CAI-MN Minnesota Community Living - Nov/Dec 2009

Minnesota’s premier homeowners association magazine

November/December 2009

In this Issue: How CICs Should Approach Budgeting of Snow Removal The Energy Tax Credit: Tips for a Smooth Installation

Volume 27 • Issue 6

Getting Set for Winter Tips for Getting Your Community Ready

Ways to Reduce Your Home Energy Bills And Much More!

Visit us online at www.cai-mn.com.

www.bncbank.com

H.o.A.

Lockbox Services Automated convenience at BNC

Accuracy • Dependability • Customer Service • Financial Stability Reasons why you should move your accounts and processing to BNC National Bank Interest bearing Accounts for your Associations

Are you on analysis today? Are you paying fees for lockbox processing?

We never charge for processing your association payments…No monthly maintenance fee or service charge and no charges for deposits and checks written.* *Returned checks or ACH payments for any reason will be charged $10 each. *Fees may be assessed if coupons do not adhere to the prescribed formats.

competitive Rates Let those reserve funds work hard for your associations. Ask about our bonus rate program for new associations coming on board.

Do any of your association accounts carry balances over $250,000, exceeding the FDIC insurance limit?

Let one of our sweep accounts solve that problem in a US Treasury backed fund, or use the CDAR’s program which provides FDIC insurance up to $50 million or consult with one of our Wealth Management experts who can help you obtain your investment goals.

our coupon printing discount/subsidy and review process program Based on your deposit balances you may be eligible for a coupon printing subsidy or, regardless of your company size, we have partnered with one of the largest coupon/statement/newsletter printers to make available print pricing normally only available to the largest of companies.

Our experts will work with you and the printer to insure your coupons are of the highest quality and adhere to our scan line specifications, allowing our processing team to correctly post each payment to the correct homeowner/business.

Let our printing specialists review your printing needs and provide you with a quote.

Member FDIC

2

Toll Free: 866-236-0548 Direct: (612) 305-2229 ajohnson@bncbank.com

Minnesota Communit y Living

For more information contact our Business Development expert Anne Johnson (612) 305-2229

Board of Directors

From the President

By Mark Gittleman | CAI-MN President

The Reserves are Coming!

Get ready to go to war to protect the physical assets of your condominium or townhome association by building up your replacement reserves! This is an increasingly important issue within our industry that is receiving heightened attention at the state and national levels.

reserve contributions. An FHA requirement that an annual replacement reserve study be completed appears to have been dropped in the latest version of the draft regulations.

Finally, there is increased focus and awareness within our industry association on replacement reserve issues separate and apart from state and federal activity due to the direct experience of homeowner associations. A significant number of older associations are at the end of the lifecycle for major building components with At the state level, the Minnesota Common Interest Own- inadequate funds to address key building infrastructure issues. By contrast, a significant number of newer asership Act (MCIOA) is anticipated to be amended in 2010. A draft of the legislative language that is anticipat- sociations are finding that the initial replacement reserves ed to be introduced in the legislature will be published by established at the time of sale will not adequate to meet long-term capital replacement expense obligations unless the end of November. One of the important provisions revised upward in the next few years. in the amendment package will amend the replacement reserve language in the existing statute. While the exact amendment language has not been finalized, we do know So, what does this mean for community associations? that key elements are likely to include the following: 1. Prepare to understand clearly the components of the association that are the obligation of the associa1. Required projection of adequacy of reserves for tion to repair and replace. replacement of building components that have a remaining life of less than 30 years and disclosure 2. Make sure that your association is contributing at of same to homeowners via the annual report and least 10% of its budget to replacement reserves in new owners via disclosure statement (applicability order to qualify for Fannie Mae, FHA and Freddie to existing homeowner associations is anticipated to Mac guaranteed loans or be prepared to explain be 2012); why the annual reserve contribution is adequate if less than 10%.

2. Updated projection of adequacy every three years; 3. Narrowing of situations and board authority as to when a special assessment can be utilized to fund common expenses rather than relying on funds from a replacement reserve accrued over time; 4. Affirmation of the restriction on transferring money out of replacement reserves to pay for operating expenses.

At the same time, the market place is being driven toward greater emphasis on replacement reserves by the regulatory changes that have been unfolding at Fannie Mae, Freddie Mac, and FHA for eligibility requirements for loans guaranteed by their programs.

Fannie Mae and FHA are evaluating adequacy of replacement reserves based on a minimum threshold of 10% of an association’s annual budget directed to replacement

3. Evaluate the thoroughness and lifecycle projections of building components that are the association’s responsibility to replace, and be prepared to increase funding for replacement reserves as may be necessary.

4. Think about different options and strategies for a replacement reserve plan that will increase the reserve fund balance to meet future expense obligations.

President Mark Gittleman Phone 952.277.2707 mgittleman@gittleman.com President-Elect Holly Johnson, CMCA, AMS, PCAM Liaison to Vision Awards Committee Phone 763.225.6400 hjohnson@developcommunity.com Secretary Jonathan Edin Phone: 651.222.2155 jedin@mnconstructiondefects.com Treasurer Michael P. Mullen, CPA Phone 952.928.3011 mike@cpamullen.com Directors Tom Engblom, AMS, CMCA, PCAM Liaison to Golf Tournament Committee Phone 866.800.4656 tengblom@cabanc.com Sarah J. Fjellanger, CIRMS Liaison to Legislative Action Committee Phone: 763.746.8278 fjellangers@rjfagencies.com Mark Johnson Liaison to Communications Committee Phone 612.381.9951 mjohnson@associationsonline.com Joel A. Hilgendorf, JD Liaison to Membership Committee Phone 952.746.2167 jhilgendorf@hjlawfirm.com Traci Lehman, CMCA, AMS, PCAM Liaison to Manager Seminar Committee Phone: 612.381.8600 tracil@citiesmanagement.com Gene Sullivan Liaison to Education Committee Phone: 952.922.2500 gene@ncmgi.com

5. Consider engaging a third-party reserve study analyst who specializes in analyzing building components to complete a reserve study for your association.

