure sign that summer is close at hand.

So far it has been a surprisingly quiet year in regards to legislation that could negatively affect our industry. Apparently our public servants at the State House are too busy trying to figure out guns and marijuana. Hopefully this keeps them occupied a while longer.

I hope you all have a wonderful and productive season. Hopefully we don’t have too many of those days that start in shorts and end in ski gear.

As we head into spring and summer there are many opportunities

There are plenty of opportunities for fun as well. A new murder mystery dinner is coming your way in April. I am guessing Professor Plum in the kitchen with the candlestick. June promises to be a great month with the Installation Banquet and Peak Awards on the 6th followed by the Arlun Golf Tournament on the 28th. The Association is also putting together a group to ride the Starlight Spectacular again this year. This year’s night-time ride through Garden of the Gods and the streets of Colorado Springs is June 15th.

Thank you,

Robert Carr, President of AASC

The Apartment Association of Southern Colorado

Installation & Peak Awards Banquet Thursday, June 6, 2013

Nominate outstanding professionals for the 2013 Peak Awards.

Until April 19, 2013. Go to www.aaschq.org and click the Peak Awards event banner.

Presented By

6

Update on the El Paso County Economy The local economy continued its growth trend that resumed in the summer of 2011 after bottoming in February 2009. The Business Conditions Index (BCI) stands at 111.93, up 8.3 percent from November 2011. The best performing indicators were new single family permits (up 26.1%), consumer sentiment (up 29.8%) and new vehicle sales. Sales tax collections in Colorado Springs were 8.9% higher than a year ago.

High sales tax revenues reflect This reflects an improved consumer sentiment, higher use taxes on residential construction and expanding retail sales patterns, especially the purchase of new vehicles.

The Business Conditions Index (BCI) is a geometric index of ten seasonally adjusted data series. The El Paso County data are single family and town home permits, new car sales, employment rate, foreclosures, QCEW employment and QCEW wages and salaries. Colorado Springs data are sales and use tax collections and airport enplanements. University of Michigan’s Consumer Sentiment and the Federal Reserve Bank of Kansas City Manufacturing Index are non-local indicators in the BCI. The BCI is in-dexed to December 2007—June 2009 = 100. All raw series are seasonally adjusted by UCCS Southern Colorado Economic Forum using the Department of Commerce X12 adjustment process.

Multi-family Market The market for multi-family housing continues to tighten. The Forum estimated the December 2012 vacancy rate at 6.3 percent (6.7% in December 2011) and apartment rents at $785 ($777 in December 2011). Recent and planned multifamily permit activity will alleviate some of the pressure on this market. However, it is not expected to offset the increase of troops at Fort Carson who will be at the base rather then being deployed in the middle east. The market for multi-family housing is expected to remain tight through 2013.

A large unknown about multi-family housing in 2013 is the effect federal budget cuts will have on the number of active military stationed at the region’s bases. The Department of Defense examined a scenario in which troop levels at Fort Carson might be reduced by 8,000. Some cuts can be expected. If cuts do occur, they may take place over several years.

Alternatively, Fort Carson might see an increase of 3,000 troops as part of the sequestration process. This scenario was also considered by the Department of Defense. If this happens, the market for multi-family housing will tighten in 2013 and 2014. www.aaschq.org

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8

Selling Yourself is Most Important

By Terri Norvell

Selling yourself actually happens through your daily words and actions So, it’s essential to routinely put your best self forward.

2. Be trustworthy. Trust within yourself to do the right thing and do what you say you will do.

3. Ask for what you want. In selling, if you don’t ask the answer is always no.

Steve called me on a Thursday afternoon in December after a disheartening conversation with Ali. He shared that Ali has been with his property management company for five years and does the work of three people. She’s the go-to person for policies and procedures. So when Steve needed a new executive assistant Ali wanted the position and Steve had to let her know why she couldn’t be promoted.

Ali’s frustration with the property managers had reached an all time high. As she shared, ‘I need to be more patient, more understanding and not so quick to become aggravated.’ Bottom line, her interaction skills had reached an all time low.

The truth is we no longer live in a transaction world (as if we ever did) where being a good technician in your job is good enough. In our transparent world of ‘social‘ it’s how you relate and connect with others that’s now essential.

Whether you are in leasing, sales, service, management or leadership, at some point it’s your interpersonal skills that determine how far your career goes.

It’s easy to see this in leasing or sales. People really do rent from people they like. I love it when leasing consultants tell me, ‘I didn’t even have what the couple came in wanting and they rented anyway!’ Why? The first ‘sell’ is you. They liked you and trusted you in making their $12,000 decision.

Let’s say you are like Ali and looking forward to that pending promotion. Have you ‘sold’ yourself through your daily can-do attitude, your resourcefulness and responsiveness in your job and with others? Does your manager like you? Have you proven yourself to be trustworthy?

As Daniel Pink shares in To Sell is Human - The Surprising Truth About Moving Others, ‘It’s no longer caveat emptor, buyer beware. We’ve shifted to caveat venditor, seller beware - where honesty, fairness and transparency are often the only viable path.’

If people like you, don’t feel threatened, believe you are listening and care about them, you are indeed doing well at ‘selling yourself’ and earning their buying decision. So here are your actionable selling keys:

1. Be likable. Connect genuinely, find commonality and be helpful.

www.aaschq.org

What if you ask for the lease or the promotion and the answer is ‘no’? There’s a good chance the ‘no’ simply means not now or more information is needed or a change needs to happen first.

Good information to have so you know how to proceed.

In Ali’s case the answer was not now. Ali and I had only three coaching calls - and she was well on her way to regaining the property manager’s trust. Her salability shifted fast.

How about you? Whatever it is that you want more of right now - to increase your income and bonus potential perhaps? Have more fulfilling work? More personal and professional satisfaction? The opportunities are in your hands. Ensure your salability on a daily basis by being your best self.

Terri Norvell is a top multifamily consultant, trainer and performance coach. She assists managers, leasing consultants and service teams to excel with hair-on-fire success in their positions. Reach Terri at terri@TerriNorvell.com or 303-439-0077.

719.576.4939

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10

The Financial Impact of Health Care Reform

By Andrew Gibbs, Peliton

The Affordable Care Act contains a number of fees and taxes and benefit requirements that will affect the cost of health care for employers during the next several years. While the exact cost may differ for each employer based on location and plan design offered, on average employers are expected to see a substantial increase in costs.

All size groups will go through significant changes and adjustments in 2014 including the individual market:

■ Remove all pre-existing exclusions from their plans

This will be done for all members not just those under

age 19.

■ Out of Pocket (OOP) limits must comply with OOP

limits for HSA plans.

■ All cost sharing (including co-pays) must count

toward out of pocket maximum.

In addition, large group employers (over 50 Full Time equivalents) must provide full-time and their dependents with minimum essential coverage to avoid paying a shared responsibility payment (i.e. tax penalty). Minimum essential coverage must:

■ Be affordable (employee contribution must not exceed

9.5% of employee’s household income).

■ Provide minimum value (employer pays more than

60% of covered plan expenses)

The following are just a few of the pricing impacts incorporated in the 2014 requirements:

■ Expanded Benefits

■ Rating Changes

■ Industry Taxes/Assessments

■ Medical Loss Ratio (MLR) performance targets and

the readiness to meet federal reporting as well as

notice and rebate payment obligations

■ Regulatory Rate Filings

■ Taxes and Fees

■ The penalty amount is equal to $2,000 annually for each full time employee, (FTE- 30+ hours) minus the first 30 employees. Employers that offer coverage, but whose employees receive a tax credit (subsidized coverage from the exchange) will be subject to a fine of the lesser of $3,000 for each employee receiving the credit or $2,000 for each FTE. The employers will be required to report to the federal government on health coverage they provide.

Consumers of both group and individual buyers will face substantial price increases, further pressuring the system.

The individual health insurance and small group market (less than 50 employees) will go through some drastic benefit and rating adjustments in 2014 including:

■ Required to add the Essential Health Benefits (EHB)

which includes oral and vision care for children.

■ Specific actuarially values for certain plan designs and

all small group benefit plans will have a maximum

deductible of $2,000 for individual and $4,000 for

family.

