CAI-MN Minnesota Community Living - Sep/Oct 2009

Minnesota’s premier homeowners association magazine

September/October 2009

In this Issue: Legislative Changes Affecting Foreclosures and Unoccupied Properties The 2010 Budget: Project Planning

Volume 27 • Issue 5

The Recession has Home Values Falling Is There an End in Sight?

Financial Checkup 3rd Annual CAI-MN Golf Tournament Winners and Photos And Much More!

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

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Minnesota Communit y Living

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From the President

By Mark Gittleman | CAI-MN President

I am please to announce that the CAI-MN Board of Directors is undertaking an exciting new education initiative in the area of Association Manager education.

Much has been accomplished by the CAI-MN Education Committee and by the CAI _____________________with regard to industry coursework and certification for Association Managers. Here in the Twin Cities, we have had some great programs and overall good attendance at our events.

With regard to the Education Committee, the Board has approved changing the structure of the Committee so that it consists entirely of CEOs of management companies that are actively involved in CAI-MN and who are committed to advancing educational programming for CAI-MN within our industry association. From now through the 2010 CAI-MN Annual Meeting, the CAI-MN Education Committee will consist of Mike Laukka; Chuck Schneider; Gene Sullivan; Traci Lehman; and myself. After the 2010 CAI-MN Annual Meeting, the Board of Directors will appoint a new Education Committee Chair who will appoint 5-7 CEOs of management companies to form the Committee.

We came to realize that the structure of our educaAt the same time, we are aware that our industry tional programming at CAI-MN was not set up to has grown rapidly, is maturing, and new types of be able to respond dynamically to changes in the educational programming are in demand. Some of industry. Specifically, the volunteers on the Educathe changes in the industry that we are responding tion Committee had full time jobs and were not well to include: positioned to put in the additional time that is necessary at times to assemble new types of programming.

• a more experienced, diverse, and well educated Secondly, in order for management company CEOs manager population that is interested in more in to feel invested in devoting more employee time and depth and dynamic programming; company money on education for managers, we • emergence of new industry issues some of which need to drive an educational program that manageare complex and require quick response for devel- ment companies find to be valuable to their managopment of educational programming or alterna- ers and the services that they provide to clients. tive education formats; Another important element of this change that • increasing participation by management comwe intend to accomplish at our next meeting is to panies in the national Association Manager certification program and a greater commitment change the reporting structure of the Homeowner Training Tract (HOTT). It is our intent to elevate by management companies to industry based the status of the HOTT Committee so that it educational programming; and • increased offerings of alternative educational pro- reports directly to the Board of Directors. In doing gramming for managers outside of CAI-MN that so, we hope to enhance the programming of the HOTT Committee as well. may draw managers from CAI-MN educational events in the future if CAI-MN does not provide We were fortunate to identify an outstanding cangreat programming. didate, Tim Broms, to be the Education Consultant for CAI-MN. Tim has extensive experience as a past In response to these changes in the industry and related opportunities, the CAI-MN Board of Direc- CEO of a management company within our industry, has assembled educational programming for our tors resolved the following at its last meeting on industry in the past, and is currently furthering his August 25, 2009: educational interests as a middle school math teacher. o approval to hire a paid CAI-MN Education We do not intend to change the luncheon eduConsultant to oversee the creation of future cational programming that has been lined up for educational programming for CAI-MN; o selection of Tim Broms as the Education Consul- September and October. For subsequent lunch programs, changes will be considered and may be tant to CAI-MN; made to the programming currently on the mano establishment of a budget authorization to supager education calendar. We also anticipate adding port the work of the paid consultant; and o creation of a new Education Committee made up additional educational program offerings. More information will follow after Tim Broms’ work of management company CEOs. unfolds over the next 60 days.

Board of Directors 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 Patricia Butler Liaison to HOTT Committee Phone 952.936.9692 pat.butler@westbrookepatiohomes.com 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

Committee Chairs Legislative Action Chair John R. Dorgan, Esq. Phone 612.729.1943 jrd@jdorganlaw.com

Education Chair Joe Crawford Phone 763.746.8120 jcrawford@developcommunity.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

Communications Chair Steve Hoogenakker Phone 763.213.2410 steve@landscape.pro

Annual Meeting Chair TBD

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

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

CAI-MN Member News 486 Professionals Earn CMCA Credential

Almost 500 professionals received the Certified Manager of Community Associations (CMCA) credential from the National Board of Certification for Community Association Managers (NBCCAM) in the first half of 2009.

Professionals must complete a 16-hour course and pass NBCCAM’s national examination to earn the certification. They must demonstrate competence in developing association budgets and financial reports; providing administrative, operational and managerial counsel to association boards and residents; enforcing covenants and restrictions; overseeing payment for community association services; and managing association personnel.

