Year End Surplus Treatment in Board’s Hands

Q:        What must be done with a condominium association’s operating surplus at the end of the year? Is it true that it must be returned to the owners in the form of payment or a credit to next year’s budget or assessment? (J.S. via e-mail)

A:        Condominium associations levy assessments against the unit owners for their individual share of funds required to pay for “common expenses.” When all of the receipts or revenues, including assessments, rents, or profits collected by an association exceed the common expenses, this is referred to as the “common surplus.”

The Florida Condominium Act generally provides that funds for the payment of common expenses are allocated in the percentages set forth in the declaration of condominium. For condominiums created after January 1, 1996, the Act provides that each unit will have identical shares for sharing common expenses and owning common surplus.

However, the statute does not state what associations must do with the common surplus (including year-end operating surplus), nor does it require associations to refund surplus operating funds to the owners (and few, if any, associations do so). In my opinion, the proper treatment of the surplus operating funds is to accrue them as revenue for the next fiscal year, and apply the revenue to offset expense items contained in the budget. This does not necessarily mean that the money has to be spent, as a reasonable accumulation of working capital is a proper budget line item.

Although only applicable in somewhat limited tax reporting situations, there is an IRS Revenue Ruling that requires a vote of the owners to authorize the “rollover” of surplus funds to avoid taxation of excess operating income. An appropriate accounting professional should determine if a particular association is subject to the IRS Revenue Ruling (most aren’t), and assist with the manner in which the “rolled over” funds are accounted for in such situations.

Q:        How are “voting interests” defined? (J.R. via e-mail)

A:        Voting interests are the voting rights distributed to the association members, which are described in the governing documents of the association.

Most frequently, each assessable unit or parcel is assigned one voting interest, no matter how many people actually own the property (sometimes called “one door – one vote”). Occasionally, particularly in older condominiums where the sharing of assessments is weighted based on unit size, the voting interests may also be weighted.

Q:        At a recent meeting of my condominium association’s board, there was discussion about voting down an audit. Is this allowed?  (O.A. via e-mail)

A:        Condominium associations with revenue in excess of $500,000 are required to prepare an annual audit. Associations with revenues between $300,000 but less than $500,000 must prepare reviewed financial statements annually. Associations with more than $150,000, but less than $300,000, in revenue must prepare an annual compiled financial statement. Associations with less than $150,000 in revenue are only required to prepare a report of cash receipts and disbursements. Owners can vote to “waive” these requirements by majority approval.

Effective July 1, 2017, the legislature made a few of changes to this law. There is now no limitation on the number of times an association may waive the statutory financial reporting requirements (it used to be limited to three consecutive years). The statute also removed the exemption for associations with less than 50 units. Now, the statutory financial reporting requirement applies regardless of the size of the community, and solely based on revenue. Although found in different statutes, these rules apply to both condominium and homeowners’ associations.

 

Written by Joe Adams and originally posted on FL Condo HOA Law Blog

The All-In-One or Best-of-Breed Dilemma: Which Technology is Best for Your Property Management Company?

In the property management industry, there is a technology to solve almost every problem.  From paying rent online to managing packages, the industry is bursting with solutions that tackle all the tedious aspects of being a property manager. But first, you have to find the vendor that’s right for your company, and that can be a tough task.

The best way to whittle down your choice of vendors is to determine if you want to use an all-in-one or a best-in-breed solution. You may not be sure which one is the best fit for your business, so we’re here to give you all the pros and cons.

First, let’s take a look at all-in-one solutions. All-in-one providers catering to the property management industry offer a combination of management, investment, marketing, leasing, and resident tools.

All-In-One Pros

An all-in-one solution can be an easy sell for some property management companies. The idea of a single platform being able to solve multiple challenges at once sounds very appealing, especially if you have limited internal resources. The IT requirements required to use an all-in-one provider may be reduced when a single vendor is used because there are fewer programs to maintain.

If your team is not particularly tech savvy, only having to learn one platform can help avoid confusion among users of the software and shorten the learning curve. Plus, users will only need a single login to manage each application.

Only having one technology vendor to juggle can be convenient, too. You’ll only have one vendor to make payments to, and call when problems arise.

