Why No One Wants To Talk About HOA Fees

Why No One Wants To Talk About HOA Fees

The dreaded topic…HOA Fees….

Board members have to determine them, enforce and collect them, and decide when to raise them (the undoubtedly unpopular decision). And homeowners generally don’t like paying them. A recent article by Joe Ducey on abc15.com sites one of the biggest complaints of Valley HOA residents is that residents don’t really know where the fees go.

AH HA! Light bulb moment HOA board members! No one wants to talk about it because they may feel “ripped off” or don’t understand the fee system.

How can I be more transparent about where the HOA fees go?

#1 Make sure – absolutely positive – that your community members have access to the board meeting schedule. You could use facebook, common areas, or emails. Make the HOA community aware and always feel welcome to come to the meetings where they can hear first-hand how fee increases are determined. Read more about Arizona’s Open Meeting Law.

#2 Be honest and open when a homeowners asks about fees.  More importantly, if you are the HOA board member, you better know where your fees go.  You are already aware that this is an uncomfortable topic, so know your stuff! Then the conversation won’t feel as tense.

#3 Create a scenario “if HOA fees didn’t exist.” This doesn’t need to be a public document, but the exercise in itself prepares board members for those pivotal talking points during homeowner conversations about the fees.

#4 Post ideas on how to keep costs low to your facebook, community website, and/or newsletter. Give a good cause and effect example that increased fees in your HOA community in the past. Real life examples are the best storytelling tool you have!

#5 Anytime an adjustment is made to the fees, publish or announce it. We understand this is not always possible, but think of a creative & efficient way to get the message across. You must include this in your meeting minutes anyways, but wouldn’t be nice, as a homeowner, that you got a personal notice as well? Let’s face it, not all homeowners are going to attend meetings or read the minutes. Here’s some tips on how to increase attendance at HOA meetings.

Good luck and tell us what worked for your HOA Board!

What You Need To Know About HOA Insurance

What You Need To Know About HOA Insurance

You’ve probably heard that there’s no such a thing as a stupid question, and that’s especially true in regards to Arizona HOA insurance. The only foolish move would be NOT to ask. Asking questions like, “Is our HOA covered?” or “What kind of insurance do we need?” are essential to ensuring that your HOA is fully and appropriately covered.

On Thursday, February 25, Planned Development Services will hold one of our popular board-training workshops that’s designed to answer all of your homeowners association insurance questions. The workshop, “HOA Insurance from A-Z,” will be held in our Peoria, Arizona office and conference center, and will cover everything from condominium insurance, planned community insurance, D&O insurance, and when to obtain workers compensation insurance.

D&O Insurance: D&O insurance – or directors and officers liability insurance – is one of the most overlooked and misunderstood policies among HOA boards. Non-monetary and discrimination cases take the lead in lawsuits among HOA boards, and most commercial insurance packages do NOT cover these claims. Find out what your board needs, including coverage for non-monetary damages/claims and breach of contract, and why a stand-alone D&O policy is the only way to go.

Non-Monetary Claims: Non-monetary claims are the second most common types of lawsuits brought against HOAs. They can be confusing, but they essentially deal with plaintiffs who file a claim that does not have a monetary value to it. Read about an example non-monetary claims here.

Workman’s Compensation Insurance: Sometimes, your HOA may sign contracts with smaller vendors who may not carry appropriate insurance on their own. Workman’s “comp” will help that employee or vendor with compensation for wages and medical bills, in the case that they are injured on the job.

Varying Coverage: There are an enormous array of coverage for what kinds of insurance you could purchase, from general liability (which has subcategories of its own) to flood and earthquake insurance, automobile insurance, and even golf course insurance! Every HOA is different, and only your board and community members will know the specific criteria that your HOA meets. Make sure that you carefully consider all of your needs and options.

PDS Arizona HOA Board Members! Mark your calendar for Feb. 25! We’d love to have you join us – neither you nor your homeowners association will regret it.

Homeowner Rights in the HOA | A PDS Blog

Harmony and Balance, Rights and Responsibilities – in the HOA

Hot and cold, work and play, sour and sweet – most things in life work better in harmony and balance.

