The Community Connection - February 2023

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No r t h e a s t F l o r i d a C h a p t e r C o mmu n i t y A s s o c i a t i o n s I n s t i t u t e

IN THIS ISSUE: Rule Violations Data Security Mulch Management Company Shorelines

Depositions Pressure Washing Online Voting Maintenance Capital Reserves

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contact information 10950-60 San Jose Blvd., #182 Jacksonville, FL 32223 ced@neflcai.com

2023 board of directors President - Leslie Pragasam, CMCA, EBP Business Partner Angius & Terry

upcoming events March 23 - Developing Successful Working Relationships Between Boards, Managers and Vendors April 6 - A Night with the Jumbo Shrimp April 13 - Managing Your Day as a CAM

President-Elect - Zenzi Rogers Manager Lennar Treasurer - Bob Chamberlain Volunteer Leader Edgewater at Sunbeam Secretary - Kate McAdams, EBP Business Partner Performance Painting, Business Development Director - Pilar Willis Dixon, CIC, CIRMS Business Partner Brown & Brown Insurance Director/Past President- Jesse Martinez-Skinner, CMCA, AMS, Manager Associa CMC Jackonsville Director - Catie Marks Manager May Management Chapter Executive Director - Robin Miller NEFLCAI NEFLCAI provides education, networking, resources, and advocacy for Community Associations in Northeast Florida and the professionals who serve them.

May 11 - Benefits of Forming Committees for Your Communities June 23 - Lights, Camera, EXPO?

2023 committees Membership Pilar Willis Dixon - Board Liaison Alanda Williams - Chair Social Catie Marks - Board Liaison Amy Newhouse - Chair Programs Zenzi Rogers - Board Liaison Ashleigh Northrop - Chair EXPO Kate McAdams - Board Liaison Frank Prescuitti - Co-Chair Patty Truax-Stewart - Co-Chair COMMUNICATIONS Robin Miller - Executive Director/Editor Brooke Hassan - Co-Chair Tara Tallaksen - Co-Chair GALA Austin Rice - Co-Chair Joshua Donlon - Co-Chair

If you're interested in being on a committee for 2023, we'd love to have you.

Please reach out to our Executive Director Robin Miller to get connected. ced@neflcai.c om

letter from the president WRITTEN BY LESLIE PRAGASAM, CMCA, EBP ANGIUS & TERRY

Dear Members, It is my distinct honor and privilege to serve as your 2023 President of the NEFL CAI chapter. I’ve only been President for a short two months, but I know our Committee volunteers have been hard at work planning some great programs and events for this year.

Our Annual Meeting held January 12th at Maggiano’s was a full house! Chapter Awards were presented and the 2023 Board of Directors were announced and sworn in by 2021 President, Pilar Willis Dixon. If you missed it, The Deerwood Improvement Association won Community of the Year, Patti Brown won CAM of the Year, and Charlie Shepperd won Business Partner of the Year.

Our first program of 2023 occurred last Thursday, February 9 at Jacksonville Golf & Country Club.

Tiffany Csalovszki of Lennar gave a fantastic presentation on “Monthly Financials: What Do I Look For?” I certainly have a greater appreciation for CAMs and the Accounting Teams and the knowledge required in their day-to-day lives.

You don’t want to miss the March program, entitled “How to Be a Good Board Member.” Ashleigh Northrup with Sentry Management will be presenting what I know will be a wonderful event!

Our wonderful Social Committee has planned the first social event of the year for April 6th as the Jumbo Shrimp take on the Durham Bulls. Member Business Partners may sponsor this event for $600 (Nonmember BPs are $700). Check out our website for more information and to register!

Please enjoy our award-winning magazine and the informative articles provided by our esteemed Business Partners and created by our Communications Committee. I cannot wait to read each & every article.

Finally, the 2023 Expo will take place on June 23rd at the UNF University Center and the theme will be “Lights, Camera, Expo!” Exhibitors are encouraged to design their booth in the movie of their choice. This year, the schedule will be a little different with CAM and board member classes in the morning only with the exhibition hall open from 11-2. This is turning out to be a fantastic and fun event, as always!

As I close out my first Presidential Message of 2023, I want to underscore how proud I am to serve as your President. I am overjoyed by all of the new members I’ve met so far and for all of the hard work all of the committees are putting in to make 2023, the 50th Anniversary of CAI, the best yet for the NEFL CAI chapter! I look forward to seeing you all very soon!

All the best, Leslie Pragasam

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Welcome to our new members since December.

Deesa Armstrong, Manager Heather Beladi, Manager Isamary Brooks, Manager Tiffany Csalovszki, Manager Noelle Parker, Manager Bethany Ridikas, Manager Austin Edwards, Addresses of Distinction, National Member Alexandria Haslam, Adobe, Business Partner Jack Hook, Building Envelope, Business Partner Ashley Leslie, Anva, Business Partner Jacob Turner, Diamond Asphalt Rejuvenation, Business Partner Oscar Gutierrez, Eswin Dows, Management Company Kelly Cumming, Evergreen Lifestyle Management, Manager Charlene Darby, I & E Construction, Business Partner Bette Lyttle, Leland Management, Manager Mary Ann Moore, Pipe Restoration Solutions Inc., Business Partner Randolph Love III, Shield Wolf Strongholds, Business Partner Don Whitlock. Sun Charge, Business Partner Michael Romeo, The Plantation at Ponte Vedra Beach, Manager

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Written by: Hans C. Wahl, Esq. Owners of properties within Florida’s community associations are subject to and bound by that association’s governing documents, which include the declaration, bylaws, articles of incorporation, rules and regulations, and any architectural guidelines. An association’s rules and regulations also apply to tenants who occupy a unit or parcel. When residents violate the governing documents, community associations have certain remedies available to them under the Florida Condominium Act and the Homeowners Association Act. Specifically, Section 718.303, Florida Statutes (for condominiums) and Section 720.305, Florida Statutes (for HOAs) provide remedies for associations and the procedures that must be followed to enforce those remedies. This blog post provides an overview of the statutory remedies available to community associations, along with the statutory procedures that associations must follow to ensure they do not violate the Florida Statues while attempting to enforce their rules and regulations.