■ The rating changes for small group will add to the

increase by limiting the rating methodology to age,

plan design, geography and tobacco usage.

■ The rates may not include adjustments for gender,

health status or industry.

• If a small group today is in a discounted

industry classification and/or has healthy

people enrolled in their group then they

could be penalized in 2014 for those positive

factors www.aaschq.org

The healthcare reform law defines a large employer as employing at least 50 full time equivalent employees in the previous calendar year, for at least 120 days. A full time employee is defined as one who works at least 30 hours per week. Part time employees are also added into this calculation, by adding together the total hours worked by all part time employees and dividing that total by 120.

EXAMPLE: A company employs 40 full time and 60 part time employees (25 hours). The 60 PT employees’ times the 25 hours divided by 120 equal 12.5 full time equivalents. So, now the employer has 52.5 full time equivalent employees.

11 The tax and fees that will be applied to the employer groups could be substantial as well and could be different whether a group is fully insured or self – funded. There are three fee categories that a fully insured group (any size) may face in 2014. There could be a “Research Fee”, an “Insurer Fee” and a “Transitional Reinsurance Fee”. These fees are estimated at $15 - $16 per member per month.

EXAMPLE: A group with 100 members in their health plan could see an estimated $18,500 fee per year included in their rates.

However, a group that is self-funded may only realize two fees, the research fee and the reinsurance fee. These two fees are estimated at $6 per member per month. So the same 100 member group that is self – funded would only see an estimated $7,200 fee per year compared to $18,500 for fully insured.

All employers will face increased costs. So, are there any alternatives?

One alternative is to entertain the idea of self-funding and based on the groups size and their appetite for risk a company can save money on regulated fees and plan/rating changes.

More employers are moving to self-funded health plans rather than full insurance from a traditional insurer. Companies with relatively young and healthy workers switch to plans where they pay the first few thousand dollars of an employee's health needs out of company funds, then buy stop-loss or catastrophic insurance for major illnesses.

The self-funded plans can be designed to benefit specific types of employees, but they also come with high deductibles and less oversight from state insurance commissions or national reform mandates.

Another alternative especially for the small group employer (less than 50 employees) is to work with a Professional Employer Organization (PEO). Professional Employer Organizations (PEOs) provide human resource services to their small business clients— paying wages and taxes and assuming responsibility and liability for compliance with myriad state and federal laws and regulations.

In addition, PEOs often provide workers with access to 401(k) plans, health, dental and life insurance, dependent care and other benefits not typically provided by small businesses. Between 2 and 3 million people are covered by a PEO arrangement. They enable clients to cost-effectively outsource the management of human resources, employee benefits, payroll and workers' compensation.

This allows the PEO clients to focus on their core competencies to maintain and grow their bottom line.

Some PEO’s offer their health plans on a large group basis so the small group now does not have to adhere to the benefit and rating changes that will affect the small group market in 2014. This could reduce the increased health care cost substantially.

This document is for general information purposes only and there are no warranties regarding its accuracies or completeness.

Spring Edition | 2013

12

March 6, 2013 NAA/NMHC JOINT LEGISLATIVE NEWS HUD Steps Up Focus on Fair Housing with Rule on Disparate Impact, New Mobile App HUD recently issued a final rule implementing the Fair Housing Act’s Discriminatory Effects Standard as of March 15. In addition to establishing uniform standards for determining when a real estate practice or policy violates the act, this final rule effectively codifies HUD’s long-standing position that liability under the Fair Housing Act may be established under the “disparate impact” theory. This is when a business practice or policy statistically demonstrates a discriminatory effect, regardless of whether the discrimination was intentional.

Shortly after finalizing the rule, HUD also announced the rollout of a new housing discrimination mobile application that allows users to learn about fair housing laws and file discrimination complaints.

These developments indicate a stepped-up focus on fair housing issues at HUD as well as a likely ramp up of its enforcement on the issue. Apartment firms should review rental policies and practices for potentially having a disparate effect, especially in the areas of occupancy limitations, resident screening and Section 8 voucher policies.

Violence Against Women Act Reauthorization Includes New Housing Programs, Provisions On Feb. 28, 2013, Congress approved S. 47, a bill to reauthorize the Violence Against www.aaschq.org

Women Act (VAWA). Following the president’s signature, the new law will be effective on Oct. 1.

This reauthorization builds on previous law and expands VAWA’s application to additional housing programs, which now include Section 8 voucher and project-based programs, low-income housing tax credit properties, HOME and a variety of elderly, disabled and rural housing programs.

In addition, the bill improves upon existing law by allowing property owners and managers who receive “conflicting information” about a domestic violence incident to require third-party verification before extending benefits under the act.

The legislation also adds several new provisions of concern to housing providers. It establishes a new emergency transfer provision, requiring the relevant federal agencies to adopt a model emergency transfer plan that housing providers would use to move residents involved in domestic violence incidents. It also adds new notification provisions requiring additional disclosures at resident application, move in and termination. However, ambiguity in the statutory language will require significant interpretation on behalf of each federal agency administering the VAWA programs.

Sequester’s Cuts Set to Affect Affordable Housing Programs The federal spending cuts known as the sequester took effect last Friday. While the full ramifications of the sequester on the multifamily industry are unknown at this point, a number of government-administered affordable housing programs will be affected in the near term.

The Office of Management and Budget estimated budget cuts for a handful of accounts of interest to the multifamily industry, although how the reductions will be implemented at a programmatic level currently is unclear. It is possible that funds available for rental assistance could be reduced, affecting select contract renewals as well as families currently wait listed for rental assistance.

Accounts listed for cuts under the sequester include: • Tenant-Based Section 8 Rental Assistance will have $1.5 billion cut from a total budget of $18.9 billion • Project-Based Section 8 Rental Assistance will have $772 million cut from a total budget of $9.3 billion • Community Development Fund will have $279 million cut from a total budget of $3.4 billion • HOME Investment Partnership will have $82 million cut from a total budget of $1.0 billion • Rural Housing Services Rental Assistance Program will have $74 million cut from a total budget of $905 million However, certain government-backed loan guarantee and insurance programs are shielded from sequestration.

FHA Issues New Guidelines for Radon Gas Testing at Insured Properties HUD recently issued a mortgage letter (ML 2013-07) to approved mortgage lend-

13 ers amending the previous environmental review requirements for the assessment and remediation of radon gas at FHAinsured apartment properties. FHA will now require radon testing of 25 percent of ground-level units; if the testing finds levels in excess of the action level, remediation is required. The changes will affect all preapplication and firm commitment packages submitted after June 1.

FHA to Soon Exhaust Multifamily Mortgage Insurance Program Authority The Federal Housing Administration (FHA) issued a letter on March 1 notifying the industry that, based on current demand levels, it expects to run out of insurance authority for its multifamily and health care mortgage insurance programs by March 27. This shortfall will temporarily delay the closing of loans currently in the pipeline and require FHA to triage loans receiving commitments going forward.

FHA’s authority issue is a result of Congress’ inability to address the remainder of the budget for its 2013 fiscal year, which ends on Sept. 30.

Although FHA will honor all firm commitments already issued through final endorsement and closing, it will have to suspend actions on some portion of applications.

This would result in a temporary delay in application processing until Congress deals with the current budget issue.

In addition, FHA plans to prioritize the mortgage applications that will receive firm commitments for mortgage insurance prior to March 27, giving precedence to loans for affordable housing projects and projects in areas affected by Hurricane Sandy.

Fannie Mae and Freddie Mac to Reduce Multifamily Lending Volume On Monday, the Federal Housing Finance Agency (FHFA) published a 2013 strategic plan for Fannie Mae and Freddie Mac. The three-part plan outlined the creation of a single platform between the two organizations for securitizing single-family loans.

While the GSEs’ multifamily businesses are unaffected by the significant change, several

additional provisions in the plan are of concern to the industry because oftheir effect on the availability of credit in the multifamily market.

More specifically, the plan called on Fannie and Freddie for a minimum 10 percent reduction in the unpaid principal balance amount of their new multifamily business.

Under the new directive, Fannie and Freddie’s combined multifamily lending would be reduced to $56.9 billion from $63.3 billion in 2012.

