Central Florida Times
In this Issue: Letter from the President - pg 1 Chapter Update - pg 2 Board of Directors - pg 3-4 Unconditional Releases in Settlements - pg 7-8 Apples to Apples - pg 11-12 Summer Social - pg 15 What is this thing called Fiduciary Duty? - pg 17 Golf Tournament - pg 18 New Members - pg 19 Sponsors - pg 22
A Message from the President Dear CAI Members, PO Box 941125 Maitland, FL 32794 www.caicf.org exdir@caicf.org 407-850-0106 Board of Directors: President: Mary King President-Elect: Jamie Rodriguez Vice President: Cathy Bowers Treasurer: Bernie Mapili, CPA Secretary: Dave Holt Bill Bishop, CMCA, AMS John Dougherty Alan Garfinkel, Esq.
I would like to report back to you that our time at the National Conference in San Diego was FANTASTIC! We had such great Key-note speakers and awesome break-out sessions. Your incoming President for 2014, Jamie Rodriguez, was trained and groomed by the National Staff and was able to connect with others in her role to prepare for an awesome year! All in all, we had an outstanding time and most of all are looking forward to the National Conference coming to Orlando next year! Speaking of National coming to Orlando next year – Save the Date! CAI Annual Conference 2014 will be held at the Loews Royal Pacific down near Universal on May 14 – 17. Our local Chapter will be hosting a Chapter Party one evening as well. I know what you are thinking… are we going to have our Central Florida CAI Annual Trade Show? How could we not! Since the Trade Show has become our Chapters most beloved events, we have the ball rolling to set our date for the Trade Show 2014 as well. Coming up we have a lot of great events: Manager Education Courses (M202, M100, M201), Summer Social at Harry Buffalo’s downtown, Meet the Managers, and so forth. See the following page for details!
Suzan Kearns, CMCA, AMS
Thank you for your participation in our Chapter and for you presence in our Industry.
Phil Masi, CIRMS
Until next time!
Gary van der Laan, PCAM
Yours truly,
Mary King 1 - Central Florida Times, Second Quarter Issue
Central Florida Chapter Update June 6 – Summer Social: Harry Buffalos / 129 W Church Street, Downtown Orlando This is an opportunity to come out and network with other professionals, to meet our CAI Chapter Board members, and to enjoy a nice summer evening. In the past, our socials have been one of the highlights for our members as there is no admission for those who RSVP online. Come and enjoy a fun night on us!! Meet the Managers - Thursday, July 18, 2013 / 4pm -6pm / Crowne Plaza, Downtown Orlando Meet the Managers is a Member-Only Event that provides the opportunity to connect our Business Partners with our Manager Members. This one-on-one time gives our business partners the advantage of developing relationships with our Managers and letting them know the benefits of using their company. Don’t miss this event!! Cost: $75 / extra $25 to have your business information in a program. M101: Essentials of Community Association Management - June 20-22, 2013 / Crowne Plaza, Downtown Orlando This comprehensive community association management course provides a practical overview for new managers, an essential review for veteran managers and an advanced course for board members. You’ll receive a 400-page participant guide filled with dozens of sample forms and time-saving tips for working with homeowners, vendors, managers and other professionals. Successful completion of this course is the first step in obtaining a professional designation in community association management. M202: Association Communications - June 6 - 7, 2013 / Crowne Plaza, Downtown Orlando Learn key communication techniques to improve resident and board relations. This course offers communication strategies that will benefit both new and experienced managers and provide the skills to better understand owners and volunteers. You’ll learn the basics of good customer service and gain the tools to effectively handle complaints, write newsletters and reports and manage public relations. M201: Facilities Management - December 5 - 6, 2013 / Crowne Plaza, Downtown Orlando Learn how to preserve and enhance your association’s property and prepare for emergencies. This course provides a hands-on approach to help you analyze, evaluate, communicate and plan for property maintenance. Your community will benefit from your increased understanding of the various types of maintenance—routine, previous, emergency, corrective and scheduled. August 1 - Luncheon: Legal Panel and Budget Save the Date!! National Conference: May 14 - 17, 2014 Orlando - Loews Hotel, Royal Pacific
Second Quarter Issue, Central Florida Times - 2
Board of Directors Mary King - Chapter President Trade Show Committee Chair Sentry Management Jamie Rodriguez - President Elect Membership Committee Chair Waterford Lakes Home Owner Board
Cathy Bowers - Vice President Meet the Managers Committee Chair Emergency Services and Reconstruction Bernie Mapili - Treasurer Mapili CPAs
Phil Masi, CIRMS Social Committee Chair Brown & Brown Insurance Gary Vanderlaan, PCAM Education Committee Chair Leland Management
Bill Bishop, CMCA, AMS Director Principal for Managment Concepts Inc. Suzan Kearns, CMCA, AMS Director Community Management Professionals, Inc.