Community associations can bring legal action for damages and injunctive relief for failure of a resident to comply with the Florida Statutes and/or the association’s governing documents. Once a violation has occurred, associations may also levy fines against the owner and tenant. An owner can also be fined if his or her guests, tenants, or invitees are responsible for a violation. If violations continue over multiple days,

associations can levy a fine based on each day of the continuing violation with a single notice and opportunity for a hearing before a committee.

For condominium associations, fines may not exceed $100 per violation per day, or a maximum of $1,000 for continuing violations, and fines may not become a lien against the unit. For HOAs, fines may not exceed $100 per violation per day and fines cannot exceed $1,000 for continuing violations unless a higher total fine amount is specifically provided in the HOA’s governing documents. For HOA’s fines of less than $1,000 may not become a lien against the parcel.

As another available remedy, associations may suspend, for a reasonable period of time, an owner and/or tenant’s right to use the common element amenities due to violations of the association’s governing documents. This remedy does have its limits. The suspension must be reasonable considering the violation. For example, for minor violations maybe a two week or one month suspension is reasonable.

For more egregious or repeating violations, longer suspensions may be reasonable. For certain violations, it may be reasonable to leave the suspension in place until the violation is cured.

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parking spaces or elevators. A few examples of common element amenities where access can be suspended include the gym, the pool, tennis courts and the clubhouse.

Associations need to be aware of the statutory procedures that must be followed prior to issuing fines and/or suspensions. To illustrate, associations must first provide at least 14 days’ written notice of the violation to the owner and/or tenant. The association must also provide the owner and/or tenant with the opportunity for a hearing before a committee. The committee, often referred to as the covenant enforcement committee, must contain at least three members appointed by the board who are not board members nor persons residing in a board member’s household. The committee must be completely independent from the board. At the hearing with the owner / tenant, the committee must approve of the fine or suspension or else it cannot be imposed against the person. If an association cannot form a covenant enforcement committee due to lack of volunteers, then it cannot impose fines or suspensions.

If an owner is more than 90-days delinquent in paying any monetary obligation owed to an association, such as an assessment or fine, the association may suspend the use rights of that owner, or the tenant, until that monetary obligation is paid in full. A condo association may also suspend the voting rights of a unit owner due to the nonpayment of any monetary obligation over $1,000 that is owed to the association and that is more than 90-days past-due. HOAs can suspend the voting rights of an owner due to the nonpayment of any monetary obligation that is more than 90-days past-due regardless of the amount. An owner whose voting rights are suspended cannot be counted towards establishing a quorum either. The notice and hearing requirements, as previously mentioned, do not apply to suspensions imposed on owners who are more than 90days past-due on monetary obligations.However, such suspensions must be approved by the board at a properly noticed board meeting and, upon approval, the association must notify the owner of the suspension by either mail or hand delivery.

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Let's talk about Managing Risks Associated with Data Security, Cyber Space, Technology and the Internet of things: Can't Live with Evolving Technology and Can't Live Without It WRITTEN BY: JOEL W. MESKIN, ESQ., CIRMS, MLIS, CCAL, FELLOW, MANAGING DIRECTOR, MCGOWAN PROGRAM ADMINISTRATORS JOEL MESKIN (C) 2023

Introduction A few things that everyone can agree upon is that the Internet of Things (“IoT”), Cyber Liability, Data Breach, Cyber Crime and Technology are touching everyone's life, both positively and negatively. Most people agree that all their devices, systems including the required software and hardware are expanding, changing and growing faster than any of us can keep up with or understand. Most everyone communicates using smart phones and/or other smart devices. More and more, new homes are built as smart homes or existing homes are transitioned into smart homes. Many of us yearn for times gone by.

Community Associations are not immune to the intended and unintended consequences of this brave new world that has been changing more and more, and faster and faster. Community Association Boards, Community Association Managers and Business Partners acknowledge the changing world and many know this while many others come from the position that why fix something that they do not perceive as broken.

However, at the same time, a vast majority of the community association industry is ready to pursue the necessary elements of the requisite Risk Management of these new technologies. (see Wired, 2018 Survey of Cybersecurity in Community associations) Community Associations, whether condo, coop, Single Family HOA or other common interest development (hereafter referred collectively as “Association(s).”) are managed by boards elected by the unit owners. The key obligation of Board is to Protect, Preserve and Enhance their community association. To comply with their obligation, boards must put the interest of the association ahead of their own and those of the unit owner members.Their duty is to the “entity."

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The issues addressed here involve risk management, both insurance and non-insurance resources: (1) Proactive Non-Insurance Risk Management tools to eliminate or minimize consequential damage from a cyber event, a data breach event, on-line theft, phishing, social engineering, hacking, ransomware and extortion, amongst others; and, (2) what insurance products are available and what should the policy include to proactively minimize insurance claims and covered losses and perils.

The goal of this article is to convince community association Boards, CAMs and Business Partners to put the Risk Management and insurance for these exposures toward the top of the board’s agenda. In this Brave New World, these issues are different from prior board issues. In the past, boards had more breathing room for them to see how claims play out to determine their cost benefit level of risk. Boards, CAMs and Business Partners hear about, read about and experience potential cyber, data, technology and the IoT. As most of us know, it is far cheaper to address and fix issues sooner than later. Although the issue is not identical, the timing issue is. The board and unit owners of Champlain Towers South in Surfside Florida received an engineering report in 2018 clearly identifying the significant infra structure issues that were critical and needed to be addressed.

The unit owners voted not to pursue any of the necessary work (approximately $9 million) per unit.