Think about a battle plan for these issues now as reserve shortfalls of today only grow larger over time.

Committee Chairs Legislative Action Chair John R. Dorgan, Esq. Phone 612.729.1943 jrd@jdorganlaw.com Communications Chair Steve Hoogenakker Phone 763.213.2410 steve@landscape.pro

Annual Meeting Chair Lisa Astelford, CMCA Phone 952.277.2787 lastleford@gittleman.com

Golf Tournament Co-Chair Tosh Tricas, CMCA, AMS, PCAM Phone 763.225.6400 ttricas@developcommunity.com

Nominating Chair Joel A. Hilgendorf, JD Phone 952.746.2167 jhilgendorf@hjlawfirm.com

Golf Tournament Co-Chair Tom Engblom, CMCA, AMS, PCAM Phone 866.800.4656 November tengblom@cabanc.com

Membership Chair Mike Laukka, CMCA, AMS, PCAM Phone 952.831.8325 December 2009 3 ml@laukka.com

|

Top Management Companies of Condos and Townhomes

By MArk Schoenfelder, Schoenfelder Painting

The past 10 years have been good to the top Minnesota management companies.

Many have doubled in size and a couple have tripled. Who is the largest management company? It depends on how you define “largest.”

Largest could be defined as the most associations, most units, most management staff or most managers. Each answer gives you a different number one and changes the order of the top companies significantly.

30000

Number of Units Managed

are able to handle more work than typical managers in the industry.

Cities Management, in keeping with its philosophy, tries to do more with technology and email, while having fewer staff. According to the results, they are all accomplishing their goals.

The distinction between manager and assistant manager was also blended with on-site managers who were supervised by an off-site manager. In order to reflect the management staff numbers as accurately as possible, all managers and assistant managers were grouped together for comparison’s sake.

25000

15000

250

10000

200

5000

150

275

225 220

214 185 Number of Condo Associations

0

t

t

en

ity

un

an

n

se

m

le

itt

m

as

t

ep

nc

G

G

ew

Co

sM

e

dis

ag

ag

ka

d

uk

La

M ar

M

Ce

op Pr

r

lle

Ke

s,

c.

t

t

en

In

C

en

em

ag

em

ag

an

CI

t

en

em

tie

er

an

an

M

ra

Pa

em

em

ag

an

ie

Cit

en

en

em

ag

an

sM

t

t

en

em

em

ag

an

M

t

en

en

em

ag

an

M

t

t

en

em

ag

an

ev

D

m

t

en

pm

elo

Co

Associations Managed

300

20000

e

on

st

y re

Co

e

on

st

er

rn

G

N

tS

an

M

em

ag

er

ez

en

ty

er

an

p ro

M

en

em

ag

y ile

M

En

p

u ro

an

en

108

100

m ge

67

a

an

sM

la

At

tS

e

vic

er

tG

en

m ge

a

Ba

rP

lle

Ke

Eb

es

ris

rp

te

an

en

M

t

es

vic

er

ag

an

M

Number of Townhome Associations Other Managed Associations

ty

er

op Pr

M

50

40

53

50

36

40 26

22

In compiling the survey it was interesting to learn that each management company is structured differently. New Concepts has an assistant for every manager. Gittleman Management has very few assistants and relies on its managers to perform many responsibilities done by New Concepts assistants. Mike Laukka of Laukka Management explains that his managers tend to be very experienced and

40 35 30 25 20 15 10 5 0

Total Number of Managers/Assistants 36

36 29 36

18

9

4

Minnesota Communit y Living

3

p

er

tG en

em ag an

M

vi

ro u

ce

NP

en

t

es ris rp

te En

em ag

an sM

Pr op e

rty

s

em ag an

y ile Ba la At

3 2

0

en

t

M rty

ro pe

an

rP le Ke l

rM

ce er

tS

an

en em

ag

e on st er

ze ne

Eb e

vi

t

en em ag

em ag M

an

ag an

M

M

st on e re y

rn

er

en

t

c.

en em

In s, tie

em ag

ro p rP

lle Ke

CI C G

Co

t

t

en

t

en em

ag an

rM Ce

da

M ka uk

La

2 0

2

2

NP

1

an

t ag

em

en

t

en em ag

an Pa

ra

di

se

M

an

t

en em ag Ci

tie

an sM pt

ce

sM

t N

ew

Co n

G

as

se

n

M

an

ag

em

en

t

en

en

em

op m

ag

el

an

ev

M

7

6

4 36

D

7

6

36

tS

7 7

an

ity

13

36

m

un

22

21

20

le

m

itt

Number with CAI Accreditation

34

G

m Co

4

36

18

8

0 ity

an

m

le

itt

G

nt

em

en

s

as

G

ew

N

ep

nc

Co

nt

e

em

ag

an

M ts

M

nt

e

em

ag

an

M

nt

e

e

em

ag

an

D

un

m

m

Co

e

m

op

el

ev

nt

ti

Ci

e

em

ag

an

M es

d

ise

La

uk

ka

ag

an

M ar

M

d

Ce

nt

e

em

ag

an

M

nt

e

em

ag

an

ra

Pa

nt

lle

Ke

In

s,

tie

er

p ro rP

c.

nt

em

C

CI

an

M

o

st

y re

G

em a

an

rM

ze

e en

Eb

m ge

nt

e

em

ag

an

rty

e

p ro

rP

lle

Ke

es

c

vi

tS

en

M

o

st

er

rn

Co

ne

er

ag

ag

an

ne

nt

e

e

e

em

ag

an

M

nt

le ai

p

sM

la

At

en

m ge

a

an

ty

er

op Pr

tS

ce

vi

er

tG

en

m

e ag

an

B

13

u ro

ris

rp

te

En

y

M

es

M

Some of the growth in the industry has been organic, growth through adding associations and managers one by one. Other companies have grown by acquiring entire management companies. Cities Management purchased Condominium and Resource Group eight years ago and New Concepts just closed on the acquisition of Management Services Worldwide in July. Each of the largest five management companies have had a strong presence with CAI-MN with leadership from each serving on the board of directors and on various committees.