3 - Central Florida Times, Second Quarter Issue
Alan Garfinkel, Esq. Director Katzman, Garfinkel, & Berger John Dougherty Director Servello & Son
Dave Holt - Secratary Communications Committee Chair Home Owner Board Member
Interested in getting more involved? Join a committee! If you are interested in getting more involved in the chapter, joining a committee is a great thing to consider. Below are the different committees that we currently have active. Please feel free to contact any of the following committees: ■ Membership Committee: Jamie Rodriguez / Sharon Parker Rogjamie1@gmail.com / sharon.parker@bbandt.comt ■ Tradeshow Committee: Mary King 407-782-0828 / Mking@sentrymgt.com ■ Golf Tournament Committee: Scott Pollock 321-689-2794 / SPollock@lelandmanagement.com ■ Communications Committee: Dave Holt 352-552-6930 / dhholt@gmail.com ■ Education Committee: Gary van der Laan 407-545-5553 / GVanderlaan@lelandmanagement.com ■ Meet the Managers Committee: Cathy Bowers 321-594-8197 / cbowers@esrfl.com Second Quarter Issue, Central Florida Times - 4
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Second Quarter Issue, Central Florida Times - 6
Unconditional Releases By: Jason Bruce in Settlements: Fear the Unknown
Pursiano Barry Lavelle Bruce Hassin LLP
Community associations often find themselves in disputes with their developer, contractors or service providers. Associations regularly resolve the disputes without litigation, or at least without litigating to judgment. In resolving substantial disputes, at least one party usually insists on a written settlement agreement. Community associations must exercise extreme caution before signing a liability release of “unknown claims” as part of any settlement. Such releases can be particularly detrimental to associations transferring from developer control. A typical example follows:
munity, but the path “as-built” ends abruptly after a half circle; (4) the main entry gate is more often broken than operational; and (5) two owners complain about water intrusion into their units.
ing the water intrusion issues into the two units. The letter then closes by offering $4,500 as a compromise.