Certified managers must take continuing education courses and adhere to the CMCA Standards of Professional Conduct to maintain the certification.

The following Minnesota managers received their CMCA during the first half of 2009: • Lisa Astleford, Saint Michael • Rox Ann Hazelton, Cedar • Andrea Hemingway, • Tracey Bernier, Forest Lake Bloomington • Jane Bristow, Bloomington • Charles Hesse, Hopkins • Dawn Butler, Bloomington • Timothy LaCroix, Champlin • Christopher Campbell, • Colleen Nesseth, Golden Minneapolis Valley • James Chanaka, Minneapolis • Jeff Peterson, Savage • Michael Cleary, Eagan • Kristi Ryan, Minneapolis • Jan Curtis, Eden Prairie • Brandi Schuknecht, • Kim Dare, Bloomington Minneapolis • Stana Gerlach, Minneapolis • Kim Gilmore, Andover • Kay Thiel, Hugo • Renee Gowan, Bloomington • Sher Trombley, Bloomington • Polly Gravelle, Zimmerman • Hamlet Vazquez, Minneapolis • Bill Hauge, Minneapolis • Carolyn Wendell, Hopkins CAI has also awarded designations to almost 300 industry professionals, which includes recipients of the AMS, PCAM, and RS designations. The AMS is the second tier of professional certification and designations for community association managers. The PCAM is the third and highest designation for professional managers. The RS designation recognizes a high level of competency in the conduct of reserve studies.

Reserve Specialists (RS) • Jonathan Pettersen, Minneapolis

“Where You Live” Radio Program Featuring the CAI-MN Minute

The weekly radio program (Saturdays from 11:00 a.m. to 1:00 p.m.), “Where You Live,” with Gene & Toni now features a one minute segment from CAI-MN every week. The program, featured on AM 1570 KYCR, is the Twin Cities’ only radio show that tackles issues and concerns faced by owners of homes, condos, townhomes or apartments. The program is produced by New Concepts Management, a member of CAI-MN. Here is a listing of the scheduled broadcast topics: Handyman Horror Stories Rights & Responsibilities for better Communities Establishing a Budget for your Property/ Tax laws How to Improve Your Credit Score: Establishing Financial Stability How to get started in buying & owning rental property Answering Renter Hotline Questions (from the pros) Navigating Financial Problems in HOA’s – part II

Sep. 12 Sep. 19 Sep. 26 Oct. 3 Oct. 10 Oct. 17 Oct. 24

“Where You Live” to have CAI CEO Tom Skiba as a Guest on September 19

Tom Skiba, CEO of CAI, will be a guest on the Where You Live radio program on Saturday, September 19. He will be on starting at 11:00 a.m. The topic is “Rights and Responsibilities for Better Communities”

CAI Offers Flu Clinics for Members

CAI members can now schedule flu vaccination clinics at their companies or in their communities, eliminating the need for residents and employees to schedule appointments with their doctors.

Vaccination clinics will be held between Sept. 14 and Dec. 1 in conjunction with CAI’s new partner, Maxim Health Systems. There is no fee for community associations or companies that sponsor the clinics if a minimum of 40 people participate. Influenza, FluMist and pneumonia vaccinations will be offered for $25, $35 and $45, respectively. Medicare Part B and a growing number of managed care organization members can be billed.

Member News continued on page 17

Professional Community Association Managers (PCAM) • Jill McMahon, Bloomington • Halo Stafford, Minnetonka Association Management Specialists (AMS) • Angie Blazek, Golden Valley • Joseph Crawford, New Market • Jennifer Campbell, Golden • Michelle Gaskill, Golden Valley Valley • Jennifer Carr, Fridley • Bill Hauge, Minneapolis • Michael Cleary, Minneapolis • Mark Karason, Bloomington

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Minnesota Communit y Living

Calendar

Index

2009 October

features

October 10, 2009, 8:00 a.m. - 4:00 p.m.

Dorsey Ewald Conference Center

By Oct. 2: $75/Member, $100/ Nonmembers. After Oct. 2: $100/Member, $125/Nonmembers

6 A Logical Solution to a

Fundamentals of Community Volunteer Leadership

Managers Luncheon “Herding Your Cats: Dealing with Non Compliance Issues” October 14, 2009, 11:30 a.m. - 1:30 p.m.

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

Homeowner Training Track “Building Community” October 28, 2009, 6:00 - 8:30 p.m.

Location TBD Maple Grove, MN Free/homeowners, $30 per manager, $15 per manager who brings one homeowner, Free for managers who bring two or more homeowners

departments

Hydrological Problem

7 Legislative Changes Affecting Foreclosures and Unoccupied Properties By Nancy T. Polomis

8 The 2010 Budget: Project

By Alan Seilhammer

10 3rd Annual CAI-MN Golf Tournament Winners and Photos

13 It’s Not My Time!

By Tom Engblom

14 Financial Checkup By Robin L. Storey

President’s Message

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By Tony Poetz

Planning

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.

