Insight and Education for Community Associations Community Associations Institute / Central Arizona Chapter / www.cai-az.org
Spring Cleaning: Time to Renew, Refresh and Replenish
PLUS‌ President’s Message Myths & Misconceptions 2014 CAI CAC Event Calendar
Spring 2014
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Spring Cleaning: Time to Renew, Refresh and Replenish Spring 2014
Community Associations Institute / Central Arizona Chapter / www.cai-az.org
Features 18
Departments
Spring Cleaning: Time to Refresh the Books By Michael Ginsburg, CPA
19 Spring Cleaning: Time to Renew, Refresh & Replenish Your Landscaping
President’s Letter ................................ 4 From the Editor
From the Director ................................ 5 Chapter Executive Director’s Letter
By Ryan Orosco
20 Budgeting for Updated
Technology in Your Landscape By Rebecca Herro
20
Save Green by Going Green
PCAM Corner ....................................... 6 Non-Fee Based Revenue: Time to Rethink What’s Possible
Committee News & Updates ............... 8 Committee News and Updates
By Isaac Berlin
Myths & Misconceptions ................... 10
21 Create Community by Creating Relationships
New Members ................................... 12
Welcome to the Central Arizona Chapter!
By Delores Ferguson, PCAM
22 Should We Amend Our CC&Rs? By Quinten T. Cupps, Esq.
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24 Maintenance Guide Using the Association’s Reserve Study
By Marcus Castle
26 Spring Cleaning for Associations
CAI Events ......................................... 13 2013 CAI Golf Tournament January Luncheon Summary February Luncheon Summary
Congratulations Corner ..................... 28 Annual Sponsors ............................... 29 2014 Annual Sponsors
By Any Ferrell, PCAM
Calendar of Events ............................ 30 2014 CAI CAC Event Calendar While efforts to insure accuracy are exercised, the publisher assumes no liability for the information contained in either editorial or advertising content.
Valhalla Community Magazines
Diamond Corner ................................ 31 Showcase of Top Sponsors
www.Valhalla360.com
For advertising and editorial information, please call Valhalla Community Magazines at (480) 634-1708.
Product and Service Directory .......... 32
Spring 2014
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From the president
President’s Letter
Community Associations Institute Central Arizona Chapter
By Mary Jo Edel, CAI-CAC President
2014 Board of Directors
In 2013, CAI observed its 40th anniversary. During this 40 year period, the organization evolved from a concept that took root during backyard strategy sessions in the 1960’s to an international organization today. With more than 32,500 members, 59 domestic chapters, a chapter in South Africa and constructive relationships with leaders in Canada, the Middle East and Australia, CAI continues to grow in membership, prestige and influence. Most of the men and women who guided CAI through its first years are now in their 60’s, 70’s and even 80’s. Many have moved on to other endeavors or have deservingly retired. But where does that leave CAI? This organization has been successful because we continue to evolve. We cultivate new leaders to ensure that
we continue to meet traditional and emerging challenges related to public policy, technology, education and a higher standard of professionalism and public reputation. Now is the time to renew, refresh and replenish, which will help us chart the future of the next generation of CAI. Julie M. Howard, Esq., President of CAI National, believes it is the right time to frame our future with two vital objectives - engaging all community association stakeholders and inspiring a fresh new generation of leaders. Together we can ensure the continued success of CAI. Our success will be measured by what we have learned and inherited from our mentors and also by developing leaders as dedicated and creative as those who have guided us for the past 40 years.
Springtime in the Valley is a busy time, as many part-time residents are in town and the area is filled with tourists soaking up our beautiful weather. What better time to pursue amendments to association governing documents, or to arrange a volunteer community clean-up? Spring is also a good time to “clean up” the association books and records, and review the maintenance and reserve plans to ensure that budgeting is on track for future projects. It is an ideal
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Chapter President-Elect Mark Wade, CMCA, AMS, LSM, PCAM Leisure World Community Association 480-823-0003 • mwade@leisureworldarizona.com Chapter Vice-President Linda Van Gelder ALPHA Community Management 623-825-7777• linda@alphacommunitymanagement.com Chapter Secretary Toni Rudolph First Citizens Bank 602-624-0949 toni.rudolph@firstcitizens.com Chapter Treasurer Josh Bolen, Esq. Carpenter, Hazlewood, Delgado & Bolen, PLC 480-427-2862 • josh.bolen@carpenterhazlewood.com Chapter Directors Milan Carnes Verde Groves HOA 937-477-8652 • milancarnes@hotmail.com Lynda Erickson, PCAM 602-616.7322 lerickson@cox.net Augustus Shaw, Esq., CCAL Shaw & Lines, LLC 480-456-1500 • ashaw@shawlines.com Jeff Reynolds, CMCA, AMS Messina HOA 602-549-5369 • jjreyno@gmail.com CAI Central Arizona Staff Kayte Comes Executive Director 602-388-1159 • kayte@cai-az.org Chapter Office 1625 E. Northern Ave., Ste. 201 Phoenix, AZ 85020 Tel: 602-388-1159 • Fax: 602-513-7462 info@cai-az.org • www.cai-az.org
From the Editor... Spring cleaning – it’s not just for your garage or your closet! Spring is a great time to refresh all areas of our lives, our businesses and our communities.
Chapter President Mary Jo Edel, CMCA, AMS, PCAM PMG Services 480-829-7400 x202 • maryjo@pmg-service.com
time to investigate new alternatives for community landscaping as well. This issue of Community Resource explores the numerous ways to “spring clean” your association. It’s time to get rid of the old and bring in the new to renew, refresh and replenish. So, get out your mop and bucket and get started! Jessica Maceyko, Esq., on behalf of the CAI-CAC Magazine Committee
Community Resource Committee Committee Chair Jessica Maceyko, Esq. Ekmark & Ekmark, LLC Committee Members Jacob Marshall, CMCA CCMC Elaine Anghel, PCAM Tri-City Property Management Services Lindsey O’Connor, Esq. Carpenter Hazlewood Delgado & Bolen, PLC. Audra Gambill, CIRMS Community Association Underwriters of America, Inc. Lydia P. Linsmeier, Esq. Shaw & Lines, LLC Magazine Editing Subcommittee Dawn Engel, CMCA, AMS Planned Development Services Kerry Lynn Goto, PCAM, RS Great Boards
CEN T R AL AR IZONA CHAP TER
Ursula Mancuso, CMCA, AMS PMG Services Kathe Barnes, PCAM Scottsdale Ranch Community Association
From the Director
Chapter Executive Director’s Letter By Kayte Comes, Executive Director CAI – Central Arizona Chapter
In keeping with the theme “Spring Cleaning-Time to Renew, Refresh & Replenish,” I would like to inform all the members of our new Chapter direction. The Chapter Board has adopted policy style governance for the operations and board practices. This is a new way of looking at responsibilities and delegation of staff, volunteers, tasks and assignments. The Chapter is very excited about the transition, but it will not take place overnight. Policies will be adopted throughout 2014 and into 2015, and will be adjusted and reviewed as needed. The concept behind this change is to shake up the status quo and see what different opportunities are out there for our membership and the many excellent volunteers the Chapter has recruited over the years. This is also a time for new volunteers to join in and express what they might like the Chapter to offer to the membership in terms of education, different types of events, and new marketing, speaking and advertising opportunities within the Chapter.
Your community is waiting to hear from you. Speak up.
Full Color Community Magazines and Newsletters Your communication is our business.
Valhalla Community Magazines To see what our communication tools can do for your community, visit www.valhalla360.com or call (480) 634-1708.
I look forward to new faces on committees and individuals getting involved in the Chapter to make it their own. The Chapter Board and staff view this organization as a family and are very enthusiastic about the changes. We hope that it will add value to your membership experience. Kayte Comes Executive Director CAI-Central Arizona Chapter Spring 2014
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PCAM C o r n e r
Non-Fee Based Revenue: Time to Rethink What’s Possible By Mark L. Wade, CMCA, AMS, PCAM, LSM
As spring approaches, many of us are already considering our budgets for next year. Ok, let’s be real, as managers we think about our budgets all year long. We are under constant pressure to cut the budgets or at least keep them the same. But with the rising costs of utilities and insurance (just to mention a few), this becomes an ever increasing struggle for boards, managers and management companies. It begs the question “Is it possible to keep our budgets static?” As stewards of associations, we have many tools in our bags that we employ to give us the desired results of great management. All of these tools come to us as a result of education, training, experience and sometimes from peers within our association. We are fortunate to be able to work in an industry where, for the most part, managers are willing to help each other out and share their knowledge and expertise. As PCAM’s in the Central Arizona Chapter of Community Associations Institute, we do this on a regular basis at our PCAM Roundtables. In the past couple of years, we’ve covered a variety of subjects, including alcohol distribution at association parties and events, as well as non-fee based revenue. We also hosted a Roundtable for board members to come and ask questions of PCAMs. Sharing quality information and expertise is common trait of many of our PCAMs in the Valley. When it comes to impacts on our budgets, we all know we can try to trim expenses (another PCAM Roundtable topic). We also understand that we can increase fees/assessments. But not so common is the idea of increasing revenues from other areas. Perhaps it’s time to give another look at non-fee based revenue (NFBR) as a resource to minimize the impact of increased cost of goods and services to our associations. I’ve attended several workshops, conferences and roundtables where ideas of possible NFBR have been bounced around by some of the best and brightest in our industry. Let me share with you a few of their ideas; • Many communities notarize documents for their residents – and charge a fee. • Pet licensing fee. • For gated communities, consider a road use fee for vendors and possibly guests. I’m familiar with one community that does this and their revenue for this year will exceed $1.5M. • Building permit fees.
