CENTRAL FLORIDA TIMES
CAICF.ORG | 3RD QUARTER 2021 RECAP
ASPHALT
3RD QUARTER 2021 RECAP
CONTACT INFORMATION P.O. Box 941125 Maitland, FL 32794 www.caicf.org exdir@caicf.org 407-913-3777
A Message from the President Dear Valued Members, As I sat down to write this quarter’s President's message, it did not take long to settle on a theme. As we enter the fourth quarter of 2021, our present landscape has drastically changed. New legislation affecting Community Associations took effect July 1st, we continue to wrestle with Covid, including variants and booster shots, and our economy appears on the precipice of significant changes with inflation and increasing interest rates. As I always say, Community Associations are perhaps the best barometer of society as they address issues on the front line.
2021 BOARD OF DIRECTORS Frank Ruggieri, Esq., President Jarad Pizzuti, Vice President Chuck Strode, CAM, President-Elect Jessica Cox, Secretary Leslie Ellis, CPA, MSA, CGMA, Treasurer Matt Vice, Past-President Tracy Durham, CMCA, AMS, CFCAM, PCAM Donna Lendvay Lynne Sadowski Robert L. Taylor, Esq. Tom Wheir
Should Community Associations reinstitute restrictions on access and use of common areas? Will Community Associations face challenges where they seek to conduct meetings by video conference? How will inflation and rising interest rates affect the mortgage market as well as the potential for an increase in foreclosures? Are the Community Associations we work with implementing the necessary changes to address the new legislation (DON’T FORGET THE NOTICE OF LATE ASSESSMENT!!!!)? These questions obviously have yet to be answered but I can say without question that our homeowners, community leaders, and business members are ready, willing and able to meet the challenge. As an organization, it is incumbent upon us to recognize these new challenges and make the changes necessary to ensure that our communities are receiving the guidance and services they need to meet them. Indeed, I see this as our mission. Sincerely,
Frank Frank A. Ruggieri, Esq., The Ruggieri Law Firm 2021 President, CAI Central Florida Chapter
2022 CA DAY & TRADE SHOW
Celebrating Communities in Our Own Backyard FEBRUARY 11, 2022 | 9AM-3:30PM MARRIOTT WORLD CENTER IN ORLANDO
EDUCATION CLASSES & TRADE SHOW
Key West After Party | 3:30pm-6pm VISIT CAICF.ORG FOR MORE INFO & TO REGISTER 3RD QUAR T ER 2021 RECAP | CENT RAL FL O R I DA TI ME S
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FROM THE CED
Chapter News BY REINI MARSH, CHAPTER EXECUTIVE DIRECTOR
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We also are having our regular in-person events and have added new events to our roster. We are growing and helping our fellow partners grow their businesses.
We accepted three Chapter Achievement and Excellence Awards at the National Conference this year in Las Vegas for Best Net Growth, Best Net Retention and for our Meet the Managers event for 2020! Check out the photos below.
Next year in May, the National Conference will once again be in Orlando. The board has generously agreed to sponsor our 50% reimbursement for any PMDP classes taken at the conference to our local Central Florida members. We will be hosting the Chapter Party as well on that Thursday of the conference. This will require firing up a Chapter Party Committee that we do every three years. If you are interested in assisting with this committee, please reach out to me at exdir@caicf.org or 407-913-3777.
e are just ROCKING! There is no other way to describe the incredible events and participation that we have been having as an association. You have shown over and over again your dedication to our Chapter and I could not be more proud. It is you that make us, thank you for all you do.
You all inspire me!