Kirk Gassen of Gassen Management was considering opening an office in Florida, where many of Gassen Management’s current clients winter. He changed his mind when he realized that the ten largest Minnesota management companies only manage a small percentage of the associations in MN. He has redoubled his focus on serving the Minnesota market, for now. Gassen was still able to grow in the past year, even though many fewer new associations are being formed.

Calendar

Index

2009-2010

features

December Managers Seminar Risk Management

departments

4 Top Management Companies of

December 2, 2009, 11:30 a.m. - 1:30 p.m.

Dorsey Ewald Conference Center $30-early, $40-late/members; $50/non-members. CEs: 1.5

Condos and Townhomes

Holiday Trade Show December 9, 2009, 11:30 a.m. - 1:30 p.m.

Sheraton Bloomington Hotel 7800 Normandale Blvd.

Minneapolis, MN 55439 Free/property managers; Free/Associated Board Members; $50/Non-managers

By Tony Poetz

7 How CICs Should Approach Budgeting of Snow Removal

By Steve Hoogenakker

9 Tips for Protecting Your Identity During the Holidays

January

10 The Energy Tax Credit: Tips for a

Managers Seminar Managing an Insurance Claim

January 13, 2010, 11:30 a.m. - 1:30 p.m.

Dorsey Ewald Conference Center $30-early, $40-late/members; $50/non-members. CEs: 1.5

Smooth Installation

By Tony Poetz

11 No One’s Home

By Kevin Kuhne

President’s Message

4

By Mark Schoenfelder

6 Window Condensation

3

by

Mark Gittleman

Member News

Thank You 2009 Annual Partners

Platinum

CABanc/CondoCerts Gold

BEI Exterior Maintenance Silver

Breiwick Companies

Carlson & Associates, LTD.

Hammargren & Meyer, P.A.

Hellmuth & Johnson, PLLC

Levin & Stein

Thomsen & Nybeck, P.A. Bronze

Gittleman Management Corp.

Omega Management, Inc.

Schoenfelder Painting

Strobel & Hanson, P.A.

12 Reduce Home Energy Bills

Register online at www.cai-mn.com For more information regarding an event, call Scott Franzmeier at 651.290.6278 or visit the CAI-MN Web site.

Online registration is available at www.cai-mn.com.

[ ADS Index ] of Advertisers Association Dues Assurance Corporation....... 4

Hammargren & Meyer, P.A. . ............................ 5

Birch Lawn Maintenance................................. 15

Hellmuth & Johnson, PLLC......................... 8, 14

BEI Exterior Maintenance............................... 12

Horticulture Services, LLC............................... 15

BNC National Bank........................................... 2

Johnson & Lindberg, P.A................................. 10

Breiwick Companies........................................ 15

Levin & Edin..................................................... 13

Carlson & Associates, Ltd................................. 7

NSI/Horwitz........................................................ 7

CA Banc/CondoCerts....................................... 16

Reserve Advisors.............................................. 12

Construct-All Corporation............................... 14

RJF Agencies..................................................... 6

Construction Consulting & Inspections, Ltd......9

Strobel & Hanson............................................ 13

Gassen Companies............................................ 7

Thomsen & Nybeck........................................... 8

Final Coat Painting............................................ 7

SMART & DECISIVE The Best Value in Construction Law for Community Associations

That’s what our clients tell us.

At Hammargren & Meyer, we’re smart, decisive lawyers focused exclusively in the areas of law that we know best.

For prompt responses and straightforward answers, call Hammargren & Meyer.

(952) 844-9033 www.hammarlaw.com

Published by Community Associations Institute — Minnesota Chapter, copyright 2009. All articles and paid advertising represent the opinions of authors and advertisers and not necessarily the opinion of either Minnesota Community Living or CAI–Minnesota Chapter. The information contained within should not be construed as a recommendation for any course of action regarding financial, legal, accounting, or other professional services by the CAI–Minnesota Chapter, or by Minnesota Community Living, or its authors. Articles, letters to the editor, and advertising may be sent to Chapter Staff Editor Joe Flannigan at joef@ cai-mn.com, or at CAI–Minnesota Chapter, 1000 Westgate Dr., Suite 252, St. Paul, MN 55114.

November | December 2009

5

Window Condensation

By Tony Poetz, Production Supervisor, New Exteriors by SMA, Inc.

I

f you’re a property manager who has recently installed windows in your units, you and I are about to receive the same phone call.

We’ve been here.

We’ll be here.

Long-term dedication to your association.

Customer: “These windows that are less than a year old are fogged. You did something wrong.

Fix your mistake.”

You and I receive these calls twice a year...sometimes in summer, but mostly in winter during the coldest days. Why? They’re brand new windows. Today’s windows can be triple-glazed, low-e, argon-filled, light-reflective, energy-efficient, ad nauseum. They shouldn’t fog. So, why do they?

For one reason or another, the answer is physics.