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$ • Fee for processing rental paper work, resident name tags, auto decals and registration. • Consider renting out space for beauty salon/spa, barber shop, etc. • Consider an energy audit and commercial powerwise business solutions. • Do you have room to build and rent out storage for RV’s, vehicles, storage lockers or storage units? • Renting common areas for weddings or events? • Having a community golf event; some charity events raise $10,000 to $50,000 or more • Cell towers. • Online merchandise store for your association. • Per plate fee for vendors if they use your common recreation center or clubhouse. • Consider the advantages of having a 501(c)(3) Foundation for your community. • Consider a community newspaper. (Advertising can be a windfall profit) • Consider a community Phone Directory. (Again, advertising) • Advertising on your community web-site, banners & still ads. This list just makes a ripple on the surface of the pool of possibilities. Maybe you’re already using some of these innovative ideas, or maybe you’ve got some ideas you could share. These are only a few of the many that are out there. I’m sure with your staff or board members you can improve on this list and add ideas that make sense for the associations you serve. I don’t believe we will be able to keep our budgets static, unless you’ve got some magic idea that stops growth and inflation. But we are the leaders of our communities and we have the vision that can take us forward in the best possible position. As we look to the future, we only need to imagine what the possibilities are and then go out and get them. Ah, what the heck, you just as well go out and get the impossibilities while you’re at it. They’re only impossible for now and you are the boards, managers and management companies that will forge tomorrow what is impossible today. Mark L. Wade, CMCA, AMS, PCAM, LSM is the community manager at Leisure World in Mesa. He is the president elect for the CAC-CAI Board of Directors and Cochair of the PCAM Committee.
Spring 2014
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Committee News
Committee News and Updates Education Committee News Do you want to help the CAI - Central Arizona Chapter flourish? Join the Education Committee! The Education Committee is a great opportunity to participate in the planning of luncheons, presentation of the CAI Essentials Class, and help organize other great educational opportunities for CAI members and non-members alike. The Education Committee meets the first Tuesday of even-numbered months at 4:00 p.m. at Golden Valley Property Management in Phoenix. The next meeting is April 1. If you are interested in joining the Committee, please contact Kayte Comes or feel free to stop by at our next meeting.
LAC-AZ News CAI and its Legislative Action Committee (LAC) have geared into action to monitor, negotiate and, often times, oppose legislation at the Arizona Legislature. As a homeowner association industry, we find ourselves faced with a multitude of proposed legislation year after year. How does the LAC keep up with the ever-changing bills being introduced? One way is through the many hours of the Committee’s volunteers led by Angela Potts, Esq. and myself, Kathe Barnes, PCAM. Secondly, the LAC relies on and works closely throughout the year with CAI’S lobbyists, Kevin and Ryan DeMenna and staff from DeMenna and Associates. The Arizona Legislature begins their session in early January and is constitutionally slotted for 100 days (although it can go longer). The LAC has been meeting telephonically on a weekly basis to review the proposed legislation and determine any necessary plans of action. Many stakeholder meetings are also held to meet with the interested parties and legislators to try and find that “common” ground. If that cannot be accomplished, then the LAC reaches out to its membership. This is where the CAI membership comes into play and has made a vast difference on many, many issues over the years. Unfortunately, the number of bills being introduced each year affecting community associations has been on the rise. That is why it is important to take the necessary steps when a “Call to Action” is sent out regarding a proposed law. The LAC and the lobbyist will work to try to kill or amend a bad bill; yet, there comes a point and time when we have to go to the membership for assistance to contact their legislators in mass. This 8
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“grassroots” effort has been very effective in the past, so be sure to do your part the next time you receive a “Call to Action” from the CAI office. But just as important is the “behind the scenes” work of our lobbyist and staff. Please be sure to help support the Central Arizona Chapter LAC by not only keeping in contact with your legislators but donating funds to help support the efforts of the LAC. You may contact the CAI - Central AZ Chapter office for more information on how to donate.
Membership Committee News Happy Spring! The Membership Committee is proud to announce that the Chapter surpassed the goal of $165K for 2014 sponsorship. Thank you to all sponsors! The Chapter appreciates your continued support. A big thanks to Kayte and Carol Cathcart for diligently working on the effort. A goal the Committee will be working on in 2014 is to grow membership by 12% this year (125 new members). A focus will be on homeowners and managers. Please let the Committee or Kayte know if you have a referral for a prospective member. We will assist by meeting with them, answering any questions or inviting them to an upcoming luncheon or event. In addition, we would like to call on all managers to invite your board members to events this year. The Committee would like to see more board member participation. With that said, the Committee is working on a nonpoaching policy and will be holding a roundtable inviting management companies and managers to participate. The Committee needs input to put together a policy that will hinder poaching of board members and other attendees at our functions and events.
CENTR AL ARI ZO NA CHAPTER
Stop by our office… 1625 E. Northern Ave., Ste. 201 Phoenix, AZ 85020
Parking Enforcement
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Arizona Parking Solutions, Inc. Community Patrols
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Spring 2014
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Myths & Misconceptions
Myths and Misconceptions By Lynn Krupnik, Esq., CCAL & Elaine Anghel, PCAM, AMS, CMCA
Myth: All contracts are the same, so it doesn’t matter what the contract says. We should just go with the contractor we like. Fact: All contracts are not the same. Some contracts can have extremely onerous provisions, such as liquidated damages clauses if the association terminates the contract early. A liquidated damage clause is when the association has to pay the contractor for terminating the contract before its termination date. Other contracts attempt to limit the contractor’s liability, or require the association to defend and indemnify the contractor. This means that, if the contractor does something wrong and someone gets hurt, the association could end up having to pay to defend the contractor and pay any resultant damages. Because there are so many pitfalls in contracts, the association should have its legal counsel review its contracts before the association enters into them. It is much more difficult to get out of a bad contract than it is to avoid entering into it in the first place. Myth: If someone gets hurt participating in a community clean-up project, the association has no liability. Also, if a volunteer causes damage to property or injures someone, the association has no liability. Fact: The association has the potential to be liable for injuries to volunteers and for injuries or damage caused by volunteers. Therefore, the association should make sure that it has the appropriate insurance coverage in place to help cover these types of events. Furthermore, the association should consider having volunteers sign releases and indemnification agreements. Although not foolproof, such forms may help limit the association’s exposure if something happens in the future. Furthermore, if the association takes the time to have such forms signed, it needs to keep them, in case a situation arises where the association wishes to use the form.
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who supplied it and whether or not there was a charge for it. The association needs to consider the following when deciding whether to have alcohol for community events: (1) does the association need a liquor license for the event?; and (2) does the association have the proper insurance for the event? There are a complicated set of laws about liquor licenses, addressing issues such as when they are required, what type of license can be used depending on the type of event, how many special event licenses an organization can obtain in a year, etc. The association needs to analyze the specific situation with the law to determine the answers to these questions. Additionally, keep in mind that there is a special type of insurance to cover liquor liability that is likely not covered under the association’s commercial general liability insurance policy. Therefore, the association should check with its insurance broker to determine what type of insurance it needs to carry to cover the association for liquor liability relating to the event. Myth: The laws and general principles that pertain to one association may be applied across the board to all community associations. Fact: Never apply the “one size fits all” concept. What may be the case in one particular community may not be the case in another due to each unique set of governing documents. It is important to understand that the state statutes do not necessarily trump the governing documents in every case. It depends on the specific wording of a specific law. Therefore, before automatically applying how you operate in one community to another community, make sure to read both the applicable law and the association’s governing documents, and consult with legal counsel. The information contained in these Myths & Misconceptions is for informational purposes only and is not specific legal advice or a substitute for specific legal counsel. Readers should not act upon this information without seeking professional counsel.
