PROPERTY MANAGEMENT MONTHLY

East Hill Property Management |  March  2018

Inside This Issue

WHERE DOES MY MONEY GO?

NOTABLE NEWS

CALIBER CORNER

Where Does My Money Go? by  Lynn A. Voorhees, R.C.S. , R.S.

Every month condominium homeowners submit a check to their Association for “maintenance fees.” It is only normal to wonder how the maintenance fees, which are so faithfully submitted, are allocated. The Association or governing body to which all homeowners belong has a budget similar to most household budgets with the exception of the necessary administrative costs incurred. There are six basic categories into which the maintenance fees and other income such as interest and late charges are allocated. Tips to Transition Control from

Property Developer to HOA Residents

Notable News

Three Signs of a Zombie Condo Association Board

HOA Homefront: El presidente is not el jefe

Our most popular blog posts from February

Understanding What is What in Your HOA Governing Documents

EAST HILL PROPERTY MANAGEMENT EastHillPropertyManagement.com

ASK THE EXPERTS

lvoorhees@dwsmith.com (732) 363-5850 ext. 104

WHAT IS A RESALE DISCLOSURE?

General Maintenance Administration Capital Reserves General Expenses Deferred Maintenance Utilities

General Maintenance: This category is most often the largest and requires the highest dollar amount. Included are items such as general building maintenance and supplies, garbage removal, landscaping, lawn maintenance, mulching, snow removal, exterminators, pool maintenance and sprinkler system maintenance. The general building maintenance and supplies include the hiring of contractors to perform small everyday repairs that occur around and to the common

NEW BY-LAWS AMENDMENT  PROCEDURES MANDATED BY PREDFDA

HOW TO SELL YOUR HOME IN AN HOA COMMUNITY  

Dealing with Mold in Your Community Association

Property Management Monthly Page 2

reserve study, transition study, specifications for replacement of a capital reserve item or has unusual problems that require a special inspection. General office expenses include equipment such as copiers and computers that may be leased, office supplies, postage and other printing fees incurred publishing newsletters and special notices.

Capital Reserves: This fund is established to provide the money necessary for the future replacement of the common elements such as roadway and driveway pavement, sidewalks, sprinkler system clocks and zone valves, pool filters and pumps, roof shingles and fencing. A reserve study is provided by a professional, generally an engineering firm, and delineates exactly what items should be reserved for, how much money is required and when it will be needed. This fund should not be confused with the general maintenance fund. General maintenance is intended for the maintenance and repair of an item until it requires replacement. The replacement of the item is then funded from the capital reserves.

General Expenses: This category includes, but is not limited to, common element liability insurance, the deductible portion of any insurance claim submitted, membership fees to CAI and other professional organizations, subscriptions and educational seminars. The Association may fund special programs such as senior health watch or environmental awareness through this budget.

Deferred Maintenance: Ongoing maintenance programs are funded through this category. Items such as painting, power washing, deck sealing and caulking are routinely scheduled. A large site may paint a quarter of the buildings each year, while a smaller site may paint the entire site every four years. Regardless of the schedule, the painting is routinely performed and the site is well maintained using the homeowner fees allocated to this fund.

Utilities: What utilities could the Association possibly have? There is electricity, water, gas and telephone to name a few. Street lights, whether they are owned and maintained by 

Where Does My Money Go?...continued

and limited common elements. These may include, but are not limited to, damaged gutters and downspouts, siding or shingle blow off, site clean up, fence repairs and cleaning services for recreational buildings. Refuse removal consists of garbage and recycling pick up. Landscaping includes the removal and replacement of dead plantings, pruning, leaf removal, fertilization and spraying. Lawn maintenance includes mowing, fertilization, thatching and reseeding when necessary. Sprinkler system maintenance provides spring startup, winterization and repair and maintenance of sprinkler heads and piping as needed. Pool system maintenance includes services such as opening and closing the pool at the beginning and end of the season, filtration system supplies and repairs,

 pool furniture repairs such as restrapping and lifeguard services. Snow removal is the one maintenance item that does not remain constant. Usually the cost of snow removal depends on the accumulation of snow each year. Insufficient funding for snow removal or an unusually high amount of snow accumulation in a single year may result in a special assessment for the homeowner to make up the deficit.