It’s no different for members of a homeowners association: community is simply more enjoyable for everyone when homeowners embrace their rights and responsibilities with equal vigor.

First, some responsibilities for homeowners:

  • Maintain your property according to the HOA’s established standards.
  • Treat association leaders – and fellow homeowners – with honesty and respect.
  • Read, understand, and comply with your association’s rules and regulations. (These regulations should be provided before you even moved in. If you haven’t received them or misplaced them, get your hands on a copy as soon as possible.)
  • Just as in your county, state, and country – exercise your right to VOTE!
  • Pay association assessments and charges in a timely manner.
  • Ensure that your HOA has your current contact information, so you can be up-to-date on relevant and necessary information for the community.

Of course, there are rights that come along with homeownership:

  • A responsive, competent community association.
  • Community leaders who are honest, fair, and respectful.
  • Attendance at all board meetings, and the ability to serve on committees and run for election
  • Access appropriate association records.
  • Prudent financial management of fees and other assessments.
  • Fair treatment regarding association obligations, such as discussion of payment plans before legal action, and the right to appeal decisions.
  • Receive rules and regulations governing the community association before purchase and settlement or upon joining the community.

    PDS is always available to help with more information about homeowner rights and responsibilities – contact us via our live chat or hotline! The Community Association Institute (CAI) is another good resource for both community managers and association management companies.

 

HOA Use Restrictions Definition | PDS

HOA Use Restrictions: What’s the Difference?

Why do we have use restrictions? And how are they different from other HOA rules?

When you purchased a home in an Arizona HOA community, you agreed to certain rules and use restrictions. Now comes the confusing part – what’s a rule versus a use restriction? Why do we have them? And how are they substantiated?
It’s a lot..we know….this should clear it up:
  • HOA Rules apply to the common areas. Areas like the pool, clubhouse, or playground. The HOA Board has implied authority to enforce the HOA Rules.
  • An HOA Use Restriction apply to such things like exterior painting, construction additions, or changing the landscape around your home. These modifications usually require written pre-approval from your HOA. Basically, anything outside the common areas.
  • Here’s where it’s tricky: Use restrictions must appear in your covenants (or commonly referred to as CC&R’s). The HOA Board can define and clarify a restriction without a vote process. However, an actual change to a use restriction requires a vote of the homeowners (unlike an HOA Rule). For example, your board can define want a noise nuisance is, i.e. continuously barking dog, without a vote from homeowners. But to remove or change the restriction a vote has to occur.
  • What are the penalties for not following a use restriction? Penalties can range anywhere from a warning letter to fines or suspension of membership rights. Most covenants have an appeal process for disputing the violation. Check your CC & R’s for clarification on your HOA’s process.
  • Why do we have use restrictions? The purpose of these restrictions is only a benefit to the homeowners. The restrictions maintain the quality of life that make the community a better place to live and also help preserve property values.
Open Meeting Law Builds Trust with your HOA

411 on Arizona’s Open Meeting Law

Open Meeting Law is important for HOA’s

Arizona’s Open Meeting Law is important for the health of your Homeowners Association. Associations must follow basic rules to ensure meetings are in fact “open” to all members.
Why do we have this law?
To protect the public from “secret” decision making and protect public officials from being excluded. It also builds trust between the homeowner and the HOA board.

 

What does the Arizona Open Meeting Law require?

The law requires the Board to provide proper notice, 48 hours in advance of a meeting (Emergency meetings are the exception). Notice must include meeting location and time of the meeting.  Meeting notice may also be reported by newsletter, e-mail blast or other reasonable means.  A meeting agenda must be available for homeowners at the meeting.

The law also requires minutes to be recorded for all sessions. Lastly, the law allows for members to attend and speak during sessions. Boards can place time restrictions on this opportunity to speak, but they must allow time to speak on the issue at hand before taking any formal action.

 

Are there any online resources to help? 
There are resources online to help you and your board understand more about “Open Meetings.” You may find them on the Arizona Ombudsman Citizens Handbook (under open meetings) or Chapter 7 of the Arizona Agency Handbook.