Myth: An association that plans a social event involving alcohol has no real risk if the homeowners bring their own alcohol and it’s not supplied by the association.
Lynn Krupnik is an attorney with the law firm of Ekmark & Ekmark, L.L.C., where she has been practicing in the area of community association law since 1997. Ms. Krupnik is a member of the CAI College of Community Association Lawyers, and speaks and writes often on topics that affect community associations.
Fact: There is a great risk of liability to the association when alcohol is served at community events, regardless of
Elaine Anghel is the Vice President of Management Services of Tri-City Property Management Services, Inc. and has been in the homeowner association industry since 1993.
www.caicommunityresource.com
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CAI MEMBERSHIP APPLICATION New Members
Welcome to the Central Arizona Chapter!
6402 Arlington Blvd., Ste 500 • Falls Church, VA 22042 Ph: 1-888-224-4321 • Fax: 1-703-970-9558 • Online: www.caionline.org/join MEMBERSHIP CONTACT: (where materials will be sent) Name: Title: Assoc./Company: Address: City/State/Zip:
The Central Arizona Chapter proudly presents and welcomes our new members from November, December and January.
Phone: Fax: Email: Select your Chapter:
Central Arizona
Individual Community Managers:
Recruiter Name/Co. Name:
Ms. Kathleen S. Fratto
TOTAL MEMBERSHIP DUES* Community Association Leaders & Homeowners q Individual Homeowner or Board Member $114 q 2 Member Board $200 q 3 Member Board $275 q 4 Member Board $345 q 5 Member Board $395 q 6 Member Board $445 q 7 Member Board $500 For 2-3 Board Member applications, please list the additional individuals who will receive materials. For applications exceeding three, please contact CAI Customer Care at 1-888-224-4321.
Mr. Joshua Perkey Vision Community Management Ms. Tennille L. Laidlaw PMG Services
Business Partners: Mr. Robert Foxcroft D.R. Paint
Name: Address:
Ms. Monquey K’Seal Marquross MeterNet
City/State/Zip: Phone: Fax:
Mr. Ron Fish Quality Landscape Management
Email: Name: Address:
Mr. Kelly Mardis Marcel Painting
City/State/Zip: Phone: Fax:
Mr. Brian Barnum Southwest Slurry Seal, Inc. Ms. Meredith Overstreet BSN Security/Fire Tech Mr. Michael F. Ledet Elite Landscaping & Sprinkler Repair Mr. Jason Schenk Spectrum Property Services, LLC.
Email: Individual Managers Management Companies Business Partners q Accountant q Attorney q Builder/Developer q Insurance q Lender/Banker q Reserve Study q Supplier/Landscaper, etc. Please Specify: q Technology Provider *Membership Dues above include $15 Advocacy Support Fee PAYMENT METHOD q Check Enclosed
q VISA
q MasterCard
$134 $410 $580
q AMEX
Account #: Name: C E N T R A L AR I ZO N A C H A P T E R
Is your membership current? Contact Kayte Comes at (602) 388-1159 or kayte@cai-az.org.
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Signature: IMPORTANT TAX INFORMATION: Under the provisions of section 1070(a) of the Revenue Act passed by Congress in 12/87, please note the following. Contributions or gifts to CAI are not tax-deductible as charitable contributions for federal income tax purposes. However, they may be deductible as ordinary and necessary business expenses subject to restrictions imposed as a result of association lobbying activities. CAI estimates that the non-deductible portion of your dues is 17%. For specific guidelines concerning your particular tax situation, consult a tax professional. CAI’s Federal ID number is 23-7392984. $39 of annual membership dues is for your non-refundable subscription to Common Ground.
CAI Ev e n t s
2013 CAI Golf Tournament By Suzanne White Our CAI Golf Tournament on December 06, 2013 at Whirlwind Golf Club saw many familiar faces and great participation by our membership. After a late start due to freezing temperatures, our foursomes headed out to their starting holes for our annual golf event.
We saw many great players win raffle prizes at our trophy presentation and prizes for shots closest to the pin, longest drive and longest putt. We want to thank each participant and sponsor in this year’s event and have already begun preparation for our upcoming “night golf” tournament.
We had a full tee sheet on both courses and saw great support by our industry partners.
Our tournament was sponsored by over 27 of our membership partners who greeted each foursome with cold beverages, snacks, and prizes as we set-up our tee shots. It was a very close tournament with only a single stroke difference between the first place and second place winners. This year’s event winner belongs to CBI with a final score of 56. The second place winners were Gothic at 57 followed by our third place winner, Sunland Team A with a 58.
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CAI Ev e n t s
January Luncheon Summary By Clint Goodman, Christina Morgan, and Nikki Patel
Gun violence at association meetings is rare, but receives much media attention. No one will forget the tragic murders of two women and the wounding of three others in Arizona when a man opened fire during an association meeting in 2000. More recently is the shooting in Louisville, Kentucky where a homeowner shot and killed two board members during an association meeting. Disagreements at board meetings are not likely to end so tragically, but gun control laws are on our radar following theAnne senseless massacre in Newtown, Connecticut. By Dill, CMCA Arizona is only the third state after Vermont and Alaska to allow the carrying of concealed weapons without a permit. There are certain areas that state law prohibits carrying a gun, concealed or otherwise, such as election polling places, jails, and schools. There are exceptions and exceptions to the exceptions, the most notable being for concealed permit holders in bars. You can carry a concealed weapon in a bar unless the bar posts a sign that complies with A.R.S. § 4-229 by, among other things, clearly prohibiting weapons on the premises. People often think the same signage applies to associations, but associations are not licensed like bars to sell alcohol. Associations normally conduct meetings on common areas or common elements, which is private property. The statutes governing private property should not be confused with other statutes controlling bar and other retailers. It is criminal trespass to carry a firearm on any private property or at a private establishment where the owner or any other person having lawful control over the property has given reasonable notice forbidding the carrying of deadly weapons or firearms. See A.R.S. §13-1502; A.R.S. §13-1503. Although there is no specific requirements for private property signage, here are some good guidelines to follow if your association wishes to ban guns from its meetings: (1) post signage in a conspicuous location; (2) the sign should contain a pictogram showing a firearm with a red circle and a diagonal red line across the firearm; and (3) the sign should contain the words “No firearms allowed.” Preventing violence at association meetings does not necessarily begin with gun control laws. It is not a good idea to confront someone with a weapon. If there is fear that someone may bring a weapon to and/or the potential for violence at a meeting, the board of directors or homeowners should consult with association professionals such as community managers and attorneys. These professionals can advise when and how to use security and law enforcement at association meetings. Courts have examined association liability for criminal acts of third parties committed on association property.
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Arizona case law alone does not yet completely answer the question; however, the question was addressed in the case Martinez v. Woodmar IV Condominiums Homeowners Association, Inc., 189 Ariz. 206, 941 P.2d 218 (Ariz. 1997). In Martinez, Carlos Martinez was shot while fleeing from a group of youths in the Woodmar IV Condominium complex. Mr. Martinez was a guest of the tenant of a unit owner. Mr. Martinez sued the association claiming that the association was liable for not preventing the attack. The lower court held that the association did not have an affirmative duty to Mr. Martinez because of his status as a guest. However, the Arizona Supreme Court held while that the association had no responsibility to control the shooter, the lack control did not necessarily free association from liability for a breach of a duty as owner or possessor of land it controls. The Arizona Supreme Court stated, in part, “We focus on Defendant’s status with relation to the land rather than the presence or absence of a special relationship between it and the tortfeasor or Plaintiff.” Id. at 220, 947 P.2d at 208. As there is little case and statutory law, the Court looked at the Restatement (Second) of Property, which states “in condominiums, the tort problem is the same as in any other case of the tort liability of the possessor of land to others”. The Court focused on the element of control. The element of control creates an “affirmative obligation to exercise reasonable care to inspect and repair such parts of the premises for the protection of the lessee, and the duty extends also to members of the tenant’s family, his employees, his invitees, his guests, and others on the land in right of the tenant.” Id. In Martinez, the Court held that for areas under exclusive control, a community association has the same duties as the landlord. Id. An association is to maintain the areas under its exclusive control (the common areas) in a safe condition and protect owners, tenants, and their guests from dangerous conditions or activities. Maricopa County leads the nation for certain violent crimes. Associations can take reasonable steps to protect against these criminal activities. It is impossible to foresee and prevent all crime, but certain measures can be taken to greatly reduce crime and keep the community safe. One such measure is the “Crime Free Program.” In its simplest terms, the Crime Free Program requires tenants sign a Crime Free Lease Addendum and pass a background check before they move into the community. This addendum is a document each tenant signs that states they will not engage in criminal activity. A tenant will not be approved to live in the community if he or she refuses to sign the Crime Free document. If the tenant commits a crime, the landlord may evict them. This approach to crime is proactive rather than reactive; it stops crime before it happens, rather than punishing crime after the fact. Implementing the Crime Free Program requires legal
help. First, legal counsel needs to review the community documents and determine whether the program can be adopted by a board approved rule or amendment to the CC&Rs. If the Crime Free Program may be adopted by a rule, the board votes on the measure at a duly called open meeting. Some may ask whether the Crime Free Program works. Vickie Owen, Crime Prevention Specialist with Gilbert Police Department has been tracking the program for many years. She says: “It’s just a great way to keep criminal activity out of communities, and a great way for police to work in partnership with the community. Before the program: crime - after the program: less crime. It’s proven statistically that crime is substantially less after the crime free program.” Andrew Stuart, Crime Prevention Specialist for Glendale Police Department says, “The Crime Free Program is sorely needed, especially in HOAs. Criminals who want to live in HOAs don’t like to have their backgrounds exposed. Embracing this program makes for a much safer tenant base.” Testimonials like this are commonplace among law enforcement. As a former police officer turned community association attorney, I have seen firsthand the benefits the Crime Free Program brings to communities in need. Clint G. Goodman is the founding attorney of Goodman Law Offices, and limits his practice to community association matters.. Prior to starting Goodman Law Offices, Clint clerked for the United States Attorneys’ Office and was a police officer with Mesa Police Department. Christina N. Morgan is an associate at Vial Fotheringham LLP, a firm devoted to serving homeowners’ associations in Arizona, Oregon, Utah, and Idaho. Christina has practiced homeowners’ association since moving to Arizona in 2009. Nikki Patel is an attorney with Carpenter, Hazlewood, Delgado & Bolen. She joined the firm in 2008 and focuses her practice in the areas of general counsel, enforcement, litigation, collections, and insurance defense.