All-In-One Cons

One suite, one purchase, one vendor to work with. It’s a powerful case, so what are the drawbacks?

The most widespread complaint property managers have about all-in-one solutions is that each product in the suite lacks in-depth functionality needed to do a particular job well.  Essentially a Swiss Army knife for property managers, you’ll get several tools compiled into one offering, most of which have limited capabilities compared to a standalone version of that service.

If you’d like to enhance the functionality that’s offered, don’t count on being able to customize features with an all-in-one solution.  All-in-one solutions tend to be more rigid in the functionality, and therefore offer little to no ability for customization. If you have specific requirements, you are probably better off with a best-in-breed solution.

You’ll likely also have access to tools you don’t need or don’t want, and in most cases, this makes all-in-one providers more expensive. Software to manage your business shouldn’t always come down to price. But when you compare dollar for dollar what you get out of an all-in-one solution and the adaptability it has, some find it hard to justify the cost for what you get back.

You may also find that components of an all-in-one solution don’t integrate as seamlessly as you’d expect. That’s because all-in-one providers often fill gaps in their product offerings by acquiring companies, then rebranding those products as their own. Getting the two components to “talk” to each other can be just as challenging as selecting software from different vendors.

Adding new products through acquisition also affects the support you receive. Support teams for all-in-one platforms won’t have as much in-depth knowledge about each specific part of their offering like best-of-breed providers have. The result of this is that it could in fact take more, not less time to identify and resolve the issue.

Now let’s take a look at best-in-breed providers for property management companies. They eat, live, and breathe their area of expertise and only focus on a handful of specialized services.

Best-in-Breed Pros

Companies opt for best-of-breed solutions because they offer power-packed systems that address a specific issue. The features offered are more extensive than what is offered through an all-in-one, but can also usually be tailored to the client’s needs. While assembling a best-of-breed technology stack means dealing with several providers, it also means upgrades are much easier, and the company has a unique system that is at the top of its industry.

If your goal is to reduce costs, choosing best-of-breed solutions will be the way to go. Because you can pick and choose which solutions your company needs, you are able to save by opting for best-of-breed software versus unified solutions.

Another advantage of using a best-of-breed over an all-in-one, is that it prevents companies from “putting all their eggs in one basket.” Using numerous products from a single vendor tightly locks you into their system. Breaking away from a unified solution can be a painful transition, something most all-in-one providers count on. If you become unsatisfied with a best-of-breed platform, there’s more leverage to negotiate a solution to the problem. And if you choose to move to another vendor, the transition will be less complicated without several aspects of your business tied to one provider.

Best-of-breed vendors usually deliver a shorter implementation time, particularly if you are using a web-based solution. With faster implementation and ease of adoption, you can achieve a quicker ROI by selecting a best-in-breed solution.

Best-In-Breed Cons

As you’d expect, picking best-of-breed solutions means you have more vendor relationships to manage.

While best-of-breed vendors work tirelessly to strengthen their integrations, some may not provide a flawless experience. If you choose vendors who do not have strong partnerships with one another, integration with your property management software may not always be the best.

Best-of-breed solutions are not a one-size-fits-all technology. Therefore, you will need to have a good idea about the kinds of features you want, and be vocal about your needs. The end result will be a solution that is tailored to your business’ specific needs.

At the end of the day, implementing any kind of technology is meant to help you streamline your processes, better run daily operations and make your team’s job easier. All-in-one and best-in-breed solutions each have their own unique value propositions so it’s important to evaluate your company’s needs, not only today, but as you will grow in the future.

 

Written by Jennifer Stahlman and originally posted on PayLease

3 Foolproof Ways to Drive Online Rent Payment Utilization

Once you see the light and begin processing payments with an online payment provider, you start to realize that receiving less physical checks and money orders means less manual work for you and your staff. You wonder how you can get more tenants or homeowners to start making payments online. Maybe you strive to be as efficient as Rainey Realty who collects 100% of their resident payments online, and no longer pays a bookkeeper to process rent checks. If you want to start seeing more (or all) of your payments in your accounting software in real-time, may we suggest the following three foolproof ways to drive utilization…

Step one; start incurring the transaction fees.