Window fog culprit #1: As we build homes that are more energy efficient or “tighter,” air does not circulate as it used to with drafty windows and sparse insulation. When a home doesn’t “breathe,” humidity remains inside. Showering, cooking and laundry are the largest providers of water vapor into your home. Normally, these kitchens, baths and laundry rooms have a fan or vent installed specifically to remove these vapors.

What happens to your bathroom mirror when you forget to turn on the fan while showering? It fogs immediately. When the fan is on, it clears the room rather quickly. While manufactured to put up resistance to this effect, your new, technologically-advanced windows will fog when there’s enough humidity present.

Window fog culprit #2: Actually, culprit #1 and #2 are a result of the same science, but they’re separated here because the things we (or nature) do to create the situation are different. In a nutshell, condensation, or dew, forms when the cold or cool surface chills the adjacent humid air and the water vapor in that air changes back to liquid water. Air has water in it. Sometimes a little, sometimes a lot (please see culprit #1).

Even though your home may have a normal amount of water vapor in it, when it comes in contact with an overly chilled or overly warmed surface, condensation will appear. You know this when you open the freezer door on your warm face and your skin gets wet. The same thing happens with your window glass. When it’s really cold outside (think Minnesota January) and your furnace is keeping your energy-efficient home nice and toasty, warm air is rolling across your chilly windows – and physics takes over. The opposite can happen in the summer, but we’re in Minnesota and we’ll let Florida worry about too much air conditioning.

What is happening in scenario #2 is that the dew point is surpassed.

The dew point is the temperature to which a given parcel of air must be cooled for water vapor to condense into water. Outdoor temperatures fluctuate (Minnesota’s is between -40F and +100F!) which means the dew point is a moving target. When it’s colder outside, the dew point is lower. If your home’s indoor temperature remains at a constant 70F and it contains a little bit of water vapor, your windows will experience condensation. This can be reduced by once again lowering the humidity level.

Window Condensation continued on page 13 6

Minnesota Communit y Living

Association Risk Management & Insurance Commitment • Adapting to your needs • Protecting your future

Advocacy • Unique solutions to control risk • Priority claims support

Experience • 20+ years helping associations • Multiple markets aligned to your current and future needs

Community Association Insurance Services (763) 746-8000 www.rjfagencies.com

How CICs Should Approach Budgeting of Snow Removal Services by

T

here are two areas this article will cover: bidding/budgeting and salting/sanding.

Bidding/Budgeting CICs have traditionally had their snow removal services budgeted by the month, or season, while commercial properties budget hourly or per time.

Why monthly? In a heavy snow season, board members don’t want to explain why they’ve blown the budget by 50-100%. Is this the smartest way to budget your snow removal? It depends on the winter and the contractor.

Here’s what happens behind the scenes when you ask for snow removal bids. The contractor goes out to the site and estimates the number of hours it will take to fully clear out the snow. He multiplies that by the number of snow events he expects. So when going with a seasonal price, you are banking on average to heavy snow for the season.

This has many benefits and a few drawbacks.

On a lighter snow season, the residents

Steve Hoogenakker, Taylor Made Lawn and Landscape

might complain about paying a monthly price when no service has been provided.

Benefits are many. Except for hauling snow off the property and salting, you already know your budget. The other benefit is the realization that a snow event requires a lot of equipment and people at the ready.

Per time snow pricing is a little better because the price depends on the amount of snow on your parking lot in most cases.

During the 150 days of the snow season, that equipment sits for about 100 days. By giving the contractor a monthly amount, he’s able to keep more equipment and people on-hand to ensure your property gets taken care of.

There are a dozen or so lawn/snow contractors that really specialize in townhomes.

Because CICs are seasonal accounts, I believe the contractors do a better job because they specialize and because you have given them the monetary resources to respond to the needs of your community ASAP.

Salting and sanding parking lots and sidewalks can be a really big expense in a year, but there are things you can do in advance to keep this in check.

What about hourly or per time bids? Unless you have someone up all night watching the parking lots, you have to have a contractor you can trust doing hourly work.

Salting/Sanding CICs have a lot of decision making to do about this one.

• Decide on auto-sanding vs. on call sanding. I just did a bid for a complex that wants their entire lot sanded each plow, or whenever there are slippery conditions.

This is extremely expensive and will cause damage to the property. This amount of salt will probably kill large areas of lawn and shrubs. We can reduce this price by 2/3 by asking the contractor to just salt/ sand intersections, entrances and any underground garage ramps. I find that just calling the next day to ask for sanding/ salting is the most economical method because every snow event is different.

Budgeting for Snow Removal continued on page 14

MULTI - HOUSI N G

Common Interest Communities | Apartments Interior Exterior www.finalcoatpainting.com

651-789-0790

Enhancing Your Image. Supporting Your Brand.

November | December 2009

7

The Talent You Need is Here.

The Time You Need it is Now. Our talented Community Association Team includes: Partners (pictured left to right) David J. McGee, Gretchen S. Schellhas, Matthew A. Drewes, Christopher P. Renz, William E. Sjoholm; and Associates Ryan J. Wood, Debra M. Newel, Natalie R. Walz, Ivory L. Ruud, Nathan J. Knoernschild

Thomsen & Nybeck’s commitment to serving the needs of community associations and those that work with them is stronger than ever.

Whether you need assistance with collections or have bigger issues like construction defects, our talented team of lawyers will deliver results.

3600 American Boulevard West, Suite 400, Bloomington, MN 55431

|

(952) 835-7000

|

www.tn-law.com

Your Single Source for Construction Defect Questions and Answers.

Our Construction Defect Practice Group provides litigation services and counsel to community associations with construction defect issues, including water intrusion, stucco defects, leaking windows, ground heaving issues, and other construction-related problems.