The FHFA stated that the reductions should be achieved through a combination of tighter underwriting, upward pricing adjustments and decreased product offerings.

NAA/NMHC issued a statement objecting to the arbitrary volume caps and possible product restrictions, stressing that, while we support a return to system dominated by private capital, it should be achieved through market-based mechanisms and not price controls. We also note that such a return is already happening without this latest FHFA action, as the GSE multifamily market share has been reduced from 90 percent during the crisis to 45 percent in 2012.

IRS Suspends Select Requirements in Areas Affected by Hurricane Sandy The Internal Revenue Service (IRS) on Feb. 6, announced it would suspend certain requirements, including those pertaining to incomes, for residential rental projects financed with exempt facility bonds in an effort to provide housing for those affected by Hurricane Sandy. Relief is available through Nov. 30.

In related action, the IRS also suspended certain Low-Income Housing Tax Credit requirements in areas impacted by Hurricane Sandy. Specifically, the IRS will allow state housing agencies to suspend otherwise applicable income limitations and non-transient requirements to allow owners of low-income housing to temporarily provide vacant units to displaced storm victims. Rent restrictions will continue to apply to such units.

NAA/NMHC Release 2013 Joint Legislative Priorities Last week, NAA/NMHC released the apartment industry’s 2013 policy agenda, Apartments Work: A Policymaker’s Guide to Apartments. Top priorities for Congress this year include fixing the country’s housing finance system, creating tax code certainty and comprehensive immigration reform. View the industry’s full 2013 priorities.

Two Dozen-Plus Media Outlets Cover Launch of New Advocacy Website NAA/NMHC’s new campaign website www.WeAreApartments.org launched with a high level of success, earning coverage in more than two dozen national and local media outlets to date.

The site, launched in conjunction with the release of a landmark report, The Trillion Dollar Apartment Industry, teaches visitors about the economic contribution, both in terms of dollars and jobs, of the apartment industry and its 35 million residents.

Tools include an interactive map that shows apartments’ economic impact for all 50 states and 12 select metro areas as well as an online calculator that estimates economic impact by unit count for both new and existing apartment communities.

To learn more about legislative efforts and how you can help, visit www.NAAHQ.org A great way to show your support is by joining us for AASC’s NAA/CAA PAC (Political Action Committee) Fundraiser, Wine Tasting Around World coming soon, July 2013.

Spring Edition | 2013

14

How To Manage A Difficult Property Management Employee! ©

by Ernest F. Oriente, The Coach

Having to manage a difficult employee is

never fun and can be the most challenging part of your responsibilities as a property management professional. While never easy, this article will address a step-by-step way to consistently and confidently handle the most challenging employee situations.

In addition, how you handle a difficult employee will send a strong and powerful message to those who still work for your property management company.

Addressing the problem: When you first realize you are having a problem with one of the members of your property management team, bring this individual behind closed doors and discuss your specific concerns. The conversation should be brief and to the point, making certain your employee understands the concerns you have and the improvements you expect. Be specific with your comments and only address the business concerns you have, setting aside any personal issues. Of course, always look to support this member of your team in any way possible with the intention of a positive outcome.

Tip From The Coach: As this is the first meeting you are having with your employee to discuss your concerns, take notes during this meeting, record the date on your notes, and place them into this person’s employee file. This will serve as a reminder of the problems you expressed during this meeting and will document the first time you asked this employee to specifically improve their performance.

This first meeting is also the perfect time to review together this person’s written job description as another way to clarify your expectations.

Continuing problems: If similar problems persist with this same employee, bring this individual again behind closed doors and present a written memo recapping your concerns. In this memo, list the day/date of your first meeting when you discussed your initial problems with this individual’s performance and list the specific areas of improvement, which must happen.

Remember, when you are requesting improved performance, the improvements must be measurable and must have a time www.aaschq.org

frame or date when these improvements will be measured and reviewed again.

Tip From The Coach: After you present your written memo outlining your concerns, have your employee sign and date this document which validates the points discussed during this meeting. In your memo, be certain to include the words, “failure to improve your performance, may lead to termination.”

of being in property management. On a positive note, take the time to analyze what went wrong and look for possible solutions. Ask yourself, “was this person the perfect fit for the position, did we give this person proper training, could I have done anything to change the course of this situation?” In asking these questions, sometimes very positive improvements can be made. Employee terminations and the investment to hire a new person, is

“Was this person

the perfect fit for the position, did we give this person proper training, could I have done anything to change the course of this situation?”

This makes your intentions perfectly clear.

Of course, always consult with your immediate supervisor, your human resource department and your legal counsel, prior to presenting your memo, so everyone is in the loop.

Terminating this employee: If necessary, termination of this employee may be required. If so, make the termination, swiftly. This person’s attitude can be detrimental to the morale of your property management team and their attitude might be affecting those around them. A termination meeting should be done at the end of the day so this person’s departure will not disrupt others. Lastly, make certain this termination meeting is brief, state exactly why this person is being terminated and have all final paperwork ready for signature.

Tip From The Coach: Sadly, the termination of an employee is not a pleasant part

expensive and should not be taken lightly.

Want to ask some additional questions about how to handle a difficult employee?

Send an E-mail to ernest@powerhour.com and The Coach will E-mail you a free PowerHour invitation.

Author’s note: Ernest F. Oriente, a business coach since 1995 [29,900 hours], a property management industry professional since 1988-the author of SmartMatch Alliances--and the founder of PowerHour...[ www.powerhour.com and www.powerhourseo.com and www.pirmg. com ], has a passion for coaching his clients on executive leadership, hiring and motivating property management SuperStars, traditional and Internet SEO/SEM marketing, competitive sales strategies, and high leverage alliances for property management teams and their leaders.

To subscribe to his free property management newsletter go to: www.powerhour.com. PowerHour® is based in Olympic-town…Park City, Utah, at 435-615-8486, by E-mail ernest@powerhour.com or visit their website: www.powerhour.com.

15

People On The Move As anyone in the Apartment Industry knows, “things are always changing”. Properties switch management companies, people switch properties, and people are being promoted and moving themselves. Here, we let you know who is doing what, and where they’re going. In the world of apartments we value relationships and understand their key role within the industry.

ForRent Media Solutions

Griffis Blessing

Please join me in welcoming Sara MinnickLujan to the Denver For Rent Media Solutions team! Sara has been with For Rent for 4+ years and brings great experience and enthusiasm.

She is originally from San Diego and is an avid outdoor enthusiast enjoying snowboarding, cycling and was even a semi-pro Rugby player! Sara enjoys spending time with her 2 children and recently celebrated her 10th wedding anniversary! Welcome Sara!

Brenda Gordon, formerly of Griffis Blessing, has rejoined the company as the manager of the Hills Apartments.

Please join me in welcoming back, Tammy Salamonik to our Colorado Springs For Rent Media Solutions! Tammy was with us just a short 2 years ago and brings back great knowledge and excitement to the market. Tammy is originally from Wyoming and was part of the Peace Core in Poland where she met her husband! She enjoys the outdoors and lives in the mountains of Monument! Welcome Tammy!

Balfour Beatty Communities Alexis Camargo departed Fort Carson in September 2012 and was promoted to Community Manager overseeing Hunter Army Airfield in Savannah, Georgia.

We have promoted Aymesha Lincoln from Resident Specialist to Assistant Neighborhood Manager.

Adriana Burke joined us late November as a Neighborhood Manager- she has worked for our company for 3 years at Fort Bliss as a Resident Specialist and Assistant Neighborhood Manager and at Lackland AFB as a Resident Specialist.

Diana Cheyney joined us as our third Neighborhood Manager late February, having come from the conventional market.

Abuzz Property Management

JR Weldon, was hired as the Service Manager of Mesa Ridge Apartments, the new apartment community in Fountain, CO. Kelly Baines, Griffis Blessing, Assistant Portfolio Manager and Software Specialist, received the Rose Award for GB at the Annual KickOff. This is the top award for employees at GB. Mike Poole, Service Manager, formerly of Homewood Apartments, joined GB in Q1-2013.

Griffis Blessing was awarded management of the Esperanza Village Apartments (110 units) in Colorado Springs.

Mesa Ridge Apartments, Fountain, CO, opened February 1st and is one-third leased as of March 15th.

