Rental Management Program
Tracking rental properties within an Association has long been a challenge to both Management and to the Board. “Managing” those Owners that choose to rent by ensuring they abide by any policies the Association might have regarding renting is even harder. It goes beyond the scope of the Management Agreement, and certainly adds further burden to the volunteer Board member experience. Recognizing this issue, Sharper has rolled out a program that adds the necessary resources to help manage this task, while allocating the cost to those creating it (the Owners that rent). This program is in the form of an Addendum to the Management Agreement. If adopted, it engages our rental management staff and gives the following benefits to the Association. Sharper Management will: · Track all rental properties and their Lease terms · Keep file of all Tenant contact information · Ensure all required paperwork is on file (ex: copy of Lease, Addendum, etc.) · Verify compliance with any City requirements (ex: rental license) The costs associated with engaging in this program is charge to the Owners that rent on an annual basis. As a Board, you have the authority to establish fees – and this minor Owner fee creates an opportunity to better manage the rentals in your community. Speak to your Manager or contact Client Care for more information. clientcare@sharpermanagement.com
The Importance of Loss Assessment Coverage
Insurance in an Association can be confusing. One important distinction in your personal homeowner policy package (commonly called an “HO6” policy) is Loss Assessment Coverage. This coverage is typically different from your “Real Property Coverage.” Real Property Coverage should cover your personal contents, coverage of building construction items like flooring and walls that may NOT be insured by the Association’s Master Policy (which can vary greatly by Association) and, at a bare minimum, coverage of all of those covered components up to the Association’s Master Policy deductible. Loss Assessment Coverage is separate and important to understand. At is core, it is actually quite simple. The Association typically assesses the owner(s) for their share of the Master Policy’s deductible in the event of a loss. The homeowner simply submits that letter, stating they’re being assessed to their HO6 carrier, and their HO6 carrier pays out that deductible assessment. *If the owner doesn’t have this coverage, it is out of their pocket and the Association will move to collect on it just as they would any other regular assessment (“dues”) or special assessment. This is becoming increasingly important because, for the past decade, Association Master Policies have had increasing deductibles – sometimes $25,000 or $50,000 on common losses; and almost all Association policies now have a separate percentage-based deductible for a loss related to wind and/or hail damage. This “wind/hail deductible” is often based on the building value and can range from 2-5%. In the case of a hail storm and loss, homeowners are susceptible to significant assessments to help the Association make up the deductible. Let’s go through three scenarios to help understand how Association deductibles work – and how (and why) Loss Assessments Coverage comes in to play. Scenario 1 – Condo Building Water Leak Unit 200 has a backed-up sink that caused water damage to unit 200 and 100 below. The Association has a $10,000 deductible on the Master Policy that has “all-in” coverage. Damage to both units totals $50,000. The Master Policy is going to cut a check to the Association for $40,000 (less the $10,000 deductible). The Association is going to assess both unit owners $5,000 to make up the $10,000 deductible. The Association is made whole on the claim and the loss/damages remedied. Scenario 2 – Fire to a Townhome Unit The end unit of a townhome complex sustains a fire and the unit is destroyed. The Association has a $25,000 deductible on the Master Policy that has “all-in” coverage, less “betterments and improvements.” Damage to unit is a complete loss. Value for the home is determined to be $200,000 to rebuild the unit back to the original specifications. The Master Policy is going to cut a check to the Association for $175,000 (less the $25,000 deductible). The Association is going to assess that homeowner (since it was the only unit affected) $25,000 to make up the deductible. The Association is made whole to rebuild the unit to the original specifications – the homeowner’s HO6 policy covers the personal contents and any “betterments and improvements” that may have been made by the owner, subject to whatever they had for real property coverage. Scenario 3 – Hailstorm to a Townhome Development Now it gets complicated. A 100-unit townhome development sustains a hailstorm and the roofs are totaled. The Association has a 4% wind/hail deductible on their policy and a total property value at $30,000,000. The loss for getting new roofs will cost $3,000,000. The Master Policy deductible for the hailstorm is $1,200,000 (4% of $30,000,000). That means the Association will receive a check for $1,800,000 (less the $1,200,000 deductible). The Association is going to assess every unit owner $12,000to make up the $1,200,000 deductible. The Association is made whole on the claim and new roofs are installed. In each of these scenarios, the Association is assessing the deductible back to the owners benefiting. Scenario 3 is significant, because the Association has to collect $12,000 from EVERY unit owner. It is a vulnerable place for the Association to be in. And it is a vulnerable place for each homeowner to be in if they don’t have Loss Assessment coverage to cover that assessment. Hopefully this is helpful in understanding how Association deductibles work – but more importantly, hopefully it illustrates just how imperative it is that EVERY owner has adequate Loss Assessment coverage as part of their H06 policy package.