Many of the board members at the time resigned due to the vote. Sometime approximately two years later, unit owners voted to pursue the changes which were now estimated at $16 million.Unfortunately, had they been proactive, and had they chosen not to “defer maintenance” in 2018, there may be 98 individuals still alive and a beautiful building overlooking the ocean standing. (I speculate that the fixes and improvements been completed, the unit values would have dwarfed the cost). Admonition:it is imperative that you have your insurance professional meet with your board to evaluate this issue for your association to help identify the issues and to explain the potential insurance solutions. In addition, you should have a similar meeting with your CAM(s) to discuss a strategy for non-insurance protected matters.

Associations hear about all the cyber, data, IoT and Technology issues every day but do not see them occurring in community associations. First, earlier this year there was a Ransomware attack in a highrise Boston association. I do not have permission to disclose that insured, but I bet you good money that they were happy to obtain the Cyber Liability/Data Breach coverage. Associations are living with a false sense of security. Hackers and cyber criminals no longer only look to large targets. Rather, they are looking at small and soft targets who may not result in a large hit, but are simple and quick hits.

At the end of the day, the issue is not “if” a hack or event will occur, but “when” it will occur.

When I speak to boards and association professionals on this topic, I am often asked what can we do? Although it is a bit tongue in cheek, I advise them to remove all technology in the management of the association.

The first thing you need to do is an audit of your Association’s use of any of the following, including what exposures board members and CAMs may have on their personal or business devices. For example, does your Association Board Members, Employees, CAMs or other business partners use any of the following in the management of the Association? Any positive answers to the following warrant cyber liability/data breach coverage.

FOBs, key cards, remote controls Building automation system Computers Virtual board meetings (Zoom, WebEx, Facebook) Email, texting, Facebook or other social media Management Software Laptops, smart phones, or other smart devices Website On line banking Wire transfer capability Access to the internet Maintain applicant or unit owner applications, ESA/ADA request, Elevators Security Cameras CYBER SPACE, CONT'D NEXT PAGE

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On line card payment capability Any documents/records that are save and stored after the requirement for maintaining them has expired.

Deal with your computer being invaded by a virus and compromising your entry key cards for your building, front gate, clubhouse, elevator and/or pool?

Admonition: it is important for board members to understand that there is no board member privilege.

Therefore, their personal e-mails are not protected from discovery in litigation. Do you want to have your personal devices and/or your business/work data requested in litigation? The only possible protection for this is to either eliminate all email between and amongst board members or to create an intranet type email where the BOD must log into the website BOD section and the email is shared and goes to all BOD members.

DO YOU KNOW WHO TO CALL IF THE ASSOCIATION INCURS ANY OF THE SCENARIOS ABOVE?

IS YOUR ASSOCIATION’S RISK MANAGEMENT PLAN PREPARED TO RESPOND TO THE FOLLOWING CLAIM SCENARIOS? Unit owner information being stolen by a hacker or disgruntled employee?

An order from a governmental agency to notify current and past unit owners and tenants for whom information has been kept, but is subject to a data breach, and pay any fines or penalties? [see Mass.Gen.aws 93H, Sec. 1]. All 50 states and the DC have Data Breach Laws] To pay costs for credit monitoring for unit owners, tenants employees and anyone else where the Association still store personally identifiable information?

A laptop or Thumb Drive being lost or misplaced with Unit owner information (personally identifiable information” on it?

A hacker encrypting your computer locking it down and demanding a ransom payable in Bitcoin to unlock the computer.

Do you know who to call if any of the scenarios listed above occur? Time is critical!

Do you have someone to call if the computer has been compromised? Time is critical !

Do you have access to education, webinars and proactive risk management services available for the BOD? Do you have someone to defend the Association against claims by governmental agencies, or civil lawsuits (at someone else’s expense)?

Tip: There is one coverage under the cyber liability/data breach policy that in and of itself is worth its weight in gold and a sufficient reason to purchase the coverage. The data breach response services materials include a number to call if any of the scenarios above occur. What is provided is a coach or claim coordinator to assist you with the claim. Most policies provides a booklet outlining the services approved and listing approved Computer Forensic Experts, Forensic Accountants, Attorneys and other principals to assist with various Claim issues within their expertise.

THE COST BENEFIT ANALYSIS OF THE STRATEGY TO MANAGE RISK OF CYBER EVENTS, DATA SECURITY AND CYBER CRIME Community association insurance professionals (“brokers”) have been proposing cyber liability and data breach coverage for many years. Under a Cost Benefit Analysis, this is no longer an optional coverage for the BOD fiduciaries. This should be part of every association’s insurance portfolio.

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Board members must understand, their primary obligation is to protect the association’s assets, tangible and intangible, and should heed the professional’s advice regarding the proposed insurance. Failure to obtain this coverage can result in draconian costs. Just Goggle Cyber Liability and Data Breach claim costs.

The “cost” to obtain a cyber liability/data breach response policy is relatively inexpensive and provides a great deal of both protection and access to extensive risk management information, data breach coaches, forensic computer experts, and training videos.

The first excuse from Boards and CAMs is “cost.” Cost is actually the main concern of the majority of Boards everywhere for all insurance. The typical policy is roughly between $500 and $2,500. The following two policies in Massachusetts are $809 for a $1 MM limit, $902 for a $250K limit, $2,139 for a $500K limit, and $2,669 for a $1MM limit. The key underwriting rating factors are: (a) location, (b) limit of liability requested (c) and the Association’s annual revenue (for the purpose of or underwriting, would be the total of all assessment and special assessments in the upcoming budget year, not capital or improvement or reserve funds). The second excuse is why do we need these coverages in the first place.Boards say: “we have not seen any claims for cyber liability or data breach in associations.” Boards say “associations are small fish, why would the hacker or cybercriminal spend his or her time on associations”? “Associations are not like Target, hospitals, law firms, insurance agencies, oil companies, large financial institutions.” What is happening is that the large targets are getting smart, significantly upgrading security measures and are doing significant training for all their employees.