Griffis Blessing added three properties to the Denver portfolio this quarter: Willow Run Village, Newport Village in Broomfield and The Flats at Creekside Park, Arvada for a total of 580 units.

Jennifer Kraft was promoted to the Property Manager at Copper Chase Apartments.

Amy Childers was promoted to the Assistant Manager at Dove Tree Apartments.

Weidner Apartment Homes Jeremy Mooney has been promoted to Area Manager. Jeremy will oversee his own property of Canyon Ranch and also the operations of Featherstone and Bristol Square.

Jeremy has been with Weidner for 10 years.

Dustin Halcomb was recently promoted to Regional Maintenance Supervisor for Weidner.

Dustin oversees the maintenance operations of our Colorado Portfolio of 23 communities and 4300 units.

Marquita Braun has joined Abuzz Property Management as an Assistant Manager!

Spring Edition | 2013

43rd

ANNUAL

EDUCATION CONFERENCE & EXPO

& MAINTENANCE MANIA

This year’s Expo was held on Feburary 13th at the Freedom Financial Services and Expo Center. Altogether there were 72 Exhibitors and each of them displayed their brand personality in their booth.

Nationally reknowned speakers Kate Good and Mark Cukro led engaging seminars pertaining to every type of apartment industry professional; so engaging that we were running out of seats! Buffalo Gals catered lunch and Know One In Particular improv group engaged the entire group in a series of comedy games.

The unique thing about this year’s Expo is that it included Maintenance Mania for the first time. Starting at 6:00am, maintenance workers were hungry to compete in the Maintenance Mania games.

The games included Fire & Carbon Monoxide Safety Installation, Key Control Deadbolt Test, Lamp and Ballast Retrofit, Faucet Installation, Blinds Installation, Duo Flush Toilet Conversion, and Icemaker Installation.

www.aaschq.org

Here are the results of the 2013 Maintenance Mania Games: Fire & Carbon Monoxide Safety Installation: Third Place: Brendt Dzurik, 0:11.30 - Courtyard Estates, Orris Family LLC; Second Place: Joshua Durow, 0:11.19 - The Vineyards, Echelon Property Group; First Place: Josh Hayes, 0:10.25 - Vistas at Jackson Creek, Riverstone Residential Group

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13 2013 FEBRUARY

Key Control Deadbolt Test: Third Place: Joshua Durow, 0:18.77 - Vineyards, Echelon Property Group; Second Place: Klint Stagner, 0:17.31 - Tierra Vista, Winn Residential; First Place: Adam Vetter, 0:16.37 - Courtyard Estates, Orris Family LLC Lamp and Ballast Retrofit: Third Place: Josh Hayes, 0:30.86 Vistas at Jackson Creek, Riverstone Residential Group; Second Place: Klint Stagner, 0:30.83 - Tierra Vista, Winn Residential; First Place: Jame Feil, 0:27.08 - Sunflower Management, LLC Racecar Derby Challenge: Third Place: Chris Helvie, 0:05.217 - Bellaire Ranch Apartments, Echelon Property Group; Second Place: Brendt Dzurik, 0:05.214 - Courtyard Estates, Orris Family LLC; First Place: Seth Barkley, 0:05.178 - Grand River Canyon, Griffis Residential

Faucet Installation: Third Place: Adam Vetter, 0:16.80 - Courtyard Estates, Orris Family LLC; Second Place: Joshua Durow, 0:16.55 - The Vineyards, Echelon Property Group; First Place: Klint Stager, 0:14.50 - Tierra Vista, Winn Residential Blinds Installation: Third Place: Will Jenson, 0:14.06 - Grand River Canyon, Griffis Residential; Second Place: Josh Hayes, 0:14.03 - Vistas at Jackson Creek, Riverstone Residential Group; First Place: Klint Stagner, 0:11.27 - Tierra Vista, Winn Residential

Spring Edition | 2013

18

Duo Flush Toilet Conversion: Third Place: George Silvernagle, 0:31.96 - Tierra Vista, Winn Residential; Second Place: Adam Vetter, 0:26.94 - Courtyard Estates, Orris Family LLC; First Place: Klint Stagner, 0.20.75 - Tierra Vista, Winn Residential

People’s Choice - Best Use of Maintenance Supplies: Third Place: Dan Pramberg - Balfour Beatty; Second Place: Richard Reyer - Featherstone; First Place: Arzanda Washington - The Willows at Printers Park

Icemaker Installation: Third Place: George Silvernagle, 0:11.11 - Tierra Vista, Winn Residential; Second Place: Joshua Durow, 0:10.53 - The Vineyards, Echelon Property Group; First Place: Brendt Dzurik, 0:10.53 - Courtyard Estates, Orris Family LLC

Region 8 - National Qualifying Winners: Third Place: Daniel Wells, 2:45.907 - Village East Apartments Second Place: Josh Hayes, 2:28.325 - Vistas at Jackson Creek, Riverstone Residential Group; First Place: Klint Stagner, 2:06.693 - Tierra Vista, Winn Residential

People’s Choice - Best Car: Third Place: Matt Rich - Grand River Canyon, Griffis Residential; Second Place: Dan Pramberg - Balfour Beatty; First Place: Bill Raymond - Sage Brook Apartments

www.aaschq.org

Best Overall Team Award: Third Place: Westmeadows; Second Place: L & L; First Place: Tierra Vista, Winn Residential 8:06.424

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Thank You for Sponsoring AASC’s 2013 Education Conference & Exposition With Maintenance Mania!

Spring Edition | 2013

20

AASC Education Calendar Dates Are Subject to Change APRIL 2013 CSU: How Water Restrictions Will Affect You

Wednesday, April 10, 2013 2:30 - 4:00 PM | FREE to Members Join us as CSU discusses the proposed water shortage ordinance, irrigation best practices, requirements and Alternative Water Management Plans!

Evictions & Collections 101

Wednesday, April 17, 2013 9:00 - 12:00 PM | Members - $40.00 | Non-Members $60.00 The class will cover the common mistakes made in filling out and serving notices. It will discuss technical defenses by residents, lease language and notice to comply versus notice to quit. This class will explore the different types of notices and what they mean. This seminar is approved for 3 hours Continuing Education Credits.

Certified Pool Operator (CPO)

Friday, April 26, 2013 & Saturday, April 27, 2013 8:00 - 5:00 PM | Rick Stewart, The Pool Guy, Inc. | Members - $265.00 | Non-Members $397.50 Owners and Managers should consider this certified program for their maintenance staff. As most of you realize, if your property has a pool, risk and liabilities are higher.

One way to minimize those risks is to have a Certified Pool Operator (CPO) in charge of your pool maintenance. Rick Stewart, Certified Instructor of the National Swimming Pool Foundation will be in Colorado Springs to teach this seminar. This intense two-day course has a limited classroom size, so you will want to get your reservation in early.

The cost of this class will include your textbook, exam fees and 5-year certificate.

MAY 2013 Certified Pool Operator (CPO)

Friday, May 10, 2013 & Saturday, May 11, 2013 8: 00 - 5:00 PM | Rick Stewart, The Pool Guy, Inc. - $265.00 | Non-Members $397.50 See description above.

Leasing Bootcamp

Wednesday, May 15, 2013 8:30 AM - 12:30 PM | Sheridan Carter; Terra Vista | Members - $75.00 | Non-Member $112.50 This class is great for both the seasoned leasing consultant and the newly hired leasing consultants. Come prepared to learn and laugh, but keep in mind this popular seminar is guaranteed to sell out very quickly! This 4-hour seminar will cover: Telephone Techniques, Greeting and Qualifying, Marketing and Advertising, Feature vs. Benefit, Safety Policies, The Leasing Notebook, Demonstration and Presentation, Closing and Objections, Fair Housing and how it applies to each phase of the leasing process. This seminar is approved for 4 hours Continuing Education Credits.