Whether you’re using PayLease or a different online payment provider, absorbing the fees on behalf of your residents is the number one way to increase utilization, trust us! If it’s free for the tenant, you will see a majority of your residents switch and ditch their checkbooks. You may be worried that the cost to incur will exceed the cost to process manually. Yes, you are adding a cost by paying the convenience fees, but you are deleting a much higher cost to manually process a paper check. We encourage you to do some research on your end and find out how much it’s costing you to process a check manually, and then compare that to the cost to incur the fee on an e-payment. Roy Rainey of Rainey Realty did the math, and decided it was worth it; “we decided to incur the costs of e-checks, which is a nominal cost. We probably pay around $300 per month in the e-check processing fees. But since everyone pays online now, we are not paying a bookkeeper to process rent. The tradeoff is worth it, especially because our system is 100% accurate and we can see all of our payments in real-time.”

Step two; implement a system like CashPay, so that those who are unbanked have a quick, secure payment option.

With CashPay, residents can pay their rent using cash from over 25,000 CheckFreePay® retail locations which include major retailers like Walmart and Kmart, as well as smaller supermarket chains and mom and pop shops. This way, payments will automatically appear in your accounting software, and you never have to see or deposit a money order. Allison Treadwell of Franklin Management expressed to us that “each month, the number of CashPay transactions [they] receive increases and the number of money orders decreases. Residents have expressed their satisfaction with the convenience and the security of this payment option.” She also stated that their “managers are extremely happy with CashPay too, since the reduction in money orders has saved them a tremendous amount of time each month.“

Step three; get the word out!

Make sure your residents or homeowners know they have the option to make their payments online. After all, no one will use the system if they don’t know about it, so it’s important that you use the right marketing tools to notify your residents. A good payment provider will offer you free materials to help communicate your new payment feature. Email blasts, for instance, are a quick and effective way to make announcements, or drop a custom door hanger on the doorknob of each unit on your daily walk throughs or site visits if you manage multifamily properties. Have your payment provider create custom flyers for you to display in your property’s on-site office, business center, gym, pool, common areas etc. Get creative and use e-payment fliers and counter top stands to make eye-catching displays. Do you currently mail statements, notices, newsletters, etc. to your residents? If so, custom inserts are an easy way to include e-payment information in the mailings you already send out. For single family portfolios, direct mailers are a proven method of communication to residents and/or homeowners.

PayLease provides these marketing materials and more to our clients for free, so be sure to take advantage of these effective marketing tools if you are a current client. Contact your client account rep or email marketingsupport@paylease.com for more info. We’ll send you sample mock-ups using your logo and URL for approval and then fulfill, and ship the order to the address(s) you request. Letting residents and homeowners know the good news has never been easier!

There you have it; incur transaction fees, implement CashPay, and get the word out with custom and effective marketing materials, and you will be sure to see an increase in utilization and a decrease in manual payment processing. Become as efficient as Rainey Realty who told us they “don’t have to employ as many people as [they] did before using PayLease, so [they] are actually saving money. Needless to say the benefits have been tremendous for [their] company.”

Written by Victoria Rees and originally posted on PayLease

Let Them Pay For Their Own Long Hot Showers: How Property Manager’s are Lowering Their Property’s Utility Expenses

Do you include utilities in your rent? Whether you do or you don’t, the million dollar question is why? Why not include it?

The answer is rent growth. To elaborate, operators are realizing that with rapid rent growth comes a growth in supply. However, coupled with stagnant wage growth, there is a hesitancy these days as operators are starting to wonder if the good times are coming to an end. If they are, how do you as an operator grow your property’s NOI if raising the price of rent is no longer an option?

Sadly, rent growth is no longer moving up and to the right. Over the entire country we are now starting to see rent growth decrease. Hopefully this is not a trend that continues, but it is scary to compare the supply hitting the market with the fact that wage growth has not increased in quite a while. We all know that you typically look for three times the amount of monthly rent in an applicant’s income. Therefore if incomes don’t rise, and supply continues to grow, it will be tough to continue lean on rent revenue to increase NOI.