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3RD QUAR T ER 2021 RECAP | CENT RAL FL O R I DA TI ME S
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CHAPTER UPDATE
Calendar of Events More details regarding upcoming events will be posted to caicf.org under the “Events” tab. Check back regularly for the most up-to-date information. CAICF Board Meetings will be held before or after each of the Monthly Meetings. Please be sure to register for all events in advance, as we need an accurate head count for space and food purposes prior to the event. Thank you for your help! • October 7th: Monthly Luncheon Meeting - Architectural Control & Enforcement for HOAs at Ace Cafe Orlando presented by Brandon McDowell of Becker for a 1 hour OPP. Registration begins at 11:30am and the program begins at 12pm. Manager Members & Homeowner Leaders (HOA Board Members) are FREE and Business Partners will be a flat $30. Please register by 12pm on October 6th. Sponsored by Stone Claims Group, Central Pipe Rehab and Kodiak Property Maintenance. • October 22nd: 11th Annual Golf Tournament at Falcon's Fire Golf Club in Kissimmee with an 8:30am Shotgun start. Registration begins at 7:30am. Sponsorships and player registrations are all SOLD OUT! A portion of the proceeds will benefit the Sunshine Foundation Dream Village. You could win big in the Hole In One Contest, cash in the Putting Contest, and loads of raffle prizes! Gold Sponsor: Vice Painting. • November 4th: Monthly Luncheon Meeting - Developing a Successful Tree Program at Dubsdread Country Club. This month's meeting will be presented by Cepra Landscape with presenter Mary Edwards, Registered Consulting Arborist, of Rollins College. It is a 1-hour CEU. Registration begins at 11:30am and the program begins at 12pm. Manager Members & Homeowner Leaders (HOA Board Members) are FREE and
Business Partners will be a flat $30. Please register by 12pm on November 3rd. Sponsored by Stone Claims Group. • December 2nd: Annual Meeting & Holiday Party – Lumber Jack & Jill at The Keg Social in Orlando from 6pm-9pm with bowling, ping pong, beer pong, billiards, arcades, ax throwing (please wear close-toed shoes) and more! More details and registration coming soon. • January 6th: Monthly Meeting - Committees presented by Erik Whynot. • February 11th: 2022 CA Day & Trade Show: Celebrating Communities in Our Own Backyard at the Marriott World Center in Orlando from 9am-3:30pm. The day will include education classes and the annual themed trade show, followed by the Key West After Party ($50 per person) from 3:30pm-6pm. More information and registration for sponsorships and booths is coming soon to caicf.org. • March 3rd: Monthly Meeting • April 7th: Monthly Meeting • May 3rd: Monthly Meeting
SPONSOR AN UPCOMING CHAPTER MEETING IN 2021! Each sponsor for the Chapter Meetings receive face time in front of the membership with the microphone to talk about your company. You will also be able to put give-away items and collateral on all the tables. Space is also provided for our sponsors to display their marketing materials. Every sponsor is important to our chapter and your generous donation goes directly to off set the costs of the program. Only three sponsors are permitted per program. Please consider sponsoring today! CONTACT REINI MARSH AT EXDIR@CAICF.ORG OR 407-913-7777 6
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LOOKING FOR A SERVICE PROVIDER? CAI Central Florida has a list of great service providers in most every industry a Community Association could need! The best part is, they are members! Check it out at: caicf.org/directory.
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EDUCATION
Upcoming Virtual Education Classes & Workshops EDUCATION FOR MANAGERS CAI offers many online and virtual learning opportunities for community managers (listed below, click the dates for links to registration). View the 2021 Education Catalog for additional resources. » October 7-8, 2021 - M-330: Advanced Insurance and Risk Management(Live Virtual Class) » October 14-15, 2021 - M-100: The Essentials of Community Association Management(Live Virtual Class) » October 27, 2021 - CAI Webinar, Topic To Be Announced, 2pm-3pm (Webinar) » October 28-29, 2021 - M-204: Community Governance (Live Virtual Class) » November 4-5, 2021 - M-205: Risk Management(Live Virtual Class) » November 17, 2021 - CAI Webinar, Topic To Be Announced, 2pm-3pm (Webinar) » November 18-19, 2021 - M-202: Association Communications (Live Virtual Class) » December 1, 2021 - Community Conversations, 2pm-3:15pm (Live Virtual Event) » December 2-3, 2021 - M-206: Financial Management (Live Virtual Class) » December 9-10, 2021 - M-100: The Essentials of Community Association Management (Live Virtual Class) » December 9-10, 2021 - M-203: Community Leadership (Live Virtual Class) 8
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» December 15, 2021 - CAI Webinar, Topic To Be Announced, 2pm-3pm (Webinar)
COMMUNITY CONNECTIONS WORKSHOP SERIES The Community Connections Workshop Series is hosted in partnership by Orange County Neighborhood Services Division and the City of Orlando Office of Communications & Neighborhood Relations. The workshops are free to all Orange County residents no matter what municipality you reside and all will be virtual events. 2021 Florida Legislative Updates for HOA's and Condo Boards Saturday, October 9th from 9am-10:30am Learn about the most recent changes to the Florida Statutes that regulate condominium and mandatory homeowners and property associations. The attorneys will answer general legal questions regarding mandatory association governance, grievances or appeals processes, official organization records requirements, association/ member disputes, reserve funding requirements, how to legally deal with foreclosures, association rules, and more. Click here for the October 9th workshop information and to register on Eventbrite. History of Orange County/Orlando Hidden Gems Saturday, November 13th from 9am-10:30am We all know that Orlando is more than theme parks and tourist attractions. Learn about the history of places and features that make Orlando a unique and interesting place. Click here for the November 13th workshop information and to register on Eventbrite.