IRO Seminar: Rental Housing Update & Statistics

Wednesday, May 15, 2013 5:00 - 7:00 PM | Ryan McMaken, Colorado Division of Housing | FREE to Members Come get information on the demographic trends and statistics for the Southern Colorado Rental Housing Market. AASC welcomes Ryan McMaken, the Director of Communications and the head of economic research at the Colorado Division of Housing.

www.aaschq.org

21

Stay Connected

With AASC Members Alturas at Bell Tower

Kelly Baines 1145 Bell Tower Hts. Colorado Springs, CO 80916 P: 719-418-5976 | F: 719-418-5980 alturas@gb85.com

American Water Damage

Diana Davis 3375 Fillmore Ridge Hts. Colorado Springs, CO 80907 719-452-3000 ddavis@americanwaterdamage.com www.americanwaterdamage.com

Arbor Pointe Apts.

Maryann Gutierrez 2503 Hancock Expy.

Colorado Springs, CO 80910 719-632-7708 www.dunmire.net

Arcadia Dell Apts.

Jennifer Dorsey 3014 N. Arcadia St. Colorado Springs, CO 80907 719-633-5411 www.dunmire.net

Aspire Roofing Contractors

JD Farmer 5445 DTC Parkway, Penthouse 4 Greenwood Village, CO 80111 p: 719-494-9652 | F: 303-953-1945 hisashes@live.com www.aspireroofingcontractors.com

Bethlehem Square Apts.

Kathy Elliott 1900 W. 12th St. Pueblo, CO 81003 P: 719-544-8840 | F: 719-544-6460

Boulder Heights Apts.

2130 Boulder St. Colorado Springs, CO 80909 719-331-6744 www.dunmire.net

CapEx Roofing

Lisa Alvarez 9800 Mt. Pyramid Ct, Ste 400 Englewood, CO 80112 P: 303-351-0065 | F: 877-410-7670 Lisa.alvarez@capexroofing.com www.capexroofing.com

Cheyenne Mountain Resort

Angie Farmer 3225 Broadmoor Valley Rd. Colorado Springs, CO 80906 p: 719-538-4032 | F: 719-538-4072 afarmer@cheyennemountain.com

Columbine Leaf Apts.

3929 E. San Miguel St. Colorado Springs, CO 80909 719-596-3746 www.dunmire.net

Introduce yourselves to these NEW members!

Delta Disaster Services of Southern Colorado

Emmis Chellman 1120 Elkton Dr. Ste. J Colorado Springs, CO 80907 P: 719-599-4200 | F: 719-599-4213 echellman@delta-us.com

Drexel Apts.

3914 N. Academy Blvd.

Colorado Springs, CO 80917 719-597-0033 www.dunmire.net

Esperanza Village Apts.

Gayle Gahagan 158 Coleridge Ave. Colorado Springs, CO 80909 719-574-4135

Fifty Five Plus Apts.

Barbara Brown 825 S. Union Blvd.

Colorado Springs, CO 80910 719-578-0581 www.dunmire.net

Foothills West Apts.

Beate Washington 720 Melany Ln. Colorado Springs, CO 80907 719-578-1414 www.dunmire.net

Fountain Garden Apts.

Shirley Couden 3165 E. Fountain Blvd.

Colorado Springs, CO 80910 719-632-2155 www.dunmire.net

Fountain Springs Apts.

Tina Marie Curtin 4325 Fountain Springs Grove Colorado Springs, CO 80916 P: 719-591-4600 | F: 719-572-5050 managerfountain@foreproperty.com

Frontier Business Products

Infinity Restoration

Derek Lindsey 2103 S. Wadsworth Blvd., Ste. 101 Lakewood, CO 80227 P: 888-855-2331 | F: 888-371-9080 www.infinityroofer.com

Invisible Waste Services

Alyssa Schmitt 5995 S. Bannock St. Littleton, CO 80120 720-841-3247 alyssa.schmitt@invisiblewasteservices.com www.invisiblewasteservices.com

Kevin Ozburn Realty, Inc. Kevin Ozburn 205-b West Rockrimmon Blvd.

Colorado Springs, CO 80919 719-440-1246 kozburn@gmail.com

LandTech Landscape/ Maintenance

Brandy Mahan 525 Laredo St. Aurora, CO 80011 P: 719-471-3199 | F: 719-632-3577 bradym@landtechcontractors.com

Mesa Vista Apts.

2910 Sage St. Colorado Springs, CO 80907 719-634-7034 www.dunmire.net

Mountain Shadows Apts.

1005 Fontmore Rd. Colorado Springs, CO 80904 719-633-5411 www.dunmire.net

Muñoz Interiors, LLC

Octavio Muñoz 3280 S. Academy Blvd., #35 Colorado Springs, CO 80916 719-200-7050 munozinteriors@gmail.com

John Mulvihill 945 E. Fillmore St. Colorado Springs, CO 80907 719-630-8725 jmulvihill@fbponline.com www.fbponline.com

Newport Square Apts.

Fusion Sign & Design

Oakridge Properties, LLC

Jean White 4169 Sinton Rd. Colorado Springs, CO 80907 P: 719-302-3144 | F: 719-571-9414 jean@fusionsign.com

Gallery Apts.

Shelly Kueker 2566 Waldean St. Colorado Springs, CO 80909 719-499-5227 shelly@abuzz-management.com

Steve Cannon 3780 Rebecca Ln. Colorado Springs, CO 80917 719-597-4894 www.dunmire.net

Tim Peterson P.O. Box 2459 Monument, CO 80132 719-375-5340 tim@oakridgepropertiesllc.com

Peak View Homes Realty, LLC Othelia Schultz 2635 Plymouth Dr. Colorado Springs, CO 80916 P: 719-392-1163 | F: 888-414-0472 peakviewhomes@gmail.com

Royalty Manor Apts.

505 Royalty Pl. Fountain, CO 80817 719-382-3424 www.dunmire.net

Santa Fe Apts.

1228 Delaware Dr. Colorado Springs, CO 80909 719-597-3527 www.dunmire.net

Surface Restoration

Dave Barrett 9009 A Sovereign Row Dallas, TX 75247 P: 877-573-6972 | F: 877-207-8578 surfacerestoration@mail.com www.surfacerestoration.net

The Landings Apts.

Shannon Kee 625 Hathaway Dr. Colorado Springs, CO 80915 719-591-6302 www.dunmire.net

The Townhouse Apts.

Terry Durham 3125 E. Fountain Blvd.

Colorado Springs, CO 80910 719-630-1128 www.dunmire.net

The Treehouse Apts.

1567 S. Chelton Rd. Colorado Springs, CO 80910 719-596-0777 www.dunmire.net

Vista Ridge Apts.

Kathy Lobato 420 Royalty Pl., #4 Fountain, CO 80817 719-382-3424 www.dunmire.net

Weber Terrace Apts.

2210 N. Weber St. Colorado Springs, CO 80907 719-634-7034 www.dunmire.net

Wyatt's Towing

Scott Jorgensen 3575 Hartsel Dr. Colorado Springs, CO 80920 P: 303-777-2448 | F: 303-296-0128 scott@wyattstowing.com www.wyattstowing.com

Colorado Springs Winnelson Co.

Keith Hallock 725 Geiger Ct. Colorado Springs, CO 80915 P: 719-573-5503 | F: 719-579-5394 kahallock@winnelson.com www.coloradospringswinnelson.com

Spring Edition | 2013

23

Apartment Industry Response to FHFA’s Regulatory Plan for Fannie Mae and Freddie Mac March 6, 2013, by NMHC

WASHINGTON, D.C. – March 6, 2013 – (RealEstateRama) — Statement from the National Multi Housing Council (NMHC) and National Apartment Association (NAA) Joint Legislative Program by Cindy Chetti, NMHC Senior Vice President of Government Affairs, in response to the Federal Housing Finance Agency (FHFA) 2013 scorecard outlining its regulatory goals for Fannie Mae and Freddie Mac in the current year.

“NMHC/NAA support returning to a more robust private capital market, but we believe that should be achieved through marketdriven solutions and not the arbitrary 10 percent reduction, or more than $6 billion, in multifamily lending volume imposed by the FHFA 2013 scorecard.

“The need for such a volume cap has not been demonstrated. Fannie Mae and Freddie Mac have already reduced their share of the multifamily mortgage market from 90 percent during the peak of the financial crisis to just 45 percent today. But there is no evidence that private capital is willing or able to meet the broad liquidity needs of the apartment industry in all markets and at all times.