Hackers and cybercriminals are lazy and go for the easy score.

The underwriting of these policies is not very rigorous.

Sometimes the key is learning the basic sections of the policy and determine what is covered. Most BODs understand that they are insured for any type of risk, injury or damage. However, the question is, are they

self-insured or insured by an insurance policy. If it is the former, the insured will have to pay any attorney fees, settlements or judgments out of its own assets. In most states, fines and penalties are not covered.

WHAT INSURANCE AND RESPONSE COVERAGE DOES THE ASSOCIATION NEED? In the normal course, the insurance coverage purchased by Associations includes two categories of benefits, “defense” of claims, governmental proceedings and civil lawsuits, and “indemnity” for settlements and judgments that the insured becomes liable. In addition, there is generally no coverage for fees, penalties ordered by regulatory entities or remedial measures. However, fines, penalties and remedial measures are covered to one degree or another in the cyber liability/Data Breach Response Services policies.

CONCLUSION The insurers that provide this coverage has videos, articles and trainings, generally at no additionaol cost. This does not need to be an “all or nothing” strategy. Simple things such as putting limitations on websites, requiring dual authorization to most IoT devices, and be a minimalist with respect to what you maintain.

In addition, insurance should be obtained. On the next page is a chart of Insurance Solutions for various risks that Associations may in fact experience and the various insurance policies that may respond. The challenge is that contrary to many other types of policies, the insurers have not developed standard terminology, or standard coverages. In addition, not all policies providing cyber liability/data breach response services are not bundled in the same way with the same coverage.

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Insurance Solutions for The Internet of Things - Technology, Cyber Liability, and Data Breach Joel W. Meskin © 2022

*If the Association D&O or GL policy is silent regarding alleged cyber liability wrongful acts or occurrences, there may be coverage, primarily a defense obligation. * Some Cyber Liability/Data Breach response are including Cyber Crime **Some court cases have found coverage available under the computer fraud portion of the Fidelity/Crime Policy. *** The Fidelity (Employee Theft)/Crime policy must specifically include Social Engineering/False Pretense Coverage **** The Fidelity/Crime policy must include Wire Transfer Fraud aka Funds Transfer Fraud

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MULCH WRITTEN BY: DAVID ROBINSON, FIRST COAST MULCH

Landscaping mulch Mulch is an integral component of any Florida-Friendly landscape. Not only does it provide an aesthetically pleasing enhancement to common areas, but it also delivers several advantages to the landscape. It can hide problem areas that may be difficult to irrigate or otherwise maintain. It is also effective in controlling weeds, aiding in soil moisture retention, regulating soil temperature, improving soil fertility, and inhibiting erosion. As mulch decomposes, it adds organic matter to the soil, which may aid in reducing the need to fertilize.

There are many types of mulch, which include: Pine bark Red, gold, & brown colored wood mulch Playground chips How to mulch – Apply at a depth of 2-3” Replenish mulch as needed to maintain a 2-3” depth Avoid “volcano mulching” where mulch is piled against the tree trunk Leave a 12-18” distance from the base of trees Mulch 1-2” from shrubs

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Playground chips Not all mulches are created equally. Mulches bearing the IPEMA label are certified as being safe for children. The IPEMA (International Play Equipment Manufacturer’s Association) sets the standards regarding not only play equipment but also the mulch in which children play on. This ensures the mulch meets certain requirements regarding mulch size, purity, & consistency.

The mulch must be manufactured following a specific process to ensure the chips are uniform in size and without splintered ends. This process is inspected, which allows the chip manufacturer to become certified & display the IPEMA seal. Also, IPEMA mulch is free of foreign objects like metal, stones, or large wooden pieces that could injure a child if they fall on the playground. IPEMA does not allow mulch made from treated wood to be used in playgrounds, so you know the mulch is free of hazardous chemicals.

Finally, the IPEMA certification ensures the mulch meets the required fall height testing, making the mulch safe for children to play and, at times, fall on.

According to the IPEMA website, critical fall height is defined as “a measure of the impact attenuation performance of a playground surface or surface or surfacing materials, defined at the highest theoretical drop height from which a surface meets the impact attenuation performance criterion specified by this Specification.”

While it is important to preserve an aesthetically pleasing landscape for your community, it is more critical to ensure the mulch used within your playgrounds are safe for your children and meet the IPEMA standards.

WRITTEN BY: TREND NELSON, AQUATIC SPECIALIST AT SOLITUDE LAKE MANAGEMENT

Imagine driving down a new street and noticing the most beautiful house you’ve ever seen. Its bright paint, glistening windows, and clean, welcoming porch show that it’s well cared for. But you find yourself distracted by something – a neglected lawn. It’s overrun with weeds, debris, and uprooted trees. It has dusty bare spots and deep channels where water flows anytime it rains. How can the owners take pride in their home when the yard looks like this?

This is a similar problem aquatic experts see with lakes and ponds. No matter how much a community association prioritizes water quality, it will never reach its full potential without a healthy shoreline. And just as a neglected lawn can lead to complaints from neighbors, cause home values to plummet, and even citations by the city, so can a deteriorated shoreline.

Most shoreline damage doesn’t occur overnight, it slowly develops over the course of several years. If you assumed responsibility of a waterbody when it was in good condition, it can be easy to overlook the signs of deterioration – and forget that it's much more than an aesthetic problem. Shorelines with deep grooves, cracks, exposed pipes, and steep, jagged peninsulas can lead to constant gripes from homeowners and cause serious safety issues for residents, guests, employees, landscapers, and other vendors working around the property. If someone falls or is injured as a result of a neglected shoreline, the association could be held liable.

