As we’ve said before, communication is key, especially in a community. As a property manager or HOA board, it’s up to you to be in touch with your residents. It’s important that you take their opinions and priorities into account whenever you’re making decisions that will affect them. You probably don’t know what your residents want and expect, but it’s not difficult to figure it out. Chances are, they want to tell you as badly as you want to know.
Surveys are a great way to obtain feedback from your residents. They can be tailored to be about a specific topic or just general living, and they will allow you to get a feel for what the general attitude of the residents is. Whether the feedback is positive or negative, it will give you a better idea of if you are on the right track. Use the survey to help you identify problems, make decisions, and set priorities.
- Conduct them regularly: Attitudes and opinions change, so it’s important to conduct surveys periodically, but not excessively. Sending them out regularly will make your residents feel like their opinions matter and they will become accustomed to sharing them.
- Include a cover letter: Don’t just send out surveys. Include a letter that explains why you are conducting the survey and asks residents to please fill it out.
- Pay attention to results: It’s not enough to just conduct a survey, you have to take the results into account. When you’re planning your budget for next year, try to include resident preferences in your decision making. Start slow by sending out surveys concerning non-critical issues. Once residents become comfortable with the process, you can start asking more important questions
- You might not be able to fix everything: Just because you identify a problem doesn’t mean you’re going to be able to remedy it immediately. Use surveys as a learning tool. Even if you can’t fix the problem, at least you are aware of it.
- Share results: If a survey proves you listened to residents and made effective changes, share the results. If resident satisfaction increases or if community programs have been expanded, share the news with residents, realtors, developers and local media.
Taking the time to acknowledge the opinions of your residents will not only reduce rule violations and complaints, but also cultivate a strong sense of community. Your residents will appreciate it and are more likely to support your decisions if they feel like their happiness was taken into account. With knowledge of residents’ needs and demands, communication is fostered and community living becomes easier for both residents and HOA boards.
A whole is the sum of it’s parts, and a group is only as strong as it’s weakest member. You probably know that there are a lot of occasions where these phrases ring true, and a homeowner association board is one of them. Each member is important to the success of the entire board, and they all have different roles.
With the help of our friends over at CAI, we’ve summarized the roles of the president, secretary and treasurer for you below.
President (http://www NULL.caionline NULL.org/info/readingroom/Pages/BoardPresident NULL.aspx): It’s important for the president to understand not only the roles and responsibilities of his or her position, but also effective leadership and management.
- Associations are both communities and businesses, so the president should enhance the lifestyle of residents and protect the value of the asset.
- It’s important that the president work closely with the board, manager and residents to form overall association goals.
- The president must be knowledgeable of all governing documents and ensure that the association operates correctly.
- As the president is responsible for the financial well being of the association, he/she must direct the budget process, collect assessments, ensure reserves are adequately funded and that insurance coverage is sufficient.
- Presidents preside at board meetings, prepare meeting agendas and ensure that valid voting procedures are used.
- The president identifies and trains potential leaders.
- In order to ensure successful operation of the association, the president should work closely with professional managers and other association professionals.
- The president must be an effective communicator, as he/she is a spokesperson for the community.
Secretary (http://www NULL.caionline NULL.org/info/readingroom/Pages/BoardSecretary NULL.aspx): Like any other business, an association must preserve its history, maintain records and protect itself from liability, and it’s the secretary’s job to do these duties.
- Prepare and distribute meeting notices.
- Record meeting minutes and resolutions.
- Affix the corporate seal to legal documents and witness and verify signatures on documents.
- Accept and verify process for annual or special membership meetings.
- Maintain all the records.
- File necessary forms with state agencies.
Treasurer (http://www NULL.caionline NULL.org/info/readingroom/Pages/BoardTreasurer NULL.aspx): Healthy finances are essential to the smooth operation of an association, and the treasurer is the custodian of the funds and financial records.
- The financial voice of the board and community.
- As the board’s liaison to the auditor, the treasurer should monitor annual audit progress and make sure that appropriate tax returns are filed on time.