November

Managers Luncheon “Records Retention and Electronic Communications” November 11, 2009, 11:30 a.m. - 1:30 p.m.

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

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..... 18 Birch Lawn Maintenance................................. 12 BEI Exterior Maintenance............................... 13 BNC National Bank........................................... 2 Breiwick Companies........................................ 19 Carlson & Associates, Ltd................................. 7 CA Banc/CondoCerts....................................... 20 Cities Management............................................. 9 Construct-All Corporation............................... 15 Construction Consulting & Inspections, Ltd......8 Gassen Companies............................................ 7 Felhaber, Larson, Fenlon, and Vogt............... 19 Final Coat Painting............................................ 4

Hammargren & Meyer, P.A. . ............................ 5 Heaton & Associates....................................... 15 Hellmuth & Johnson, PLLC......................... 9, 18 Horticulture Services, LLC................................. 7 Johnson & Lindberg, P.A................................. 14 Levin & Edin..................................................... 16 Minnesota Exteriors, Inc.................................... 7 Omega Management........................................ 6 Reserve Advisors.............................................. 15 RJF Agencies................................................... 17 Stock Roofing Co............................................. 13 Strobel & Hanson............................................ 15 Thomsen & Nybeck......................................... 16

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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.

September | October 2009

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A Logical Solution to a Hydrological Problem Keeping H2O away from your HOA

M

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

any structural elements of your multi-unit homes exist for the sake of one fundamental goal keeping water out. Your roofs, siding, windows, doors, drain tile, sump pumps...they all function to keep the rain and snow-melt moving away. While these elements all function well when installed properly, they can perform even better with a little help from a rather simple solution: gutters.

Heavy rain and natural snowmelt rolling off your eaves creates ruts, destroys landscaping and worst of all leads to basement flooding.

Consider this: 1 inch of rain on 1 square foot of roof yields 0.6 gallons.

That’s 60 gallons for every inch of rain on 100 square feet of surface area.

With an average US duplex roof being 4,800 sq ft and the average precipitation in the southern half of Minnesota being 34 inches, you’ve got 97,920 gallons of water racing toward your foundation every year.

Gutters might be the solution you need before your association installs an irrigation system or sump systems.

Most gutter contractors offer a variety of colors and they’ve got the timeline down to a science. The process is rather non-invasive as they only need to access the exteriors. Ironically, however, they can’t work in the rain.

Rain work is generally an insurance “no-no” due to roof and scaffolding slippage.

Drain tile working in concert with your gutter system is an additional option toward foundational peace of mind. A small trench is dug heading away from the building then a hole is dug a little deeper at the end and filled with rocks. A molded plastic pipe is then placed in the trench. One end is attached to the downspout, the other drains to the end of the trench into the erosionresistant rocks. This moves the rainwater an even safer distance (and down about 3’) away from the structure.

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Minnesota Communit y Living

One increasingly popular alternative is the rain barrel. These items are the definition of “green” and can save a lot more than the environment. Rain barrels are a dry season option to turning on the sprinkler, thereby reducing the utility bill. A barrel with hole in the top and a spigot at the bottom is placed underneath a downspout so rainwater fills the barrel itself.

Residents (or your landscaper) use the water for their flowers and lawns during dry times.

If you’ve ever visited an extremely dry climate, you’ve seen these next to a lot of home and on many roofs, but in a much larger size.

Those that are used in Minnesota’s continental climate are more discreet and decorative. You can pick your styles and colors.

Gutter prices range widely depending on the type of material you use. Vinyl and plastic are about the cheapest and you’ll get what you pay for with almost assured maintenance required within two or three seasons. Copper gutters look beautiful and function well, but the price is rather high starting around $10/ft just for the gutters.

The downspouts are priced separately and are generally a little more per foot. Copper gutters are normally installed on higher end homes and are custom fitted so the price can be much higher depending on the layout.

Aluminum and steel seamless gutters are the most popular and the most durable. Most come with a lifetime warranty on the product and 10 – 15 years on the installation. Installation warranty is different as there is a sealant used on the end caps that can wear down. The seamless aspect is made possible by a machine that actually transforms a giant roll of aluminum into what you see on the building. It is known as a “K” style gutter due to its shape when viewed from the end. Aluminum and steel can be rolled out at nearly any length.

Aluminum gutters for a large project can usually be found for $5 - $7 per foot. The price depends on the company and will reflect their willingness to come back for repairs if needed.

Estimates are almost always free.

We’ve seen fancy ground irrigation set-ups, expensive sump-pump installs and flooded basements all because water was allowed to be near the foundation. Gutters might be your multi-unit’s straightforward solution to simply keeping the H2O away from your HOA.