Ready for the next session on Open Meetings? Click here for Part 2 of this series.
Thank you to Mulcahy Law Firm for contributing to this article.
The Easiest Guide To Welcoming New Neighbors

The Easiest Way To Welcome New Neighbors

Moving to a new home may have only rated a 20 on the Holmes and Rahe Stress Scale – that 70s-era psychological study in which researchers related common life stressors to illness – but anyone who’s moved knows that it’s never easy. Packing and unpacking, new schools, new jobs, upended schedules and routines, too much fast food … it’s enough to make even the most easygoing among us experience some very real stress that’s hard to put a number on. So when residents join your communities, it’s the neighborly thing to do to make sure that “Will our neighbors be nice?” is one less thing they’ll have to worry about.

The easiest way to welcome new neighbors? Think about what you would’ve appreciated when moving into the neighborhood. There are gestures that both an HOA and individual residents can make to roll out the red carpet for the people next door:

 

  • Gifts that reflect the community
    It doesn’t need to cost a lot of money. Residents might decide to drop off a pan of brownies (reusable or recyclable containers – don’t add “return dish” to their to-do list) or a basket of apples from the tree in their back yard. HOAs could send over a gift card for a local farmer’s market or the great coffee shop on the corner.
  • Share your knowledge
    It takes time to figure out where the best salons are, who the most reliable mechanic is, which pizzerias deliver, if any parks have family movie nights in the summer. Residents can help by providing a simple list of some of their area favorites. And HOAs might provide a calendar or schedule of important events – from board meetings to block parties – in which new residents can meet new people and get a feel for the community.
  • Offer help and a smile
    Sometimes it’s nice for someone to simply smile, wave, and/or introduce themselves – and it’s helpful to know who you can contact if you have questions as you settle in. You don’t need to go overboard – after all, you don’t want to overwhelm anyone and you do want to respect their privacy and personal space – but letting someone know that you’re glad to have them and willing to help is always a good-neighbor move.
HOA Collections During Difficult Economy

How Does an HOA Collect During Volatile Economic Times?

How does an HOA collect during this volatile economic time? Nana says, “You Get More Flies With Honey Than You Get With Vinegar”

We know and may have personally experienced the economic downturn of the past few years. When the downturn hit, many families were literally choosing which bill to pay and which bill to forego. In many cases the HOA payment was put to the bottom of the pile.  Attorney, Beth Mulcahy of Mulcahy Law Firm told me a long time ago “Homeowners need to understand that HOA assessment payments are very important and should be one of the top 5 bills they pay.” Homeowners fail to realize the ramifications of delinquent assessment payments, such as property liens and foreclosure. As Board Members and Management Company representatives it is our duty to instill this understanding.

The financial forecast “seems” to be on the upswing and the truth seems to hold with whomever you ask or what news station you tune into. Recent newscasts indicate a 6.2% increase in home sales recorded in June 2015, the national unemployment rate dropped to 5.3% (June 2015) and 223,000 new jobs were added to the economy as of July 1st, 2015. However, HOA’s continue to struggle with delinquent debt.

HOA Collections in and of itself is not a welcome phrase. Mention the word, “collections” and that old cartoon comes to mind; you might remember it with the craggy old debt collector, holding a bag of money in one hand and a hammer in the other hand. Not a very pleasant thought. Not a very pleasant position for anyone to be in, including an HOA Board.

Since HOA Board members are also community members, neighbors and friends with many delinquent homeowners, the thought of initiating collections action is often a sticky wicket. The HOA must collect money due, yet the collections actions will often be toward a friend or neighbor which is a tough choice for sure.

That said; I encourage anyone who is collecting delinquent association debt from a homeowner to do so respectfully and responsibly. Kindness and flexibility go a long way when collecting past due balances for HOAs.

Many HOA managers and Board Members have come up with solutions that will eventually get the delinquent owner out of debt and back in good standing.

A payment agreement between the HOA and the homeowner is a good first step. The homeowner will have to agree to an amount that will work with the homeowner’s budget. A good tip is if the owner proposes a payment that is so low the debt will remain open for an inordinate length of time, counter-offer with a payment plan that will reduce the timeframe of the debt. What I have found is that in most cases the owner is able to meet a counter offer which is a win for not only the homeowner, but the HOA as the debt will be paid in a reasonable timeframe which means any lien filed will be removed and the owner will be in good standing again.