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ELECTION OF DIRECTORS
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2021 CALL FOR NOMINATIONS
t's that time of year again! We are looking to CAICF Chapter Members for Nominations to the 2022 Election of Directors. To facilitate an improved election process again this year, your Chapter Board retained The Inspectors of Election (TIE), a national provider of election services for community associations and a multi-Chapter Member of Community Associations Institute.
#10 (AL) all expiring in December 2024. Additionally, Seat #11 is open for a term to end December 2023. The At-Large positions may be filled by any membership category.
TIE will apply its proven technology and techniques to make the election process a pleasant, confidential, and efficient one for Central Florida Members.
To complete the “Nomination Form,” visit www.tieivote.com and enter:
Self-nomination is required. Please fill out the online “Nomination Form” tab at www.tieivote.com. The username and password to access the site is below. Please add a picture of yourself.
Username: CAI-CF Your Governing Board has eleven Members holding Seats designated #1 - #11. Each Seat has a three-year term. This allows approximately 1/3 of the Seats to be up for election each year. Each Seat also has a membership designation. These are Business Partner (BP), Community Association Manager (CAM), Homeowner Leader (HL), or At-Large (AL). This is your opportunity to get involved and support your local Chapter of CAI! The four (4) Seats open in 2021 are #7 (AL), #8 (BP), #9 (HL) and 10
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Password: 4221
To be considered for election the online “Nomination Form” must be completed by 5pm on Friday, October 22, 2021. Information will be used exactly as provided to TIE in the self-nomination process. Please read the candidate qualification requirements for each Seat carefully which are available upon login as described above. Once a Seat is selected you may not change later. If you have any questions, please contact Kurtis Peterson, CMCA, of The Inspectors of Election, LLC at info@tieivote.com.
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LEGISLATION
Summary of Legislative Changes for Community Associations 2021 BY SHAYLA J. MOUNT, ESQ., BECKER
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s if the social, medical, and technological changes associated with the COVID-19 pandemic were not enough for community association board and members to adjust to over the past year, as of July 1, 2021, there are also a host of new changes to the Condominium (Chapter 718, F.S.), Cooperative (Chapter 719, F.S.), and Homeowner Association Acts (Chapter 720, F.S.), (collectively referred to as “The Acts”) which have practical and immediate effects on how associations operate and how they enforce and amend their governing documents. Below is a highlevel summary of some of the main legislative changes affecting community associations this year. Note that associations should consult with their attorney to review the current language of their governing documents to determine what amendments may be required in order to remain consistent with the current language of the relevant Acts applicable to the association.
I. LEGISLATIVE CHANGES AFFECTING CONDOMINIUM ASSOCIATIONS: 1. Official Records Request (s.718.111(12)(a), (b), (c), F.S., effective July 1, 2021) – These recent amendments expand a tenant’s right to inspect the declaration of condominium, bylaws and rules; requires bids for work to be maintained for at least one (1) year after receipt and prohibits the association from requiring a purpose or reason for a records request. Additionally, s. 718.501(1), F.S., (effective July 1, 2021) was also amended to expand the jurisdiction of the Department of Business and Professional Regulation, Division of Condominiums, Timeshares and Mobile Homes (“Division”) to 12
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investigate complaints related to the maintenance of and unit owner access to association official records. 2. Assessment Notices (s. 718.111(12) (a) and (c), F.S.; s. 718.116(6) (b), F.S.; 718.121(4) and (5), F.S., effective July 1, 2021) – These amendments require an association to maintain as part of the association’s official records all affirmative acknowledgments made by owners if the association changes its method of delivery of assessment notices; increases the time frame for the required presuit Intent to Lien and Intent to Foreclose notices from 30 days to 45 days; and requires an additional Statement of Account and Notice of Late Assessment prior to the association turning over the owner’s account to the attorney. 3. Notice of Meetings (s. 718.112(2)(d)3. & 4., F.S., effective July 1, 2021) – This change expands the ability of the association to post official notices to the membership on association property and requires notices of meetings to include an agenda; be mailed, hand delivered, or electronically transmitted to each unit owner (consenting to receive electronic notice); and be posted in a conspicuous place on the condominium property or association property within the timeframe specified in the association’s bylaws, or at least fourteen (14) days, if there is no timeframe specified. 4. Insurance Subrogation (s. 627.714(4), F.S.; effective July 1, 2021) – This recent amendment provides that if a condominium Continued on page 14
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LEGISLATION association’s insurance policy does not provide rights for subrogation against the unit owners in the association, an insurance policy issued to an individual unit owner in the association may not provide the right of subrogation against the condominium association. 5. Board Term Limits (s. 718.112(2)(d)2., F.S.) and Board Recall (s. 718.112(2)( j), F. S.), (effective July 1, 2021) – These amendments clarify that when determining applicability of the 8-year board term limit added to the Condominium Act in July 1, 2018 the director’s service start date will be on or after July 1, 2018 and now director recall disputes may be filed in state court or as a petition for arbitration with the Department of Business and Professional Regulation, Division of Condominiums, Timeshares and Mobile Homes (“Division”).