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Legislative Changes Affecting Foreclosures and Unoccupied Properties by

A

nother legislative session has come to a close. Although overshadowed by budget disputes, budget cuts and unallotments, there were a few changes to laws affecting foreclosure of mortgage and association liens and vacant properties. Most changes affect the mechanics of the foreclosure procedures, but a few changes were clearly aimed at addressing the growing number of foreclosures and the problems related to vacant properties.

Homeowners May Now Postpone Sheriff’s Sales Previously, a sheriff’s sale could be postponed by the foreclosing creditor only. However, a homeowner now has the right to request that a sheriff’s foreclosure sale be postponed for up to five (5) months from the originally-scheduled date of the sale. In order to postpone the sale, the homeowner need only complete and record an affidavit, and provide a copy of the recorded affidavit to the sheriff and to the foreclosing creditor. The creditor is not required to publish any notice of postponement or even to modify its published Notice of Sale. In exchange for the right to postpone the sale, however, the homeowner agrees that

the redemption period following sale after such postponement is reduced to five weeks.

As a result, the foreclosure process is not unduly extended by any such postponement.

A homeowner may request a postponement only once, even if there are foreclosure proceedings commenced again after reinstatement during the postponement, and the postponement option is available only on homesteaded residential properties (one to four dwellings).

Postponing the sheriff’s sale gives a homeowner more time to reinstate the loan by paying the amount in default (the back payments), as opposed to being forced to pay the entire loan balance off during the redemption period.

Such postponements may prove to be a boon for associations governed by the Minnesota Common Interest Ownership Act (MCIOA), so long as the foreclosure sale still takes place after the postponement.

MCIOA allows the association to retain a “superlien” for assessments accruing during the six months prior to the date on which the redemption period expires, so whether the redemption period is five weeks or six months, the association is entitled to collect

Nancy T. Polomis, Esq, Hellmuth & johnson, P.A..

six months’ assessments from the foreclosing lender. Further, the lender takes full title in just five weeks after the sheriff’s sale, meaning the association has a new “dues paying” member (the lender) on the books sooner.

If the delinquent homeowner is able to reinstate the mortgage during the period of postponement, that homeowner retains ownership and possession of the home. If the homeowner is also delinquent on his or her association assessments, the association may then be in a position to pursue collection of those unpaid assessments more aggressively.

Only time will tell how many homeowners take advantage of the opportunity to postpone sheriff’s sales.

Cities Gain Right to Secure Vacant Buildings Effective August 1, 2009, if a building becomes vacant and is deemed hazardous because it has not been secured—and the building could be made safe by securing it—the city may order the owner of the building and holder of the sheriff’s certificate to secure the building. If the building is Foreclosures continued on page 18

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September | October 2009

7

The 2010 Budget: Project Planning Do it Now or Face Inflation!

By Alan Seilhammer, Senior Vice President, CA Banc

2009 in most corners of the country has been a horrific year for the cash flow of associations.

Unit owner bankruptcies and foreclosures have stripped associations of a tremendous amount of association dues. We all have fingers crossed that 2010 will see the foreclosure pace having well slowed. Those units that were not paying could then be filled with financially healthy, dues paying, happy homeowners.

As we all painfully know, this financially stressful experience began way back in the summer of 2007. We have been wrapped up in this difficult time for a long time. Typically, what most community associations have done during this period is controlled their expenditures in a very draconian fashion.

Deferred maintenance that really needed to be addressed prior to now, has not. The leaky roof is now rotting the roof sheathing and trusses. The parking lot is all chopped up.

But, because there has been a very constrained budget and likely reserves are depleted to access cash to support operations with so many non-paying units in foreclosure. There maybe only 2 options to fund a capital maintenance project: Special assessment or obtaining loan.

One of the things that is a coming reality as result of our government’s efforts to stimulate the economy is going to be inflation. It’s not a maybe. It will occur as all the economists are reaffirming regularly in the news. The only maybes are WHEN and HOW MUCH. Logic suggests, as soon as the economy begins picking up, inflation will be stimulated. The guess is that 2011 will be the year inflation will start growing out of control. What is inflation? Inflation is raising prices. Inflation is increasing interest rates. Inflation is very painful and problematic. Does anyone remember December 1980 when the Prime rate was 21.5% because inflation was around 10%?

2010 is likely the last best year to get your capital maintenance projects done on the cheap. Because of the terrible condition of the economy, contractors are available and hungry for work. The prices of construction material are down. Interest rates are low.

This is a perfect storm of conditions to get a 8

Minnesota Communit y Living

project done in a least cost manner. Waiting beyond 2010 is going to be the worst of all possible conditions. The economy will be improving which means the contractors will become busy. Thus, their prices go up as their availability contracts. As demand for building materials increases, prices go up.

The imbalance of government intervention of the past few years is going exacerbate the extent of price increases: inflation.

