fbpx

Sharper Management

952-224-4777

Summer Construction: Protecting Your Investment

Living in Minnesota, we’re all too familiar with construction in the summertime. After a freezing Winter and rainy Spring, asphalt is ridden with cracks and potholes. Spring and Summer storms can result in serious roof and siding damage. Repaving or remodeling can seem like a real hassle; however, that construction is important to protecting your investment. We’ve gathered a few reasons as to why those pesky projects are beneficial in the long run. Appearance Your HOA board is in charge of maintaining your community, and one aspect of that responsibility is general maintenance. It’s important to keep your neighborhood looking attractive and welcoming for prospective buyers and tenants, and for the current residents. Home Value By not keeping up with essential construction or maintenance, your home value runs the chance of decreasing. Prospective buyers or tenants will be put off by poorly kept lots and pathways. Roof damage that isn’t visible won’t affect appearance but will certainly decrease your home’s value. Saving Money Taking care of these issues when they arise will actually save you more money later on. Over time, damages like cracks in the asphalt will only get worse and will become a bigger hassle. Your HOA board will want to save reserve funds for more unexpected expenses.

Getting Things Done – Our Growing Vendor Directory

he Sharper Management list of preferred vendors continues to grow! If you are in the market to check a few of your maintenance items off the To Do List this Spring, the Directory is a great resource. Check it out using the button link below.   [button link=”https://sharpermanagement.com/preferred-vendors/” color=”black”] Vendor Directory[/button]

Vendor Checklist

When selecting a vendor or contractor, it is critical to use due diligence and have a process in place for making these selections. By having a thorough process, you will satisfy your obligation as a board member while also protecting from potential liability. When evaluating vendors or contractors for selection, there are some key pointers to follow: Establish a thorough process for vendor “vetting.” Better yet, document the process for future boards to ensure consistency. Conduct personal interviews (or engage in some kind of personal contact). Confirm insurance coverage/documentation. Note that not all vendors need or have insurance, but this is an important aspect to take note of. Confirm any licensing, credentials, or certifications a vendor may have depending on its specific industry. Request multiple references and check them. Proposals are not contracts, even if all parties sign it. Always ask for a formal contract that includes important terms regarding the relationship (i.e. termination, dispute resolution). There are also special considerations for specific types of vendors and projects: Construction Projects Always get multiple bids to compare costs, operations, and qualifications. Ask for Certificate of Insurance and ensure that it is current and up to date through the anticipated length of a project. Check with the Minnesota Department of Labor and Industry to confirm license status, learn of potential enforcement action, or history. Follow up on any issues. Explore resources such as BBB, Angie’s List, Google reviews, and more. However, take all reviews with a grain of salt. Confirm contractor’s ability to complete project within your desired timeframe. Clarify methods of communication for project ahead of time. Management Companies Consider the amount of control you are relinquishing—full management? Partial? Ensure agreement covers what is expected in as much detail as possible, including things like termination options, governing documents, and auto-renew provisions. Have a thorough understanding of what services are included and what may require payment of additional fees. Understand the relationship between management and the Board and how it translates in terms of a contract. Routine/Ongoing Service Vendors Ensure there is a termination or dispute resolution process in place in the event there is an issue. Understand the schedule of services and what triggers action (i.e. inches of snowfall, days for garbage collection). As general rules of thumb, you can (and should) always negotiate a contract if there are concerns over the terms proposed. If multiple bidders are involved, allow for a process to give all bidders a fair chance at the project. Finally, make sure there is always a way to end the relationship if needed. At the end of the day, it is important to do your homework on the front end of the relationship to circumvent future issues. Do thorough research and check all available resources and negotiate for terms that you find acceptable. Luckily, Sharper Management offers a Preferred Vendor Directory. All preferred vendors are required to provide a certificate of insurance and be in good standing with the state of Minnesota. This can be a fantastic starting point in the vendor selection process: https://sharpermanagement.com/preferred-vendors/

Operations and Personal Protection Continue During COVID

As the pandemic continues, most people have adjusted to the “new normal” that is affecting everyone in the community association industry, the associations, and the owners. While we may be exhausted by the restrictions and repercussions of the coronavirus, we need to remain cognizant of actions needed to prevent the spread. There are several areas that associations should continue to monitor: CDC Guidance: Provided by the CDC, there is specific guidance for “shared or congregate housing,” which includes condominiums and other multi-family buildings. This information is comprehensive and includes many guidelines to maintain safe operations, acknowledging community associations’ unique needs and challenges. Declaration, bylaw, rules, and regulations: While there may not be specific COVID-19 related provisions, these documents provide insight on what general terms could impact or govern steps taken to respond to these issues. Social gatherings: Social gatherings should be continually evaluated, especially those seeking to occur indoors. Recommendations and restrictions are fluid, and it is important to stay abreast of these changes. Outdoor events are typically easier to implement, however with cold weather, indoor facility use may be more common. Construction projects: Continue to appropriately manage access to buildings by vendors. Create and maintain appropriate protocols, emphasizing the steps these vendors will take to ensure proper cleanliness and sanitization while working. Usage of amenities: There is ample information regarding access to amenities such as pools, fitness centers, etc. within associations. As this is an ongoing, fluid situation, it is important to create a schedule to evaluate these aspects. Adjustments should be continually made based on the latest data and guidance available. CDC Fact Sheet: Communication is critical to avoiding issues or misunderstandings in operations. Posting the updated/current CDC guidelines or fact sheet in buildings ensures that owners and others entering the building are aware of the standards and protocols in place. There is an overwhelming amount of information and suggestions for safety guidelines out there but keeping up to date on the aspects above is a good foundation. Balancing safety issues with common sense and community spirit is the best remedy available to us during this time.