Since there are strict time limitations that apply to all construction defect claims, it is important to understand your rights and take action quickly. Contact Robert Keena today for your free initial consultation at jkeena@hjlawfirm.com or 952-746-2113.

10400 Viking Drive, Suite 500, Eden Prairie, MN 55344 P 952-941-4005 • www.hjlawfirm.com

8

Minnesota Communit y Living

Tips for Protecting Your Identity During the Holidays

From CAI National

Identity theft is a problem any time of the year. But, while consumers are focused on giving during the holidays, crooks are focused on taking. If there’s one thing consumers don’t need, it is dealing with identity theft during the holidays. The National Foundation for Credit Counseling (NFCC) offers the following tips to help consumers protect themselves during the busy holiday season: • Be aware of your surroundings.

Sidewalks and malls will be crowded and shoppers will be distracted—the perfect combination for a pick-pocket.

If someone bumps into you, don’t assume it was an accident. Women should clutch purses closely at their side or in front of them with the wallet hidden at the bottom. Men should stow wallets in an inside coat pocket.

• Don’t carry large sums of cash.

Charge your purchases or use a debit card. Just remember that credit cards offer some protections that debit cards don’t. When you use a credit card, you can dispute a purchase before paying for it. With a debit card, the money is removed from your account at the time of the purchase. A thief can wipe out your checking or savings account before you ever realize the theft has taken place.

• Guard your PIN number at the ATM. Be aware of anyone lurking around the ATM, and if someone is standing too close, simply ask him or her to step back. Thieves can also install devices that read your information at the ATM without you knowing it. If you notice anything unusual about the ATM, use a different one, and report what you’ve seen to the bank.

• Don’t let your credit card out of your sight. Unscrupulous clerks or waiters can copy your card information or swipe your card into a second card reader and later make a new credit card for themselves. Worse yet, they can sell your information to an organized crime ring.

• Lighten your wallet. Remove anything from your wallet that you don’t absolutely need to have with you. That way, if someone is successful in stealing it, they won’t get as much. Never carry your Social Security card with you, but check other cards that might use your SS# as an identifier. If you’re not going to use your checkbook, leave it at home.

• Make copies of your credit cards.

Copy both sides of all your cards. If you lose your wallet, you’ll have easy access to all of your account numbers and phone numbers, allowing you to alert your bank immediately.

• Keep up with all receipts. Not only will you need them to make returns easily, but crooks are very interested in stealing the information they contain.

Never stuff the receipts into your car visor or leave them exposed in any way.

of the major credit reporting bureaus, and could be money well spent.

• Order your credit report. Consumers are allowed one free credit report every 12 months from each of the three bureaus. Order a report now from one bureau, and order another one in January from a different bureau. This will give you a good snapshot of activity and will alert you to anything unusual.

In spite of all your efforts, if you are victimized by ID theft, contact an NFCC Member Agency for help. Their certified counselors can walk you through the steps to recovery.

To find the agency closest to you, dial (800) 388-2227, or go online www.DebtAdvice. org. To locate a Spanish speaking counselor, call (800) 682-9832.

For more information and tips about identity theft visit NFCC at www.ProtectYourIDNow.org.

• Open your credit card statements as soon as they arrive. Check the bill for any unauthorized purchases.

Even better, keep a watchful eye on your accounts by going online and reviewing your accounts each week.

If you notice anything out of the ordinary, report it immediately to your bank. Doing so will likely remove any payment responsibility you might have for fraudulent purchases.

• Secure all personal information even while at home. Unfortunately, many times an ID thief is someone we know. During the holidays, you may have guests in your home. Remove temptation by putting personal information out of sight.

• Consider signing up for a credit monitoring service. Such services alert you via email anytime there is an inquiry or other activity to your credit report.

In other words, if someone tries to open an account in your name, you’ll know about it. Such services are offered by all November | December 2009

9

The Energy Tax Credit: Tips for a Smooth Installation

By Tony Poetz, Production Supervisor, New Exteriors by SMA, Inc.

Homeowners in the U.S. have an approaching deadline. It’s December 31, 2010. This is the final day to receive a 30% (up to $1500/ owner) tax credit for installing qualifying home energy-efficiency improvers such as roofs, insulation, doors and windows. According to the U.S. Department of Energy’s website, www.energystar.gov, these items need to be placed “in service” before the deadline so each homeowner can receive their tax credit. Visit the website for details including a list of qualifying products – careful, just because a product is labeled “Energy Star” doesn’t mean it qualifies for the credit.

While the website is full of information on how to qualify, it doesn’t give you an idea on the logistics of your multi-unit, window replacement project. Based on a 50-unit HOA with 7 windows in each unit, here’s a look at how your project will likely unfold.

Timeline

In-Project Experience

Prices

Resident Reaction

These are guidelines that vary depending on type of window, weather & accessibility.

• Measure Time – 1 week • Order Time – 1 month • Installation Time – 2-3 weeks

Window prices depend on the type and options you require. Research & recommendations will help you find the best value.

Overall, new windows: • Install for less than $1000/ea, but increase per type • Reduce utility bills (Fed says $377/yr in Minnesota) • Increase resale value • Protect your home is whether or not your installation allows for insert windows (installing inside the existing frame) or if it requires full-frame replacement (new casing, jambs, extra time, etc.).

Contractors will show you the difference and will bid accordingly.

These numbers are dependent on type of window as well as structure. For installation, a one-story building is simply easier than a three-story, especially if windows need to johnson_2.5x4.5_bleed.pdf PM install from the outside. One major2/4/07 factor 8:33:09 No matter the size of your project, there are a few straight forward things you can do to greatly improve your experience.

Construction defect problems?

Construction defects can have a devastating impact on your association. Johnson & Lindberg's skilled attorneys offer straightforward advice.

