Agenda Day 1
Introduction/Logistics/Course Objectives Legal Basis Rule Development/Enforcement Budget & Reserves Collecting Assessments Financial Statements
Agenda Day 2
Maintenance Contracting Risk Management & Insurance Community Management Board Meetings & Decision-Making Manager Ethics Day 2 Wrap-Up
Agenda Day 3
Review/Questions and Answers Course Evaluations Examination 100 multiple choice questions 2 hours
Legal Basis
This section of the program will introduce you to: The legal nature of a community association, including the scope and limits of its authority (Legal Basis for Community AssociationsLesson 1) Proper rule development and enforcement (Rule Development and EnforcementLesson 2)
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Community
Business
Government
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Equal Employment Opportunity Commission (EEOC) Fair Debt Collection Practices Act (FDCPA) Fair Housing Act Fair Labor and Standards Act (FSLA) Family and Medical Leave Act (FMLA) Federal Communications Commission (FCC) / The Telecommunications Act of 1996 Federal Insurance Contributions Act (FICA) Occupational Safety and Health Act (OSHA) Soldiers and Sailors Civil Relief Act of 1940 (SSCRA) U. S. Bankruptcy Code
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Recorded map, plat or plan Declaration, CC&Rs, proprietary lease or occupancy agreement Articles of Incorporation
Bylaws
Board Resolutions
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Articles of Incorporation
Brings corporation into existence Cooperatives must incorporate why? Other types of communities may incorporate varies by state Benefits of incorporating: - Limit liability of individual owners - Right granted all corporations - Easier to deal with utility companies, vendors, etc. - Grants the board the same rights as all board members of incorporated entities under state statutes
Bylaws
Bylaws: Formal procedures for administration and management of the governing entity Examples: - Meeting procedures including voting rights - Board powers and duties - Indemnification of officers and directors
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Resolutions
Resolution A motion following a set format and formally adopted by the board. May enact rules and regulations or formalize other board decisions
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Resolutions
Resolution A motion following a set format and formally adopted by the board. Kept in a Book of Resolutions Four types of resolutions: 1. Policy resolutions owners rights and responsibilities, i.e., use of recreation facilities 2. Administrative resolutions internal operation, i.e., where board meetings will be held 3. Special resolutions apply a policy or rule to an individual owner, i.e., decision about alleged rule violation 4. General resolutions routine events, i.e., adoption 36 of annual budget
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Basic Steps in a Due Process Procedure for Handling Alleged Rule Violations
1. Call the resident or send a courtesy letter to resolve the violation. 2. Issue a formal cease and desist letter. 3. Issue a hearing notice if the alleged violation does not end within the stated time. 4. Hold the scheduled hearing if the alleged violation does not end within the stated time. 5. Issue a decision after a hearing is held. 6. Allow for an appeal of a decision.
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Financial Management
This section of the program will introduce you to: Budgets and Replacement ReservesLesson 1 Collecting AssessmentsLesson 2 Financial Statements, Audits, Income Taxes, and InvestmentsLesson 3
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Budget Components
Revenue Owner assessments Interest Other revenue (includes late fees, fines, and user fees) Expenses Operating routine administration and operations Major improvements new Replacement fund repair or replacement of major components
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Calculating Assessments
Formula for calculating assessment fees for condominium owners:
Total Assessments Required Percentage Interest as Found in Annual Budget X in the Declaration
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Budget Items
Mandatory line items community and owner needs and obligations - For example: taxes, repairs, utilities, maintenance
Discretionary line items owner, board, and committee desires or expectations - For example: social and recreational expenses, picnic areas, patrols, pool towels
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Budgeting Methods
1. Zero-base budgeting all line items are set to zero and the amount of funds allotted to each must be justified 2. Historical trend budgeting existing line items are needed - Item assumed to be justified - Prior information adjusted for expected changes * Utility costs * Construction materials * Insurance * Staff size * Staff raises
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Reserve Account
The reserve account consists of funds put asidein reservefor the replacement of major components of a communitys common property. Typically used to replace asphalt paving, concrete sidewalks, roofs, central heating and cooling plants, swimming pool, tennis courts, elevators, and other varied property components. Revenue raised for adding a major item will be a major improvement expense. Revenue raised for replacing that item when it deteriorates will come from the replacement reserve account.
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Assessments
Assessment Owners financial obligation to a community association during a given period of time Special assessment One time assessment, often voted on by owners to cover a major expense such as a major repair or replacement
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Delinquency Remedies
Extra Judicial Remedies Late charge or interest penalty Require security deposit equal to certain number of months assessments Acceleration Collection of all assessments due through the end of the fiscal year Suspend owners user privileges, such as pool privileges Suspending owners voting and other participation rights
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Bankruptcy
Immediately take three actions: 1. Contact legal counsel (attorney) 2. Forward any bankruptcy notices to counsel 3. Stop all collection efforts Types of bankruptcy: 1. Chapter 7 liquidation 2. Chapter 11 corporate reorganization 3. Chapter 13 personal reorganization
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Lesson 3: Financial Statements, Audits, Income Taxes, & Investments Session Overview
Learning Objectives
Identify the purpose and types of financial statements. Identify and explain the three types of accounting methods. Differentiate between an audit, review and compilation. Recognize federal income tax requirements and responsibilities for community associations. Explain investment policies and objectives for community associations.