Another very important circumstance that has developed over the past couple years is construction defects. Remember that the economy downturn started in mid 2007.

The obvious response of a contractor that is beginning to feel the financial strains of a slowing economy is to cut corners. Cutting corners on a project that is new construction or a conversion into a condominium results in defects. Defects will cost the association lots of money. Being likely that your new community has defects and inflation is going to occur in 2011, it is prudent to find those construction defects now verses letting them show themselves in a few years after the defect has allowed expanded damage. The smartest thing a new association could due for itself right now is to bring in investigative engineers to inspect the property. Find any potential construction defects and deal with them now. Obviously, those defects are not going away. They have the potential of causing more damage. There may be an opportunity for recourse against the developer if you act now. The cost of making the repair is going to become very much more expensive after 2010.

Important in your project planning is the source of funds. It is going to be tough to be able to levy a special assessment after what your unit owners have been through for these past couple years. If you plan on obtaining a loan to finance your capital maintenance projects, you will need to be presenting a sound financial position to the bank. Banks are very skittish about taking on any type of borrower that might even show the smallest degree of weakness. The best thing you can do is plan your 2010 budget to show proper planning and healthy cash flow. You must

have a bad debt expense in your budget.

If you have a delinquency level of 15% in you’re A/R aging, you need to have at least that level of bad debt expense in your budget. You might not believe it or like it. But, if you think you are going to need to convince a bank that you have enough contingency in your cash flow for all eventualities, you had better do some aggressive planning. After that large bad debt expense is in your budget, you need to have a healthy Net Excess available for contribution to reserves. This all adds up to the potential of a large amount of cash build up of reserves if the bad debt expense is not as troublesome as the contingency has prepared you for. But, that is not a problem. Excess funds can be used to reduce the amount of loan that is being requested or allow for loan prepayment. As indicated throughout, you have a small window of opportunity to get capital maintenance projects done inexpensively. Do not squander the opportunity by leaving yourself unable to qualify for a bank loan to fund the projects.

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

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September | October 2009

9

CAI-MN 3rd Annual Golf Tournament Congratulations Winners!

15th Place Team Prize – Score: 67 John Labatt Premier Home Improvement LLC Trey Labatt Premier Home Improvement LLC Chad Ricksh Premier Home Improvement LLC Sean Ricksham

10th Place Team Prize – Score: 65 David Bruneau Community Development Inc. James Chanaka Community Development Inc. Kari Miller Community Development Inc. Ben Smith Community Development Inc.

5th Place Team Prize – Score 64 Paul Balfanz Burke, Wheeler & Associates, PA Matt Drewes Thomsen & Nybeck, P.A. Brent Rolling Burke, Wheeler & Associates, PA Aaron Rolling Thomsen & Nybeck, P.A.

First Place Team Prize – Score 56 Keith Alverson Mike Jacobs American Building Contractors, Inc. Josh Moe American Building Contractors, Inc. Wayne Srsen American Building Contractors, Inc. Closest to the Pin Andrea Hemingway Gittleman Management Corporation Bob Cochrane

Longest Drive Angela Anderson Restoration Professionals J.B. Larson Condominium Resources, LLC

Longest Putt Andrea Hemingway Gittleman Management Corporation Tim Swanson BNC National Bank

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Minnesota Communit y Living

Thank You Sponsors!

Title Sponsor

American Building Contractors www.abc-mn.com

Tournament Sponsors

BEI

Exterior Maintenance

Hammargren & Meyer, P.A. www.hammarlaw.com

BEI Exterior Maintenance www.beixm.com

September | October 2009

11

CAI-MN 3rd Annual Golf Tournament

Additional Sponsors Par 3’s and Hole-in-One Sponsor CABanc/CondoCerts

Closest to the Pin Sponsor: Men US Bank

Golf Cart Sponsor Birch Lawn Maintenance

Closest to the Pin Sponsor: Women Cedar Management

Giveaway Bag Sponsor Dorglass, Inc. Putting Contest Sponsor Kiser Construction At the Turn Sponsor Stock Roofing Co. Beverage Cart Sponsors Community Development Concierge Enterprises Smartstreet, A Division of RBC Bank Lunch Bar Sponsor Prescription Landscape Lunch Sponsors Avvid Technologies Plehal Blacktopping Dinner Bar Sponsor Hellmuth & Johnson, PLLC Dinner Sponsor Giertsen Company Driving Range Bar/ Bvgs Sponsor Thomsen & Nybeck, P.A. Trophy Sponsor New Exteriors by SMA, Inc.