Put experience on your side.

Call attorney Mark Peschel for a free consultation.

JOHNSON & LINDBERG, P.A. 7900 International Drive, Minneapolis, Mn (952) 851-0700 www.johnsonlindberg.com

10

Minnesota Communit y Living

• Choose a product with sufficient certification. Windows and doors are tested to various degrees and have warranties that correlate. Remember that only certain products qualify for the tax credit. You can find recommendations online or from other property managers.

• Choose a company that is both certified and has enough support staff to handle your project. With large requirements in coordination, storage and labor-force and vendor credit accounts, your project may overwhelm otherwise solid companies that aren’t big enough.

• Set a schedule and expectations. Go over the timeline with your contractor and set realistic goals. The contractor will mention ways to increase efficiency such as “anytime access” to units and on-site storage.

Weather may play a factor, especially in Minnesota’s winter.

• If it’s not you, assign a point person for all information and scheduling to flow through. This person will be mirrored by the contractor’s point person taking care of

Some things you’ll experience during the project include: • Install areas need to be cleared of furniture • On-site dumpsters near driveways • Sawdust/Debris Cost will be an issue and some just won’t agree with the need for new windows.

However, new styles have huge improvements in: • Soundproofing • Safety • Functionality • Cleaning

ordering, scheduling and – most important – receiving communication from the homeowners. The contracted point person has one major goal – not making your phone ring. A project will soar or sink depending on the point people.

There are other things to consider such as progress payments, seasonal logistics, and city inspections with their requirements for smoke and carbon monoxide detectors, but your contractor should be able to address these issues during your interview or bid process.

Cost will likely be your biggest issue, but you can almost certainly get a volume break. Some items (such as fireproof doors and safety windows) can improve insurance premiums. And, of course, there’s the Energy Tax Credit in effect until the end of 2010. The Department of Energy states that the product “must be placed in service from January 1, 2009 through December 31, 2010” (http://www.energystar.gov/index. cfm?c=tax_credits.tx_index) to qualify for the credit. That’s about a year from now. Your project has a turn-around time starting at three months (bid process, measure, order duration, install) so the deadline may be closer than you think, especially considering product availability in the wake of a tax credit scramble.

But, with foresight and just a few commonsense applications, your window project can be affordable and hassle-free.

No One’s Home Technology That Provides Peace of Mind

By Kevin Kuhne, COO, PureChoice, Inc.

M

other Nature’s annual fall explosion of color is here. While we enjoy the crisp fall days, picking apples at our favorite orchards and watching the geese fly in their classic Vformation, we are reminded that the seasonal human migration to a warmer climate is about to begin. This means many homeowners will leave their northern homes unoccupied for several months. The same homeowner will be returning to another home to inspect its condition after sitting empty for several months.

Whenever a home is left unoccupied it is subject to regional climate conditions. It is our hope that our home’s environmental systems such as furnaces, humidifiers, dehumidifiers and air conditioners will function as expected. However, our experience tells us that any of these mechanical systems is subject to failure. It is not a matter of if, but when.

Failure in any of these systems can create significant and expensive problems. Broken pipes and related flooding, high and low humidity conditions each can cause a host of problems including damage to wood flooring and casework and worse, potential mold problems. Mold problems are often more expensive to repair than water damage and can make a property very difficult to market. In multiunit housing, these problems can reach beyond the unoccupied property to affect the adjoining units — furthering the damage, related expense and strain on personal relationships.

The cost of this damage can affect every member of the association by impacting insurance premiums. In addition to the seasonal migration, many associations have additional housing units that may have fallen into foreclosure.

In foreclosure situations, the association may have to work with a bank-owned property, where in some cases there is very little care provided for the unoccupied property.

Many homeowner associations grapple with the issue of seasonally unoccupied or vacated properties. It has become more common for associations to add a requirement in their bylaws that homeowners make arrangements for regular inspections of their homes when unoccupied. In at least one instance, an association mandates owners to return to their homes

once every 59 days and check in with the association from their home phone. In addition to the expense of inspections, the real problem is that failures generally do not occur at the same time as the inspection. This means when a system fails, the inspection will simply notify you that the damage has already happened.

So what options are available to homeowners?

Up to now, the best option for northern climates has been a freeze alarm. These devices make a phone call when the temperature falls below a certain level. While this does offer some protection, these devices provide no help in predicting the problem before it happens. When it comes to monitoring humidity and actual temperature remotely the homeowner has very few options.

The good news is that some of the environmental measurement and software based tools previously available to commercial building operators are making their way into the residential market. These tools offer the homeowner the ability to measure the environmental conditions of any property on a continuous basis.

The solution also includes a software data collection, reporting and email alerting system that is delivered via a web based interface.

This means no software to install and you can access the software from any computer via the internet. These solutions are typically sold as a subscription service.

A typical retail application will include an environmental collection device and an annual subscription to the software application. The collection devise comes fully calibrated and ready to start collecting temperature and relative humidity right out of the box; simply set it on a table top and plug it in. You will need access to the internet, any cable or DSL modem will work just fine.

If neither of these are available, a wireless option is available (some additional charges from the cellular provider may apply). Once the devise is plugged in and connected to the internet you are up and running. The devise will begin collecting data and every five minutes deposit temperature and humidity conditions into your web based account.

Because these services are software driven, they offer many features that the homeowner will find useful. First, you can log in and set up your desired conditions and high and low limits. Next, you can establish your alerting levels. If you wish to change your settings at a later date, no worries. All settings are managed by the software on the server, not on the collection device, allowing adjustments to be made at any time and from anywhere.