Don’t fret! There is another way to recoup costs that is currently being overlooked by management companies all over the country. Why not turn your focus on expense management? Think of it this way, when early engineers built the Transcontinental Railroad or dug the tunnel for the English Channel, they didn’t start from one point without considering the other end. They worked from both sides and met in the middle.

In the past decade we’ve seen a huge focus on the revenue side of property management, particularly when you consider revenue management systems like The Rainmaker Group or YieldStar. Obviously, the revenue side of the house is the primary concern, but the expense side is curiously out of focus. It’s not that operators don’t recognize the importance of expense management, it’s just that the revenue side is more… sexy. The expense side is like Marla Hooch from A League of Their Own. She’s overlooked because she’s not pretty, which (in this case) makes PayLease Geena Davis. We are calling Marla (expense management) out and saying ‘hey, this girl can actually play ball!’

In other words, let’s focus on expense and revenue if we’re trying to drive NOI.

Can you relate to this next scenario? You’re traveling for work, and the first thing you do once you enter your hotel room is crank the AC because (guess what?) you’re not paying the electric bill. While you’re at it, you go ahead and take a nice long shower because you’re not paying for the water bill either. Which brings us to an important question – why do properties include utilities in the price of rent?

One reason, some might say, is the cost of water. Why not include it? After all, water is not that expensive compared to gas and electricity, except that in recent years the cost of water has been drastically rising. This may be obvious in states like California where we experienced that biblical drought that had us swapping our green grassy lawns for desert rocks and cacti.

What’s surprising though, is that we’re also seeing a 130% increase in the cost of water over the past four years in states like Georgia where there’s no hint of a drought.

Moral of the story is, even if your property is in a state with an abundance of readily available cheap water, if you’re including it in your rent, then we can guarantee your residents are using more than they should. Hello! That means it’s affecting your bottom line.

Including utilities in the rent is like giving your residents access to an all-you-can-eat buffet. It is wise to consider switching to a consumption-based billing method instead. You might be thinking, ‘but residents prefer the all-you-can-eat method, I’ll lose them if I switch.’ For many years this was true, but recently consumers’ mindsets have started to shift. Every year, more and more organizations are adopting these sustainable strategies not only to reduce expenses, but because consumers are aligning themselves with products and services that have adopted such initiatives.

Just look at the following stats from SolarCity:

  • 72% consumers want to learn more about corporate sustainability initiatives
  • 75% of consumers would be more likely to buy a product or service if the company is making an effort to be sustainable
  • 82% of consumers are more likely to purchase a product that represents Corporate Social Responsibility than one that does not
  • 93% of Americans have done something to conserve energy in the past two years

What does all this mean? It means sustainability is the tie-breaker. They won’t choose your property because you’re conserving, but if a potential tenant is debating between two properties that are very similar except for the fact that one is ‘green’ and the other is not, conservation will win the battle.

From an NOI standpoint, it makes more sense to separate the utilities so that you can use more of your rent revenue towards the bottom line of your property as opposed to paying off high utility bills.

Let’s say property ‘A’ includes water in the rent price, and the residents of this property have a leaky faucet, or their toilet is running. They decide not to report it because, why would they? They’re not paying for the wasted water, they don’t want the maintenance guy coming into their apartment, and they don’t own this property, so they just don’t care. Because of that, property ‘A’ is giving (on average) an extra $100 a month from their rent revenue to the water company. To make up for some of the cost, property ‘A’ decides to increase the rent by $50.

Property ‘B’ installs sub-meters and decides to charge each unit for their individual usage. So instead of increasing the rent, they keep the rent price as is and charge the resident back for the utilities they actually use. Because the residents in property ‘B’ are now conscious of this, they start using less water, gas, and electricity and pay around $50 a month out of their own pocket for their personal utility bills.

Because of the $50 rent increase at property ‘A’ and the $50 utility charges at property ‘B,’ the total out-of-pocket expense for both residents is about the same. However, the owner of property ‘A’ is still handing money over to the water company every month, while the manager at property ‘B’ is using those recouped costs to increase their NOI.