February Luncheon Summary By Wendy E. H. Corbett, Solve It! Community Mediation Service
“My neighbor’s dog barks well into the night and I can’t get any sleep!” “The feral cat population in our neighborhood is out of control!” These comments, and others like them, may seem very familiar to Arizona community managers. Resident complaints or concerns regarding animals seem particularly acute in communities where neighbors share common walls and common areas, and, therefore, common living space. When residents believe that their quality of life is affected by neighborhood animal issues, they will search for accessible avenues to help resolve the issue immediately—and, oftentimes, one of the
first avenues is the association or community manager. Unfortunately, some animal concerns are very difficult to approach from a community management standpoint, and mediation may serve as a viable option for managers and residents to consider. Mediation is an efficient, facilitated discussion process that allows those in conflict to sit down with trained, neutral mediators and work towards permanent resolution of the issues, simply through open communication. I recommend that when community managers are faced with neighborhood animal complaints, they consider making a referral to a local mediation program or service, such as Solve-It Community Mediation Service, to assist the residents with turning their destructive conflicts into productive solutions. Referrals to mediation services can be made at any point in the conflict life cycle, whether a new and developing situation or a long-standing issue. Over 2,500 inquiries for service were received from the Phoenix-metro area by Solve-It! Community Mediation Service alone during the 2012-2013 fiscal year—of these, 60% were concerning animal issues, the leader being neighborhood barking dogs. In almost all cases, police, animal control or other municipal offices had already been called to handle the situation. In addition, in over 50% of the cases, association board members or community managers had previously been contacted for advice and/ or guidance. In almost all cases, the residents had not previously had any personal, face-to-face communication with the pet owners or other “source” of the animal concerns. By the time folks contact us, they are often extremely frustrated and many mention that lawsuits are going to be their next course of action. Mediation is particularly effective in resolving animal issues because: • It is voluntary and driven by the self-determination of the parties to resolve the issues. Judgments are not handed to the parties; rather, they work together to resolve the conflict, therefore making the terms of agreement much more durable and often permanent. • It is time and cost effective, which is particularly meaningful when parties have a more immediate need to stop/prevent a situation from occurring. • It does not limit the parties’ options. • It helps strengthen and preserve the neighbor-toneighbor relationship, which aids in preventing future conflict in your communities. Animal issues that go to mediation are often resolved to the full satisfaction of all parties. Keeping mediation in mind when dog barking, feral cat and other animal complaints hit their desks has the potential to save continued on page 16
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community managers and residents, alike, valuable time and resources when searching for resolutions. For more information or to make a mediation referral, please contact Wendy at: solveitcms@gmail.com 480-420-MED8 www.theleadershipcentre.org
Community Association Restrictions on Pets and Support Animals
the disability is not readily apparent.
By Phil Brown, Esq.
Animals are a significant part of any community, whether that community is made up of several acre lots that allow livestock, or a high rise condominium that does not allow any pets. The governing documents of many associations impose restrictions on what kinds of pets and animals a homeowner may keep. These restrictions are often spelled out in the association’s declaration of covenants, conditions, and restrictions (“CC&Rs”). An association may generally restrict the type, size, and number of pets a homeowner may keep. Support Animals An association generally cannot apply pet restrictions in its governing documents to support animals. Support animals are often kept by individuals suffering from a disability. The Arizona Fair Housing Act (“FHA”) A.R.S. § 41-1491, et seq. closely tracks the Federal Fair Housing Act. The Arizona FHA requires an association to make reasonable accommodations in its rules, policies, practices or services if the accommodations are necessary to afford a homeowner an equal opportunity to use and enjoy their dwelling. (A.R.S. § 41-1491.19(D)(2)). An association must waive its pet restrictions if: (1) the resident has a disability, (2) the requested accommodation is necessary for the unit owner’s use and enjoyment of the home, and (3) the requested accommodation is reasonable. If an association refuses a homeowner request for an accommodation, that homeowner may file a discrimination complaint against the association. A homeowner can file a complaint at no expense; even if it is later proven that no discrimination occurred. If a homeowner files a complaint against your association for discrimination, the association should immediately consult with its attorney. One way to avoid and/or defend complaints against the association is to have a policy in place on how accommodation requests are to be administered. Associations are allowed to make reasonable requests into whether the resident is disabled if 16
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People with disabilities may own many kinds of animals for emotional support, such as miniature horses, potbellied pigs, gerbils, ferrets and birds. A support animal is distinguishable from a pet. A support animal typically provides a service or benefit to its owner. To qualify as a support animal the animal must be: 1) individually trained; and 2) work for the benefit of a disabled individual. There is no requirement that the animal be certified as a support animal. The training may have even been done by the disabled individual. When in doubt, the board should discuss all requests for accommodations with its attorney. This discussion should happen before the association refuses any request for an accommodation. Pets With respect to pets (as opposed to service animals), the restrictions set forth in the Declaration are enforceable through the association’s enforcement policy just as any other violation. Additionally, most municipalities have laws and zoning restrictions concerning such things as the number and types of permitted animals, barking or biting dogs, and the sale of animals. The municipality may be able to assist an association when the association’s documents have weak or absent pet provisions in its documents. Even in cases where the association has a strong pet policy in place, action by the municipality is often quicker and more effective than enforcement by an association. Each association should work with its community manager and attorney to develop and implement effective policies for the management of pets in the community as well as the administration of requests for accommodation from disabled individuals. Having policies in place help provide guidance to the membership and help associations avoid discrimination complaints. Phil Brown is the managing partner of Brown | Olcott, PLLC (“PB&J”). Formerly the Brown Law Group, PB&J represents hundreds of communities throughout the State. Along with his partner Jonathan Olcott, PB&J pioneered contingent fee assessment collection in Arizona.
Crying Fowl: Community Associations and the Backyard Chicken Farming Movement By Javier B. Delgado, Esq.
Backyard chicken farming is the practice of raising domesticated birds such as chickens, turkeys, ducks, and geese – but primarily chicken, as a source of local and fresh eggs and meat for the family. Interest in backyard chicken farming is on the rise. The Federal government estimates that just less than one percent (1 %) of households raise chickens in their backyards. By 2015, that figure is estimated to quadruple – to four percent (4 %). Not everyone however is a fan of the fowl. Proponents tout the practice as a natural source of bug and pest control, fertilizer and of course, the companionship of the animals, as reasons to support and legalize the practice. Backyard chicken farming is so popular in Central Arizona, that the Valley Permaculture Alliance held their 5th Annual Tour de Coops Sustainability Festival. A major draw is the tour of local backyard chicken coops and backyard farming technique seminars. One major purveyor of baby fowl estimates they sell between five to eight thousand chicks and other baby fowl in the Phoenix area annually. Opponents cite nuisance concerns over the noise and smell, as well as health concerns that chickens could be a source of infectious agents (such as influenza and parasites), or attract predators (such as javelinas, coyotes and wild dogs), putting domestic pets and children at risk. Chickens are productive egg layers for up to two to three years, but can live for up to ten years. It is also notoriously difficult to properly “sex” a chick. About one in twenty perspective chickens turns out to be rooster. Some backyard chicken farmers are unprepared for the expense associated with feeding the birds, the start up costs associated with the aviary (coop), veterinary care as well as the labor required to clean up the coop and surrounding area. As a result, the rise in backyard chicken farming has led to an accompanying rise in the need for chicken shelters. More than one backyard chicken farmer unprepared to cull their flock has simply released their birds. Whether or not backyard chicken farming is permissible in a community association is a document specific question.