A powerful feature is the email alerting. A homeowner may set as many email alerts in the system as desired. Alerts may be sent to the homeowner’s service vendor, a friend or relative in the area, maintenance personnel and of course, the homeowner. Email alerts can be changed at any time by simply logging in an update to the emails on the alerting page.

An additional benefit of the system is saving energy. Unlike simple alarming systems, the continuous recording solution provides graphs of actual conditions. This allows the homeowner to ensure the property is not being over heated or overcooled, depending on the current cycle. There is nothing more frustrating than receiving the utility bill simply to find that energy was unnecessarily consumed. In addition, variations in the environmental conditions many times indicate what is referred to as “predictive failure.” Variations in environmental conditions may be an early warning that something is beginning to fail. Armed with this information, the homeowner can simply send an email to the appropriate service vendor, have them take a look at the data and decide if corrective action is necessary.

Taking action prior to a system failure is the most cost effective way to deal with mechanical failures. This has been a standard practice for commercial building operators and now the homeowner has the same advantage.

Now you can enjoy your time away knowing that your home is under your watchful eye, no matter where you may be.

Kevin Kuhne is Chief Operating Officer at PureChoice, Inc., manufacturers of PureTrac, a measurement and verification alerting solution available for commercial and residential properties. Kevin can be reached at kkuhne@ purechoice.com.

November | December 2009

11

Reduce Home Energy Bills

From CAI National

U.S. homeowners can lower home energy bills, lower federal income taxes and increase home comfort by making energy efficiency home improvements that qualify for up to $1,500 in federal income tax credits.

Consumers who make energy-efficient upgrades can also reduce their personal carbon footprint because using less energy at home means emitting less pollution, too.

The federal income tax credits for specific home improvements are available now through 2010, thanks to the American Recovery and Reinvestment Act (ARRA) of 2009.

While the tax credits are similar to those in effect a few years ago, consumers should be aware of some changes, according to Steve Nadel, executive director of the American Council for an Energy-Efficient Economy (ACEEE). Consumers must install the specific products and equipment that qualify for the 2009-10 tax credits. Some important details on the home improvement tax credits include: • For each type of qualifying equipment, the credit is for 30 percent of the cost up to $1,500.

• It is a one-time tax credit that can be claimed in part or in whole for tax year 2009 and/or tax year 2010.

• Homeowners who claimed the $500 credit available in 2006-7 can claim the remaining $1,000 credit for additional products bought and installed in 2009 and/or 2010.

• There are two basic categories of qualifying equipment—“building envelope” products and heating and cooling equipment.

• Building envelope products are replacement windows (including storm windows, storm doors, and skylights), certain ENERGY STAR asphalt and metal roofs, insulation and other sealing products.

• Heating and cooling equipment includes furnaces, boilers, ground source or geothermal heat pumps, gas or propane water heaters, central air conditioning systems (but not window air conditioner units) and biomass stoves.

• Installation costs are not covered for building envelope products.

• Installation costs are covered for heating and cooling equipment.

• For some products, the qualifying criteria are more stringent than they were in prior years. For example, all ENERGY STAR windows no longer qualify.

For detailed information on what qualifies, visit www.energytaxincentives.org.

12 Minnesota Communit y Living

Roofing Siding Decks Carpentry Asphalt & Concrete Windows & Doors

BEI

Exterior Maintenance

Exterior Construction, Repair and Replacement Individual Unit or Complex Wide 405 West 60th Street Minneapolis, MN 55419

(612) 861-6243 Fax (612) 861-6267 Web: www.beixm.com Email: info@beixm.com

GAF

MN #20241131

GAF MATERIALS CORPORATION

Knowing your goals.

And the most effective way to meet them.

At Reserve Advisors, we understand that no two reserve studies are ever the same. Which is why we always start at the same place – with you. We begin with a blank slate and then build a reserve study based on your special requirements.

Let us be your partner for the future.

Serving all of Minnesota from our Twin Cities office.

For your no-cost proposal, please call Nik Clark at (800) 221-9882 or visit reserveadvisors.com

Condensation continued from page 6 Even after you’ve explained this to your customer, they will still say “these windows should guard against that. They’ve got Argon.” Well, that is correct to a certain extent. Single-paned windows of the past continuously fogged in hot-cold exchange environments. Enter the double-paned window. They were better, allowing for the pocket of air sealed between the panes to soften the physics exchange. Now, windows are filled with the element Argon, a gas that is heavier and much slower moving than air. When Argon is heated, it takes much longer (and much more heat) for it to move to the top of the inside of the glass where all its warmth is focused at the top and the cold is focused at the bottom. If you’ve got a concentration of cold at the bottom of your windows, they’ll condense. Argon takes longer to get there – but, it’s not infallible and when the dew point exchange is drastic enough, there wil be water droplets. If you’ve recently updated other parts of your home such as the roof or siding, you’ve REALLY changed the dynamic of your home’s efficiency, thus its airflow. The scientific numbers before and after a remodel are drastically different.

Finally, culprit #3: Outside condensation occurs in the morning as the overnight air temperature increases and the grass doesn’t warm at the same pace. Dew is formed, and that water is evaporating along every surface in its way. Your windows will have dew, no matter how much technology has been applied.

lower your heating and air conditioning expenses. Air-to-air exchangers are required in new homes and can be installed in older homes.

While all of these precautions will alleviate condensation effects, the final culprit may be a broken seal (likely under warranty) between the panes. Seal failure is usually the result of a shifting structure as a foundation moves with frost activity or earth settling. Your panes are glued together at the edges and when the seal is broken, the argon escapes and condensation occurs more frequently. One clue to seal failure is “drop residue” between the panes. Another sign is condensation taking place on just one window in a room full of windows.

