Association Funds – Operating vs Reserve
As you create your HOA’s 2021 budget, make sure you plan on having more than enough money in both your reserve and operating funds. Having both funds full is important to maintain the upkeep of your community. But what is the difference between operating and reserve funds? And why can’t you just use one fund instead of two? Let’s break it down.
Operating Funds are what is used for normal, day-to-day expenses such as lawn care, snow removal, repairs & maintenance, and more. The services classified as operating services are set by governing documents, so while there may be some variation as to what your HOA offers, most of them are the same.
Reserve funds are funds used in an emergency, like storm damage. Most associations hire a professional to come and develop a reserve study, looking at your buildings and pavement and estimating when maintenance and replacements will need to be made. HOAs can then set a budget off of these estimates; if you will need a new roof in 2 years and new siding in 5, put more of your reserve funds into the “roof” section and less in the “siding” section since you will need your roof done sooner than your siding.
Operating and reserve funds are just like checking and savings accounts. Most of your expenses will be paid via your checking account, but when there is an emergency like a major hailstorm or pavement damage, you dip into savings account. Having your money separated into these two accounts will help keep you within budget and spending money on the things that your HOA community needs to operate.
Fiduciary Duty 101
As a member of your HOA’s board, you have many of duties. The most important of them is fiduciary duty.
Fiduciary duty requires board members to stay objective, unselfish, responsible, honest, trustworthy, and efficient. Board members, as stewards of public trust, must always act for the good of the organization, rather than for the benefit of themselves. They need to exercise reasonable care in all decision making, without placing the organization under unnecessary risk.
The duty of care is the duty to make reasonable and informed decisions. Instead of going with the first contractor you come across, shop around. Is there anyone more qualified? Less expensive? If so, go with them. Part of your job as an HOA member means choosing the best option for your community, not the easiest.
The second duty is the duty of loyalty; the ability to set aside your personal interests for the good of the HOA. Don’t hire your friend as a contractor if they aren’t the best person for the job. If you want to spend money on a new project, ask yourself if it is a personal interest or a community interest. If the community would not benefit from, say, a new hot tub or upgraded gym, scrap the project.
If you have questions contact Sharper Management – we are always here to help!
Long-term Ideas for Productivity When Working from Home
According to Stanford University, 42% of the American workforce is currently working from home. If this applies to you, we have few ideas that may help.
Have a designated workspace. While the kitchen counter may seem like a welcoming home office, it is recommended to carve out a space that is specifically for work. Having a specific workspace will help maintain the mental separation of work and home, and will also make it easier to stay organized.
Set ground rules with loved ones. It’s easy for your family to think you’re “home” when really at “work”. Setting a few ground rules like, “If my door is shut, don’t disturb me” can help keep you stay focused.
Maintain your regular work hours. Dedicated work hours are a great way to keep family time and work time separate. Resist the urge to pop into your home office to do a “couple of quick things”. Often times those quick things turn into a few hours instead.
Thinking About Selling Your Home?
With interest rates and housing inventory at historic lows, this is a very good time to sell your home. If you’re considering putting your HOA property on the market soon, there are a few things to remember about selling an HOA.
A review of the Governing Documents for your Association is a good idea to know what kind of questions may arise during the sales process. If you need an updated copy of your Governing Documents, they are typically available on your Association’s website through Sharper Management.
As the seller, you will be required to provide resale disclosure documents about your HOA. These documents contain a wealth of information for a buyer that include things like:
- Pending litigation about the association
- Up-to-date information about assessments
- The Association’s financial status
- Covenants and restrictions within the HOA
- Any violations about the unit you are selling
- Governing documents for the HOA
You may request resale disclosures through the Sharper Management website or visit this link directly to learn more.
Haley Boles Joins the Sharper Management Team
Eden Prairie, MN, (September 9, 2020) – Sharper Management is pleased to welcome Haley Boles to its community management team as an Assistant Community Manager. She will be working with our Community Managers to ensure tasks and requests from Sharper Management properties are attended to efficiently.
Boles comes to Sharper Management with a background in both association management and retail. In her last position she was a team lead for a rental property management company. Prior to that, she managed a successful retail location in the metro area.
“As we continue to grow our presence in the local market, we understand that investing in our current and new staff is imperative. Welcoming Haley is a bright day for the Sharper Family. Her experience and attitude will be a great addition for Sharper and the clients we serve,” states Matt Froehlich, Partner and Chief Operating Officer.
Founded in 2010, Sharper Management is a locally owned, mid-sized property management company offering a full suite of premiere services to homeowner’s associations of all sizes. Sharper Management currently provides services to the Minneapolis-St. Paul seven-county area.
For more information on Sharper Management services and employment opportunities, call 952-224-4777 or email to info@sharpermanagement.com.
Michelle Gaskill Joins the Sharper Management Team
Eden Prairie, MN, (September 9, 2020) – Sharper Management is pleased to welcome Michelle Gaskill to its team. As the new Operations Manager for Sharper, Gaskill brings nearly 30-years of experience and a wealth of knowledge to the position. Her effective and efficient information management style will be a great benefit to overall operations and to all community members in associations managed by Sharper.
Gaskill began her career in rental property management in 1991. After spending 15 years in that sector, she transitioned to association management in 2006 and earned both the CMCA and AMA accreditations. In 2010 she made the shift from community management to the internal operations department at Associa MN.
Working for a Minnesota-based company is something Gaskill is looking forward to in her new position at Sharper management.