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Longest Drive Sponsor Men Levin & Stein Longest Drive Sponsor Women CertaPro Painters - Women Longest Putt Sponsor - Men CenterPoint Energy Longest Putt Sponsor Women Gassen Companies Hole Sponsors ACI Asphalt Contractors Asphalt Associates, Inc. BNC National Bank Breiwick Companies CABanc/CondoCerts Carlson & Associates, Ltd. CertaPro Painters - Twin Cities Giertsen Company Golden Valley Heating & Air Conditioning Lawn Ranger Majesty Companies LLC New Exteriors by SMA Inc. Northrup Roofing & Remodeling Reserve Advisors, Inc. RJF Agencies, Inc. Schoenfelder Painting Tenet Painting

Minnesota Communit y Living

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

Professional Landscape Maintenance

Locally owned and operated since 1978

651-481-9180

birchlawn@birchlawn.net

3100 Spruce Street • St. Paul, MN 55117

www.birchlawn.net

It’s Not My Time!

By Tom Engblom, AMS, CMCA, PCAM

A

s I travel through seven Midwest states for Community Association Banc I listen to various radio stations between office visits. I continue to hear this popular lyric about its not my time reflecting if you only had a short time to live as follows by Three Doors Down - It’s not my Time! The lyrics mirror the life of an association and their committee volunteers “ I look ahead at all the plans we made and the dreams we had I’m in a world that tries to take them away oh’ but I’m taking them back cause all this time I’ve been to blind to understand what should matter to me its not we have its what we believe.”

Attending numerous board meetings relating to loan presentations I see unit owners that feel its not their time to assist the board in the decision making process by volunteering.

Unit owners need to step up to the plate assisting the board in the decision making process thru volunteering as a committee member. The board benefits from input of committees working at the will of the board when assigned specific task. The committee will create effective leadership; develop specific task or goals; time frames to accomplish the goals; methods to accomplish goals; progress and recommendations to the board. The committee is a Group of individual’s organized to represent everyone. In the formation of a Group the following entity is formed: Goal | Reward | Organization | Union | Procedure.

Usually a community association bylaw and sometime its declaration will name certain committees that are required or allow for the appointment of other committees that be required from time to time. Typically committees are focused by 3 subgroups consisting of mandatory, standing, and ad hoc. Each committee implements is own distinct characteristic to support the board in their policy making decisions. The Mandatory Committee is vital during election, nominations, and architectural standards.

Roofing The Standing Committee creates the steady flow of budgetSiding ing, grounds, social, newsletters, pools, and rules including disputes. Finally the most unique Committee is the Ad Hoc Decks created for a one time issue to make recommendations to the board within a specific time frame. On the humorous side Carpentry the board should not create or assign volunteers to comAsphalt & Concrete mittees simply to keep them busy or not to complain to the board during meetings. The board should take the commitWindows & Doors tee recommendations serious, meaningful task, adequate authority to complete the task, and public recognition for their performance. As time progresses the committee volunteers will mature to potential board members It’s not my time to volunteer I have to much work, they won’t listen, I won’t make a difference, the meetings are too long or the meeting date is the wrong day. Unit owners should volunteer to create family tradition, self esteem, sense of responsibility, self protection, issue resolution, and sense of community.

“I’ve been to blind to understand what should matter to me its not we have its what we believe.” Make it your time to make a difference in your association the result will create a greater sense of community living for the association that it is your time!

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

September | October 2009

13

Financial Checkup

Two proven ways to improve your bottom line

By Robin L. Storey is president of Smartstreet, a division of RBC Bank

If it’s been a while since your homeowners association or management company has taken a good, hard look at your payment processing and cash management processes, you may not be taking advantage of some important innovations. The good news is that these innovations are now road-tested and easy to implement. Here’s an exploration of two simple systems that can help make your staff more efficient, save you money and help you increase your investment earnings.

1. Lockbox services designed for the specific needs of associations

Are your administrators still handling payments manually? If your association or management company opens envelopes, posts payment information, fills out deposit slips and goes to the bank, these activities can add up to significant administrative time for your staff. Now there’s a better way: automated processing.

with people who say they first assumed that “lockbox” meant a safe deposit box, or some type of reserve account. Quite simply, a lockbox is a cash management tool that provides a cost-effective way to outsource the most routine duties associated with payment processing, saving you time and money.

Lockboxes aren’t new in and of themselves.

They’ve been around since the 1930s, when they were used primarily to speed up mailed payments. Payments could be sent to a post office box, where the lockbox service could pick them up and deliver them, without waiting for the post office to sort and deliver them. Modern use of lockboxes dates from the late 1990s, when computer-imaging technology made it possible for advanced lockbox systems to create electronic payment files.

Here’s how it works today: rather than receiving payments at your office, you arrange for them to go directly to the lockbox Automated processing often includes lockcompany, which can usually accept checks. box services.