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Waterbodies with degraded shorelines also tend to experience flooding problems. Most of the ponds we see in HOAs, POAs, CDDs, and urban areas are man-made to collect stormwater when it rains. Eroded sediment can fill them with muck, reducing depth and volume. Dangerous flooding is more likely to occur if the stormwater facility cannot function properly. In addition to the liabilities this can cause, flooding expedites the rate of erosion and may cause waterfront properties – and their estimated value – to “shrink” over time.

In addition to the obvious signs of erosion, property managers may notice that maintaining healthy water quality is becoming more challenging. Lakes and ponds filled with muck are more likely to have dissolved oxygen (DO) deficiencies and elevated nutrient levels. These imbalances often manifest as nuisance aquatic weeds and toxic algae blooms, fish kills, bad odors, and cloudiness–resulting in an unsightly lake and an influx of complaints from residents.

These problems aren’t just surface level, they can have disastrous, lasting consequences for residential communities. According to a 35-year study of 2,000 lake homes, Bemidji State University in Minnesota found that a 3 ft decrease in lake clarity caused a $700 decrease in the sale price per foot of shoreline. For example, this calculates to a $28,000 decline in the value of a 40 ft waterfront lot. We know the effects of erosion can be stressful, but when you fully understand how it occurs, you can implement strategies that will help preserve property values and make your job easier over time.

Poor shoreline management can also accelerate the timeline for more substantial maintenance services like dredging, which is one of the largest expenses a community may ever face. Though all waterbodies will need to be reset at some point by digging out all accumulated sediment,

communities usually have 20-30 years to plan and budget for a major dredging project. In cases of severe erosion, this could drop to less than 10 years, leaving community leaders in a very difficult position – divert funds from other important maintenance projects or increase dues and suffer the blowback?

Once erosion occurs, it can be difficult to halt future damage. When partnering with a professional, they will work with you to evaluate the level of deterioration and muck development, and design a restoration plan that’s customized to the unique qualities of your waterbody. Often, these involve the use of tools that allow aquatic experts to bioengineer a new shoreline that is incredibly stable and aesthetically pleasing. They may recommend pairing these efforts with mechanical hydro-raking to scoop out bottom muck in target areas, which will then be shaped and sodded over to reestablish several feet of land back to the property.

Shoreline erosion is a slow burn; it’s easy to ignore, but it’s also easy to intervene.

Professionals recommend integrating several proactive solutions into the ongoing maintenance practices on your property: Cultivate a beneficial buffer of tall native plants around the perimeter of your waterbody to slow stormwater runoff and help hold the soil in place.

Monitor wildlife populations – species like muskrats and invasive armored catfish (found primarily in Florida) are known to burrow and destablize banks.

Introduce docks or special paths for visitors to safely fish, kayak, or enjoy the view without trampling vulnerable areas.

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Partner with a professional to regularly survey the area for invasive weeds that can quickly take over sensitive shorelines.

Properly dispose of yard waste, pet droppings, trash, and other debris so it doesn’t decay and contribute to muck build up in your waterbody.

Reduce the use of lawn and garden fertilizers, which fuel the growth of aquatic weeds and algae.

Break down muck by introducing nutrient remediation products, biological bacteria, and aerators that increase DO, which is essential to the digestion process.

While erosion is a natural part of pond ownership, property managers have a lot of control over how quickly it occurs. Responsible management practices not only help enhance aesthetics and recreational opportunities, but also safeguard the value and reputation of a community.

Become the most desirable community in your region with beautiful, healthy lakes and ponds. With proactive shoreline solutions in place, you can be at ease knowing your water, residents, and assets are protected from future erosion damage.

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WRITTEN BY: BROOKE HASSAN, VESTA PROPERTY SERVICES

Managing a successful homeowners' association is no easy task. There are many responsibilities that come along with being an association member. From dealing with finances to finding vendors, it is safe to say handling a self-managed community can be quite stressful and time consuming.

The hiring of an HOA management company can help relieve much of the stress associated with managing a community. In this article, we will discuss the major the benefits of using a management company and why they should be utilized.

Increased Resident Support As an HOA member, duties include answering residents’ questions and providing residents with support. There are bound to be times when board members won’t have all the answers. However, hiring a management company alleviates that issue. Not only do they have more expertise on all things regarding association management, but their hiring also allows for board members to gain more time back for themselves.

Vendor Oversight A significant benefit of HOA management is their professional expertise in vendor management. Without a management company, it is far easier for the board to become overwhelmed when it comes to managing vendors. Management companies will bring years of experience of handling vendors and possess the software to help the process move along smoothly. By only using professional and dependable vendors, management companies also allow the community to look more appealing overall.

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WRITTEN BY: CASTLE GROUP

Community living offers a great amount of benefits to all residents within. Nonetheless, sometimes residents miss out on a lot of these great opportunities for mere lack of involvement. As a board member, you want to carry out your job and represent the needs of all your residents, but how can this be achieved, when most of them are (sometimes through no fault of their own) uninvolved?

The impact of this can go beyond just low participation. Votes to approve budgets, document amendments or updating memberships on important capital projects can all be impacted. In our ever-changing, modernized world, many communities are looking to the internet to help grow member participation through electronic voting.

Many strategies have been tried (ranging from incentives to stricter regulations) to boost this resident involvement, yet many of these just lead to animosity or generate control groups. With this in mind, what could be the best way to simplify engagement for those who may simply “not have enough time to get involved”?

Mind you, electronic voting is not a new concept by any means. Whether you realize it or not, we’ve all used electronic voting when we partake on reality shows like The Voice or America’s Got Talent. Of course, the stakes in each of these voting scenarios are different, but it just goes to show that we are more familiar with this concept than we perhaps realize.

