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February 2019 - The Sharper Focus - HOA Board Edition
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Thank you for reading our newsletter. The goal of this newsletter is to touch on general industry news and helpful topics that may help you in your role as an HOA board member.
Every Association is different in their type, size, scope, and how things are organized and established via the Governing Documents. There are, however, a number of universal topics common to all Associations. We hope you will find this newsletter a valuable source of information!
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Advertising Directory
We strive to continually add valuable content and resources in our newsletters. In 2019, you will see promotional ads from local businesses within the newsletter and on our website. Click the ads to view more from each business or view other promotions on our website, by
clicking here. We will be adding to the list throughout the year.
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Year-End Requirements for Associations
Did you know that associations, as a registered non-profit corporation, are required to file Federal and State taxes? It is also important to be aware of any requirements of your governing docs for an annual financial review or audit. If you are governed under MCIOA (Minnesota Common Interest Ownership Act,which effects all condominium associations and any association incorporated after June 1, 1994),you are required to have, at minimum, an annual financial review. Note: you can have a vote of the membership to waive this requirement.
Financial reviews and audits do differ; however, they achieve the same goal. That is to have an independent, licensed CPA review the association's financials and the accounting practices of its management company. It should also be noted that MCIOA puts this criteria on who performs the financial review or audit.
Your property manager and staff at Sharper are working hard behind the scenes to provide the engaged CPA firm with all of the materials required. Bank statements, reports, invoices, etc. all must be provided.
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Signs It is Time to Update Governing Documents
Perhaps the most important tool you have as a Board member to help in your governing responsibilities and decision-making process is the association's set of governing documents. It is the foundation for every decision you make and the playbook for how those decisions will be executed into action. Like everything else in the association, however, governing documents also need maintenance and updating.
Here are a few key areas of the governing documents that might suggest it is time to either amend sections or re-state the entire document:
Developer/Declarant Rights
- most Declaration of Covenants (other common titles: Declarations or Covenants, Conditions and Restrictions) have language and numerous sections that instruct how the association should be run and give rights to the developer/declarant when the association is first incorporated and still under "declarant control." Once the association turns over to the membership and starts to be controlled by a Board of Directors, those sections are irrelevant. They are worth removing to clean up the document and eliminate any confusion.
Ambiguous or Missing Information
- the older the document, the more confusing the language can be. Some common examples of ambiguous information can be the definition of unit boundaries, listing of common elements and limited common elements, clear description of maintenance responsibilities, and scope of insurance requirements. If you find yourself spending the money to seek legal opinions for clarification, it's a good sign you might need to amend and re-state the document(s).
Alignment with State Laws
- it can be common for governing documents to contradict state laws. Under the Minnesota Common Interest Ownership Act ("MCIOA" or 515B), most sections of the statute preface by saying "unless the association's documents say otherwise..." If the association's document predates MCIOA, the association could be missing out on key provisions of the statute that better position the association for success. For example, MCIOA gives the Board authority to levy a special assessment. If the association's governing documents, however, require the membership to approve a special assessment, state statute would default to the governing docs, and the Board would have to seek approval. It's an example of a significant hamstring the Board could have on the operation of the association. In most instances, it befits the association to be a part of MCIOA and re-state the documents to both align and reference state statute.
Outdated Communication & Voting Requirements
- some simple but powerful components should be a part of all governing documents. The bylaws should allow for proxy voting. Options for voting by mail and electronically should be incorporated. Delivery methods for communications should extend beyond the dated "mail only" option. Voting and communication requirements in the governing documents are a telltale sign of the age of the documents, and a good signal that it is time to amend or re-state.
Language Style
- typically, the older the document, the more it sounds like a room full of lawyers drafted it. While modern day documents certainly use legal phrasing and key terms, they tend to be more clear and easier for a layman to understand.
Amending or re-stating governing documents can be a complicated endeavor. But again, they are your most powerful tool. If your documents are dated and issues listed above interfere with your interaction with them, it is a worthy cause to update.
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Construction Chat: Navigating a Bad Ice Dam Year
The up and down temperatures and the record-breaking February snow totals have been the perfect recipe for ice dam formation on various types of roofs this year. Ice dams are particularly tricky for associations because the line between Homeowner vs. Association responsibility can become rather blurred.
First, it is important to understand how and why ice dams form. In short, they form when snow melts on your roof and then re-freezes over the eave-typically over the soffit area. The ice "dam" then prohibits further melting snow to drain properly off the roof, which can (but not always) cause leaking water into the home.
There are many factors as to why ice dams form-the inevitable freeze/thaw cycle; excess snow pack; clogged gutters or frozen downspouts-but the primary culprit is excessive heat loss from the unit and/or a lack of ventilation. Which is why, many times and depending on your governing documents, ice dams and the leakage they can cause are not necessarily the association's responsibility. They are not caused by roofing deficiencies; they are caused by insulation and ventilation deficiencies INSIDE of the home.