The infuriated board votes to initiate a lawsuit. The developer answers the lawsuit, denies all liability and files a At an association board meeting, the counterclaim against the association developer convincingly gives assur- for alleged assessment overpayments ances that all valid concerns will be on the developer owned units. addressed. The developer asks the new board members and property The initial litigation is tremendously manager to walk the property and as- expensive, and the lawyer advises fees semble a final list of remaining issues. and costs will quadruple before the The new board members enthusiasti- end of trial. No funds are available cally agree. After listing every known for protracted litigation and special issue, the association presents a assessments will not be well-received. “Punch List” to the developer. The lawyer suggests mediation (a A developer builds a 356 unit consettlement negotiation facilitated by dominium community promising to The developer addresses many of the a neutral person, who is usually a be full of attractive amenities. The smaller issues, but not the six more lawyer). The board agrees. amenities advertised include a pool, significant issues. As time passes, the spa, meandering asphalt walking path developer becomes less and less reAt the mediation, the developer exand an automatic entry gate. When sponsive to phone calls and warranty plains it has no liability and the court the unit owners take over the assorequests. After several months of will find that the association actually ciation’s board of directors, several getting “the runaround” the associa- owes it money. The board believes issues are brought to their attention: tion directs its lawyer to resolve the the developer is prepared to litigate (1) the pool deck has large cracks; (2) turnover issues. to the bitter end. The day presses on the spa pump does not work corand the board becomes discouraged rectly; (3) the sales brochures show The lawyer writes a letter demandabout the prospect of resolution and a walking path encircling the coming the developer cure the remaining its ability to fund further litigation. Punch List items. The developer’s lawyer responds: (1) the pool Just when the day seems wasted, the deck cracks are normal and with- developer announces that to rid itself in construction tolerances; (2) the of the litigation, it will make a busispa’s malfunctioning was caused ness decision to resolve the “frivolous by post-turnover unit owner claims”. After some back-and-forth abuse; (3) the declaration of in the negotiations, the parties agree condominium gives the developer that the developer will: (1) inject an discretion to modify the walkepoxy into the pool deck cracks; (2) ing path; (4) the entry gate was install a new spa pump; (3) place repaired at the time of turnover, landscaping at the end of the walking so the new malfunctions result path; (4) pay $550 toward the gate from cars bumping the gate; and issue; and (5) caulk the two leaking (5) lack of maintenance is causunits’ windows and stucco cracks. 7 - Central Florida Times, Second Quarter Issue
Despite the simplicity of the mediated settlement terms, the developer sends the association a five page settlement agreement. It contains language releasing “all known and unknown claims” and “all unnamed third parties whether or not they are currently known to the association.” The board has concerns about the provision, and asks its attorney to remove it. The attorney reports back, “The developer doesn’t think it has any liability. Their position is that they are being way too generous already and see this as buying their peace from future frivolous litigation.” The association is in no financial position to pursue the litigation. The board feels they must show some benefit for the effort and sign the agreement. Over the next three years, many construction issues surface. Unit owners increasingly report water intrusion issues, including the two units recaulked by the developer. The association also takes possession of an abandoned unit with water intrusion problems. The association hires an engineer to assess the unit’s problems and make recommendations. Stucco is removed around a window, sliding glass door, decorative band and balcony. The engineer concludes that the windows and sliding glass doors are improperly installed and reverseflashed, the balcony/stucco intersec-
tions are missing required flashing and sealants and the decorative bands are installed in a way that direct rainwater into the wall cavities. The engineer estimates the repair of this single unit to be $20,000. He also notices there are ceiling stains likely caused by a roof leak, which would be an additional cost to repair. The engineer then walks the community looking at other units. He concludes that all of the buildings have similar water intrusion issues. The repair cost of the abandoned unit multiplied by 356 units equates to $7 million. The residents cannot afford special assessments close to that magnitude.
tion that no latent defects exist. Associations should also do their best to avoid releasing “third parties”, “unknown parties”, “other parties”, “unnamed parties”, “all other persons and entities” or the equivalent. By rejecting such a release, legal avenues remain to bring claims against the general contractor, subcontractors, design professionals, quality assurance firms, and others that may share responsibility.