“We are excited to welcome Michelle to the Sharper family. Her experience and attention to detail will be a great resource for our new and existing clients,” states Matt Froelich, Partner and Chief Operating Officer.
Founded in 2010, Sharper Management is a locally-owned, mid-sized property management company offering a full suite of premiere services to homeowner’s associations of all sizes. Sharper Management currently provides services to the Minneapolis-St. Paul seven-county area.
For more information on Sharper Management services and employment opportunities, call 952-224-4777 or email to info@sharpermanagement.com.
Virtual Board Training – Tuesday, October 20, 2020
October Session –
Tuesday, October 20th – 6pm (Login information will be sent to those registered) – “Financial Fundamentals and Simplifying Insurance”
All Board members from community associations managed by Sharper are welcome to attend.
Tuesday, October 20th at 6 p.m. – “Financial Fundamentals and Simplifying Insurance”
This focused session coincides with most association’s end-of-fiscal year and insurance renewal seasons. Insurance and financials are always large and complex topics. Led by Sharper’s two directors of community management, Candy Lee, CMCA, AMS, PCAM and Michelle Stephans, in addition to trusted insurance vendor and expert, Eric Skarnes, of Insurance Warehouse, this session will cover topics such as:
* Defining Types of Insurance Policies & How they Interact
* Insurance Claims & How They are Handled
* Market Place Update
* Basic Financial Reporting
* Understanding Operating Cashflow & Reserve Savings
* Budgeting Process & Methods
* Replacement Reserve Studies & Requirements
If you are interested in reserving your spot, please email info@sharpermanagement.com
Maintaining Community Ties During COVID-19
With everyone spending time more time at home and distanced from others, has your HOA been affected? As we navigate our way through COVID-19, it’s important to foster connectivity in your association.
Holding events over Zoom is a great way to connect with people and do different activities. For example, you can play bingo, have virtual club meetings, and have HOA meetings. Zoom is a free software that anyone can use; all you need is the email address of those wanting to attend.
Companies have been coming out with online extensions so people can play games at home, too. Netflix has a Chrome extension that allows multiple devices to watch the same show at the same time, so you can have an at-home movie theater night and show movies to residents via Chrome. Another way to have a movie night is to have families reserve spots, then set up an outdoor projector and mark off seating areas 6 feet apart. Households can sit together, bring their own snacks, and enjoy time outdoors while staying safe.
If your homeowners love the game “categories”, use the free website scategoriesonline.net. Simply go to the link, hit “play game”, choose the categories you want, and then select the option to send players a link for a private game. This way people will be able to have fun, interact, and stay safe.
Tips for Welcoming New Residents to Your Community
- Welcome letter. Including a letter that will officially welcome the new resident to your HOA will help them feel invited and give a positive first impression about your community.
- Community rules and regulations. While more association buyers will have already reviewed the rules and regulations of the association before deciding to purchase, it’s a good reminder to include them as a good reminder and note on what to expect from their neighbors.
- Board and committee makeup. Include the structure of the board, its members, and contact information so they know who to contact with questions/concerns.
- Amenity information. If your community has shared areas, such as a pool, park, clubhouse, or fitness center, include the location and hours of these amenities. It’s always nice to have that kind of important information at your fingertips.
- Owner contact sheet. Ask the new resident to fill out and return a contact sheet so the HOA board can easily contact the new owner with questions/concerns.
- FAQ sheet. Ask residents who have been in your community for a while what questions they had when they first moved into your HOA, and create an FAQ sheet that includes these questions and the answers. This will help reduce the resident’s need to contact you with simple questions.
- Local events. With the pandemic still in full force, events probably are not happening in your area. However, including maps of local parks and walking paths as well as tips on restaurants are usually very well received by new residents. It’s nice to have an insiders tip sheet on local attractions.
Summer Fun and Noise Complaints
Summer means warm weather, longer days, and more time outside. It also means extra noise, which could lead to an increase in noise complaints. Here are some great ways to deal with the summer noise and the complaints that come with them.
Things to do now. Look over your noise based HOA rules, and adjust them if needed, such as changing or adding quiet hours, a policy on animal noise, outdoor noise, or anything else you think might come up this summer. Even if you don’t make the changes, make your noise rules available to everyone in you HOA so they cannot use ignorance as an excuse.
Dogs and noise complaints. If you don’t have a specific dog policy, try to follow the nuisance barking definition: barking, yelping, or whining for more than 5 minutes in any 1-hour period. While some people are fine with dogs barking during the day, when people are sleeping it can be more than inconvenient.
Noisy neighbors. If you get a complaint about excess neighbor noise during quiet hours, there are a few steps to take. First, have the person complaining talk to their neighbor about the noise and record the complaint. If the noisy neighbor doesn’t stop, bring the two parties together with a moderator from the HOA and see if a compromise can be reached. If not, consult your HOA rules and see what you can do; if anything. While you will want to try and help, you shouldn’t overstep your bounds. If you really want to do something about it, ask the person that made the complaint to attend the next board meeting and petition to have the noise-based rules changed to include the problem they experienced.
Going forward. Make sure to recheck your noise rules at least once a year, as they can change. While you don’t want to nit-pick too much, try to think outside of the box when coming up with scenarios you want to cover. Ask those living in your HOA for any recommendations or noise policies they would like to see implemented for more ideas. This will also help you do an informal survey on what noise problems your HOA is having so you can adjust the policies accordingly.
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