Electronic Voting could be the answer to your troubles! If your community is like (the vast majority) of communities around the country, it will often struggle to even get a quorum for annual meetings

The Deterrents (And Their Respective Solutions) The most common argument used against ELECTRONIC VOTING, CONT'D PAGE 28

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Financial Support Keeping track of HOA financials is not typically a job for one person, let alone someone with little experience dealing with finances. A major benefit of hiring an HOA management company is financial assistance. Most companies will have a Certified Public Accountant (CPA) or accounting specialist dedicated to their community to help take some of the financial weight off the board members' shoulders.

Electronic Voting is of course, antiquated laws. A lot of communities have rules and regulations that require in person voting (because at the time of foundation, these were the norms state and nationwide). However, in the past few years a number of states have amended HOA and Condo laws to allow electronic voting, making it easier than ever to adopt the new technology and alleviate the woes. Today residents in over 20 states can use electronic voting for HOA or condominium matters.

Legal Aid There are many laws in place that are important for board members need to be aware of. Through having an HOA management company, communities gain a significant amount of legal expertise that they otherwise may not have. If legal problems arise, the company’s legal team will be there to help.

The benefits of hiring an HOA management company go on and on. To learn more about Vesta Property Services and our commitment to our customers, check out our brochure here: vestaps.com/brochure.

Security and transparency are also an issue for implementing electronic voting. These concerns particularly grew in the early 2000s with the famous Diebold touch screen voting machines during the Presidential election. Needless to say, though, nearly all electronic voting vendors have processes in place to ensure the security and integrity of the voting process as they have learned from these past situations.

As with any change, residents may be a little hesitant to adopt electronic voting due to lack of understanding of the process or technology. Before implementing such a process, it would go a long way to host an educational session to explain the process to residents.

Even though there is no absolute solution to reduced engagement, electronic voting makes matters so simple, that the busiest of residents can partake in the decision-making aspects of their community, all within conditions that favor whatever situation they may be in. Electronic voting holds promise, especially in larger communities, to bring down costs and facilitate member engagement.

oversaw approximately $25.8 billion in reserve funds for repairs, replacements, and enhancements to common property. This touched on everything from replacing roofs and fixing swimming pools and elevators, to resurfacing streets, upgrading to meet environmental standards, and making changes to help communities become more energy efficient.1

Unexpected and unfunded maintenance Reserve funds aren’t always enough to handle problems that arise, and maintenance surprises— even for the best prepared—are common. A 2020 survey by the Foundation for Community Association Research found that four out of five respondents faced unanticipated infrastructure needs in the previous three years.2

WRITTEN BY: TRUIST

Aging buildings and systems along with rising maintenance costs to support them present a sizable challenge for property managers and associations. One quarter of Americans are part of a community association, and collectively, these properties are worth $9.2 trillion.1 Preserving that immense value and protecting it from loss hinges on carefully planned maintenance and upkeep.

Association leaders recognize the critical need to set aside money for maintenance and repair to protect their member’s investments. In 2020, they oversaw approximately $25.8 billion in reserve funds for repairs, replacements, and enhancements to common property. This touched on everything from replacing roofs and fixing swimming pools and elevators, to resurfacing streets, upgrading to meet environmental standards, and making changes to help communities become more energy efficient.1 Association leaders recognize the critical need to set aside money for maintenance and repair to protect their member’s investments. In 2020, they

Thirty-six percent of survey respondents reported problems with plumbing or electrical systems, and nearly a third said they’d experienced issues with one of the following, none of which had been uncovered during the association’s most recent reserve study:2 Roofs or roof sheathings Building envelopes or structures Recreational facilities Too often, unexpected structural problems and system failures lead to short-term superficial or temporary repairs that don’t adequately address the need for restoration or replacement. Then, the damage grows, along the safety risks and the potential costs for remediation.2 But while 80% of respondents said adequate maintenance reserves were a critical need, only half thought their association had enough funds to handle an unanticipated repair or replacement of a major system or building component.2

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Assessing conditions and funding reserves Four key steps can help your association board or property management company get ahead of unexpected problems and underfunded reserves to keep your association in good shape physically and financially.

Step 1 – Start with a healthy board. Boards have a responsibility to decide what’s necessary and clearly communicate maintenance requirements to residents. A strong, well-led board can boost your association’s chances of success in assessing property conditions and financing as well as in implementing remediation plans. Community managers need to recruit volunteers to sit on the association’s board who have clout in the community, are willing to face pushback that often accompanies unpopular decisions and are able to work with residents who are delinquent in paying assessments.

Step 2 – Conduct a full reserve study to inform the community’s reserve financial analysis and funding plan. Make sure the reserve analysis is up to date and use less extensive periodic examinations to revise remaining useful life estimates and replacement costs for major components.

Step 3 – Set priorities with the association board or appropriate committee. Structural safety is an absolute necessity, but issues that could lead to water damage, electrical problems, pest infestation, or other problems can reduce property value and impact residents’ quality of life. Things like inoperable lighting systems, peeling paint, and deteriorating fences may not seem as urgent, but they can affect safety as well as marketability.

Step 4 – Engage leaders and prepare to communicate with boards and homeowners.

Homeowners and association governing boards sometimes resist efforts to resolve maintenance needs, avoiding the financial cost and the community confrontations that can emerge from expensive projects.

From assessment to outcome Resolving long-neglected maintenance issues often requires significant assessments to ensure repairs are made safely and completely. Working with a lender that understands the unique borrowing needs of associations can be crucial in obtaining the necessary funds for repairs. Funding preventative maintenance reduces the risk of unexpected failures that require expensive repairs that can disrupt the community or even endanger residents.

In some cases, more assessments may not be the answer. Many older buildings lack a reserve to handle even basic repairs and don’t have residents willing to pay for major repairs. Property managers and association boards could be called upon to guide the community through the choice between repairs or replacement.

For communities that choose to repair or replace, hiring independent construction experts, engineers, and architects can offer a useful perspective on how to best address the problem. And though it may be painful, dealing with unexpected maintenance concerns can help educate community homeowners on the importance of preventative maintenance.