Administration: Administrative expenses generally include management fees, auditing fees, a legal retainer and other legal fees as required, engineering fees and general office expenses. Management provides the administrative expertise to oversee the many aspects of community living. Depending on the type of management your site prefers, the management fees differ. The fee to have an on site manager would be significantly larger than a site with no on site manager. The Association retains an accountant to audit the Association record of accounts and attorneys who are necessary for legal advice, to act on behalf of the Association in obtaining delinquent maintenance fees and provide other legal  services when required. Engineering fees are generally incurred when the Association requires a replacement

EAST HILL PROPERTY MANAGEMENT EastHillPropertyManagement.com

" A R E S E R V E S T U D Y I S P R O V I D E D B Y

A P R O F E S S I O N A L , G E N E R A L L Y A N

E N G I N E E R I N G F I R M , A N D

D E L I N E A T E S   E X A C T L Y W H A T I T E M S

S H O U L D B E R E S E R V E D F O R , H O W

M U C H M O N E Y I S R E Q U I R E D A N D

W H E N I T W I L L B E N E E D E D . T H I S F U N D

S H O U L D N O T B E C O N F U S E D W I T H

T H E G E N E R A L M A I N T E N A N C E F U N D . "

Property Management Monthly Page 3

The simple answer is: it depends. While “it depends” is not

the most satisfyingly complete answer, owners generally

have a right to see our invoices. However, when an invoice

pertains to or contains attorney-client privileged

information, your counsel should review them and redact

any part of the privileged narrative.  Examples of attorney-

client privileged information that would have to be

redacted include entries related to individual privacy,

pending or anticipated litigation, contract negotiations,

the employment, promotion, discipline or dismissal of a

specific officer or employee of the association, or any

other matters falling within the attorney-client privilege, to

the extent that confidentiality is require in order for the

attorney to exercise his ethical duties as a lawyer.

Generally, we would advise our community associations to

inform an owner requesting access to the association’s

counsel’s invoices that if they wish to review the content of

legal invoices, rather than just the amounts billed, they

must first be reviewed by counsel, so that any entries which

are protected by the attorney-client privilege can be

redacted. While that work is not a significant undertaking,

the association should not make the determination as to

what is or what is not subject to the attorney client

privilege or attempt to undertake the redaction on their

own without the advice of counsel. An entry as innocent as

“discussed contract negotiations with the Board and

landscaping contractor” may be an attorney-client

protected communication.

The cost to review and redact the invoices should be

charged to the requesting unit owner and not as a

common expense to all unit owners. While owners may

argue that you are attempting to prevent them from seeing

the invoices, this is not the case at all. Owners are

permitted to see the amount of each invoice, but they are

not permitted to review narrative entries which contain

attorney-client privileged communications.

Finally, while an owner may argue that they “pay our bill”

or that they are our client and therefore have the right to

see the narrative entries on our invoices, the individual unit

owners are not our clients. Yes, the unit owners pay 

What is a Resale Disclosure?

What is a resale disclosure?  According to Pennsylvania Uniform Planned Community Act it is “Information supplied by unit owner.--In the event of a resale of a unit by a unit owner other than a declarant, the unit owner shall furnish to a purchaser before execution of any contract for sale of a unit, or otherwise before conveyance, a copy of the declaration (other than the plats and plans), the bylaws, the rules or regulations of the association”  In plain terms, it is the seller of the home disclosing to a buyer all of the pertinent information that the buyer should know about the community association in which they are buying. The disclosure should include, but is not limited to, the governing documents, the rules for living in the association, the fees for living in the association, the financials, the insurance certificate, any outstanding violations et al. The more that a seller can disclose about the community association to a buyer, the more informed the buyer will be and the less likely a buyer will run into issues with living in the association.

Did you know that the contract is voidable until the resale certificate has been provided to the buyer and is still voidable for 5 days after delivery? That is a pretty big loophole for the buyer to get out of the contact! We encourage our realtors at East Hill Real Estate Group to order the resale package before the home is listed. This allows you to post the package in Trend and require that the buyer sign off on the package. This way the 5 day countdown starts as soon as the contract is signed.  The resale package will need to be updated prior to closing with payoff statements and those updates (which are usually an additional fee) are included in the initial fee because we are committed to providing superior service in the communities we manage and make the practice of real estate better in our area.