“Fannie Mae and Freddie Mac have been a critical backstop to ensuring sufficient liquidity and stability for the apartment industry

– providing capital in markets and for products that haven’t historically attracted private capital. Importantly, the very successful multifamily programs of Fannie Mae and Freddie Mac were not part of the meltdown and have actually generated more than $10 billion in net profits to the government since conservatorship.

“That backstop has been critical to our industry’s ability to meet the growing demand for rental housing. Up to half of all new households formed this decade could be renters, and an artificial limit in multifamily lending by the Government-Sponsored Enterprises will harm our ability to meet that demand.

“We continue to call on lawmakers to take a comprehensive approach to housing finance reform legislation. That reform should also explicitly recognize the unique needs of the multifamily sector to avoid disastrous consequences for the nation’s supply of workforce housing.” ***

For more than 20 years, the National Apartment Association (NAA) and the National Multi Housing Council (NMHC) have partnered on behalf of America’s apartment industry. To learn more about apartments, visit www.weareapartments. org. For more information, contact: NMHC at (202) 974-2300 or or www.nmhc. org. NAA at (703) 797-0616 or or www.naahq.org/governmentaffairs.

A Murder Mystery Dinner April 24, 2013 Registration: 5:30 | Show : 6:00-9:00pm

AT The Phantom Canyon Brewery 2 E Pikes Peak Ave. | Colorado Springs, CO 80903

Tickets - $35 | Open to the Public!

Who did it?

Set in a 1920’s, It’s a Chicago-style Speakeasy Theme!

Come dressed-up!

Spring Edition | 2013

24

ASK

YER W A L THE WHAT TO DO WITH UNCLAIMED SECURITY DEPOSITS

By Mark N. Tschetter, Senior Managing Partner, Tschetter Hamrick Sulzer PC

Most landlords are familiar with the re-

quirements of the Colorado Security Deposit Act (the “SDA”). However, many landlords don’t know that their legal responsibility for security deposits may continue after a security deposit refund is completed. In addition to the SDA and Colorado Real Estate Commission Rules (“commission rules”), a landlord’s liability for security deposits is governed by the Colorado Unclaimed Property Act (the “UPA”). The UPA kicks in when a security deposit refund check is either returned or not cashed, and remains “unclaimed”. The UPA requires landlords to track unclaimed security deposit refunds for five years, to file reports regarding unclaimed security deposits, and to ultimately turn all unclaimed security deposits over to the state of Colorado.

Under the UPA, property is presumed to be abandoned after five years. Security Deposits are defined as intangible property under the UPA, and are subject to the UPA’s requirements. Under the UPA, unless subject to an exception, all unclaimed Security Deposits must be turned over. Given the complexity of almost all of the exceptions and the unlikelihood of them applying to a landlord, landlords should comply with the UPA rather than attempting to fall under an exception. However, the small business exception is straightforward and will be applicable to some landlords. If a landlord’s business has less than $500,000 in annual gross receipts, the landlord is not required to file UPA reports until the aggregate value of the unclaimed property that the landlord holds exceeds $3,500.

Key terms under the UPA include “holder”, “apparent owner”, and “last known address”. Holder is defined as a person in possession of property that belongs to another. When it comes to security deposits, a holder can be a management company or an owner. As discussed later, management companies do not want to be holders to avoid being subject to the UPA. Apparent owner means the person whose name appears on the records of the holder (landlord) as the person entitled to property held, issued, or owing by the holder.

Under the UPA, if you hold unclaimed secuwww.aaschq.org

rity deposits of tenants, the tenants are the apparent owners. “Last-known address” means a description of the location of the apparent owner sufficient for the purpose of the delivery of mail.

Under the UPA, a landlord is responsible for turning over unclaimed security deposits, retaining records, making efforts to return the unclaimed security deposits to the owners, and reporting. Landlords must turn over unclaimed security deposits at the time a landlord files a report. Because security deposits are maintained as cash, turning over means writing a check to the state of Colorado. Landlords are allowed to deduct from unclaimed deposits on an individual basis two percent of the deposit or twenty-five dollars whichever is less.

Under the UPA, landlords must retain copies of reports and supporting financial records for five (5) years after the property becomes reportable. A landlord’s records must indicate the date of last activity or contact with the owners of property (tenants), as well as the last known address, if available. Under Real Estate Commission rules, Brokers are required to keep records for four years. Given these two requirements, landlords will need to maintain appropriate records for unclaimed security deposits up to ten years.

Under the UPA, a landlord must make efforts to return unclaimed security deposits to tenants prior to turning over to the state and reporting. This requirement is known as the “due diligence” requirement.

To meet the due diligence requirement, landlords must send written notice to a tenant with an unclaimed security deposit not more than one hundred and twenty days (120) days prior to reporting. Because reports are due on November 1st of any given year, landlords are required to send the statutory required notice on or after July 4th of any given year. If you report annually, you should calendar sending out required notice every year after July 4th.

You should also calendar that reports are due on or before November 1 of each year.

You are only required to send written notice if you have no information that a tenant’s last known address is inaccurate, the tenant’s claim to the security deposit is not barred by the statute of limitations, and the security deposit is fifty dollars or greater. If the tenant’s SODA and refund check was returned as undeliverable, you do not have to send the written notice because you have information showing the tenant’s last known address is inaccurate.

When a landlord receives information indicating an address is inaccurate, this information should be added to a spreadsheet or database as discussed later on in best practices. The statute of limitations for a tenant to file a security deposit claim is six years or one year greater than the five-year turn over requirement under the UPA. While theoretically possible based on reporting deadlines, it is not very likely that a tenant’s claim will be barred by the statute of limitations at the time a landlord is required to report and turn over an unclaimed security deposit. Thus, landlords shouldn’t take the position that they don’t have to send the required written notice because the tenant’s claim is barred by the statute of limitations.

The most onerous UPA requirement is reporting. Landlords are required to report if they hold unclaimed security deposits, unless they meet the small business exception. Reports are due on or before November 1st of any given year, for the previous reporting period. A reporting period runs from July 1st to June 30th. Thus, a landlord must report on or after July 1st but before November 1st any security deposit that was abandoned in the proceeding July 1 to June 30th period. To establish applicable dates and calculations, we recommend using the SODA date. For example, a tenant’s SODA is prepared April 30, 2007. The SODA and refund are returned as undeliverable. Under the UPA, the security deposit is considered abandoned on April 30, 2012, or five years after the SODA. April 30, 2012 is in the July 1, 2011 to June 30, 2012 reporting period. This unclaimed security deposit would have to be reported by November 1, 2012.

25 To report, Landlords will have to complete both Form A and Form B. Form A collects information about the “holder”.

Form B collects information about the unclaimed property. For detailed reporting requirements visit http://www.colorado. gov/treasury/gcp/generalreportinginfo. html. To accurately complete reports, landlords will need to keep track of tenants with unclaimed security deposits, last known addresses, amount of unclaimed deposits, tenant’s social security numbers or TINs, date of last transaction (SODA date). Landlord’s who in good faith timely file reports are relieved from legal liability for a tenant’s security deposit. Because reporting can be complicated, Colorado provides both website and telephone support to assist landlords in reporting.

Every landlord should know that the penalties for not complying with the UPA are harsh. Under the statute, landlords are liable for eighteen percent interest on the value of all unclaimed property that was not turned over, plus a penalty of twenty five percent of the value of the property not turned over. Additionally, a landlord is subject to a $100 per day penalty for each and every day a landlord willfully fails to report, up to five thousand dollars.

If a landlord has several thousand dollars in unclaimed security deposits, non-compliance could get expensive fast.

Every landlord should develop and adopt a systematic plan to track and report unclaimed security deposits. Step one for management companies and brokers who third party fee manage is to avoid being a holder by diligently complying with the Colorado Security Deposit Act and Real Estate Commission rules for the handling of security deposits. Both the SDA and commission rules require managing agents who are holding security deposits to give tenants written notice, via U.S. first class mail, when a tenant’s security deposit is transferred to a successor management company or to the owner. Upon compliance, a holder of a deposit is relieved from further liability. Complying with the SDA and commission rules also has the major benefit of relieving you of having to comply with the UPA because you are no longer holding the security deposit.