11. Board Emergency Powers - (s. 718.1265(1), F.S., effective July 1, 2021) – In light of the COVID-19 pandemic, this amendment expands the association board’s powers when there is an “emergency” now defined to include “any occurrence, or threat thereof, whether natural, technological, or manmade, in war or in peace, which results in or may result in substantial injury or harm to the population or substantial damage to or loss of property.” 12. Payment of Fines (s. 718.303, F.S., effective July 1, 2021) – This amendment provides that a properly imposed fine for violations of the governing documents is due 5 days after notice of the approved fine is provided to the unit owner and, if applicable, to any tenant, licensee, or invitee of the unit owner.
6. Transfer Fees (s.718.112(2)(i) F.S., effective July 1, 2021) – The amendment increases the statutory amount the association can charge for transfer fees from $100 to $150. Note that an association may be required to amend their documents in order to remain consistent with the new statutory increase.
13. Removal of Discriminatory Covenants (s.718.111(1)(c) F.S., effective July 1, 2021) – Pursuant to s. 712.065, F.S., this amendment allows condominium association boards, without a vote of the owners, to remove discriminatory restrictions contained within an association’s governing documents, upon the request of a parcel owner.
7. Technology – Condominium Websites and Apps (s.718.111(12) (g) F.S., effective July 1, 2021) - For condominiums with 150 or more units, an association may make certain required documents available through an application (“app”) that can be downloaded on a mobile device instead of posting copies of those documents on the association website.
14. Multicondominiums (s. 718.405(5), F.S., effective July 1, 2021) – Multicondominium associations may adopt consolidated or combined declaration of condominium but cannot merge the condominiums or change the legal descriptions of the condominium parcels, unless accomplished in accordance with relevant law.
8. Alternative Dispute Resolution (Arbitration and Mediation of Disputes, (s. 718.112(2)(k), F.S effective July 1, 2021) – Instead of requiring associations and unit owners to arbitrate certain disputes with the Division, association and unit owners can now choose to attempt mediation of disputes if the association’s bylaws require alternative dispute resolution prior to filing a lawsuit. 9. Electric Vehicle and Natural Gas Charging Stations – (s. 718.113(8) & (9), F.S.; effective July 1, 2021) – These new provisions expand an owner’s right to install an electric vehicle or natural gas charging station within an owner’s limited common element or association designated parking space subject to certain conditions. 10. Conflicts of Interest – (s. 718.112(2)(p), F.S., effective July 1, 2021) – This amendment removes the prohibition against association contracts with a service provider that is owned or operated by a board member (or certain relatives with a financial relationship); however, note that other conflict of interests provisions may still apply.
II. LEGISLATIVE CHANGES AFFECTING HOMEOWNERS ASSOCIATIONS: 1. Rental Agreements (s. 720.306(1)(h)1.F.S., effective July 1, 2021) – Similar to the already existing language in the Condominium related to amendments restricting or prohibiting rental agreement, the HOA Act now provides that, except as otherwise provided in s. 720.306(1)(h), F.S., any governing document or amendment to a governing document that is enacted after July 1, 2021, which prohibits or regulates rental agreements, applies only to a parcel owner who acquires title to the parcel after the effective date of the governing document or amendment, or to a parcel owner who consents, individually or through a representative, to the governing document or amendment. However, an association may amend its governing documents to prohibit or regulate rental agreements for a term of less than 6 months and may prohibit the rental of a parcel for more than three times in a calendar year, and such amendments shall apply to all parcel owners regardless of whether they vote or how they vote. Continued on page 16
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LEGISLATION 2. Removal of “Rules and Regulations” from definition of “Governing Documents – (s. 720.301(8), F.S., effective July 1, 2021) – Board adopted rules and regulations are no longer statutorily defined as part of the association’s governing documents, meaning they no longer have to be recorded in the public records of the county. 3. Official Records (s. 720.303(4), (5), F.S., effective July 1, 2021) – This change requires an association to maintain for at least 1 year after the date of the election, vote or meeting, the ballots, sign-in sheets, voting proxies, and all other papers and electronic records relating to the parcel owners’ voting. Additionally, any documentation obtained in a gated community in connection with guests’ visits to parcel owners or community residents are records not accessible to members or parcel owners upon request. 4. Reserves (s. 720.303(6), F.S., effective July 1, 2021) - Reserves are now considered “mandatory” only if the declaration, articles or bylaws obligate the developer to create reserves or upon the affirmative approval of a majority of the total voting interests of the association. There were several other changes related to developer reserve funding which should be reviewed and discussed with the association’s attorney. 5. Association Notice to Owners (s. 720.306(1)(g), F.S., effective July 1, 2021) – All official notices required by s. 720.306, F.S., must now only be sent to the mailing address in the official records of the association and no longer have to be sent to the address on the property appraiser’s website. 6. Election Disputes (s. 720.306(9), F.S. effective July 1, 2021) – As of July 1, 2021, board of director election dispute must be submitted to binding arbitration with the Division or filed in state court. 7. Association Turnover and Transition (s. 720.307(1)(a), F.S., effective July 1, 2021) – The HOA Act now provides that parcel owners other than the developer are entitled to elect at least a majority of the board of directors three months after 90 percent of the parcels in all phases of the community that will ultimately be operated by the homeowners’ association have been conveyed to members other than the developer.