When you take the utilities out of the rent and don’t increase the rent price, three things happen. One, the resident will use less electricity, less gas, and less water, saving the planet little by little. Two, the resident will be happy their rent was not raised, and will consider this when the time comes to renew their lease again. Make your property sticky, people! Three, you are no longer paying the utility bills, which will result in a higher NOI for your property. It’s a win-win-win!

Hopefully now you are at least entertaining the idea of billing back your utilities to your residents, and if that’s the case, then the next question is, ‘how do I get started?’

Click here to learn the two different ways you can bill back utilities to your residents, and find out which is right for your property.

 

Written by Victoria Ress and originally posted on PayLease

Infographic: Fun Facts about Recouping Rent, HOA Dues and Utilities

We’re so excited about the upcoming release of our annual Market Survey, that we couldn’t keep quiet about the results. This year, 1,300 HOA, multifamily and single family firms participated in our survey, answering questions about resident payments, utility billing, utility expense management, and Accounts Payable. We’ll soon be releasing the results in a white paper called, A Property Manager’s Guide to Payments, Billing and Utility Management.

Until then, we rounded up some juicy tidbits from the survey that you can see in this infographic.

 

Written by Jennifer Stahlman and originally posted on PayLease

 

Utility Meters 101: How Your Property Management Company Can Recoup Utility Expenses

One of the top questions a prospective resident wants to know when they are interested in your property is, “Will I have to put any utilities in my name?”

The answer is largely determined by how your property is metered, and ultimately, how you can recoup those utility expenses from residents. There are several ways a property manager can recoup utility expenses, so let me give you a breakdown of all the scenarios that are possible.

In order to calculate what is owed for each utility, a reading must be obtained from your community’s applicable utility meter. Your property is metered in one of two ways:

Direct metered: This means that there is one meter per utility type, per residential unit. Each meter is read by the utility provider. The utility provider is responsible for calculating those usage charges and billing them directly to your resident. In most cases, the property management company is only responsible for utility charges when the unit is vacant.

Master metered: In master metered communities, there is one meter per utility type, per building. The utility charges for that community are billed directly to the property owner by the utility provider. From there, it is up to the property owner to determine how they wish to recoup those costs. Here’s how that can be done:

  • Submeter Reads: In this instance, individual meters for each residential unit are installed behind the master meter. Those meters are monitored by the owners or the submeter vendor rather than the utility provider. The readings obtained from submeters show precisely the utility consumption for each unit. Either the property management company or a third-party billing provider invoices residents for what they owe.
  • RUBS: RUBS stands for Ratio Utility Billing System. It is a method of calculating a resident’s utility charges that is proportionately based on the number of occupants per unit, square footage or other factors. Either the property management company or a third-party billing company performs the RUBS calculations and bills the corresponding charges to residents.
  • Utilities Included: Some property owners inflate the price of rent to account for monthly utility costs. With this method, property managers must factor in the possibility of rising utility rates, variance of utility usage per season, and local rental rates.

If your community is master metered, you may be wondering which of the above options is best for recouping utility expenses. Our answer: Submeters, if it is structurally and economically feasible for your property. Submeters are a win-win for both the resident and the property owner. Residents benefit because submetering provides them with a precise picture of their utility usage, enabling them to have more control over their future consumption, and if they wish, save money by conserving. Submetering also protects property owners from unbudgeted utility expenses, giving them higher net operating margins. Also, by effectively reducing property expenses, property managers can increase their property value.

When submetering is not a practical option, RUBS is great and fair alternative for calculating utility consumption. The drawback can be the process of making the calculations. This can be complex and time consuming for a property management company, which is why some prefer to outsource this task, along with billing residents, to a third party.

Lastly, there’s including utilities in the price of rent. We recommend avoiding this practice like the plague. For one, you’ll either end up undercharging your residents (meaning you have to pay the difference every month) or overcharging them, which is illegal in some states. Including utilities in the rent also means that your property’s utility bills are going to be much higher than if the residents were paying it themselves. When residents are not the ones held responsible for paying the bill, they tend to consume more. Pair that with having to charge a higher price for rent in an already competitive market, and a “utilities included” model can be quite damaging to a property manager’s bottom line.