Looking for language that creates a release of “all unknown claims” or “all third parties” must go beyond simply looking for buzz words. Florida courts have ruled that no words of art Over the next several years, the asare required for an effective release sociation does its best to address the if the intent of the parties is apparwater intrusion and damages. The ent from the language used. This board does its best to objectively means the same broad release could prioritize the repairs with the limited be stated a different or convoluted funds, but the community’s needs way, yet still achieve the same effect. and unit owners’ demands are over- For this reason it is always prudent whelming. The stench of mildew to consult an attorney before signbecomes a way of life despite every- ing a liability release when resolving one’s best efforts to soak up water complex issues. intrusion and apply bleach to stained areas. Unit owners begin abandon- Releasing unknown claims can be exing their units. Others stop paying tremely detrimental to an association. assessments under the justification It is generally worthwhile to either that the association has breached its negotiate the release to a carefully responsibility to keep the common defined scope or perform an inveselements in good repair. Property tigation to be reasonably certain the values plummet as the association settlement terms are in the associaspirals downward into condemnation’s best long term interest. In sum, tion. associations should fear and protect themselves against the unknown. The effect of releasing “known and unknown claims” can be devastating by leaving an association without a remedy. Before signing such a release, associations should undertake a thorough investigation to be reasonably sure that additional claims will not arise in the future. Reserve study analyses seldom accomplish this goal and most expressly state an assumpSecond Quarter Issue, Central Florida Times - 8
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Apples to Apples by Connie Lorenz
With the effects of the recession still running strong in all of our lives, people are finding new ways to get the most for their money in every possible way from mortgages, to bartering, to refurbishing rather than replacing. These are things we probably all should have been doing for a long time now, but we had forgotten the value of a dollar or the pressures of not having one. In the asphalt maintenance industry, it seems to have hit some of us a little harder than other. We are finding that we have to market in new ways that help not only draw new customers, but also show them that what we have to offer is worth their hard-earned dollars. Unfortunately, in times like these, desperate people do desperate things. I recently met with a property manager who was positive that he wanted to rejuvenate his asphalt roadways but was confused on what product to use. He had all of his bids in front of him and all of the sales paraphernalia that comes with it, but said he just couldn’t figure it out. I asked him if I could help in any way, but like most property managers, he was extremely hesitant to voice his concerns. Becoming more and more curious as to why he was so confused, I asked him if I could see some of the bids and product information he had received. Not wanting to jeopardize his relationship with these other contractors. He was hesitant at first, but finally let me look at a pamphlet that one of the contractors had given him. It was obviously a sales packet put together by a company that was just starting out because the pam-
phlet consisted of copies, not the original documents. As I read through the information, I asked what it was that was causing his confusion. Once this discussion started, I realized that some clarification needed to be made to not only him, but to anybody that is looking at these same companies and their products. I needed to find a way to help them all understand what goes on in the asphalt maintenance industry. In asphalt maintenance, if you are not comparing apples to apples, you are wasting your time and your contractor’s time, as you will never come up with a solution to the confusion when you are being deceived. This particular customer had the following issues: • ISSUE: The bids had different square yards for the designated work area. • SOLUTION: Measure the property yourself. If you find a discrepancy, then readdress the situation with the contractors and ask them to revisit their numbers. • NOTE: As a contractor, I am grateful for those communities that provide this number and bid accordingly, but I also take the time to re-measure the property to make sure that the customer measured right as well. If there is a discrepancy, ask the contractors to note the issue in writing and make sure to forward it to the other contractors as well. In this case, the contractors assumed all the roads were the same width and they really ranged anywhere from 18 feet wide to 25 feet wide. This resulted in a huge discrepancy. • ISSUE: References-are they real? In this case, the property manager gave me the list of references that implied that the names listed were this
11 - Central Florida Times, Second Quarter Issue
contractor’s customers; however, upon closer reading, the list stated “users of rejuvenators” not that they were specifically customers of the contractor who submitted the list. Why would a contractor specifically try to deceive their customer? • SOLUTION: When asking for references, ask for two good references and one bad reference. All contractors can provide good customer references. I want my potential clients to see that if I make a mistake, I can come back and make sure it’s corrected. Unfortunately others in this industry may not follow-up on customer problems because they try and “wait out” the warranty period. It’s a good idea to know a contractor’s history early on. I promise you this request will aid in separating the good contractors from the bad ones. • NOTE: Call the references, visit the property, find out what their issues or worries were, and ask questions. • ISSUE: Repairs. Each contractor offered not only a different number of repairs, but a totally different product for correcting the issues. • SOLUTION: Specify what you want done to each contractor in a prepared scope of work outline. If you know that you need a certain type of service, specify it and let the contractor correct you and explain why they feel his/her solution is better. This property had an inverted drain line that was cracked and raveled but could be salvaged by installing a
crack-fill into the cracks. One contractor bid for the complete removal and repair of the invert line at an astronomical price, and the other contractor offered a “price range” for non specific repairs. My bid noted the number of repairs, their locations, and the best solution to correct each area. When the property manager asked the contractors about crack-fill, he was told that they didn’t offer that type of service so they couldn’t bid it. They bid only what they could offer and did not offer or explain any other options to the client. • NOTE: When a contractor gives you a price range, please select another contractor to quote you. This tells me that they are subcontracting their work and that is a dangerous game. • ISSUE: Warranties. This property manager thought he was comparing rejuvenators and that they all came with the same type of warranty. In this case, all three contractors offered different warranties ranging from one year to three years, and one offer wasn’t even included in writing on the bid. • SOLUTION: When a warranty is presented for any product, make sure to get it in writing from all of the contractors, and that it states what the warranty includes. If there is any variance, like this property manager had, it should be clear that you aren’t comparing the same products at all.