Climatologically-engineered vapor barriers, insulation inspired by NASA (really) and thermally-regulated glass have created an environment a bit more energy-efficient than the last generation of homes built in the era of Ford Pintos and disco music. However, Minnesota’s climate has remained the same. We now attack the same problems with different solutions. So, as you survive another Minnesota winter with its extraordinary set of physics, you might be able to glance at the thermometer and present a clear solution to a foggy problem.

What can you do about all of this? Start with a humidity test on the environment. Hygrometers can check the air’s humidity with the push of a button. They can be found at home improvement stores or online and they range from $50 - $200. As mentioned before, ventilation fans and ceiling fans are designed specifically for air movement. Be sure they’re functioning and for more than just condensation problems…restroom fans guard against mold, ceiling fans dramatically

Over 20 Years of Experience in the resolution of construction defect claims on behalf of condominium and townhome associations

750 Landmark Towers 345 St. Peter Street St. Paul, Minnesota 55102 PHONE (651) 222-2155 FAX (651) 222-2156 jedin@mnconstructiondefects.com

To schedule a free initial consultation with us, or a free initial inspection by a qualified consultant, contact managing attorney Jonathan A. Edin at 651-222-2155

SPONSOR MINNESOTA STATE CHAPTER

November | December 2009

13

Budgeting for Snow Removal continued from page 7 Calcium Magnesium Acetate (CMA) This acetate is not a salt! It is biodegradable, and thus, is very environmentally friendly. Furthermore, CMA is not corrosive to metals, in fact, it is an inhibitor of corrosion! CMA is typically used in liquid form and is most effective as an anti-icer. It needs to be spread before, or at the very onset of a storm, before the snow begins to accumulate. CMA has its downsides, too. It only works to about 10 degrees and is very expensive.

• Decide on sand/salt vs. salt. In years past, a 90/10 sand salt split was the norm. This allows for traction, but isn’t really enough salt to remove thick, icy areas. Now, most contracts call for straight salt. Skipping the sand also means reducing the amount of sand carried into condo offices and retail centers — and sand damage to carpeted areas. Using this information, you can decide which method works best for your CIC. • Types of salt. What kind of salt is your contractor using?

Sodium Chloride (NaCL) The old standby. The cheapest form of salt. Its disadvantages include its potential to be corrosive to concrete and steel. It also can be harmful to the lawn and shrubs in your association. It only works to about 20 degrees; so if it’s 10 degrees or cooler, which happens a lot in Minnesota, it’s useless until the weather warms.

CONSTRUCT-ALL CORPORATION

Calcium Chloride (CaCL) The most significant feature of calcium chloride is its effectiveness as an ice-melter in severely cold weather (up to -20º F).

Its advantage is that it melts the ice faster, thus “finishing the job” faster. A potential disadvantage is that it tends to attract moisture from the air even after the ice has melted, causing pavements to remain moist. If the moisture should refreeze later, it not only causes icy conditions, but the ice’s expansion could cause some surface damage. CaCl is more environmentally friendly than NaCl.

24

MEMBER

Hour Service

ASSOCIATION INSURANCE REPAIR ´ Fire ´ Smoke ´ Wind ALL

INSURANCE

´ Water ´ Vandalism ´ Emergency Services CLAIMS WELCOME

WE WORK WITH ALL INSURANCE COMPANIES www.construct-allcorp.com

763-427-5900 Bonded Licensed Insured

The Easiest Maintenance Decision You Can Make.

Associations face numerous maintenance decisions.

However, when it comes to maintaining your association’s legal affairs, look no further than Hellmuth & Johnson.

Hundreds of associations and property managers look to us as the definitive source for legal expertise, education and counsel. As one of the first firms in Minnesota to focus on this specialized area of law, we know the many challenges of running and managing an effective home owners association.

For attorneys who know associations, call us or visit our web site www.mncommunityassociation.com.

10400 Viking Drive, Suite 500, Eden Prairie, MN 55344 P 952-941-4005 • www.hjlawfirm.com

14

Minnesota Communit y Living

Landscaping

Snow Removal

www.breiwick.com or

Lawn Care

Stump Removal

763.767.9230

11681 Eask Laketowne Drive - Albertville,

Thank You! CAI-MN thanks the sponsors and exhibitors of its monthly events. Your support is greatly appreciated.

September

October

Luncheon Sponsors

Luncheon Sponsors

Breiwick Companies, Inc. CABanc/CondoCerts Northrup Roofing & Remodeling

Turf Maintenance • Fertilization and Weed Management Shrub & Perennial Management • Irrigation Management • Snow Management

Professional Landscape Maintenance

CABanc/CondoCerts Northrup Roofing & Remodeling

HOTT Sponsors

Gassen Companies Community Development, Inc. Gittleman Management Corp.

Locally owned and operated since 1978

651-481-9180

birchlawn@birchlawn.net

SPECIALIZING IN

ASSOCIATION LANDSCAPE MAINTENANCE

SINCE 1989 3100 Spruce Street • St. Paul, MN 55117

www.birchlawn.net

November | December 2009

15

Community Association Banc is Now a Division of Mutual of Omaha Bank and Stronger Than Ever • • • •

Online cash management systems Lockbox and digital imaging services Online ACH and credit card payment systems Loans for property maintenance and development

CondoCerts simplifies the process of obtaining and distributing community association data and documentation with our online document delivery system.

• Real-time account access 24/7 • Automated resale and refinance disclosure packages • Dedicated customer service teams

Tom Engblom CPM PCAM

Vice President / Regional Account Executive

312.209.2623 Toll Free 866.800.4656, ext. 7498 tengblom@cabanc.com Visit us at mutualofomahabank.com

Community Association Banc National Corporate Member of Community Associations Institute.

Community Association Banc is a division of Mutual of Omaha Bank.

Member FDIC Equal Housing Lender