Some communities have implemented an amnesty plan which looks something like this:

Re: HOA OFFER OF AMNESTY PROGRAM

Dear Homeowner:

The board of directors for your homeowners association is excited to offer you a way to resolve your outstanding delinquent account and bring it to a current status. This is a onetime offer that may never be offered again. Please read the terms and conditions of this program as outlined in this letter very carefully as they all must be met fully before the amnesty will be granted.

Your current account balance with (Name of) HOA is: __________________

The breakdown of your balance is as follows:

                  Assessment (HOA Quarterly Dues) ______________

                  Late Fees __________

                  Administrative Fees _________________

                  Fines ____________________

                  Collection or Attorney Fees _______________

The amnesty program will offer you relief from all fines and late fees conditionally. As of the date of this letter your offer of amnesty is: _____________. All hard costs to the Association which are assessments, administrative fees, lien fees, and attorney fees must be paid by the homeowner. The amount that you must pay upon acceptance of this offer is:____________. (These 2 above amounts would equal their total due).

The terms and conditions of this amnesty program are as follows:

  • Across the board waiver of all fines if lot is now in compliance and assessments are current regardless of the balance owed in fines.
  • Requirement that owner stay in compliance (no CC&R violations) for six (6) months in order for amnesty to be granted.
  • Collections would be put on hold if the owner accepts the plan to obtain a waiver. Owner would sign an Acceptance of Amnesty acknowledging amount owed and need for lot to stay in compliance for six (6) months.
  • The waiver would not include any hard costs like administrative or legal fees. Hard costs and assessments would have to be paid first or an acceptable payment plan drafted before fines are waived. A broken plan will invalidate the waiver of fines.
  • An owner under an amnesty plan would have the right of appeal for any CC&R violation sent by management after acceptance of the plan. If the violation is deemed an error or invalid in any way, the amnesty plan remains intact.

Please find attached an Amnesty Acceptance Form which you must fill out and sign in order to apply for acceptance into this program. The board of directors will review these forms and notify you if you have been accepted. Once you have been accepted, all collection action on your account will be stopped as long as you meet the terms as outlined above. The Acceptance Form must be returned to the address at the top of this letter no later than _____(date) in order to be considered.

We trust you find this offer a clear demonstration of the board’s concern for the overall welfare of the community and each individual homeowner. It is their desire that each and every owner now in the community brings and keeps their individual financial account in a current status.

 

Unfortunately there are owners that will not respond to delinquent letters, demand letters, pre-foreclosure letters and the HOA must continue with the collections of assessments and assessment related fees per the letter of the law. As hard as that step is, I have seen debt paid, in full, after the receipt of a foreclosure letter.

I encourage managers and board members to try creative collections strategies. Work closely with the HOA attorney who may also have some proven yet, innovative approaches to HOA collections.

Remember, respectful and responsible collections will result in reduced Association debt and foster a sense of Community. My nana used to say, “You get More Flies with Honey than with Vinegar.”

-Dawn Engel
Community Association Manager and Education Director with Planned Development Services

Planned Development Services 20 Year Anniversary

PDS Turns 20!

It’s hard to believe that 1995 – the year we said goodbye to everything from “Full House” to Operation Desert Storm, and hello to “Toy Story,” the World Trade Organization, and a little online bookseller called Amazon – was twenty years ago. But we’re ready to embrace the passage of time, because 1995 is also the year that Planned Development Services (PDS) launched in Arizona with the goal of providing top-tier homeowner association management services to customers, volunteer board members, and residents across the Phoenix Valley.

PDS, a proud member of both the Community Association Institute and the Arizona Association of Community Managers, has come a long way since those early startup days of the mid-90s to become an award-winning and leading regional HOA management company.

Today, we provide more than 120 communities, including large master-planned, condominiums, and small, custom neighborhoods, with an array of services like HOA management, accounting and collections, homeowner communication, vendor management, and HOA board education.