“Lockbox” isn’t a very2/4/07 good 8:33:09 Checks are read by scanners, so there are johnson_2.5x4.5_bleed.pdf PM descriptive term for it. I’ve often talked typically very few reading errors. Payment processing is generally faster than by manual means, so payments are credited faster. An accounting department can upload these files directly into its accounts receivable system without ever having to type in a payment. Some systems can even read the handwritten amount on a check and comConstruction defect problems? pare it to the amount on a coupon. If the amounts don’t match, an operator flags the payment for review. Payment information – including scans of checks and a wide variety of statements and reports – is available to you online right away.

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

14

Minnesota Communit y Living

At Smartstreet, because we work exclusively with community associations and management companies, we’re also set up to handle member checks, coupons and statements – both paper and electronic – and to handle exceptions, such as when a member includes correspondence or makes an unusual type of payment.

The associations we work with often say they have been able to reduce time spent on routine payment processing and have often been able to redeploy staff to work on other things, such as growing the company or offering more

and better customer service to members, while their payment processing is being done better and more efficiently – and at a lower cost, because Smartstreet doesn’t charge for payment processing with qualifying deposits.

How do you find the lockbox service that’s right for your association? Here are some ways to find the one that best fits your needs: • Seek out professional recommendations.

Not all lockbox services offer the same features or deliver the same level of performance. Ask other management companies and associations what has worked for them – and why.

• Ask specific questions about technology.

Most lockbox services will tell you they have “the latest technology.” You can find out more by asking about specific features: Do they offer online check and coupon images? Electronic files for your accounting system? These features add the greatest value to the collection process. You should also ask whether the company develops and maintains its own technology or whether they license an off-the-shelf software system. If they don’t have in-house IT, they may not be able to offer you as many customization options and they will probably have higher development and maintenance costs, which — one way or another — they’ll pass on to you.

• Ask specific questions about what it’s like to work with the provider. Once you narrow down your choices, ask each lockbox service a few candid questions: § Is the lockbox service in-house or outsourced? (In-house lockbox services are normally customized for the industry, provide a higher degree of functionality and are integrated with the payment processing – thus providing a higher level of service.) § How frequently and when do you make processing deposits? § How long should I expect mail delivery to your location to take? (This is especially important if you’re using a national service located in another state.) § Do you have enough staff for peak times? § What reports do you provide your customers?

§ Do you offer images of checks and coupons? How good is the image quality? § How do you handle checks without coupons (called “exceptions”)? Do you return the checks to us to research or let us verify and post online? § What do you do with odd correspondence that sometimes gets included in our envelopes? § How do you handle checks from online bill-pay services? § What are your error rates? How do you respond to errors? § What is your fee structure?

2. Association-specific cash management services Does your financial institution understand the specific needs of homeowners associations and management companies? If not, you may not be getting the guidance you need to maximize the returns on your deposits. Take a look at your cash management picture and ask yourself the following questions: • Are my reserve accounts performing as well as they should?

• Am I earning the maximum returns on my money market deposits?

• Are my CD deposits properly insured through FDIC coverage?

• Are my non-CD assets adequately covered by private insurance if they’re not covered by FDIC insurance?

• Do I have easy ways to move funds around as needed to get the best return on my money?

• Do I have an investment manager I can trust for assistance with investments that meet my association’s regulations and criteria?

If you’re not sure, look for a financial services company that specializes in the association industry and ask for a detailed no-cost evaluation. It’s the best way to make sure your association is making the right cash management decisions and investing wisely.

CONSTRUCT-ALL CORPORATION

24

MEMBER

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763-427-5900 Bonded Licensed Insured

With you.

Every step of the way.

At Reserve Advisors, our clients expect a high level of quality and service, and we deliver.

We’re fully committed to you during every step of the reserve study.

Let our experience and expertise be your guide.

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

September | October 2009

15

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.

(952) 835-7000 | www.tn-law.com Our new address as of October 1, 2009: 3600 American Blvd. W., Suite 400, Bloomington, MN 55431

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

16

Minnesota Communit y Living

Member News continued from page 4 Vaccinations for the H1N1 virus (more commonly known as “swine flu”) will be available later in the year in accordance with the federal priority lists. Availability will be announced to CAI members via e-mail.

“We are pleased to be able to offer this opportunity to our members,” says CAI Chief Executive Officer Thomas M. Skiba, CAE. “This is an easy, nocost way for community associations to provide a valuable service to their residents, and for businesses to provide a convenient and important benefit to their employees.”

We’ve been here.

We’ll be here.

Long-term dedication to your association.

“The single best way to protect against the flu is to get vaccinated each year,” says the Centers for Disease Control and Prevention (CDC). More than 200,000 people are hospitalized every year in the United States due to flu complications, and about 36,000 people die from flu-related causes.

While the community or business will be primarily responsible for promoting the clinic, Maxim Health Systems will provide flyers and posters to promote the clinic, as well as language to use in other promotions.

To sign up, members need to complete and return a short online form. It can be accessed in the members-only section of the CAI website at www. caionline.org. The form can be faxed to (304) 776-2047 or e-mailed to andrea.gess@maximwellness.com before October 1.