It is unusual for recorded covenants, conditions and restrictions (“CC&R’s”) to specifically address the practice. Local laws governing the matter vary from city to city. Where permissible, regulations may impose specific setback requirements, a minimum lot size, specific zoning requirements, a maximum number of birds, may prohibit roosters, require a coop and impose minimum cleaning standards. Currently, backyard chicken farming is expressly prohibited in Fountain Hills, effectively prohibited in Avondale, Chandler, and Gilbert, and permitted within Glendale, Mesa, Peoria, Scottsdale, Surprise, and Tempe. Please note, the Town of Gilbert has been studying the matter and may adopt a rule change permitting the practice at its March 2014 meeting. A proposed change to Arizona law, SB 1151, if adopted, would pre-empt all local laws on the matter and would expressly permit residents of single family detached homes from keeping fowl in their backyard. Under SB 1151, cities would remain free to restrict the number of fowl and prohibit or restrict male fowl (roosters). SB 1151, as currently drafted, would allow a community association to prohibit or restrict backyard chicken farming. The best practice for a community association board is to proactively review their general nuisance, health and safety, animal, and architectural restrictions, to determine whether the practice is permitted, and if so, to ensure that the practice is sufficiently regulated so as to minimize the potential for confusion and conflict. For instance, adopting a rule clarifying what a “generally recognized household pet” is and how many are permitted, and whether such animals are permitted to roam free in the common areas or common elements, has the potential to save the community association future headache and litigation. Javier Delgado is a community association lawyer that represents homeowner associations and condominium associations throughout the State of Arizona and has been doing so since 2002. He is a graduate of the University of Arizona College Of Law and is licensed in both Arizona and New Mexico.
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Spring Cleaning:
Time to Refresh the Books
By Michael Ginsburg, CPA
As the weather gets warmer, it seems like everyone usually does a spring cleanup around their own home. The association is no exception; however, spring cleaning means not only cleaning the physical surroundings, but also the piles of administrative paperwork - including the accounting books and records. Specifically, let’s look at four areas that should be “tidied up” at this time. Accounts Receivable This is a good time to review the ageing report and analyze the delinquencies. Homeowners that have moved out of the community where all collection efforts have been exhausted should probably be written off. Small amounts such as late fees for prompt payers that may have a reason for a rare late payment may be written off with the consent of the board. A review of the accounts with the collectors and the attorneys will also give indications of which receivables should be written off. Accounts Payable This housekeeping should be done to aid in running your accounting software more efficiently and quickly. Vendors that are no longer used by the association should be archived and purged. Current vendor information (name, address, phone numbers, ID numbers) should be verified and updated if necessary. Special attention should be given to identification numbers (whether federal employer identification numbers or social security numbers) that will be needed at the year end to issue required annual filings for federal and state revenue departments. Current W-9’s should be in each vendor file and updated annually.
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Chart of Accounts Springtime is a good time to start fresh. Look at the chart of accounts. Purge the account titles that have not been used in recent years. Look at the current accounts that are being used. Does the association need additional information that could be received by separating a single account into several accounts? For example, “Landscaping” might be divided into accounts with titles of “Monthly Lawn Maintenance”, “Tree Pruning”, Irrigation Parts”, etc. The more finite the categories, the easier it is to budget for these items. Review and Update Monthly Reports Each month the board is receiving a financial package which includes, at a minimum, the balance sheet and profit and loss statement. In many instances, these two reports will give the necessary information to fiscally manage the association. However, boards may desire to have more detailed information. Therefore, reports such as aged receivables, aged accounts payable, cash flow, and detailed daily deposit information could assist management with the day to day operations of the association. Only request reports that you will need for analysis; otherwise, excess financial information can become overwhelming. By taking some time to review the above items, recordkeeping is streamlined and valuable information is disseminated. Everyone then gets a good understanding of the financial health of the association. Michael Ginsburg, CPA is a partner in the firm of Ginsburg & Dwaileebe CPAs LLP, that works exclusively with community associations. He has served on boards of directors for associations and teaches financial accounting for association boards and industry organizations.
Spring Cleaning: Time to Renew, Refresh & Replenish Your Landscaping By Ryan Orosco
This is the time of year to focus on several landscape areas as, along with maintenance, preparation for the spring and summer seasons starts now. Now is the time to plant trees so they can establish themselves before the summer. It is also time to begin trimming deciduous trees since they have lost their leaves, and prune evergreens while they are still dormant. Removing dead plants and hard pruning of selected plant material, promotes rejuvenation and healthy new growth in the spring and summer months. Don’t let our perfect afternoon temps, and continuous sunlight fool you—even though perfection seems so close. Our natural enemies “Mr. Hard Frost” and “Mr. Noxious Weed” rear their ugly heads creating the always impressive look of neglect. Other than these two culprits, the predators to a perfect landscape are all but silent. Now is your moment, so utilize this time wisely. Give your landscape a fresh start and chance to flourish in our sunshine state. This time of year is great for planting trees and bare root plants because lower temperatures provide roots time to establish before the unforgiving late-spring and summer heat. Native species such as Mesquite, Palo Verde and Desert Willow provide food, cover and nesting sites for native wildlife, as well as shade and beauty for the rest of us. Look for different varieties at the plant nursery. Trees with flowers are always a plus and provide great seasonal color. The Texas Mt. Laurel provides great spring color with very fragrant flowers. For summer color, the Desert Willow is a great choice, as it has several hybrid varieties that create less litter, and produce longer flowering cycles. Even with our short fall we still have choices like the Red Push Pistache that provide great color.
decreases the time spent in summer months trimming back overgrown plants. With the colder temperatures only certain plants can be cut back. Those that are frost sensitive should be trimmed after February 15th. This is normally the time spring begins, and temperatures for frost are less likely. Now is the time to prepare for your spring and summer weed bloom. Pre-emergent can be used to help kill weeds before they ever emerge. They are used in both summer and winter to coincide with our monsoon and winter rains, and can be applied manually with a sprayer. The product must dry, and then be watered to be effective. If applied during the rain it becomes even more diluted.
Before the cut back
After the cut back
Crossed branches, suckers, and competing leaders should be removed. Remember that no more than 25% of a tree’s canopy should be removed during any pruning season. Most deciduous trees rarely need trimming. Their branch structure allows for this benefit.
Remember, the desert offers many hidden wonders, and with our winter temperatures it seems to come alive. Utilize the opportunity of our dual seasons. 6 weeks after the cut back By choosing the right plant, right place theory and taking advantage of the vast wealth of knowledge available, your landscape can look beautiful all year long. The Desert Botanical Garden is a great place to see how to harness the beauty of the desert. Remember it is always best to have a plan. Not just in the design of your landscape, 3 months after the cut back but in the selection of each plant. Picking plants that can weather both seasons can be hard, but if you do, your landscape is given the best opportunity to survive.
Rejuvenation cutbacks to selected plant material can create a variety of benefits. Removing old growth allows plants to grow new vegetative material. This promotes health, flower production, low water use, and
Ryan Orosco, Director of Horticulture at Vistancia - ISA Certified Arborists CDLP, ACPA, SLM, ACLP, joined Caretaker Landscape and Tree Management as a Gardener. He brings over 11 years of experience in the landscape maintenance industry.
Trimming deciduous trees now, is the perfect time. With most of their leaves dropped, and their branches exposed, limbs that need to be removed are more accessible.