III. LEGISLATIVE CHANGES AFFECTING COOPERATIVE ASSOCIATIONS: 1. Definition of Cooperative “Unit” (s. 719.103(25),F.S., effective July 1, 2021) - The definition of “Unit” is amended to state that “an interest in a unit is an interest in real property.” 2. Board and Committee Meetings (s. 719.106(1)(b)5., F.S., effective July 1, 2021) - A board or committee member participating in a meeting via telephone, real-time video conferencing, or similar real-time electronic or video communication now counts towards a quorum and such member may vote as if physically present. 3. Official Records (s. 719.104(2)(c), F.S., effective July 1, 2021) – As is the case for condominium association unit owner records requests, an association may not require a member to demonstrate any purpose or state any reason in order to inspect the official records. The same legislative changes to Chapter 718, Florida Statutes (The Condominium Act) referenced above were also amended in Chapter 719, Florida Statutes, with regard to: Director Recalls (s. 719.106(1) (f ), F.S.), Alternative Dispute Resolution Procedures(s. 719.106(1)(l), F.S.), Discriminatory Covenants (s.719.106(3), F.S.), and Emergency Powers (s. 719.128(1), F.S.) Assessment Notices (s. 719.108(3)(b), F.S.). The above summary is a non-exhaustive list of some of the legislative changes now applicable to community associations so be sure to consult further with your association’s counsel for a full review of the latest legislative changes, including an assessment of what may be required with regard to updating your association’s governing documents.
Shayla J. Mount is an Associate Attorney in Becker’s Community Association Practice Group. She focuses her practice on providing counsel and representation to homeowner and condominium associations throughout Central Florida. An experienced litigator, she has handled collections litigation and served as general legal counsel for numerous homeowner and condominium association
The changes to the Condominium Act referenced above related to Posting of association documents on an association application (s. 720.303(2)(c)1., F.S.), Recall of board members ((s. 720.303(10), F.S.), Payment of Fines (s. 720.305(2), F.S.), Alternative Dispute Resolution Procedures (s. 720.311, F.S), Discriminatory Covenants (s. 720.3075, F.S.), and Emergency Powers (s. 720.316(1), F.S.) have also been amended in the above-referenced sections of the HOA Act. 16
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boards throughout Orange, Osceola, Seminole, Duval, and Sarasota Counties. Shayla regularly advises association boards on issues regarding vendor contracts and disputes, document amendments, and covenant enforcement issues. She also has substantial experience handling a variety of civil litigation issues including small business and contracting actions, foreclosure defense, real estate transactions, and insurance disputes.. For more information, visit beckerlawyers.com, email sjmount@beckerlawyers.com, or call 407-875-0955.
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NEW CHAPTER MEMBERS
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RESERVE STUDIES Editorial Credit: Felix Mizioznikov / Shutterstock.com
The Importance of Reserve Studies: What We Can Learn from the Champlain Towers Collapse BY NICK BRENNEMAN, RESERVE ADVISORS
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n the wake of the tragic collapse of the Champlain Towers Condominium in Surfside, Florida, many people want to know how such a thing could happen. The dangers of aging infrastructure have been a concern for a while now, but little has been done to regulate how property owners prepare for, fund and conduct these repairs. Prudent community association boards make sure all repairs, maintenance and modernizing are properly funded by the reserve budget and executed at the right time.