It is important to understand how your association's governing documents define "unit boundaries." Does the boundary of the unit include "unfinished surfaces" or "no upper or lower boundaries"? If so, this could imply that the attic space (or the space between the roof deck and the ceiling) and insulation inside of it would be a homeowner responsibility; therefore, the heat loss causing the ice dam is the homeowner's deal.
Once there is an understanding of who is responsible for what, it is very helpful for associations to review their ice dam situation and have a policy in place for how they are to be addressed.
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Sharper News
Sharper Scramble Golf Tournament
- mark your calendar for the 3rd Annual Sharper Scramble Golf Tournament to be held Friday, July 19 at Boulder Pointe Golf Club in Elko. This FREE afternoon of fun, food, and golf is Sharper's way of showing our appreciation to you, our valued client, to our Sharper staff, and to our trusted vendors.
If you are interested in securing your spot for the Sharper Scramble, contact Matt Froehlich by emailing
[email protected]
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Board Training Session
- thank you to those that attended our first comprehensive Board training session last month, Board Basics: An Orientation for Board Members. We had a tremendous turnout, far exceeding our expectations for registration. Over 80 Board members from dozens of varying community associations managed by Sharper attended the session led by Sharper's two Directors of Community Management, Candy Lee and Josh Reams. This comprehensive program will be offered twice a year with more focused topic sessions, such as Insurance and Financials, to be held quarterly.
Vision Award Nominees & Winners
- Sharper is pleased to share that in November, seven nominations for the Community Association Institute - Minnesota (CAI-MN) annual Vision Awards were received by our staff.
The ceremony was held on December 6, 2018 at CAI's annual Vision Awards and Holiday Gala. This event is an opportunity for community association managers, business partners, homeowner leaders, and other various industry professionals to come together and celebrate with one another for a very special night.
Sharper's nominations were received for the six categories that recognized individual efforts or collective community association achievements.
Nominees Included:
- Miguel Pariona and Matthew Vitek (finalist) for Rookie of the Year
- Sam Nichols for Excellence in Service (finalist)
- Natalie Martynow for Excellence in Service
- Miguel Pariona for Financial Impact (finalist)
- Michael Miller for Financial Impact
- Michelle Waldroff for Above and Beyond
- Bearpath Homeowner Association for Outstanding Community Building by an Association (finalist)
Miguel Pariona took home the award for Financial Impact.
Director Josh Reams Earns PCAM
- Associate Director of Community Management, Josh Reams, was recently awarded the Professional Community Association Manager (PCAM) designation. The PCAM is the highest designation possible awarded to community management professionals.
Earned by only an elite group of community professionals nationwide and to only 3,000 people in the field since it's inception, the PCAM is a pinnacle achievement for community management professionals.
Requirements for earning the PCAM include:
- A minimum of five years of direct community association management experience.
- Successful completion of all six M-200 level courses (with the last PMDP course completed within the past five years). These courses cover topics such as risk management, financials, property management, governing documents and community governance, board meeting facilitation and board members roles and responsibilities.
- Completion of the PCAM application case study and earning a minimum total of 125 points. The case study consists of a two-day intensive experience learning about an example association and then completing an extensive case study essay.
The PCAM is awarded by the Community Association Institute, an international membership organization dedicated to building better communities.
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Your Feedback Is Important to Us
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As Board members, we truly value your feedback. If you appreciate the work we do for you and your association, we want to encourage you to take a few moments and write some positive feedback and comments via an online "review." Among others, Google, Yelp and BBB are common sources of reviews that pop up on search engines. Please help us establish a review log that is reflective of the excellent service we feel we provide!
Additionally, in the coming month, you will receive a survey to help us better understand our performance for you and your association. This is an annual initiative and we use the information to improve our processes and to incorporate the feedback into performance annual employee performance reviews. Please watch for an email and take the time to share your valuable feedback.
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Need Help Renting and Managing a Townhome or Condo?
Think Advantage Home
A sister company to Sharper Management, Advantage Home helps homeowners and investors manage their single-family residences.
Since your Association is already affiliated with Sharper Management, renting your home through Advantage would have extra benefits you wouldn't find in another property management company. Those benefits include:
- A thorough understanding of Associations
- Information sharing regarding governing documents, rules, and regulations is efficient between Sharper and Advantage Home - Advantage is literally right down the hall
- The Sharper Management maintenance staff is already familiar with your Association's property
- Our emergency response team is fast and effective
If you or someone you know is interested in renting their townhome or condominium, have them contact [email protected].
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