Best practices also require simple and appropriate lease language. Every lease should contain language requiring a tenant to provide both you and the U.S. Post Office with a forwarding address. For example, “prior to vacating, Resident shall provide in writing to Owner and the U.S.

Postal Service each Resident’s individual forwarding or last known address.” You should also incorporate into your vacate forms and procedures, reminders to tenants that they are required to comply with this provision when vacating. When tenants provide forwarding addresses, the amount of “unclaimed security deposits” will be greatly reduced, and thereby significantly decrease your UPA reporting burden.

Finally, best practices dictates the development of a system to track unclaimed security deposits. The system does not need to be complicated. First, download Form B from the state treasurer’s office. Form B is the report you will have to complete if a security deposit remains unclaimed for 5 years. Form B can be downloaded at http://www.colorado.gov/treasury/gcp/ images/FormB.pdf. Use Form B to develop a simple spreadsheet. Enter the column headings from Form B onto your spreadsheet, add any additional columns, and insert some calculation columns, and you have an unclaimed security deposit tracking system. Because your tracking system has all of the information required by Form B, completing the report should be easy. Calculation columns you may want to develop are 5 years from the date of the SODA, the date the due diligence letter needs to be sent, and the date the unclaimed deposit would have to be reported. As discussed above, you may also want to add a column to keep track of any information received that indicates you have an inaccurate address, and when the required written notice to meet due diligence requirements is due.

You will also want to keep any backup documentation such as SODAs, copies of returned unopened mail demonstrating you do not have an accurate address, and copies of required due diligence letters.

You should also keep all documents showing compliance with the SDA and commission rules to prove that you are not a holder, and thus don’t have to report. If the community is sold or if you lose management, you can forward all of this information to the Owner, or your successor along with a letter explaining that you have complied with applicable law regarding security deposit transfers, you no longer are legally liable for the deposits, you are no longer the holder of such deposits under the UPA, that the transferee has a duty to comply with the UPA, and that you are forwarding the necessary information for the transferee to comply with the UPA at the applicable time.

Whole Property Pricing Education 2013 AASC’s Whole Property Pricing Packages allow companies and individual properties to enroll in AASC’s classes based on their size and total units.

Whole Property Pricing Packages Single Property:

1 - 50 Units - $100

51 - 100 Units - $150

101 - 150 Units - $200

151 - 200 Units - $300

201 - 300 Units - $400

301 - 499 Units - $500 Management Company:

$2200 for 7+ properties This pricing program allows all on-site and corporate staff to attend AASC’s basic seminars year-round. Year-round attendance starts when payment is received.

Get 10% off all certification and designation courses when you enroll for the Whole Property Pricing program.

Register & Sign-Up for Classes Today at www.aaschq.org.

Spring Edition | 2013

26

Snap Shot of AASC’s Annual Ski Trip 2013

Presented By

Sponsored By

www.aaschq.org

27

Drought Persists in Colorado

By Colorado Springs Utilities

Colorado Springs is located in a semi-arid climate where drought conditions regularly occur. The U.S. Drought Monitor shows Colorado in moderate to exceptional drought, which is forecasted to continue through 2013.

Extreme, dry conditions persist in local and remote mountain watersheds. In 2012, precipitation was 49 percent of normal, while average temperatures were 109 percent of normal. Last year, Colorado also experienced the second warmest statewide average annual temperatures since 1895.

These conditions, partnered with back-to-back lower-than-average snow pack yields and increased demand, have put stress on Colorado Springs’ water supply. System-wide storage is at a near historical low of 49 percent; normal storage is 65 percent.

so increases awareness of the importance of saving water during drought, supports business and economic vitality, and minimizes bill impact to customers who follow water conservation practices and restriction.

As your local water provider, we have a responsibility to protect your water supply and help ensure the health, safety and economic vitality of our community.

Residential customers

Water restrictions

Colorado Springs experienced mandatory water restrictions 2002 through 2005. Currently, voluntary watering restrictions of one day per month for winter are currently in place. Customers are asked to water trees and shrubs only once a month to preserve their investments and reduce water demand to help landscapes rebound from winter.

Given the current situation, we proposed in February to City Council two days a week outdoor water restrictions for 2013. If approved in March, restrictions would take effect April 1.

Given the current situation, Colorado Springs Utilities proposed to City Council at its Feb. 11 informal meeting two days a week outdoor water restrictions (Water Shortage Ordinance Stage II Level B) for 2013. A formal recommendation and water shortage ordinance would be vetted through the formal process. If approved by City Council, restrictions may take effect April 1.

The community water-savings goal for the 2013 irrigation season (April through October) is 30 percent. Achieving this will help rebuild Colorado Springs’ water supply, which could take years to accomplish.

Price changes In addition to water restrictions, we will propose price adjustments to encourage water savings. This is in alignment with many Front Range cities, including Fort Collins, Denver and Aurora. Doing

For residential customers, two days a week watering: Current Tiered Pricing Blocks

Proposed Blocks

Block 1 Up to 999 cf Block 2 1,000 to 2,499 cf Block 3 More than 2,500 cf

No change 1,000 to 1,999 cf More than 2,000

Also, block 3 water use would cost double the current price.

Residential customers who adhere to restrictions and best water use practices (tiers 1 and 2) will see little to no impact on their water bill. Customers who use the most water would be charged double for any use that falls into tier 3. The blocks listed reflect monthly use.

Non-residential customers A structure for non-residential customers is included in the proposal.

• Maintain current price structure • Establish a base water use level using the 12-month water use average from 2012 • Any water used above the base is subject to a higher price

Water Non-residential, Non-potable Restrictions non-seasonal and contract 3 days/week 2 days/week 1 day/week

1.25x of current charge 2x of current charge 3x of current charge

1.15 x of current charge 1.2x of current charge 1.3x of current charge

Spring Edition | 2013

28

Apartment Industry and Residents Contributed $1.1 Trillion to the Economy

by NMHC

WASHINGTON, D.C. – February 13, 2013 – (RealEstateRama) — Despite the worst economy in a generation, apartments and their residents contributed $1.1 trillion to the national economy in 2011, supporting 25.4 million jobs, according to a new report released today by the National Multi Housing Council (NMHC) and the National Apartment Association (NAA). The report, along with an interactive map and economic impact calculator, is available on the new website www.WeAreApartments. org.

Based on research by economist Stephen S. Fuller, Ph.D., of George Mason Uni-

www.aaschq.org

versity’s Center for Regional Analysis, the report covers the economic contribution of apartment construction, operations and resident spending on a national level plus all 50 states. In addition, construction and operations data is available for 12 metro areas: Atlanta, Boston, Chicago, Dallas, Denver, Houston, Los Angeles, Miami, New York City, Philadelphia, Seattle and Washington, D.C. Highlights from the report include: • The apartment industry spent $14.8 billion on construction in 2011, and this was a year with one of the lowest

multifamily completions on record, just 130,000 new units. The average prerecession was around 270,000 completions.

• The industry spent $67.9 billion in 2011 to operate and improve the country’s 19.3 million apartments— more than four times the amount spent on construction—creating a $182.6 billion economic contribution supporting 2.3 million total jobs.

• The country’s 35 million apartment residents spent $421.5 billion on goods and services in 2011—70 percent of

29 which stayed within the local economy.

The spending created a total economic impact of $885.2 billion supporting 22.8 million jobs nationwide.

For more information or to download the report “The Trillion Dollar Apartment Industry”, visit www.WeAreApartments. org.

• The combined contribution of apartment construction, operations and resident spending equals $1.1 trillion, or more than $3 billion every day.

***

“Although attention is usually focused on homebuilding and the single-family sector, the annual construction and operating outlays for apartment buildings with five or more units are major sources of economic activity, jobs and personal earnings,” said Fuller. “In addition, the residents of apartment buildings constitute an important source of local, state and national economic activity as their spending for goods and services is recycled through the economy.

Like the operating outlays for apartment buildings, the spending by renters recurs annually thereby supporting local economies on an ongoing basis.”

In conjunction with the study’s release, the new website www.WeAreApartments.org breaks down the data by each state and the 12 metro areas through an interactive map.

Visitors can also use ACE, the Apartment Community Estimator, a new tool that allows users to enter the number of apartment homes of an existing or proposed community to determine the potential economic impact within a particular state.