- Implement a reserve program based on an engineering study and make sure it has adequate funding.
- Ensure the implementation of an annual operating budget.
- Implement safeguards to protect association assets.
- Oversee insurance, financial record maintenance, fund investment, collection of assessments and delinquent accounts, and calculation and funding of reserves.
All the roles of a community association board are important, and it’s essential that each person knows what their responsibilities are so that everything runs smoothly. To be effective, an association board needs to understand its roles and purposes and have a clear mission. Whether the board is made up of volunteers or professionals, each member has to work together to make sure the entire board works efficiently towards its purpose of maintaining the community.
Anyone can be at risk for fraud, so it’s important that you take steps to safeguard your association funds. While no safeguard is foolproof, using a combination of different techniques could help you protect your association from being victimized.
We recently read a CAI article (http://www NULL.caionline NULL.org/info/help/Documents/Preventing%20Fraud%20and%20Embezzlement NULL.pdf) about preventing fraud and embezzlement and have summarized the major points for you below.
- Know the association’s federal tax ID number (FTI) and keep separate accounts: Use the FTI to obtain periodic listings of all bank accounts and account numbers and make sure they are under the association’s name and FTI number. Each board member should know the FTI number because it is needed to verify the existence of accounts and open new accounts, but it should not be spread to general membership.
- Use a lock box system for deposits and require dual signatures for all withdrawals: Do not EVER sign a blank check. Require dual signatures on all checks or a monthly report which shows payees, check numbers and amounts. A lock box system allows owners’ payments to be mailed or transferred directly to association bank accounts, which reduces the chance that the money will be deposited into the wrong account.
- Segregate and safeguard your association’s reserves: The reserve account(s) should be under the control of at least two people who have the ability to make withdrawals and transfers. For associations which use professional management or an office manager to handle the finances, any withdrawals and transfers should require the name and signature of a board member. Never give just one board member total control over reserve accounts, and try to lock long-term savings into non-liquid accounts.
- Require that duplicate monthly statements of operating and reserve accounts be sent every month: One statement should be sent to the treasurer or management company and the other should be sent to a board member who does not have the authority to sign checks or make any transfers or withdrawals. Many banks offer statements by e-mail, so these statements could be sent to more, if not all, of the board members. Alternatively, board members could have read-only access to online accounts. While this does require boards to update the information, it could prevent someone from falsifying bank statements.
- Check invoices against checks paid and the original receipts for credit card accounts: For associations with professional management or a bookkeeper, the board treasurer should check for any unauthorized use. For self-managed associations, a board member without access to bank accounts or credit card privileges should conduct the review.
- Shop around for bank services: Many banks don’t enforce dual-signature requirements or prohibit electronic transfers among accounts, even though they are under different FTI numbers. Choose a bank that will demonstrate the safeguards it has in place to minimize theft threats, especially in electronic transfers.
- Know the association’s insurance company and consult with the agent: Each board member should have copies of the association’s insurance policy and the board should have the agent attend a board meeting once a year to discuss the association’s policies and whether additional coverage is recommended.
- Insure the association’s money: Obtain fidelity coverage on the board members and the management company or bookkeeper in an amount that equals or exceeds the association’s reserve and several months of operating funds. This should be a part of every association’s common expenses.
- If your association is professionally managed, make sure that the management agreement includes specific terms to require these safeguards: The association should have its legal counsel review the original agreement and any renewal before execution so that the agreements are not filled with terms that are detrimental to the association.
- Regularly engage an independent Certified Public Accountant to conduct an audit: The board should perform an audit at least every few years, if not more. In between audits, the association should have an annual review performed with the stipulation that the bank balances be verified independently.
Used in conjunction with each other, these tips will help you create a system of checks and balances that will safeguard your association from fraud and embezzlement. The last thing you want to find out is that your funds aren’t being used the way they should be, so it’s up to you to take the steps necessary to protect your association. For more information on how to protect your HOA, call us today at 954-316-1339.
We hope you will join us for a property managers happy hour! We look forward to seeing you there!