Hellmuth & Johnson Adds New Attorney

Hellmuth & Johnson, PLLC is pleased to announce that Jack Bouquet has joined the firm.

Bouquet joins the firm as Of Counsel with more than 40 years of experience. He practices in the areas of real estate law, community association law, corporate and business law, estate planning, and probate. Jack is licensed to practice law in the state of Minnesota.

Jack is a certified real property law specialist, certified by the Minnesota State Bar Association (MSBA), past chair of the Hennepin County Real Property Section, member of the MSBA’s MCIOA committee (charged with reviewing all proposed changes to the Minnesota Common Interest Ownership Act), past chair of CAI-MN and currently a member of the CAI Legislative Action Committee.

Thomsen & Nybeck to Relocate Offices on October 1

Thomsen & Nybeck, P.A. is pleased to announce that it will be moving its offices to the Northland Executive Office Center effective October 1, 2009.

The firm’s new address will be 3600 American Blvd, Ste. 400, Bloomington, MN 55431. The firm’s phone and fax numbers will remain the same.

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

Mary Felix Promoted to Property Manager Supervisor

Mary Felix was promoted to Property Manager Supervisor at Gassen Company on July 1, 2009.

Mary joined Gassen Company in 2007 with extensive experience in the building trades and customer service business. In January 2009, she assumed the position of Trainer for new Property Managers. Mary continues with the training program, serves on the Membership Committee for CAI-MN and is working on obtaining her PCAM designation. Congratulations to Mary Felix!

Community Association Insurance Services (763) 746-8000 www.rjfagencies.com September | October 2009

17

Foreclosures continued from page 7 not secured, the city may do so, and the costs associated with securing the property may be assessed against the property. “Neighborhood associations”—which by definition would include homeowners associations—may request that they also be notified of such demands.

Associations are encouraged to notify city officials of the association’s desire to be notified of vacant buildings in the community. While many associations are usually aware of vacant homes in the association, requesting formal notice from the city ensures that the association is “in the loop” regarding those properties.

Lenders Now Have Obligation to Secure Vacant Buildings Previously, foreclosing lenders had the right, but not the obligation, to enter foreclosed properties to secure them and protect them from waste and trespass. As of August 1, 2009, however, if a property is vacant or unoccupied and the holder of the sheriff’s certificate has knowledge of facts that support a court’s determination that the property has been abandoned, the certificate holder has a duty and obligation to enter the property, make reasonable inspections, change the locks on the doors, install locks on windows, and ensure that all locks are functioning properly. Such certificate holders may (but are not obligated to) board windows, doors and other openings, install alarm systems, or otherwise

prevent or minimize damage to the property from the elements, from vandalism, trespass or other illegal activity. The costs related to securing the property may be added to the balance due or the costs allowable on redemption.

Cities Have Right to Reduce Redemption Period for Abandoned Properties As many associations know, the typical six-month redemption period following a foreclosure sale can be reduced to five weeks if the property has been abandoned. Evidence of abandonment would include, for example, boarded windows and smashed doors, as well as terminated utility service. The right to request such a reduction was previously limited to the foreclosing party (usually, the first mortgage holder). Such lenders often opted not to seek an order reducing the redemption period because of the cost and time involved.

The foreclosure statutes have now been modified to allow cities to make a motion to a court to request a reduction in the redemption period. If this right is exercised by cities, it should allow cities to minimize the time that abandoned properties are owned by the homeowner that has abandoned the property, and allow lenders to market and sell the properties more quickly.

While these new statutory provisions will not necessarily solve the problems associated with vacant properties, they do impose a higher duty upon foreclosing lenders to monitor their properties and to take steps to protect them from trespass and the elements. It is also hoped that the changes will shorten the time periods that a property is vacant and shorten the time period a foreclosing lender (or association) must wait to market and sell an abandoned property.

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

18

Minnesota Communit y Living

Snow Removal

Landscaping

www.breiwick.com or

Stump Removal

Lawn Care

763.767.9230

11681 Eask Laketowne Drive - Albertville,

member of:

The Community Associations Institute & The Minnesota Multi Housing Association Providing LegaL ConsuLtation to

Homeowners assoCiations sinCe 1975 • General corporate matters, enforcement of covenants, restrictions and management issues • Document interpretation and amendments • Collection of assessments and foreclosure of assessment liens • Dispute resolution and litigation, including construction defect litigation • Applicability and options under the Minnesota Common Interest Ownership Act (MCIOA)

David Eide 612.373.8520

Fred Krietzman 612.373.8418

Timothy Hassett 651.312.6006

Trina Sjoberg 612.373.8536

Rich Voelbel 612.373.8544

Steve Yoch 651.312.6040

• Project development and documents • Turnover of developer control

www.felhaber.com September | October 2009

19

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