Online Shopping and Delivery Safety
The number of Americans having online orders delivered at their front doors has significantly increased this year, and it’s sure to continue to increase before Christmas. Some great tips to keep in mind to help ensure your packages arrive and stay on your doorstep include: Request notifications on your deliveries so you can bring it inside as soon as possible and have a written record of your package being delivered Always require a signature on your deliveries so packages aren’t left unattended, especially when expecting larger/more expensive items Schedule deliveries for a date and time when you are normally home, so you can grab your package as soon as it is dropped off Set up a vacation hold if you will be going out of town for the holidays, or ask a neighbor to keep an eye out on packages and bring them inside if they see any If you were struck by a porch pirate, call your local police department Have a safe upcoming season and enjoy holiday shopping!
Things to Do During the Stay at Home Order in Minnesota
If you’re watched enough TV and gone on all the walks you care to for the day, you’re probably looking for other ways to pass the time. We’ve pulled together a list of a few ideas to keep your entertained during this unprecedented time. Facebook Live Concerts Musicians around the country are moving their “gig” online using resources like Facebook Live. Download the MySet app, choose the music styles you enjoy and you’ll find an assortment of Live music most nights. You can request songs and tip the band using the app. Virtually Visit a National Park https://www.travelandleisure.com/trip-ideas/national-parks/virtual-national-parks-tours Take A Virtual Field Trip This is a large list of places to visit. https://docs.google.com/document/d/e/2PACX-1vTbUBsKt4U5tR-eXC8b2bogrvjrVlEBl8OJIesNPw6b7BRScYRuyXIaSAVIcl_q52BI4SqrK4_HVQCw/pub We have this list helps fill a few hours for you during the next few weeks.
New in 2019
Resource Directory! We strive to continually add valuable content and resources in our newsletters and on our website. To serve you better, we added a Resource Directory to our website. If you’re looking for carpet cleaning or other services, be sure to check this great source for local businesses. We will be adding to the list throughout the year. If you know a local business that would be a great addition, have them call us at 952-224-4777. [button link=”https://sharpermanagement.com/advertising-directory/” color=”black”] Resource Directory[/button]
Sharper to Host Board Training Session – January 15th
Mark your calendars for Tuesday, January 15, 2019 for Sharper Management’s presentation “Board Basics: An Orientation for Board Members,” to be held at 6 p.m. in Bloomington. This free seminar, led by Sharper’s two directors of community Management, Candy Lee and Josh Reams, will cover topics such as: * Defining What an Association Actual Is * Roles & Responsibilities of the Board * Financial Fundamentals * An Overview to Governing Documents & State Statutes * How to Run Effective Board Meetings * Insurance Basics * Property Management Practices Look for more information as the event get closer. If you are interested in reserving your spot, please email info@sharpermanagement.com
Fountainwoods II Condo Association and Sharper Join Forces
Eden Prairie, Minn – (August 17, 2018) – Effective August 1st, Sharper Management is pleased to welcome Fountain Woods II Condominium Association to the stable of clients managed in the Edina area. Originally constructed in the early 70s and incorporated as Condominiums a decade later, Fountain Woods is a beautiful community made up of four condominium complexes tucked in a quiet area of Edina off of highway 169 and 62. There is a shared tennis court, shared pool and in each building there are multiple amenities such as party rooms and expansive common areas. The Fountain Woods II phase is made up of twin four-story buildings that house 154 units. “We are so excited to be a part of the Fountain Woods community,” said Dan Cunningham, Owner of Sharper Management. “We have had the great fortune of managing a number of condo buildings in Edina. This is certainly a special one. We look forward to the opportunity to work with the Board to help keep, and enhance, property values in this expansive and complex community.” Founded in 2010, Sharper Management is a locally-owned, mid-sized property management company offering a full suite of premiere services to homeowner and commercial associations of all sizes. Sharper Management currently provides services to the Minneapolis-St. Paul seven-county area.