By: Gian Ratnapala, Esq.
During 2007 to 2008 a large number of mortgage foreclosure cases were filed and dismissed throughout the State of Florida. Recently, however, a new wave of mortgage foreclosure cases has been filed to restart the foreclosure process on these previously dismissed cases. Whether these mortgagees are precluded from restarting a foreclosure action that was previously dismissed under the doctrine of statute of limitations remains a mystery.
Statute of Limitations
Statute of limitations is a hard and fast legal rule that prevents a party from filing a lawsuit after all elements necessary to the filing of a cause of action have occurred.  In a mortgage foreclosure action, the statute of limitations begins to run from the date on which the last installment under the note is due or from the date on which the note was accelerated by the mortgagee.  Under section 95.11(2)(c), Florida Statutes, an action to foreclose on a mortgage must be brought within five years of the date on which the last installment under the note is due or from the date on which the note was accelerated (which events start the clock on statute of limitations). Additionally, if the last payment on the note is not yet due, acceleration is a necessary precondition to bringing a mortgage foreclosure action.  Therefore, a mortgage foreclosure action must be brought within 5 years of acceleration of the note by the mortgagee.
A number of mortgage foreclosure cases initiated between 2007 and 2008 were dismissed due to irregularities in pleadings, foreclosure procedure, failure to prosecute, or other technical deficiencies despite the mortgagees having already accelerated the note or alleging acceleration in their mortgage foreclosure complaints. Many of these dismissed mortgage foreclosure cases have recently been re-filed. However, most of these re-filed foreclosure cases may not be actionable due to the statute of limitations. In most instances, the statute of limitations bars a mortgagee from re-filing of a mortgage foreclosure case after 5 years of the first acceleration. 
In some cases the running of the statute of limitations may be tolled or waived by voluntary payments or mortgage modifications ; however, this would occur only in a minority of cases. In the event of a mortgage modification, evidence of the modification would be a record instrument that would be easily ascertainable from a title review, and put the world on notice of the renewed agreement between the mortgagee and the homeowners. A voluntary payment, on the other hand, would toll or restart the statute of limitations, but would be hardly ascertainable from public information. Consequently, in a handful of cases, the re-filing of a seemingly time barred case may be proper.
1. Kush v. Lloyd, 616 So. 2d 415, 419 (Fla. 1992) (stating “A statute of limitation runs from the date the cause of action arises; that is, the date on which the final element (ordinarily, damages, but it may also be knowledge or notice) essential to the existence of a cause of action occurs.”).
2. See, generally, Locke v. State Farm Fire & Cas. Co., 509 So. 2d 1375, 1377 (Fla. 1st DCA 1987) (stating “It has been held that the statute of limitations on a mortgage foreclosure action does not begin to run until the last payment is due unless the mortgage contains an acceleration clause.”) (citation omitted).
4. See Houck Corp. v. New River, Ltd, 900 So. 2d 601, 605 (Fla. 2d DCA 2005) (stating that a mortgage foreclosure action must be filed within 5 years of accrual of the cause of action).
5. § 95.051, Fla. Stat.
Advantages to a Community Association
A community association can greatly benefit from recognizing situations where the first mortgagee’s dismissed foreclosure action could be used to the Association’s advantage. Only liens for ad valorem taxes and first mortgages have priority over a community association’s lien for unpaid assessments.  As such, if the first mortgage is unenforceable due to the statute of limitations, Association virtually has the first priority lien on the subject property.
Therefore, community associations should aggressively pursue foreclosure on real property where the first mortgage may be barred by the statute of limitations. This is because, if the community association takes title to the property at its foreclosure sale, the community association will very likely prevail against the first mortgagee in a mortgage foreclosure action filed on a later date. Additionally, third party purchasers are more likely to purchase at a community association foreclosure sale given the lowered risk of losing their investment to a foreclosure by the first mortgagee. As such, community association possibly would be able to recover its entire past due assessments and potentially benefit from a profitable sale which would help bridge the budget shortfalls caused by the increased number of delinquencies within the community.