EAST HILL PROPERTY MANAGEMENT EastHillPropertyManagement.com

Bill Huyler (267) 571-9418   bill@easthillpropertymanagement.com

ask the experts

A resident is demanding copies of attorney invoices, but aren’t these subject to the attorney-client privilege? 

Martin C. Cabalar Becker & Poliakoff

(973) 898-6502 mcabalar@bplegal.com

Property Management Monthly Page 4  

The Spring Selling Season is upon us and you are listing your property for sale…. congratulations! As a member of an HOA, there are a few items you should consider as many HOAs have rules and regulations in place to help facilitate a safe and smooth listing.

As a general rule, it’s a good idea to consider the following regardless of which community you live in:

Have your monthly dues increased? Need help?

Unfortunately, these changes are NOT automatic. As the originator setting up your account with the “autopay” you have the power to control your account and the payments feature on the portal.

If you need to update your monthly dues, please log into your CalPay account, click on the “pay now” feature.  View/open your autopay, click on the “pencil” icon, change your amount, hit continue or save changes. This change will be in effect on the next processing month.

• If you have a small balance owed from the dues increase, please set up an “one-time payment” for the difference.

CALIBER CORNER Mattrese Foster

EAST HILL PROPERTY MANAGEMENT EastHillPropertyManagement.com

Helpful Hints For Caliber Users

the common expenses fees, which fund the association’s

legal expense, but our client is the corporate entity which

acts through its governing board.  reserves.  Think about

making rules that have real meaning to your community.  

If your governing board receives a request to review the

association’s attorney’s invoices, we recommend that you

first consult with and seek the advice of your counsel

before providing copies to a unit owner.

On July 13, 2017, a new law was enacted in New Jersey amending the Planned Real Estate Development Full Disclosure Act (PREDFDA). While the new law was created in reaction to litigation involving a community called the Radburn Association, which lacked by-laws that mandated fair and open trustee elections, it also includes provisions relating to amendments of the by-laws which will apply to all community associations.

One of the major provisions is the board can amend its by-laws. The by-laws can be amended by the Board in two circumstances: (1) when required by state, federal, or local law, or (2) when less than 10% of unit owners vote to reject the amendment.

The by-laws can be amended by the Board in two circumstances: (1) when required by state, federal, or local law, or (2) when less than 10% of unit owners vote to reject the amendment. There are bound to be questions relating to bylaws amendments now that these provisions are in effect. If your association is amending its bylaws you will want to talk to legal counsel before starting this process as you may not be able to rely entirely on the procedures set forth in the by-laws.

Ask the Experts...continued

New By-Laws Amendment Procedures Mandated By PREDFDA Mary W. Barrett & A. Christopher Florio (609) 895-7335   mbarrett@stark-stark.com cflorio@stark-stark.com

How to Sell Your Home In an HOA Community  Nicole Gailliard (484) 800-4271 ngailliard@easthillrealestategroup.com

• Traffic - Consider the amount of traffic that will flow through the community during showings and Open House tours.  Does your community gated or have traffic flow patterns that your agent will need to be aware of?   • Signage – Many communities have guidelines governing the “For Sale” signs.  Some elements to consider are: how large is the sign, what type of material is the sign made of, where is the sign allowed to be installed, what information is prohibited on the sign and what is allowed.  Advertising flyers, posters and billboards could be prohibited also.   • Open House – Directional signs are typically allowed on certain days of the week and during certain times.  These signs must be removed after hours. • Parking – As potential buyers visit your home it is important to alert the agent of areas where parting is prohibited.   • Lock boxes – Are lock boxes allowed on the property?  If so, is there a predetermined location they must be placed?  Be sure it is OK for lockboxes to be visible on your property.

Ultimately, the goal is to conduct business in a socially responsible manner where the property is appealing, the process is understood, and the neighbors are undisturbed. When in doubt, consult with your Property Manager about the rules and regulations surrounding your listing. They are there to assist you and the community during this time and have a wealth of knowledge and can help you avert a sticky situation.