WHAT IS OUR OBJECTIVE?
In California, there are an estimated 50,000 community associations comprising condominiums, townhomes and single family associations. They represent an estimated 3,000,000 units and are occupied by an estimated 6,000,000 people. Annually, California community associations spend an estimated six billion dollars and own an estimated 450 billion dollars in property values.
Actually, no one really knows the magnitude of this industry, we can only be certain the industry is massive, it is enormous and it is here to stay. We also know that many associations are fraught and beset with incompetent managers and ineffectual Board Members. Oh yes this is true – I talk to them every day.
We are concerned, however, that during the past recession the value of condominiums and townhomes decreased in value at a faster rate and recovered at a slower rate than other single family homes and therefor, the loan on your property may be greater today than the appraised value. Did you know that the State of California Department of Real Estate does not require property managers to obtain a license of any kind to management community property?
The California Association of Homeowners Associations is committed to correct these matters. We have sponsored legislation to address these issues and have assembled an impressive organization to accomplish our objectives. But we cannot succeed without your help. There is tremendous strength in numbers of the magnitude involved with this industry. Six million (6,000,000) homeowners, however, organized, united and committed to a worthy cause will succeed. And we will change the concept of community living, we will increase the value of property and decrease expenses. United we will change communities for the benefit of all condominium and townhome owners.
SAVING MONEY – SOLVING PROBLEMS
The California Association of Homeowners Associations Incorporated, can help homeowner associations in solving financial and other problems. By joining together and utilizing the strength of our great numbers, community associations can significantly reduce costs of major items. Items such as insurance, painting, roofing, slurry sealing and tree trimming, and other large ticket items. Moreover, vendors such as contractors, plumbers and electricians will offer discounts when providing services on a group basis. Work provided is often better performed when the vendor is aware the quality of service will be known to other homeowners. There are many functions performed by vendors that are common to most Homeowners Associations where group rates could result in substantial savings for Homeowner Associations.
The cost of HOA insurance has recently dramatically increased. We can reduce this cost, hopefully, when associations adopt appropriate policies on an industry wide basis to manage their insurance coverage and work together to mitigate claims and losses. At the same time, we will also convey a message to primary insurance companies and reinsurance companies that there is enormous strength, order and direction in the community association industry that will affect future insurance rates and regulations at state and federal levels.
HOME FOR THE DURATION
Problems affecting community associations, however, are not solely financial. Often problems that have financial consequences originate with other matters. For example, some associations may have financial problems because many of their owners consider their residence in a condominium or townhome as a temporary stay, the step between an apartment and a single family home. Consequently, dues and reserves may be kept unreasonably low and may explain the lack of owner interest in being involved or participating in association decisions and business. Many owners may truly believe they will only reside in their condominium for two or three years, so why not defer the reserves, maintenance and other problems to someone else. Many of these same homeowners, however, often end up extending the intended short duration to many years. Moreover, many community associations may not have developed sound policies or practices for dealing with people problems, especially difficult people or major expense items.
There are also matters that can only be solved when an organization has a sizable muscle to flex. Take one City in the south land for example. About three years ago this City changed their water rates for condominiums from residential to industrial. Consider what effect that has had on water and sewer bills in this region. If it happened once, how long before other cities will follow? Some cities are holding water deposits of condominiums on file until the corporation changes ownership, which can never happen. These, and other similar matters, will be challenged by the California Association of Homeowners Associations Incorporated.
Consider your property taxes? Within a city consider the geographic size of a condominium association of 100 units compared with the geographic size of one hundred single family homes. The 100 homes are typically on asphalt streets with curbs, parkways and landscaping, with sewer lines, fire hydrants, telephone and power lines, street lights, street sweeping, police patrol and street maintenance. The 100 unit condo complex has none of these public-funded amenities. If one asks the police to tow an abandoned car, they will tell you they cannot for it is on private property. Both the homes and the condos pay the same property taxes according to proposition thirteen. Appropriate legislation resolving this matter alone could solve the financial problems of most condominium and townhome associations.
Homeowner Associations working together provide tremendous strength and influence on a “State of California” level to enact legislation that will benefit all condominium homeowners. We will strive to enact legislation that will help standardize community living, define association responsibilities from homeowner’s responsibilities, and help professionalize community living. We need legislation in many other areas such as: building requirements, standards for preparing financial reports, year end audits, property taxes and reserve analysis.
ACCOUNTING AND FINANCIAL REPORTING
Financial planning and reporting are essential to the survival of any organization. CPAs are available to offer boards and managers consultation on financial matters, accounting functions, budget preparation and reserve analysis and tax preparation. The California Association will provide guidelines to Boards of Directors and Property Managers to standardize the accounting and financial reporting of community associations.
EDUCATION & TRAINING
The California Association provides education and training for Board Members, Homeowners and Management Companies. Seminars will be held periodically throughout the year to accommodate new board members on subjects of finance, conducting meetings, parliamentary procedure, preparing essential records, etc.
Why should each homeowner associations reinvent the wheel? It is common knowledge that the CC&Rs, Bylaws and other association documents are out of date. So why should each association hire an attorney to update these documents at high costs? Could not a committee of attorneys bring the best of all associations together, prepare one generic document on computers and then attorneys could tailor a new document for each association at a fraction of the cost?