Low Interest Rates and Your HOA Loans

One of the silver linings from the pandemic’s impact on the economy are the historically low interest rates. Due to concerns about the stability of the economy, most financial institutions have adjusted their traditional credit evaluation and standards. Because of the relatively low interest rates, now could be a good time for community associations to obtain or refinance a loan. HOA loans can help fund capital improvements and projects in the community—from common area improvements, to maintenance and repairs. Typically, HOAs utilize loans as alternatives to a special assessment for unexpected expenses. HOAs can also use loans for pay annual insurance premiums up front—which is especially beneficial if the insurance company offers an incentive for paying in advance. Additionally, loans allow HOAs to spread out the cost of common area improvements over time, while also allowing repairs and maintenance to be performed in a timely manner at today’s prices. With historically low interest rates, now is a good time to reevaluate current loans and see if a refinance would be beneficial for your community. The biggest advantage to refinancing is lowering the interest rate, which can have an incredible effect on monthly payments. Long term, this strategy could save the association hundreds (if not thousands) of dollars each year. There are a few types of loans that are pertinent to HOAs: Term loans are a type of loan where the funds are taken at loan closing and the monthly payment is fixed, usually ranging from three to 15 years in length. Term loans are typically utilized for capital improvement projects, deferred maintenance, property acquisition, reserve replenishment initiatives, refinancing existing loans, common area improvements, and construction defect repair. Non-revolving lines of credit are a type of credit where HOAs are required to pay interest on the borrowed balance. These lines of credit are typically shorter term (approximately 12 months) and are converted to a term loan before or at maturity. Emergency lines of credit are typically used for disaster relief. Instead of having to wait for insurance funds to arrive, HOAs can make any necessary repairs in a timely manner, and then pay back the loan once the claim has been paid. Interest would only be paid while waiting for insurance funds. If an association enters into a loan agreement, it is important to determine what method will be used for repayment. For smaller loans, HOAs could utilize an increase in monthly assessments. For larger loans, HOAs could create a special assessment that would allow each owner to pay up front or participate in the loan program. In both situations, transparency is key and board and homeowner approvals must be considered. Loans provide financial relief to associations with unexpected expenses and lessen the burden to homeowners. If your association could benefit from a new loan or refinancing an old, now may be the time to get a historically low rate.

Snow Removal and Trigger Depths

We have already had some snowfalls this winter, meaning most of us are already back in the swing of driving in the snow. Understanding your HOAs contract for snow removal is key to knowing when you can expect your lot and drives to be cleared. A trigger depth is the minimum amount of accumulation a snow-removal company requires before they will plow the streets. The average trigger depth is between 1-2”, and most contracts say this much snow needs to fall in a single event. A “single event” policy means that the minimum trigger depth must be reached during one snowfall; if you reach the trigger depth in 2-3 snowfalls, they will not plow. Most snow-removal contracts also specify the timing of snow removal, as well as “open-ups” for heavy snowfalls. Timing is the amount of time the company has after snowfall ends to finish clearing the roads; in most contracts this is between 6 and 12 hours depending on how much snow accumulation there is. Open-ups are single passes plows make through the roads when it is still snowing but accumulation has already hit high levels, which makes it easier for people to get in and out of the HOA community, especially if there is an emergency.

New Pets and HOA Living

Since the beginning of the COVID-19 pandemic, pet adoptions have skyrocketed. For companionship and the fact many are working for home full-time, it’s clear this has been the year to get a dog. If you are one of those new puppy owners, you may find these tips helpful in your training journey. Please also note, there are some special considerations for those living in an HOA regarding pet (especially dog) ownership. Training Tips: Establish a potty routine. When potty training a dog, it is important to establish a routine that includes potty times, location, affirmation, and phrasing. Take your puppy our after certain times of day, go to the same part of your yard, give your dog affirmations when they are done, and say a word or phrase that you can eventually use to remind them what to do when distracted. Crate training is essential. Whether you need time to do housework without a puppy underfoot or you are going out to run errands, crate training your dog will help them feel at peace when you are gone. Slowly introduce the crate, then lock them up for short periods of time. When they can go 30 minutes of crate time while you are home without whining, you can start to leave the house. Keep initial trips short, slowly lengthening your time away from home until your dog is comfortable. Leash train your dog. Especially in a shared living community, having your dog used to being on a leash is important. Most communities have rules that animals must be on some type of leash, so by training your dog you will also be adhering to your HOA’s standards. Start leash training by putting the leash on your pet while they are spending time indoors. When they are used to it, start walking your dog around your house so they know what it will feel like and don’t have as many distractions as they would outdoors. Finally, take them outside with their newly developed leash skills! Pets and HOA Living: Please keep in mind your neighbors and the rules of your HOA. Some of the most common complaints regarding pets in an association include: Nuisance behavior. Lack of physical control over your dog, your dog relieving itself on walls or floors of common areas, aggressive and/or dangerous behavior, and conspicuous uncleanliness or parasite infection. Barking problems. If your dog barks continually for a period of 10 minutes or intermittently for a certain amount of time at any time during the day or night, you could be in violation of noise rules. Picking up poop even in winter weather. No one likes to spend more time outside than needed when it’s cold and snowy, but that doesn’t mean you can leave your dog’s poop outside until spring.

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.

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.

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.