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Accounting Methods
Cash Basis Income when received Expense when paid Accrual Basis Income when earned Expense when incurred Modified Cash Basis Records income and expenses on a cash basis with selected items recorded on an accrual basis Most common = records income (assessments) on the accrual basis and expenses on the cash basis Also known as Modified Accrual
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Financial Reports
The Statement of Revenue and Expense Records transactions during a given time period Three components: - Revenue - Expense - Net revenue (or loss)
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Investments
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Facilities Management
This section of the program will introduce you to: MaintenanceLesson 1 ContractingLesson 2 Risk Management and InsuranceLesson 3
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Bayview Towers Condominium Association, Inc. GREEN ENERGY COMMITTEE (Advisory Committee) CHARTER OBJECTIVES: To assist in the education of homeowners and staff regarding energy, water and other conservation related subjects. This shall be accomplished through research, analysis and testing of new technologies, in addition to well established procedures and recommendations. Additionally, the committee will investigate federal, state, and local government programs while also soliciting knowledge and ideas from public utilities and private industry. Communication of technical findings, ideas and suggestions to homeowners will be through, but not limited to, a monthly column, special notices, lectures and demonstrations. Ideas suitable for the community will be presented to the board or appropriate committees. The actions and benefits resulting from this committee will be dependent upon a high level of interest and the involvement of the entire community. Therefore, the committee shall encourage and solicit homeowner participation to the maximum extent practical. ORGANIZATION: The committee will meet as needed, typically monthly. The committee members will select its chair. All committee meetings will be open to the public. Minutes of the meetings will be taken and filed in the corporate files. A report that will be issued to the board will be generated from each committee meeting. The committee will consist of at least five (5) association members. The committee will serve at the pleasure of the board.
Contract Provisions
Parties Scope of work Compensation Time period Performance standards Warranty Restoration Indemnification Insurance License & permits
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Legal provisions
- Assignability - Modifications - Waiver - Severability - Entire obligation
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Exposures to Loss
1. Property Exposure tangible or intangible Real property buildings, land, information Personal property inventory, furniture, supplies 2. Liability Exposure Third-party claim of personal or property damage 3. Income Exposure net loss reduction in income/increase in operating expenses 4. Personnel Exposure claims of employees
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Risk Control
1. 2. 3. 4. Exposure avoidance Loss prevention and reduction Segregation of exposure Contractual transfers
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Property Coverage
Commercial package policy Mechanical/equipment breakdown insurance Ordinance/law insurance Flood insurance Electronic data processing
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Liability Coverage
Commercial general liability Hired and non-owned automobile liability Commercial umbrella liability Directors and officers liability
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Income Coverage
Fidelity insurance Business income insurance Assessment fees receivable insurance Extra expense insurance
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Personnel Coverage
Workers Compensation insurance Employers Liability insurance
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Evaluate Agents/Brokers
Experience Specialty in the field Knowledge of community associations Claims processing history Participation in professional and trade associations Professional standing Licenses Bonding CIRMS
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Types of Committees
Mandatory o Required by the governing documents o Typical mandatory committees: - Elections - Nominations - Architectural standards
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Forms of Management
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Transition
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Definition
Transition - (tran-sis'-shun)
n. the gradual process by which the control and responsibilities of the governing board of an association are transferred from the declarant to the persons who bought units/lots in the common interest community.
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Definition
Turnover - (turn'-oh-ver)
n. the date on which the declarant no longer has the right to appoint a majority of the members of the board.
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The Players
Manager Attorneys o Developer o Association Engineer/Reserve Specialist Accountant Insurance Agent
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The Manager
Twinkle in eye o Documents o Budget o Design o Community association creation Orchestra conductor Educator Trainer Coordinator Cheerleader Mediator Discipliner Task Master The Great Communicator Buffer
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Initial Services
Review site, building & landscape plans Confirm amenities Create team Draft realistic multi-year budget Determine developer funding obligations Review documents Craft rules, ACC guidelines Create transition timeline/checklist Train sales and construction staff Create HO manual Create/review Maintenance Responsibility Chart
Pre-Turnover Services
Train initial board Provide leadership programs for emerging homeowner board and committee members Conduct new owner welcome and orientation sessions Update developer funding obligations Frequent Town Hall meetings
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Turnover Services
Prepare for Turnover Meeting o Documents & statutes o Positive environment o Ducks in a row Coach board Prepare homeowner advisory/board members Coordinate transition team Turnover checklist
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Post-Turnover Services
Community association management New board orientation Coordinate transition team Coach new leaders Follow up turnover meeting issues Leadership development
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Legal Requirements
State statutes and governing documents establish requirements for board of directors meetings. Legal requirements commonly address such issues as: Frequency of meetings When meetings should be open or closed Notice of meetings Voting Executive session Violation hearings 127
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Conflict of Interest
1. Is the transaction which results in compensation to the management company or agent directly or indirectly related to managements relationship with the community association? 2. Will management directly or indirectly receive some compensation from the community association, or a third party, other than the compensation described in the management contract?
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Full Disclosure
1. Make full and complete written disclosure of all relevant facts to your board prior to any dealings which may be, or appear to be, a conflict of interest for you. 2. Obtain specific authorization from the board in writing before proceeding with any action which may present a conflict of interest. 3. Even after full disclosure, avoid any actions which areor may be perceived asa conflict of interest.
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Course Conclusion
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Contact CAI
6402 Arlington Blvd., Suite 500 Falls Church, VA 22042 (888) 224-4321 (M-F, 9-6:30 ET) (703) 970-9558 (Fax) caieducation@caionline.org www.caionline.org
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Thank you!
For participating in this course For your support of CAI and the Professional Management Development Program
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Final Questions?
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Evaluations
Please be sure to fill out your course evaluations. Your feedback is important to us.
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Course Exam
100 questions Multiple choice Results will be available within four weeks, if not sooner Good luck!
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