And PDS doesn’t just provide those services – we always look for ways to do it better, and to build more open and effective lines of communication between board members, homeowners, and PDS managers. In the last year alone, we announced a new location, gone live with an industry-first mobile app, and launched a redesigned website. PDS’ new Peoria, Arizona office (14100 N. 83rd Avenue, Suite 200), is more accessible for customer and homeowners – who are always encouraged to drop by and share questions and concerns – and offers a larger space for the company’s popular HOA board training courses. The PDS mobile app, HOA link, is available for download on iTunes, and allows homeowners to contact managers, make payments, report violations, find community event information, and access necessary forms and paperwork on their smartphones. And with the relaunch of www.pdsaz.com/, users can view legislative updates, register for HOA board trainings, and get community updates more easily than ever before.

Visit the our Facebook page to participate in a monthly trivia challenge with prizes, and learn more about our upcoming 20th birthday bash in October. HOA board members have a special opportunity to participate in our water support drive for local charities: those who bring a case of water for donation to any PDS training will be entered to win raffle prizes at the party in October.

Stay tuned to PDS on social media for updates on these and more ways we’ll be celebrating the big 2-0 for the rest of the year, and thank you for being a part of the PDS community!

Planned Development Services | Community Manager Qualities

5 Qualities Every HOA Community Manager Should Have

HOA Community management: the job may not be glamorous, but community managers just might be the unsung heroes of the real estate and property management worlds. Think about it – a good HOA community manager plays a huge part in the safety, comfort, living arrangements, and finances of large groups of people. If they’re not doing their job well, many individuals and families can suffer.

What does it take to make an outstanding community manager? Here are five of the most important qualities he or she should have:

 

  1. Good Communication Skills

Community managers are responsible for communicating with a broad range of people, from tenants to contractors to HOA board members. They need to be able to effectively communicate with people working in different disciplines and trades, and people with varying personalities and agendas.

 

  1. Ability to Mediate and Advocate

A community manager will often serve as something of a liaison or “middle-man” between different groups of people. As such, she needs to be able to capably (and fairly) mediate conflicts, and be comfortable advocating for individuals or groups when it’s necessary.

 

  1. Commitment to Responsibilities

Managers are usually responsible for everything from accounting services to landscaping and maintenance requests. They wear a lot of hats, and as such, it’s vital that they’re committed to upholding their responsibilities and seeing them through.

 

  1. Has Integrity and Ethics

Really, honesty is fundamental to almost any job. Unfortunately, some people are willing to cut corners or make deals and allowances that benefit only certain groups and individuals. That can be the undoing of a community manager, whose job it is to serve everyone fairly and equally.

 

  1. Flexibility

Though it’s important for community managers to know the ins and outs of HOA bylaws, rental and leasing procedures, CC&R’s etc., he or she also needs to be a generally reasonable person, and recognize when there is some room for give and take or when it’s time to address an outdated/irrelevant policy or procedure.

 

Do you have what it takes to be an HOA Community Manager?

HOA Board Legislation

Who Really Uses HOA Legislative Roundtables? Should I?

Whew! That’s what you call getting down to business.

Arizona Governor Doug Ducey, along with the Arizona legislature, recently jumped headfirst into what the Arizona Republic called a “whirlwind 81-day session” with a $9.1 billion budget. The result? More than 300 – yes, you’re reading that right – new laws on the books. Technically, they’ve agreed upon 324, most of which kick in on July 3.

So, you’ve got about a month to acquaint yourself with hundreds of new laws, which deal with social, financial, business, and school issues, and subjects ranging from microbrewery expansions to school testing – and everything in between.

You’ll also need to discern which of those apply to your homeowners association, and get on the road to complying before that early July deadline.

Need a little help?

Planned Development Services is ready to do just that – we’ll be hosting an HOA training event this month to get you prepared. Mark your calendars now for Thursday, June 11th at the PDS office in Peoria. This particular meeting will be a legislative roundtable aimed at bringing attendees up to speed on the laws, so you can start taking the appropriate actions for your community.

So who, exactly, utilizes legislative roundtables? Primarily, HOA board members who are interested in having open, informational, and constructive conversations that help them understand a range of issues that could directly (or indirectly) affect their homeowners association. Roundtables provide an opportunity for discussion, debate, and education, and of course, action.

King Arthur’s round table may be the stuff of fables and legend, but this PDS training session will arm you with relevant information and tools to help your community prepare for the hundreds of new laws heading the way of Arizona residents and communities.

Don’t miss out!