After issues arising from aging infrastructure, communities frequently increase reserves, and many hire a reserve specialist to help prevent future problems.2 Whatever your community’s age and maintenance needs, formulating an effective plan is essential to fulfilling the association’s legal obligations, fiduciary responsibilities, and lender requirements while enabling financial planning for a sustainable future.

Sources 1 U.S. National and State Statistical Review, Community Association Fact Book 2020, Foundation for Community Association Research, 2020.

2 Breaking Point: Examining Aging Infrastructure in Community Associations, Foundation for Community Association Research, 2020.

Truist Bank, Member FDIC. © 2023 Truist Financial Corporation.

Truist, the Truist logo and Truist Purple are service marks of Truist Financial Corporation.

WRITTEN BY: RESERVE ADVISORS

As we all know by now, inflation has moved into our lives and isn’t estimated to move out for about a year or more. While some industries are already seeing some relief, this is not and will not be the case for many other industries for the foreseeable future, including those that community associations rely on for capital projects.

Because the primary purpose of reserve studies is to provide associations with a comprehensive short and longterm capital plan, we work diligently to account for these economic changes in our studies and reports.

Generally taking 3% inflation into account in our reports, we are now incorporating higher rates in the near term when/as applicable. There are three primary ways in which inflation is affecting capital planning efforts within associations, including the cost of goods, the cost of materials, and the cost of labor.

Specifically pertaining to goods and materials, we have found that materials related to waterproofing are most commonly increasing in price. This can include flat roofing, shingle roofing, traffic coatings in garages, and more. Additionally, due to increases in oil costs, petroleum-based products like asphalt are also rising in cost.

Along with rising material costs comes rising labor costs. We have compiled some data detailing annualized inflation rates of various materials and labor costs as seen below: INFLATION AND RESERVES, CONT'D PAGE 33

INFLATION AND RESERVES, CONT'D FROM PAGE 32

PPI Rates Source: U.S. Bureau of Labor Statistics, AGC The Construction Association So, what are the implications of the current economic environment on capital planning for associations? First and foremost, the current climate has lent itself to capital planning issues within community associations. Because of this financial turbulence, an association’s existing reserve fund or reserve funding plan may be prematurely outdated and in need of updates.

This is especially true in cases where there are projects due soon or projects already in progress that are capital-intensive.

Understandably, this information may seem intimidating. However, with years of experience and having conducted many reserve studies during previous periods of inflation and financial uncertainty, Reserve Advisors is able to take current inflationary circumstances into account when creating our studies and capital plans.

First and foremost, we take into account the fact that the market will eventually correct itself, as it historically has. When it comes to short-term adjustments, particularly current-year expenditures, it’s important to bring in an expert on each project to guide you through the scope

of the projects, the need for the project, and related costs. These can be incorporated into the reserve study, even after the report has been received. Because we are always available to make changes to the capital plan we’ve laid out based on current conditions, the report is not truly “finalized” and can be adjusted to take inflation into account for up to six months after the date of report publication.

Currently, when we conduct reserve studies, we are typically increasing near-term project costs extending through 2023. To account for supply chain issues, inflation, and pandemic-related pricing, we rely on real-world costs which our engineers collect as part of their information gathering at a community, along with published sources including construction cost estimating guides. Because these numbers may vary by market, we also rely on a proprietary database of recent projects in each market. When we weigh these sources of information, we find that client vendor contracts are priority, followed by the database of recent projects by market and published sources of information.

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One important thing to examine during times of economic uncertainty is the prioritization of all upcoming projects. If an association is unable to complete all capital projects as planned, priority should be placed on projects that, if deferred, would cause additional damage to the component, later leading to higher project costs to remediate excess damage. For example, if deferring a roof replacement would increase water infiltration, replacement costs down the road would increase due to continued deterioration of the roof and any other component affected by this water infiltration.

Next, associations can weigh the importance of discretionary projects, and decide to defer noncritical projects until inflation subsides or evens out. Again, your reserve study consultant will always be available to your board to help inform and solidify the updated trajectory of capital project timelines.

Of course, periods of inflation require associations to re-evaluate their current funding plans, specifically near-term. With the guidance of a reserve study consultant, two questions associations will work through are: 1. If we are facing significant increases in contributions, can the increases be phased in over a number of years?

2. Could a loan scenario be used to minimize reserve contributions near-term?

These questions allow associations to consider not only their current and future financial situation, but to consider the financial situation of their residents. While it’s important for boards to consider how inflation is affecting their community as a whole, it’s also important to consider the financial status of those who make the community what it is.

If an association is running low on funds and project timelines are being disrupted, it’s inevitable that residents may be individually suffering financially as well. If you can expand

the number of phases of increased reserve contributions, residents will not experience as dramatic a financial burden. Additionally, minimizing contributions near-term through a loan can help associations complete crucial projects on time, while also giving residents time to recoup from any financial strain they are experiencing before having to comply with higher dues.

If your association has a recent reserve study in hand, there are some best practices we recommend to weather this storm. If your latest reserve study is only a year or two old, a reserve study update without a site visit is a costeffective option to consider if your association needs insight into the following: 1. Have capital-intensive projects been recently completed?

2. Can previously planned on projects be safely deferred until the market evens out?

We know that making these decisions on your own can be stressful, but Reserve Advisors is here to help you navigate the unknown with expert experience and advice. If you have any questions regarding inflation within your community or would like to inquire about tweaking your current study, please do not hesitate to reach out.

LET'S HAVE A TALK ABOUT DEPOSITIONS

Whether you are a property manager, board member, or homeowner, the likelihood of being involved in litigation is ever-increasing. The COVID19 pandemic has brought a wave of litigation throughout the country, with homeowners’ association related issues being a hotbed. One inherent aspect of that litigation involves the litigants taking depositions.

A deposition serves as a tool for the parties of a lawsuit to take the sworn statements of persons with information relevant to the suit. These serve as the basis of evidence and fact for any given case.