Another place to exercise caution property, but taking the time to is the 1-800-PAY-MORE numbers. educate yourself about each task will Someone came up with the idea of help save you money and headaches. securing an 800 number nationwide With a little bit of knowledge, you and then selling off the area codes can save your community thousands per territory. When a potential cus- of dollars by avoiding the oranges tomer calls from a specific area code, and just dealing with the apples. the contractor that paid for that area Connie Lorenz is President of is given the lead. Unfortunately, no Asphalt Restoration Technology one bothers to qualify these contrac- Systems, Inc. For more information, tors as long as they pay the $200 per visit www.asphaltnews.com month area code fee. A great source for research is to check with the other properties where you liked the work that they had completed. Contact local organizations that your community might belong to and see if they have a qualified list of contractors available. Another important place to check is with the Better Business Bureau or with the State Now Offering Insurance Appraisals. website to make sure a contractor is registered to And the most effective way to meet them. do business At Reserve Advisors, we understand that no two reserve studies in your area. are ever the same. Which is why we always start at the If they’re same place – with you. We begin with a blank slate and then build a reserve study based on your special requirements. not, you might not Let us be your partner for the future. be protected by the state laws that protect communities Miami | Tampa | Orlando from bad contractors. I know that a I recommend to any associa- community tion that is looking into an asphalt cannot posmaintenance program, do as much sibly know research as possible. Be cautious if everything you are searching on the Internet, when it many companies pay money to have comes to their company listed first, but it has maintaining For your no-cost proposal, please call Matt Kuisle at (800) 980-9881 or visit reserveadvisors.com nothing to do with being best or the asphalt most qualified. on their
Knowing your goals.
Second Quarter Issue, Central Florida Times - 12
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Second Quarter Issue, Central Florida Times - 16
What is this Thing Called Fiduciary Duty?
F
never use their position to take advantage of the association. They should never make decisions for the association that benefit themselves at the expense of the association and its members.
Board members fulfill their fiduciary duty by: From time to time you may hear Developing and using a formal that the board of the association budgeting process operates in a fiduciary capacity for Establishing and adhering to budthe homeowners. Or you may read getary guidelines about the board’s fiduciary respon Making sure the budgeting process sibility in the governing documents. Fiduciary duty also includes the reflects the wishes of the association Just exactly what does this mean? duty to exercise ordinary care. This members means board members must per Promoting understanding and Fiduciary duty simply means the form their duties in good faith and acceptance of the reserve accounts board has an ethical and legal obli- in a manner they believe to be in the among the members gation to make decisions in the best best interest of the association, with Collecting sufficient fees to adinterests of the entire association. such care as an ordinary prudent equately operate the association That’s a small explanation for a very person in a similar position under Soliciting bids and negotiating apbig responsibility. similar circumstances would use. propriate contracts Authorizing expenditures Fiduciary duty includes a duty of In short, boards must act in the best loyalty to the association, which interests of the association and act means that board members should reasonably.
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First Quarter Issue, Central Florida Times - 18
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