REASONS FOR INFRASTRUCTURE NEGLECT Reserve budgets often account for obvious and visible aspects of a condominium association, such as a lobby, a clubhouse or a pool. These areas are more likely to be maintained on a regular basis because everyone can see them. In many cases, their needs for maintenance are easily apparent. However, infrastructure repair needs are often neglected because they’re not as visually apparent. Subsurface utility piping and roofing are not viewable day to day, so they are often forgotten 22
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until there is a dire need for repairs. There are other reasons why infrastructure repairs are often ignored: » Higher Fees - It can be an uphill battle to get agreement on implementing additional assessments and increasing reserve contributions, especially when members don’t understand the value of that investment.
» Reliance on Short-Term Fixes – It may seem easier to just make small fixes to immediate problems when they arise because these are often less expensive and less disruptive in the short term.
COST OF NEGLECT In reality, ignoring or deferring repairs of building infrastructure can have the opposite effect on these common concerns. Continued on page 24
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RESERVE STUDIES Editorial Credit: Felix Mizioznikov / Shutterstock.com
1. The most dangerous result of ignoring aging infrastructure is a catastrophic failure. The building collapse in Surfside is an extreme example of how neglected infrastructure can fail. More often, these failures are less dramatic but still create an emergency situation that requires immediate remedy. For example, failure to replace aging elevator control systems will inevitably result in emergency repairs and a major inconvenience to residents. A reserve study can identify potential infrastructure problems before they get out of hand. 2. Deferred maintenance and underfunded reserves have a negative impact on property values. It may seem like a good idea to set reserve budgets to reflect replacement needs of aesthetic elements of an association because appearance helps sell a property. In reality, when infrastructure problems are ignored and not budgeted for, conditions can deteriorate to the point that they lower property values. 3. An unexpected increase in fees to cover emergency expenses leaves owners angry and unprepared financially. This can lead to strained relations between boards and owners, as well as a tarnished reputation for the management company. A reserve study recommends appropriate, gradual increases to reserve contributions to cover impending infrastructure projects, which is more affordable and reasonable to owners over time.
RESERVE STUDY CONSIDERATIONS Associations should consider working with a firm that specializes in reserve study consulting services for community associations. These firms understand the complex nature of residential communities and have the necessary expertise to assess the condition of your property and to develop reliable funding recommendations. These firms also staff engineers with related qualifications. Hiring a firm who utilizes licensed professional engineers (PE), reserve specialists (RS) and professional reserve analysts (PRA) ensures you are partnering with the most qualified individuals in the industry. Experienced and highly-trained engineers are able to identify issues that a less-experienced person would not notice. A reserve study provides a non-invasive, visual inspection. The report will document visually apparent structural conditions that are abnormal and/or a potential safety hazard. A reserve study will provide guidance as to conditions that warrant invasive inspection or a complete structural engineering analysis. At that point, it is necessary to schedule further invasive inspections conducted by an expert specific to the component in question. Associations should schedule a reserve study update every 2-to-4 years to stay current on ever-changing conditions and funding needs. Keep residents informed about the importance of reserve studies and capital planning as the board has a fiduciary responsibility to maintain community infrastructure. Once a reserve study is completed, explain the findings and recommendations to residents as they are more likely to understand the reasoning behind your community’s capital repair and reserve funding needs. Learn more about the impact of aging infrastructure from the report Breaking Point: Examining Aging Infrastructure in Community Associations, sponsored by the Community Associations Institute.
Nick Brenneman is a Regional Account Manager for Reserve Advisors. He received his Bachelor of Business Administration degree from the University of Wisconsin. Nick works closely with property managers and community association boards to provide industry leading reserve study solutions that
4. Avoiding infrastructure repairs leads to higher expenses for maintenance overall. Instead of completing roof repairs annually, it may cost less and be less disruptive over time to invest in replacing roofs in a timely manner. Plus, a reserve study can help identify preventative maintenance activities that extend useful lives of building components and minimizes the total cost of ownership while greatly reducing the risk of unexpected repairs. 24
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help guide community associations in fulfilling their fiduciary responsibilities for the maintenance, operation and longevity of their properties. Nick speaks to community stakeholders about the importance of and benefits associated with having a professional reserve study. As an industry expert, he conducts seminars with industry partners to provide education and professional insights to managers, boards and community residents. In 2020, Community Associations Institute – Georgia awarded Nick with the Educator of the Year Award. For more information, contact him at 813-536-7199 or nick@reserveadvisors.com
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TOGA BOWLING TOURNAMENT
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Managing and innovating association banking solutions is our business, so you can focus on growing yours. Specializing in: No-Fee Checking Accounts Online Banking Loans & Credit Solutions* ConnectLiveTM Software Integrations In-State No-Fee Lockbox Services ACH & Online Payment Services *All offers of credit are subject to credit approval.