If you need any guidance about the best way for your property to recoup its utility expenses, feel free to contact us. We’ll evaluate your current meter setup and go over some personalized options for you to effectively recoup your properties’ utility expenses.

Written by Jennifer Stahlman and originally posted on PayLease

4 Steps to Start Recouping Utility Costs from Residents

Understand Local Rules & Regulations

This can be tricky because there are no federal or universal laws regarding utility bill-back. Every state has its own rules and regulations, as does each municipality. Failure to comply with the stated regulations can lead to heavy fines and penalties.

Becoming a member of an organization like the Utility Management and Conservation Association (UMCA) can be tremendously beneficial when trying to understand regulations in your state. Members of the UMCA have access to an up-to-date database of rules and regulations for each individual state. Third-party billing providers who are also members of the UMCA will make sure you are continuously in compliance with these regulations.

Decide Between Submeters or RUBS

Next, property owners need to decide on the infrastructure that will measure your residents’ utility usage. Will you install submeters, which track the precise utilities used in each unit? Or will you utilize your property’s existing master meter and calculate usage via RUBS? RUBS stands for Ratio Utility Billing System, and works by utilizing formulas to allocate usage. The formulas are based on factors such as square footage and number of occupants in each unit. The meter usage will then be divided among residents according to these established formulas.

There are a lot of pros and cons for both submeters and RUBS, which PayLease’s team will be happy to talk through with any property management company.

Build Internal Processes or Select a 3rd Party Billing Provider

Once you decide if you will be using submeters or a RUBS, you need to determine the logistics behind billing residents for their utility usage. Perhaps you have plenty of in-house resources at your disposal. If so, you will need to assign someone to the following tasks:

  • Manage meter installations (if necessary)
  • Perform readings of the meters
  • Calculate monthly charges
  • Prepare and deliver resident bills

Most property management companies do not have the resources to effectively perform these processes and opt to outsource them to a third party. Third-party billing providers have expertise in all of these areas and will manage all of these things for you. They will even integrate utility and payment data into your property management software.  For tips on interviewing third-party billing providers, click here.

Update Lease Agreements

Lease disclosure about how you will bill residents for utilities should be considered a universal requirement. It’s an industry best practice and a smart way to avoid resident confusion.

All billing methods and fees must be fully disclosed and explained in the lease. Any changes to the lease agreement (pertaining to utility charges) should be signed in an addendum or pursuant to the original lease language. Residents must also have sufficient written notice in accordance with the lease when changing billing methods or fees and detail all the changes and fees in the notice.

If any of these seem like daunting tasks, contact PayLease.com for guidance. They are happy to put together a personalized action plan for your company so you can effectively recoup utility expenses.

Originally posted on PayLease.com

Make it Count

Let’s take a short quiz.

Who are the most likely people who want to purchase their first home? Current renters.

Who are the people who need their credit score to positively reflect years of on-time rental payments? Current renters.

Who are the people who shouldn’t have to change the way they pay their rent just to have their credit score improved by their on-time payments? Current renters.

The answers to those questions are obvious. So why is this even an issue? Because most rental payments arenot reported to the Credit Bureaus, and therefore have no opportunity to positively influence credit scores.

Is this a big problem? Let’s look at the numbers. In 2014, there were 104 million renters in the US which counts for 33% of the population. Of those, Millennials make up a huge portion of the market. In a survey of our millennial employees, we found that 83% still view home ownership as a major life goal.

So, you have an audience of renters with a goal of home ownership, and a system that doesn’t allow them to benefit from their on-time rental payments to raise their credit score to be able to qualify for a mortgage. That sounds like the prime opportunity for innovation. This is a problem that needs fixing.

And while Millennials are a large, vocal and often-analyzed group, there are other constituents who desperately need this service as well. Our friends in low income housing who are living paycheck to paycheck may not have the dream of home ownership, but they certainly deserve to benefit from on-time rental payments. Having that positive rental history could be the difference between getting approved or not – and if approved, determining the interest rate. Its importance can’t be over-stated.