“For the first time we’re able to quantify the tremendous economic impact of apartment residents across the country, in addition to the powerful contributions from apartment construction and operations,” said NAA Chairman of the Board Alexandra Jackiw, CPM, CAPS. “It truly shows a comprehensive view of the industry’s critical role not just in housing, but to the economy at large.”

“Even in one of the worst economic climates we’ve ever seen, the multifamily industry and its 35 million residents contributed more than $1 trillion to the economy,” said NMHC Chairman Thomas S. Bozzuto, CEO, The Bozzuto Group. “With up to seven million new renter households forming this decade—almost half of all new households—the dollars and jobs we add to the economy will only grow in magnitude.”

For more than 20 years, the National Apartment Association (NAA) and the National Multi Housing Council (NMHC) have partnered on behalf of America’s apartment industry.

Apartment Rents Climb to Another Record High in Springs The Gazette

By Rich Laden Colorado Springs’ apartment market showed a bit of softness late last year as rents increased to another record high but fewer apartments were occupied, according to a Colorado Division of Housing report released Thursday.

The average monthly rent for Springs-area apartments rose to $790.95 in the fourth quarter of 2012 — the highest recorded by the Housing Division and the 12th consecutive quarterly increase in year-over-year rents, the report showed.

The fourth quarter rent increased $3.73 from the third quarter of last year and $15.51 from the fourth quarter of 2011, according to the report.

The area’s apartment vacancy rate, meanwhile, climbed to 7.1 percent in the fourth quarter, a full percentage point higher than the third quarter and up from 6.7 percent during the fourth quarter of the previous year.

The uptick in the vacancy rate might have been caused by renters being turned off by rent increases, said Ryan McMaken, a Housing Division spokesman. Also, a lack of job growth in the Springs could be a factor, he said; the area’s unemployment rate, while falling for five straight months, nevertheless remained at 9 percent in December.

“You’re just not going to have as many people sticking around town as much and as long if they feel they need to look to another metro (area) to find employment,” McMaken said.

It’s also possible a recovery in single-fami-

ly housing has sapped some of the strength from the multi-family market; some renters are opting to take advantage of historically low mortgage rates and are buying homes, he said.

However, not all renters are abandoning apartments, McMaken said. Some can’t qualify for a mortgage and others can’t find the house they want because of a relatively limited supply of homes for sale, he said.

Gary Winegar, chief investment officer for Griffis/Blessing Inc. in Colorado Springs, said it’s not unusual for vacancy rates in the first and fourth quarters to rise slightly; people don’t necessarily move to town and rent apartments when the weather is cold, he said. Griffis/Blessing owns and manages more than 5,000 Front Range apartments.

One portion of the Colorado Springs area, however, has been experiencing a dramatic decline in its vacancy rate.

Apartment complexes in Fountain and the unincorporated Security-Widefield area, south of the Springs, saw their vacancy rate plunge to 2.6 percent in the fourth quarter — a “flight to affordability” as renters flocked to the area for its cheaper rents in the wake of rising costs elsewhere, McMaken said.

Vacancy rates in the Security-WidefieldFountain area regularly topped 20 percent between 2006-2008 — soaring as high as 36.3 percent at one point during that period — as the economy slumped and thousands of Fort Carson troops were deployed overseas.

But if the area’s overall vacancy rate is up, why didn’t rents go down?

McMaken said some apartment owners and landlords are still trying to cover their operation and maintenance costs with their fourth quarter rent increase, which he added was a modest 2 percent over the same quarter a year earlier.

Winegar said while rents increased, they nevertheless remain 8 percent to 10 percent lower than they were a decade ago if inflation is factored in.

“We still feel like there is some upward movement and lift for rents,” Winegar said.

Still, the pace of this year’s rent increases probably will trail that of 2012, he said. #

30

Connect With NAA Industry-Wide PR Campaign in Full Swing

By Alexandra Jackiw, CAPS, CPM, McKinley, Inc. 2013 National Apartment Association Chairman of the Board

O

n May 6, NAA and NMHC will launch a direct mail campaign to news media and policy groups as part of our major outreach campaign targeting policymakers. With the tagline, “Apartments.

We Live Here,” the ads will run in Washington, D.C., print and online political journalism publications. In addition, two 60-second ads will air on a D.C.-based allnews radio station. The ads will be available to affiliates and members to customize with your logos in your localities. Learn more at bit.ly/1382FMo or contact NAA’s Carole Roper at carole@naahq.org.

Research From 2013 NAA Student Housing Conference & Exposition Now Available

NAA is pleased to announce that research conducted by Christian Ruzich of TRU, presenter of “The Millennial Immersion” closing keynote session at the 2013 NAA Student Housing Conference & Exposition, is now available at www.naahq.org/SHC. Want more great information affecting the student housing industry? Save the date for NAA’s 2014 Student Housing Conference & Exposition, March 3-5 at the ARIA Resort in Las Vegas.

2013 NAA Education Conference & Exposition Exciting Opportunity: Win Lunch with Life is good® Co-Founder Bert Jacobs

An unbelievable opportunity awaits attendees of the 2013 NAA Education Conference & Exposition, June 19-22 in San Diego, to both help children in need and win lunch with Bert Jacobs, Chief Executive Optimist of Life is good®.

Jacobs, back by popular demand following his moving thought leader presentation during the 2012 NAA Education Conference & Exposition, will be a featured speaker during the NAA Awards Breakfast Celebration. The opportunity to witness Jacobs speak is enough reason to stay for this special Saturday session; but it gets even better: the chance to participate in NAA Play It Forward.

NAA is holding a fundraising contest to encourage attendees to raise money for the life is good® Playmakers charity, a 501(3)(c) public charity that helps kids overcome violence, poverty and illness.

Teams and individuals can decide when, how and where to fundraise using the Life is good® fundraising site, https://lifeisgood.fundraise.com/play-it-forward-fundraiser.

Not only will NAA match 20 percent of the total raised by all teams

www.aaschq.org

up to $5,000, but the winning team (the team raising the most funds) will be invited to choose up to 10 people to share a private lunch with Jacobs on Saturday, June 22, following the conclusion of the conference. Hear from Jacobs about this exciting opportunity at bit.ly/ZQ3HFh. This could be a life-changing experience—but only if you’re registered for the 2013 NAA Education Conference & Exposition. Visit bit.ly/WFOo0Z.

Independent Rental Owners: Earn Your IROP Certificate In Your Pajamas

Do you manage your own personally held rental properties? Are you searching for a way to learn what it takes to be a successful property manager? Is your time valuable and in short supply?

If you’ve answered yes to any (or all!) of these questions, then be aware the NAA Education Institute is now offering you the chance to earn your Independent Rental Owner Professional (IROP) Certificate entirely online. The webinar series will begin Tuesday, April 2 and will run every Tuesday through April 23. All webinars will run from 1 p.m. to 4 p.m. ET. Cost is $349 for members and $499 for non-members.

Module pricing is $99 for members and $125 for non-members.

Find out more at bit.ly/WTkBrh

Attend the 2013 NAA Green Conference: Your Residents—and Your Bottom Line— Will Thank You

Attendees of the 2013 NAA Green Conference, April 15-17 at the Baltimore Marriott Waterfront, stand to reap huge savings on energy and utility expenses from the knowledge and insight delivered by the apartment management professionals scheduled to share their proven methods for cost reduction.

But don’t be intimidated by the perceived costs of sustainable community improvements—many of the savings strategies promised at the 2013 NAA Green Conference are ideal for small and mid-sized owners.

“To anyone who says they can’t afford to be green, I say, ‘You can,’’ says Villas at Chase Oaks Property Manager, Tina Paysinger, CAM, who recently identified easier, more affordable ways to green her Plano, Texas, community. Using a few simple steps, from replacement lighting (an annual savings of $14,067) to programmable thermostats (a $16,077 annual savings), Paysinger was able to save her community $50,000 by going green (visit bit.ly/XDJDcD to see what owners can do to achieve similar bottom-line savings).

The best part? You can, too, by attending the 2013 NAA Green Conference. And, to help you begin saving money right away, register

by April 5 at bit.ly/TSsgPZ for a $100 discount.

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