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AUDITS
Efficient Association Audits BY JEREMY NEWMAN, CPA, NEWMAN CERTIFIED PUBLIC ACCOUNTANT PC
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ssociations with December 31st year ends make up a large share of annual audits. There is often intense pressure on managers, accounting departments and audit firms to complete accurate and complete audits in a timely fashion. Completing an efficient audit requires strong communication and sharing of information.
SIGNED ENGAGEMENT LETTER CPA audit engagement letters should be approved by the Board for all audits. Signing the contract well before the association’s year end will provide more time for the CPA to plan and prepare for the audit, and more time for the client to assemble supporting reports and documents.
DOCUMENTS & REPORTS NEEDED FOR AN AUDIT A lot of documents and reports are common for most associations; however additional information will be needed as circumstances dictate. Typical information and documents include: 1. Governing documents 2. Prior year audit and tax return 3. Communication with the previous auditor as applicable 30
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4. Reserve study 5. Budget 6. Board meeting minutes 7. Correspondence with the Association’s legal counsel 8. Shared cost agreements 9. Cost center details 10. Correspondence with governmental agencies 11. Special assessment information 12. Loan agreements. An association’s accounting department generally provide the following reports, and access to information: 1. Year-end financial reports: a. Balance sheet b. Statement of revenue and expenses (often referred to as budget variance reports) c. Bank statements and bank account reconciliations d. Aged receivables and prepaid assessments report 2. General ledger Continued on page 32
What’s Lurking Beneath the Surface in Your Community We handle claims on a contingent fee basis, advancing all fees and costs We have attorneys Board Certified in Construction Law by The Florida Bar We will partner with your current attorney for your association and solely handle the construction defect claim Do not let your claims expire! Call us at 407.455.5664 for a free inspection and report of any findings of construction defects
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AUDITS
3. Check register 4. Financial reports for the periods after the year end date. 5. Access to paid and unpaid invoices
ACCRUAL VERSUS NON-ACCRUAL Presenting audited financial statements in accordance with U.S. Generally Accepted Accounting Principles often requires auditors to record certain adjustments to the financial reports prepared by a management company. Management companies prepare monthly financial reports using the cash basis of accounting, modified accrual basis, or the accrual basis. Under the cash basis of accounting, income reflects money received and expenses represent money spent. Assessments receivable and accounts payable are not presented on the balance sheet. As part of the audit, the CPA proposes adjusting journal entries including recording a bad debt allowance and any amounts payable to vendors for unpaid invoices. Modified accrual basis accounting generally records assessment revenue when assessments are billed (accrual basis). Expenses are generally accounted for on the cash basis (as above). Using the accrual basis, financial reports include assessment income when billed, and expenses using invoice dates rather than payment dates.
CASH! Cash is one of the most critical audit areas. Cash, meaning all petty cash, bank accounts, and investment accounts. Together with the general ledger, bank and investment account statements can act as a roadmap of an association’s financial activity. For accounts where statements are not provided by the banking institution, an auditor will generally require an independent confirmation of the account balances as of the year end date. In terms of efficiency, this situation is often one of the main hurdles to completing audits on time. CPA’s can verify account balances in various ways. The most common method is to transmit an account confirmation/ verification form to the banking institution. Banks require confirmations to be signed by an authorized signer on the account. It is imperative that signature cards are updated whenever signers change. Excessive time can be spent transmitting the confirmation forms to the board, waiting for a signature, sending the form to the bank, then waiting for a response from the bank. Many times, audits are nearly complete, but cannot be released until the banking institution returns a signed completed confirmation to the auditor.
REPRESENTATION LETTER AND FINAL AUDIT Upon completion of the draft audited financial statements, the board reviews the audit report together with a representation letter. The client representation letter confirms management’s and the board’s representations, oral or implied, during the audit, and upon signature, the auditor will release the final audit report for distribution.
COMPLETENESS OF RECORDS FOR THE AUDIT Often, the success of an audit can be measured by the completeness, accuracy, and timeliness of the audit and audited financial statements. Efficiency requires full, complete and timely access to accounting records and documentation. 32
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Jeremy Newman, CPA is the owner of Newman Certified Public Accountant PC and provides audit and tax services for community associations. For more information, email jeremy@hoacpa.com or visit www.hoacpa.com.