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Save Green by Going Green Budgeting for Updated Technology in Your Landscape By Rebecca Herro By Isaac Berlin
It’s not news that one of the most essential tools for a healthy landscape is an efficient and well-functioning irrigation system. Maintaining that system in good working order is imperative to keeping your community looking good year round. While you’re annually budgeting for routine repairs, adjustments and water costs, is your community planning for lifespan related upgrades to your entire irrigation system? A good example of a looming large-scale irrigation expense is controllers. Technology advances every year, and eventually irrigation system components - like controllers will be obsolete. For example, the widely used Hunter ICC will soon be retired in favor of a model with more cutting edge technology. Why is this important to your reserve funding plan? For example, if your community has 25 controllers currently in use, and assuming a replacement cost of $4,000 per controller (labor and materials), your community is looking at an expense of $100,000 when the controllers need to be replaced! In some cases, communities’ reserve studies do not include planning for large-scale irrigation system replacement. That is why it is a good idea to double check your reserve plan to ensure that funding for the replacement of items like pump stations, irrigation controllers and polyethylene drip lines (Poly pipe) are included. Another thing to keep in mind when budgeting for your irrigation future is that many of the newer central control systems provide better management of your irrigation system through remote access.
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Everybody likes to save a little cash; SRP and APS are currently working with associations to feel good about doing so. At the time this article was written, SRP still had over $6 million for rebates to customers who upgrade to energy efficient lighting, HVAC, and refrigeration alternatives during the first quarter of 2014. Associations with large quantities of common area lighting are prime candidates for capturing some of these monies. According to SRP’s website, “lighting can account for as much as 40% of a business’s energy bill.” The impact of reducing this cost is significant on an association’s operating budget. Additionally, companies offering rebates on installation costs, helping the investment pay for itself in as little as one year, make it a no-brainer for community associations to consider. The savings can be even greater when lower maintenance costs are factored in. Most of the products that qualify for rebates have a longer lifespan than what was being replaced. This means bulbs need to be changed less frequently and that communities spend less on annual lighting maintenance costs.
There are cheaper systems available, but they do not offer the features of central control systems. Contractors are able to turn off your irrigation during rain events by simply logging in to the system. Another thing to think about is that some of these systems require monthly or annual subscriptions to keep the controllers working and the technology current. Planning for these types of upgrades not only helps you keep your finances healthy, but allows you to proactively phase in updates to minimize the visual effects on your landscape.
The process is stress-free when associations work with SRP Energy Efficiency Alliance Contractors or APS Trade Allies. These designations are given to electrical contractors who have been vetted by the aforementioned power companies and are considered preferred vendors. These companies have representatives with the power companies, which streamlines the process. Part of the process is factoring the annual energy savings; SRP and APS have proprietary worksheets that help generate accurate estimates of annual savings. Once the annual savings and rebate amounts are calculated, the ROI is determined and the board can decide if the lighting project is fiscally responsible and proceed with mobilization.
Rebecca Herro leads DLC Resources Client Relations Team. As a member of the DLC family for the past 5 years, Rebecca’s team supports the needs of DLC’s 26 Community Partners as well as implementing the company’s growth strategy for future clients.
Isaac Berlin is the founder and president of Berlin Precision Construction, a member of CAI. He studied sustainability and entrepreneurship at Arizona State University. His company is an Energy Efficiency Alliance Contractor with SRP and an APS Trade Ally.
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Create Community by Creating Relationships By Delores Ferguson, PCAM
There’s something about the end of cold, snowy, rainy days and the beginning of warm, sunny ones that inspires people to change things that aren’t working and develop new ways to do them. It’s no different in community management. Why not take this opportunity to change what isn’t working so you can make room for a new approach? It’s time for a little “Spring Cleaning,” which can help you create a true sense of community by creating relationships among the residents you serve. The Wilson Effect One of the biggest impacts we’ve had in the communities we manage is our approach to lifestyle. Our goal in every community we manage, is to make connections and create relationships: neighbor to neighbor; neighbor to association; and neighborhood to the greater community. This strong desire to connect – sometimes called “The Wilson Effect” from the Tom Hanks movie “Castaway” (remember the volleyball Hanks’ character named Wilson so he would have someone to connect with while stranded on a desert island?) – was foremost in the mind of our Chairman Emeritus, Ed Boudreau, when he founded CCMC more than 40 years ago. He understood and embedded in all of our employees how important the sense of belonging is to the homeowners we serve. Because that neighborhood feeling is what helps our residents feel connected to each other, their association and their community overall, our community managers are tasked with finding ways to bring neighbors together. Creating Neighborhoods that Feel Like Home Our site teams pride themselves on helping residents get to know each other. If, for example, next door neighbors attend community events together, the Smiths aren’t going to complain when the Andersons forget to put their trash can away. Mr. Smith will put the can away for Mr. Anderson and Mr. Anderson will thank Mr. Smith for
the favor. That’s the difference between residents and neighbors: neighbors look out for each other, and go out of their way to help each other, because they have become friends. So, what can you do to create a neighborhood that feels like home? Create events that bring people together. Keep them small so residents get to know one another. Do them frequently, so buzz is created community-wide and your residents can attend them. Start a community magazine and invite your board and committee members and residents to submit articles, so the perspective and voice is fresh and unique for each issue. Freshen up the look of your community newsletter with new layout or font so it looks new and different when your residents receive it. Consider sending email blasts to your residents to let them know about upcoming meetings, construction or community beautification projects, or that your association is in need of volunteers. Position and plan your annual meeting as a celebration of the past year’s accomplishments and build it around a theme so residents are more inclined to come, learn more about their association and their community, and meet their neighbors. In short, find ways to help your residents connect with each other. Once you do that, you are on your way to creating a true sense of community; a place where residents want to spend time getting to know each other, help each other and do nice things for each other. This is what has made us so successful at CCMC – our ability to manage communities, communicate with our homeowners, and create events that make the residents under our care feel like they live in a place that feels like home. Delores Ferguson is a seasoned professional with 26 years of diversified master-planned and portfolio community management experience. Since joining CCMC in 2006, Delores has provided strategic planning, project leadership, training and financial insight to several high-profile communities.
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Should We Amend Our CC&Rs? By Quinten T. Cupps, Esq.
It is always interesting to me to see how many members of homeowner association boards of directors have not read or regularly reviewed their association’s CC&Rs and other governing documents. I think that most would agree that every board member should be familiar with the governing documents of their association. As a member of the board, it is also essential that a periodic review of the governing documents be conducted with the following questions in mind: “What changes, if any, need to be made”, and “Is this the year we try to amend our CC&Rs?” My focus here is on amending the CC&Rs, maybe the most important governing document for an association and usually the most difficult to amend. There are typically three reasons why an association might consider amending its CC&Rs. They are: 1) to address weaknesses or to add essential provisions that are missing; 2) to address specific issues in the association; and 3) to address and conform to changes in the law. The most common request I receive when asked to review an association’s CC&Rs is to take a document that appears to have been written on papyrus using ink and a feather pen and come up with a list of provisions that are missing or that need to be strengthened. Many associations have CC&Rs that were written 30 or 40 years ago, or longer, that have never been amended or updated. Sometimes an association will have a more recent set of CC&Rs that are still lacking vital provisions. The following are some important provisions that I commonly see missing from CC&Rs or in need of alteration: a non-waiver provision; sufficient rule-making authority; proper language allowing an association to recover attorney’s fees and costs incurred in enforcing the CC&Rs and in collecting unpaid assessments and including said amounts as part of the association’s assessment lien against the property; and clear language regarding an association’s ability to enforce the restrictions in its CC&Rs. An association should consult with its attorney to determine if these provisions, and others, are missing and what can be done to improve its CC&Rs. An association may also want to amend its CC&Rs to address specific concerns in the community. If an association wants to restrict an owner’s use of his or her
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property, the authority for said restriction must be found in the association’s recorded CC&Rs. Too many times I see associations enforcing “restrictions” that are not found in the CC&Rs because the association thought it could just make a new rule rather than amend the CC&Rs. For example, if an association is interested in restricting the number of rentals, it must look to its CC&Rs for this authority. Amending the bylaws or rules and regulations to add rental restriction language is not legally sufficient. A careful review of the CC&Rs should be conducted before restricting certain activity, like rentals or pets, to make sure that such authority is contained in the recorded CC&Rs. An association should also consult with its attorney and seek an opinion letter if needs be. Lastly, changes in Arizona law may cause an association to need to amend its CC&Rs. Every year the Arizona legislature makes a valiant effort to amend and add laws governing homeowner associations. With those changes may come the need to amend the CC&Rs. Many changes were made during last year’s legislative session only to be challenged and voided by the court. It appears that many, if not all, of the changes in the law from last year will be revisited this year. With that knowledge, an association can take the opportunity now to review and amend its CC&Rs in preparation for the changes that are sure to come. As an example, the changes last year included a limitation on an association’s ability to restrict rentals unless the CC&Rs already contained such a restriction before the law was passed. Whether it pertains to the number of rentals in your community or a recent change in the law that nullified a provision of the CC&Rs, an association should consider acting now, with the help of its attorney, to determine if any changes to its CC&Rs should be made through the amendment process. The time is now to review your CC&Rs to determine if they need to be renewed, refreshed, and replenished. Please remember, however, that the association’s attorney should always be consulted and relied upon for advice and guidance during any attempt to amend the CC&Rs.