The third question above speaks to ease of use and seamless adoption. If you are already paying your rent online, wouldn’t it be great if that software offered the option to report your positive results to the credit bureaus? That way, the renter doesn’t have to change their payment method – they just enroll in the credit reporting program and it is all taken care of.

PayLease recently implemented a credit reporting service designed to solve all of these predicaments. By enrolling in this optional service, renters have the opportunity to potentially build their credit score with each on-time payment made online. The payment data not only helps build credit scores, but can also help property managers validate a potential resident’s positive rent payment history. And, credit reporting is free to both the renter and the property management company, truly making it a win-win for all parties.

So ask yourself – are we taking care of our renters? Don’t they deserve to benefit from their diligence of on-time rental payments? Our constituents need a break. After all, it’s their money and they are spending it wisely. Let’s make it count.

 

Originally posted on PayLease Blog

 

Condominiums That Fail To Properly Fund Reserves Will Usually Resort to Costly Special Assessments

Question: My condominium association has no reserve funds for our roof. Every year at the annual meeting, the board asks the owners to waive the reserve funding and every year the owners vote to waive the reserves. Now we need a new roof for the building and the board is telling the owners that there will be a special assessment of over five thousand dollars per unit. Can the board just levy such a large special assessment without the owners voting on it? N.R. (via e-mail)

Answer: Probably. The Florida Condominium Act does not impose any limits on a board’s authority impose special assessments. The statute simply provides that the association must give fourteen days mailed and posted notice of any board meeting where special assessments are to be considered. There are other technicalities in the statute as to the content of the notice, as well as the content of follow-up notices that must be sent. Obviously, any special assessment would have to be for a proper common expense, but I assume there is no debate that your roofs are the association’s responsibility.

Any limitation on a board’s authority to impose a special assessment would have to be contained in the condominium documents. Although not the norm, it is not totally uncommon to see condominium documents that impose limits, such as providing that any special assessment over a certain amount requires unit owner approval. I have heard some debate the legality of such a
restriction.

Your situation demonstrates the risk of routinely waiving the funding of reserves. While associations want to keep assessments low, if there are insufficient reserve funds to pay for a capital item that needs to be replaced, the association has limited options.

 

Written by Joseph Adams

Originally posted at Florida Condo & HOA Blog

How to Increase Your HOA’s Revenue with Coupon Books

Successful HOA’s are always looking to find creative and unique ways to be competitive and profitable. Would you like to eliminate an annual expense or turn that expense into a profit? Of course you would!

Payment coupon books are an essential and necessary component of any property management company’s billing process. What if you could transform HOA coupon books into marketing tools for local businesses and enjoy an added revenue stream for your HOA?

For decades, SouthData customers have used message coupons inside payment coupon books as a way to communicate with homeowners. Message coupons are extra pages placed into the payment coupon books that contain information instead of payment coupons.

Property management companies can use these message coupons as powerful advertising platforms for business partners in their area. Businesses pay for the ad space within the message coupon, thereby helping you offset the costs of producing the coupon books.

Everyone wins:

  • Advertisers gain a higher return rate, reach target audiences, and enjoy repeated exposure
  • Management companies enjoy added revenue and are reimbursed for the costs of producing payment coupon books
  • Homeowners see ads about products and services that are relevant to their lives

Potential advertisers can include everyone from auto repair shops, electricians, and plumbers to heating & cooling specialists, pest control services, or home security companies. With access to 100% of their market base, you have the ideal platform local advertisers need to reach their audience.

  1. ADVERTISEMENT SPACE: Show businesses a coupon book sample and the message coupon so they will be able to see the advertising space.
  2. ADVERTISER EXCLUSIVITY:  Coupon books have five message coupon slots. Allow only one advertiser per industry in order to guarantee them exclusivity within their market and block out their competitors. Ex: Only one pest control company, etc…
  3. REPEATED EXPOSURE: Ads will be viewed an average of 12 times per year and are usually seen by spouses as well.
  4. MEASUREABLE RESULTS: Advertisers can track their results by offering a redeemable coupon, a unique phone number, or website address in the ad.

Written by Chelsey Seidel

Originally posted at PayLease.com