For example, in a construction defect case by the Association against a developer, board members can expect to be deposed by the developer’s counsel, along with any other defendant parties to the lawsuit. However, for as much as they are useful to litigation, they can be equally stressful for deponents. To help reduce the stress and anxiety associated with depositions, allow this to serve as a guide for what to expect.

It's not like the movies (typically)

WRITTEN BY:KAYLIN MARTINELLI, BECKER

contentious, full of surprises, and emotionally charged. While that can certainly happen, it is an exception rather than the rule. Parties attending the deposition are typically Plaintiff’s attorneys, Defendant’s attorneys, and the court reporter.

Plaintiff’s counsel and Defendant’s counsel usually have exchanged all of the information they have, which means surprises are unlikely. Moreover, the objections in depositions are limited to “form” objections as opposed to speaking objections. That means if counsel has an objection to a question being asked, they are supposed to simply state that they have a form objection for the record. So, you are unlikely to hear words like “hearsay” or “speculative” during a deposition objection.

Yes, you have to answer the question The scope of depositions can be incredibly broad, sometimes eliciting information that seems borderline irrelevant. Unfortunately, if you are asked a question during a deposition, you are obligated to answer, unless counsel instructs you not to. Remember, you are under oath! Think carefully about your answer

As portrayed in movies, depositions appear highly DEPOSITION, CONT'D NEXT PAGE 36

DEPOSITION, CONT'D FROM PAGE 36

and take time to formulate a response, but you must be truthful. I often ask my clients to take ten seconds before they answer a question. That not only gives me time to object if necessary, but also forces the deponent to slow down and think before answering.

Show up to the deposition All too often, folks fail to show up for their depositions. Perhaps out of anxiety or a belief that they do not know enough about the subject matter to offer any testimony. Regardless of the reason, failure to show up for a deposition could result in sanctions as severe as being held in contempt of court.

Right to counsel You are entitled to counsel. Even if you are not a party to the lawsuit, you are entitled to have your own counsel present. Depending on the subject matter of your testimony, obtaining counsel may very well be worth the expense.

LET'S TALK ABOUT PRESSURE WASHING! pressure washing. Pressure washing uses a highpressure water spray to remove surface impurities.

After an accident or natural disaster, for example, power washing may be ideal for areas that have been contaminated by high amounts of viscous fluids, such as grease. It is also beneficial for exteriors that are subject to salt deposits from the sea air. But, in most cases, standard pressure washing is sufficient.

WRITTEN BY: KATE MCADAMS, PERFORMANCE PAINTING

Residents might fall in love with a community at first, but what keeps them around when the initial thrill has worn off? One big contributor is overlooked by HOAs all too often: The level of care and attention taken in the upkeep of buildings, pathways, and amenities for the money paid.

Cleanliness has always been recognized as a measure of the pride taken in a building. In the sanitationfocused world, we find ourselves in today, it’s even more important. Residents see it as a key factor that tells them more about just how safe a property is.

Pressure washing is one way to provide superior cleaning and aesthetics for virtually all surfaces in your community. Plus, compared to many other options at your disposal, it is quick, safe, and inexpensive.

What is Pressure Washing?

From homeowners to facilities managers, just about everyone has some familiarity with the concepts of

Pressure washing may be the only safe and effective option for cleaning some areas of your community. A large surface can be cleaned very quickly with virtually no likelihood of surface damage as a result.

The Benefits of Pressure Washing for HOA-Led Communities As an HOA leader, you want to be sure you’re getting an excellent return on investment for residents’ fees.

Pressure washing meets the high standards of a modern community. It takes only a short time and will contribute to savings in other areas of your maintenance strategy.

Some of the key benefits include: 1. Higher Safety for Residents and Guests Safety is crucial for maintaining your community’s sterling reputation. Pressure washing helps you control environmental hazards that can lead to air pollution or aggravate certain conditions. Mold and mildew are no match for pressure washing. Dirt, dust, and loose paint can also be easily removed. Pressure washing is an important first step in any HOA exterior painting project.

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2. Greater Longevity for Surfaces Pressure washing can be a good step when you’re planning a larger long-term rust remediation or another project. With the capacity to rejuvenate your surfaces, you will face fewer issues down the road.

This can help protect your facility from the risk of having to fully repair or replace particular surfaces or equipment that operates in the area to be cleaned.

3. Better Coating Performance Even the best high-performance coating has certain environmental tolerances. After new coatings are cured, they become much more resilient, but they can still absorb damage over time. This makes pressure cleaning essential, especially where moist conditions threaten to accelerate oxidization. Cleaning removes surface debris and helps coatings retain their vital qualities.

4. Easier Time Communicating Your Value Every year, your HOA is sure to see some turnover from residents who move on. Although some of these moves are unavoidable, some are driven by dissatisfaction. While pressure washing won’t keep people happy on its own, it is an important piece in a multi-prong, resident-focused maintenance strategy.

Your team will have one more talking point when discussing residents’ needs.

5. Superior Aesthetics Aesthetics may not be the top concern on your list, but it should still be on there! You never know when you might get a visit from a senior executive, an important business partner, or even an inspector from your town, city, or county. The cleaner your community, the better all-important first impressions will be. New residents will love having the chance to tour your clean, modern-looking amenities.

6. Reduced Overall Maintenance Costs Regular pressure washing can protect your buildings against certain hazards that might cost thousands of dollars if they’re left unchecked. Mold is a key example: Some forms of it are so dangerous that you

might need to shut down affected buildings, but a regular pressure wash helps keep it at bay. You have greater control over the timing and cost of large-scale renovations when the basics are in place!

When planning for pressure washing, choose a team familiar with HOA coating services. Discuss your goals so your team can help you reach them while minimizing disruption to residents and fulltime staff. Your efforts will pay off in appearance and building longevity.