HO6 Policy Overview
After making the decision to join a homeowners association, your next step should be to protect all of your home assets. Overall, there are two main insurance policies necessary to cover a property loss: a master policy through the association and personal homeowner policy (called an “HO6”). The master policy is provided by your association and can vary in coverage. Generally, it always covers the exterior shell of the building/home and common areas. The interior of the unit/home, however, varies. It is very important that you understand the scope of coverage required by the association’s governing documents and therefore covered by the master policy. “Walls In,” “Studs Out,” “All In,” “All In, Less Betterments and Improvements” are common terms that mean very different things. Often times the structural coverage of the HO6 policy is called “Coverage A” or “Real Property Coverage.” This would cover damage to the unit that is either A.) not covered by the master policy or B.) from a loss that may not reach the association’s deductible. The amount of “Coverage A” that you should carry will vary, so you and your personal insurance agent should look to the master policy to identify possible coverage gaps and recommended amounts. Another part of your HO6 policy should usually include Liability; in many cases, this type of coverage is an umbrella policy. Should someone hurt themselves on your property, your insurance would cover the medical expenses. Liability claims can lead to expensive lawsuits that involve you and the association, so an HO6 protects you from the financial strain that follows those type of events. If your unit is left empty for long stretches of time, there could also be a tailored coverage for that situation. Finally, you should look to add “Loss Assessment” coverage to your HO6 policy and check your association’s governing documents, as it may be a requirement. Loss Assessment would cover you in the event the association assesses you for a deductible or for damages caused to Association property. Association insurance can be complicated, so you should utilize your agent to help navigate coverage needs. Furthermore, don’t be afraid to tell your agent to work with the association’s agent to ensure all possible coverage gaps are closed.
Winter Snow Removal Reminder
In case you missed our article last month about snow contracts, here are the highlights you need to know about most HOA snow removals. This has been a hot topic at our office the past few weeks because so many of our snowfalls this year have not reached “trigger depth”. Trigger Depth – Most contracts will state an accumulation total that must be met before snow service will commence. This can be anywhere from a trace up to multiple inches. For most, it is somewhere between 1 – 2 inches. This can be one of the biggest variables in the pricing of your snow contract. Accumulations – The definition of “trigger depth” is important. Does your contract state that service will happen when the trigger depth has been met for a single snow event/storm, or is it vague regarding at what point trigger depth is met? There is a significant difference between the definitions. For example, you could have a winter where less than 1 inch of snow accumulates per event, but there may be many events like this in a relatively short period of days thus creating heavily packed drives in your association. Most contracts are written “by event”. Timing – The second most important component of your contract is the time in which snow service must be completed. For most contracts, “final cleanup” is somewhere between 6 – 12 hours after the snow has stopped falling. This timeline is also subject to snow accumulation totals. The more snow received, the more time allowed for cleanup. Open-Ups – Most contracts provide for an open-up during snowfall events that exceed a particular total. For example, if 4 -6 inches of snow depth is met, but the event has not stopped, it is common for an open up to happen. Open-ups are simply done to allow vehicles to come in and out of the complex. They are not the same as a final clean up. Open-ups generally consist of a single pass through the roadways with the plow. One thing to define in your snow contract is whether open-ups include driveways, or just main roadways. Typical language states that an open-up will occur prior to __AM and/or after __PM.
Aaron Osowski Joins the Sharper Management Team
Eden Prairie, MN, (November 7, 2017) – Sharper Management is pleased to welcome Aaron Osowski to its community management team as an Assistant Manager. He will be working with our Community Managers to ensure tasks and requests from Sharper Management properties are attended to efficiently. Osowski comes to Sharper Management with a background in property management. A rental associate at a 66-unit complex where he was responsible for leasing, tenant communication, and assisting in unit turnovers, gives him a solid base upon which to build. He’s looking forward to learning the ins and outs of HOA management and the various rules and regulations of the industry. “Aaron comes in with experience in the property management industry. His attention to detail will serve Sharper’s clients very well. I have no doubt he will have a long and successful career in this field,” state Josh Reams, Associate Director of Community Management. 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.