Quinten T. Cupps is an attorney at Vial Fotheringham, LLP whose practice focuses on representing homeowner’s associations through the state of Arizona as general counsel and in the areas of enforcement, collections, construction defect, bankruptcy and civil litigation.
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Maintenance Guide Using the Association’s Reserve Study By Marcus Castle
Your association has completed a reserve study, and now is the time to use this invaluable tool. A reserve study isn’t just a fancy paper weight, but a planning tool that can give your association a solid financial path when used correctly. As we are moving out of winter and into spring, your association should be implementing reserve component maintenance. While some maintenance components surface over the course of the year, there are several reserve items that are best completed at specific times of the year.
when the pavement is at its coldest and [the] best time to sealcoat is when the pavement is at its warmest”. With our current night temperatures, now is the time to crack seal. Any crack in the pavement will allow moisture or debris to penetrate to the subsurface and shorten the life of the pavement. This can cause the reserve study useful life projections to be shortened and possibly jeopardize the financial health of the community’s reserve funds.
Reserve studies are a great tool because they remove the guessing when something last happened and, possibly more important, what year it needs to happen again. Your reserve study will have an Annual Expense Summary Table by Calendar Year or by Reserve Component to reference which items need re-visiting in 2014. Let’s focus on three of the more expensive reserve components: tree thinning, street maintenance, and painting.
Completing a quality paint job is the fastest way to improve a community’s appearance. Painting can be completed just about year-round in the Valley. Jeff Reynolds with CLC Enterprises indicates that early spring is the busiest time of year for painters. Most associations have scheduled this for the beginning of the year. If you have not received any bids, now is the time to call. Painting cycles are different for walls, wrought iron fencing, and building exteriors. The reserve study will keep these cycles on track and the community looking great.
Thinning trees involves removing dead branches and crowded or rubbing limbs to minimize hazards. There are numerous reasons for thinning a tree. Trees may be thinned to increase light and air penetration to the inside of the tree’s crown or to the landscape below, as well as reduce canopy weight. In most cases, mature trees are thinned as a corrective or preventive measure. Miguel Hernandez, Desert Appeals Landscape, notes that as a rule, “…growth of a tree is maximized and wound closure is fastest if thinning takes place before the spring.” Heavy pruning just after the spring growth flush should be avoided. At that time, trees have just expended a great deal of energy to produce foliage and early shoot growth. Past the spring growth, your association can plan on thinning during the fall and winter. One of the most expensive reserve components are maintaining the community streets. Richard Hunt with Dynamite Paving says, “The best time to crack seal is
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For each of these components, associations should be comparing any received proposals to the reserve study’s Annual Expense Summary Table by Calendar Year or by Reserve Component to verify the funding is available. When following the study’s recommended payment schedule, you have available funds that can be spent without hesitation. While these costs may at first give you sticker shock, your association can feel comfortable knowing you have the money in reserves to spend. When you continue to use your reserve study as a financial planning tool, homeowners will not only have more confidence in your association but will better appreciate the beauty of their community. Marcus Castle is the owner and operator of Castle Reserve Studies. Castle has been producing reserve studies in Arizona and New Mexico since 2006 and holds a strong commitment to Customer Service.
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www.dlcresources.com Spring 2014
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Spring Cleaning for Associations
By Any Ferrell, CMCA, AMS, PCAM
With spring right around the corner, you may be looking at home improvements and gearing up for summer getaways. For many communities, this is also a great time to do “Spring Cleaning” for the association. This may mean literal cleaning and updating of the facilities, but it can also include the financial and administrative functions. Following are ideas and considerations that associations should consider as part of their association Spring Cleaning: • Consider holding a community garage sale, as this is a great way to encourage homeowners to clear items out of their garage and make way for parking of vehicles. It also provides a way to encourage community events and activities. Many communities can then partner with a non-profit group that can pick-up unsold items. • Prepare your facilities for the summer season. Review the overall components and ensure that they are all in working order. • Establish priorities and goals for 2015 and beyond. Many board members have the best intentions and can come up with several goals and projects to be completed in one fiscal year. Unfortunately, time
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and financial resources can hamper these goals and ultimately result in accomplishing only a small percentage of each goal. Consider instead establishing SMART goals for the association. SMART goals are defined as follows: o Specific: Specific goals should try to answer the “who, what, when, where, how” types of queries. One example could be to improve the facilities. A more specific example would be to improve the pool area by renovating the restroom facilities. o Measurable: In order to reach a goal, you need to have a target that can be measured. One example could be to reduce overall expenses. A more measureable goal would be to reduce operating expenses by 5% from the prior fiscal year. o Attainable: This is where you need to determine if the goal is something that the association has control over. For example, an association may wish to establish a goal to improve an area outside of the association that it does not own or control. A better alternative would be to partner with the owner of that property and work with them in order to improve that area. o Realistic: When establishing goals, the board needs to understand where funding will be available to achieve a goal. Going back to the idea of renovating pool facilities, if the association does not have the funds available to do so, a complete overhaul may not be realistic. Instead, a community can consider doing a volunteer clean-up day or make small improvements along the way. o Time-bound: Goals that are time-bound provide accountability for all parties involved to get them accomplished. This is where it is important to understand the time and resource limitations. Planning and execution that is not rushed or pushed through ultimately will generate a better end product. • With many residents heading out of town for the summer, this is a good time to collect out-oftown contact information. Consider sending out a homeowner registration/contact form so that the association can maintain contact information in case there are any concerns that may come up while residents are out-of-town. Now that you have done your Spring Cleaning, it is time to sit back and enjoy the fruits of your labor. Any Ferrell, CMCA, AMS, PCAM, Senior Vice-President, is responsible for the operations and oversight of the portfolio management team at FirstService Residential. She works with the Vice-Presidents and staff in serving board members and homeowners in our communities.
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C o n g r at u l at i o n s Corner
AMS Designations Associated Asset Management, LLC Mr. Walter Moneypenny
CMCA Designations Vision Community Management Mr. Chris Teel Associated Asset Management, LLC Mr. Walter Moneypenny Jomar Association Services Mr. Jacob Hoffman
CMCA Designations PMG Services Ms. Ursula Looper CCMC Ms. Kathleen Clark PMG Services Ms. Maggie Story
Volunteer Award Winners The Central Arizona Chapter will be highlighting the 2013 Volunteer Award Winners in each issue in 2014. The three highlighted in this issue were the recipients of the Rising Star Award. The award goes to the volunteers who stood out in 2013 and made a difference in the events they were involved in through personality and flare. Congratulations to: Arianne Ahlvin, Cmca, Ams FirstService Residential I began my career in the HOA management industry in 2001 after graduating from ASU with a degree in Communication and a minor in Business. I started as an administrative assistant and, within two years, was promoted to portfolio community manager. My ascension in the company was rapid and two years later, I was promoted to the position of onsite community manager for one of our most prestigious masterplanned communities. I have also held the position of District Manager, overseeing several community managers and been the Director of Business Development. I currently reside as the onsite Community Manager for the Troon North Association. I have been a member of CAI since 2006, and have participated in several social and education events that they hold each year. For the last 2 years, I have been an active member of the New Membership Committee. I have enjoyed my time volunteering for this committee, as it has enabled me to meet great professionals and allows me to give back to a great organization. As a believer in education, I continue my studies of HOA 28
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management by maintaining my CMCA (Certified Manager of Community Associations) and AMS (Association Management Specialist) and I am on my way to receiving the PCAM (Professional Community Association Manager) designation, the highest designation in our industry. Amber Welch HOA Relationship Manager Metro Phoenix Bank She joined Metro Phoenix Bank in 2010 after graduating with honors from Arizona State University in 2009. Her studies were focused on business administration and communication, which has served her well and was a natural progression in joining the Bank and building and maintaining their HOA relationships. As a fourth generation Arizonan, giving back to her community has always been a value that she and her family has shared. Additionally, while being new to the industry, volunteering has provided her a great opportunity to build solid relationships with association managers and other industry vendors. She has found volunteering for organizations like CAI have been beneficial, on both a personal and professional level; working towards the common goal, helping the community by building strong relationships. As a community bank, Metro Phoenix values the importance of giving back and supporting their local businesses. If you are interested in volunteering for CAI and would like some suggestions, or to learn more about Metro Phoenix Bank’s HOA Services please feel free to contact Amber at any time. Amber Welch Metro Phoenix Bank Relationship Manager, Specialty Accounts 602-346-1816 awelch@metrophoenixbank.com Suzanne White, CMCA, AMS Director of Business Development Paramount Roofing I have been a member of CAI for several years and have enjoyed watching the Arizona chapter grow and evolve every year. I am privileged and honored to be a part of the inception and growth of the CAI Family Community Clean-up Project Committee during this time and the service the program provides for homeowners and communities that have struggled with money for maintenance and services that they would otherwise not have been able to obtain. I am awed by the generosity of our membership volunteers and what they have done and provided to give back to our communities. They say the best way to find yourself is to lose yourself in service to others. Our membership has demonstrated that to the fullest extent. I am excited for our future events with the committee, volunteers and communities of our management membership. Suzanne White, CMCA, AMS is the Director of Business Development for Paramount Roofing and Paramount 911 Restoration and has been involved in the homeowners association industry since 1994. Suzanne is the chair of the CAI Family Community Clean up Committee.