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LAKE & POND
How Consistent Lake Management Helps Create Happier, Healthier Communities BY NOEL BROWNING, AQUATIC BIOLOGIST, SOLITUDE LAKE MANAGEMENT
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akes, rivers, beaches, and even swimming pools have beneficial effects on the well-being of visitors that are hard to define. Water is not only essential for our survival, it has a profoundly relaxing and refreshing impact on people’s mental health and happiness. Human beings will always be inextricably connected to water physically, mentally, and spiritually. This helps explain why communities near large water systems are common vacation destinations and highly desirable places for residential communities. It also underscores the importance of preserving our precious aquatic resources.
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effect on swimming, boating, fishing, wildlife watching, and overall enjoyment of nature.
Maintaining balanced aquatic ecosystems is more important than ever as water scarcity, eutrophication, drought, and increasing demand continue to cause depletion and degradation of water quality worldwide. Water pollution can lead to Harmful Algal Blooms, toxicity, nuisance and invasive aquatic weed growth, bad odors, and taste issues in drinking water reservoirs - among many other issues. These types of water quality challenges can lead to diminished property values and will undoubtedly have a negative
Preserving and enhancing water quality requires successful proactive management with long-term results in mind. Lake and pond management is a science and taking all variables into account is the only way to address water quality issues at their root causes. Aquatic biologists pay close attention to detail and consider the entire aquatic ecosystem when collecting sound physical, chemical, and biological data. Continued on page 36
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In many areas, it’s common for water quality problems to shut down lakes and beaches throughout the summer, but few people are cognizant of why these problems occur and how significantly they can threaten our innate connection with the water. Assessing and addressing issues with water quality takes the experience and knowledge of experts who focus on optimizing all the benefits that balanced water can provide.
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LAKE & POND Water quality assessments are a common starting point to uncover this important information and identify potential nutrient imbalances, pollutants, watershed inputs, algal populations, or other problems. With every visit to your waterbody, aquatic biologists can learn more from each new water sample. This data creates a basis for management recommendations and informs the use of ecofriendly tools and advanced technologies. Depending on the challenges your waterbody faces, it may require a combination of solutions. Fountains and submersed aerators are excellent at increasing healthy dissolved oxygen levels in the water while circulating different areas of the water column. Likewise, new aeration solutions like Oxygen Saturation Technology are changing the game by making it possible to directly inject oxygen into the water to correct deficiencies, eliminate bottom muck, and potentially end reliance on herbicides. In the event that herbicides are required to achieve lasting aquatic weed control, advanced drone technology is now available to efficiently and precisely target affected areas. Drones also aid in surveillance, making it easier than ever to identify problems such as eroded shorelines, which can be rebuilt with innovative mesh technologies that integrate seamlessly into the landscape for lasting stabilization. These efforts are often paired with sediment
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removal strategies like hydro-raking and the application of nutrient management products that prevent future algae and aquatic weed growth. These steps can be further supported with the introduction of deep-rooted native vegetation, which form beneficial shoreline buffers that prevent undesirable nutrients and pollutants from entering the water. These solutions provide immediate benefits, but they are not permanent. Lakes and ponds require year-round care for long-term success. An annual management program comprehensively supports aquatic ecosystems with many of these solutions and others that nurture waterbody health and functionality. When an annual plan is uniquely tailored to the individual characteristics of your waterbody, you can maximize the many physical, mental, and spiritual benefits of time spent in and around the water.
Noel Browning is an Aquatic Biologist with SOLitude Lake Management, a leading environmental firm specializing in sustainable lake, pond, wetland, and fisheries management solutions. Learn more about this topic at www. solitudelakemanagement.com/knowledge.
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PAINTS • COATINGS • ADHESIVES • SEALANTS
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An INNOVATIVE approach can yield truly AMAZING results. At Cogent Bank, we believe the human side of technology is as important as the technology itself. Come experience state-of-the-art banking with a human touch.
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Schedule a time with Traci to discuss your Association’s needs and see how we do things differently at Cogent Bank. Traci Smith | Senior Vice President | Commercial Relationship Manager Office: 321.414.2173 | tsmith@cogentbank.net Cogent Bank is a Member FDIC and an Equal Housing Lender. Loans are subject to credit approval. Only deposit products are FDIC insured.
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Gala Committee Ken Zook Waterford Lakes ken.zook@mywaterfordlakes.org
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David Furlow Leland Management dfurlow@lelandmanagement.com
Social Committee Tara Stone Your Private Adjustor tara@yourprivateadjuster.com Sunshine Foundation Committee Jennifer Agravat Asphalt Restoration Technology Systems jennifer.agravat@asphaltnews.com
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