Annual Sponsors
CAI - Central Arizona Chapter
2014 Annual Sponsors
DIAMOND SPONSORS Arizona Parking Solutions, Inc. Carpenter Hazlewood Degado & Bolen, PLC CCMC Maxwell & Morgan, PC copper SPONSORS Alliance Association Bank Brown|Olcott, PLLC Vial Fotheringham, LLP GOLD SPONSORS CBI Consulting & Construction Mgmt. Community Association Underwriters of American Dicks Coglianese & Shuquem, LLP DLC Resources, Inc. Metro Phoenix Bank SILVER SPONSORS Burns Pest Elimination Butler Hansen, PC Caretaker Landscape and Tree Management COIT Cleaning & Restoration Desert Classic Landscaping Dynamite Paving & Sealcoat Goodwill of Central Arizona, Inc. Kasdan Simonds Weber & Vaughan, LLP Mutual of Omaha Bank Paramount Roofing Republic Services Roofing Southwest Shaw & Lines, LLC Sherwin-Williams Paint Southwest Slurry Seal, Inc. Universal Protection Service Valley Protective Services BRONZE SPONSORS ALPHA Community Management APM Contracting Services (Allscape) BlueStar Landscape Brown Community Management CLC Enterprise Painting FirstService Residential Ginsburg & Dwaileebe CPA’s, LLP Holbrook Asphalt Jomar Association Service, Inc. Jon Wayne Construction & Consulting Metro Property Services Nautilus General Contractors PMG Services RENCO Roofing TLC - The Landscape Company Tri-City Property Management Services, Inc. Union Bank HOA Services
I am also a salesperson in print. I talk to the 10,000 perspective customers in Community Resource every issue. How many do you talk to? The readers are here, where is your ad?
Hello, I am an Ad. Valhalla Community Magazines
(480) 634-1708 Spring 2014
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C a l e n d a r o f Ev e n t s
Keep your money where your house is ...
2014 CAI-CAC Event Calendar
April 4th CAI – Central Arizona Chapter Tradeshow Presented by – Sunland Asphalt Location: Glendale Civic Center 5750 W. Glenn Dr. Glendale, AZ 85301 may 1st New Member Breakfast Club Meeting Sponsored by – Goodwill of Central Arizona Location: 2626 W. Beryl Ave. Phoenix, AZ 85021 14-17th CAI – Annual Conference & Exposition Location: Loews Royal Pacific Universal Orlando, FL 29th
PCAM Panel Discussion for Business Partners (Lunch) Location: Leisure World Arizona Community Association 908 S. Power Rd. Mesa, AZ 85206
june 5-6th PMDP Course M-350 Tempe, AZ Location: Sheraton Phoenix Airport Hotel Tempe 10th CAI – Central Arizona Educational Lunch – 2014 Legislative Update Location: Phoenix Airport Marriott 1101 N. 44th St. Phoenix, AZ July 10th New Member Happy Hour Meeting Sponsored by – First Citizens Bank Location: First Citizens Bank Scottsdale 14650 N. Northsight Blvd. Scottsdale, AZ 85260 17-18th PMDP M-201 Tempe, AZ Location: Sheraton Phoenix Airport Hotel Tempe 25th Bowling Location: Brunswick Via Linda Lanes 9027 E. Via Linda Scottsdale, AZ 85258
For more information, visit the chapter website at www.cai-az.org or call the office at 602-388-1159. Items in red are CAI National events.
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Amber Welch
Relationship Manager Give your associations the satisfaction of banking locally by keeping their investment in Arizona! Whether you are looking for a full service banking relationship or a great return on your reserve accounts, Metro Phoenix Bank is sure to meet all of your association’s financial needs.
Call us Today!
602-346-1816
Metro Phoenix Bank
4686 E. Van Buren #150 Phoenix, AZ 85008 602-346-1816 awelch@metrophoenixbank.com
business – helping residents connect with each other and become friends – is a great, new way to describe what we do for a living. Who doesn’t want to connect with someone or become friends (or at least friendly with) the couple or family who lives next door? By refreshing our thought process, and thereby our approach to community management, not only do we create ways to help our residents connect with one another, but we also play a pivotal role in creating communities that feel like home.
Diamond Corner
Diamond Corner The CAI Central Arizona Chapter wants to thank our Diamond Sponsors, whose contributions assist us in preserving, protecting, and enhancing the industry. Our Diamond Sponsors contribute at the top level to our organization and are recognized in each issue by providing helpful information to our members. Carpenter, Hazlewood, Delgado & Bolen, PLC Spring Cleaning is a great time to clean out and organize your association’s records. Every association should consider adopting a document retention policy as a means of regulating what information and records are retained, how the records are stored (e.g. paper files, electronically stored) the location of these records, and the length of time that they will be retained by the association. Then, records can be retained or destroyed according to the written policy at the appropriate time and in compliance with Arizona law. CCMC Describing our profession as being in the quality of life
Maxwell & Morgan, P.C. Spring is a great time to for a community association to review and consider updating its reserve study, inspect the property for needed repairs, and review its rules, policies and procedures, such as its delinquency collection and enforcement policies. Arizona Parking Solutions, Inc. Since 2001, APS has offered courtesy patrol, parking enforcement and compliance services. By virtue of the fact that community associations are charged with the obligation to enforce the restrictions contained in CC&Rs on both private and public streets, APS has developed its own proven technology to assist board members and community managers. This allows APS to provide accurate and real time reporting, GPS tracking, variance management, parking violation management and incident reporting. APS can customize its reporting to includes items such as burned out lights, recycling container, burglaries in progress, landscape, park, pool and graffiti.
Vial Fotheringham provides homeowner associations with the everyday advice you need and can understand. We offer practical answers to your questions, free training, publications, and online resources. Our team helps associations like you proactively and successfully navigate community life. Visit www.vf-law.com.
2450 S. Gilbert Rd Ste 212. Chandler, AZ 85286 Phone: 480.448.1334 Spring 2014
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Product and Service Directory
If your business is interested in advertising, please call (602) 388-1159.
Full Service Commercial Landscape Maintenance
Ginsberg & Dwaileebe CPAs LLP
Apm is a full service commercial landscape maintenance contractor providing services throughout the valley. Our company partners with management companies to establish the highest level of services required by h.O.A. communities.
Audits, Reviews, Compilations, Tax Preparation, Forensic Accounting, Board Financials, Accounting Training, Expert Witness Testimony, Superior Court Special Master Assignments
Scott Haas, President A.P.M. Contracting Services scott@apmcontractingservices.com
Contact us for our new “one fee for all� pricing. No charge for phone calls and board meeting attendance.
( 623) 340-2760
Metro Property Services
Our practice is exclusively devoted to homeowner associations.
(602) 826-8640 info@gadcpas.com
Galaxy Gates
Metro Property Services has been providing full service management to Homeowner Associations across the Valley for the past 24 years. Master planned, single-family homes, condominiums, active adult, and new developer communities. Efficient service with state of the art reporting, timely and accurate information. Our relationships with the associations we serve are long-term with some clients being with us for over 15 years. We are a leader in Fountain Hills.
Galaxy has the highest quality products, installation, service, and maintenance throughout Arizona. We offer up-to-date technology in access control, automatic gates & video surveillance. Our projects consist of: gates, access controls, retrofits, renovations, surveillance; all of which our expertise and value engineering customizes to provide a turn-key experience. Galaxy prides itself on superb fabrication of steel, iron, and aluminum fence and gates; from the very simple to the ornate.
www.metropropertyservicesaz.com
(480) 654-3839
Republic Services For all your trash or recycling needs. No job is to big or to small Call Warren Nichols
(602) 442-7280 to talk trash We want your trash!
Advertise your business for only $100.00! Call (602) 388-1159 today!
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Advertise your business for only $100.00!
Advertise your business for only $100.00!
Call (602) 388-1159 today!
Call (602) 388-1159 today!
www.caicommunityresource.com
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