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central florida times

WWW.CAICF.ORG | FIRST QUARTER 2015


a message from the president First Quarter 2015

contact information P.O. Box 941125 Maitland, FL 32794 www.caicf.org exdir@caicf.org 407-850-0106

Life is for participating not spectating. The theme of my message for this newsletter edition is your involvement and participation. The key to a rewarding experience in any organization is participation. In order to get the most out of your CAI membership, you need to be involved. It’s just that simple. Using our resources, educational opportunities and really fun networking events creates even more value in your membership. What made you join CAI to begin with? Are you getting everything you can out of CAI? How can we help you achieve your goals within CAI?

board of directors Alan Garfinkel, Esq., President Suzan Kearns, CMCA, AMS, PCAM, President-Elect John Dougherty, Vice President Gina Holbrook, Secretary Bill Jackson, CPA, Treasurer Lou Biron Paul Melville

Your Board of Directors made a commitment to ensure you have every opportunity to meet colleagues, volunteer board members and business partners; and we want you to have fun doing it. We are working hard to create a culture that supports your involvement, world class education and best practices for the communities we serve. CAI participation/involvement takes many forms. Ideally our members utilize all of the resources made available with your membership. If you are wondering what the fastest and most effective way to get involved is, join one of our committees. All of our committees welcome new members (some are full but sub-committees are still available). You can chose from the following committees: CA Day, Communications, Education, Golf Tournament, Membership, Meet the Managers, Social, FLA, and our end of the year Gala (banquet and awards). There is also great value in our CAI networking opportunities. I want to personally thank everyone that came out to our first Meet the New Members networking event. It was a great success! The board and I look forward to many more networking events and getting to know even more amazing people. I believe the best marketing is good ol’ face to face meetings. In my personal experience, attending CAI networking events provides the very best opportunity to make new friends and expand your horizons.

Jamie Rodriguez

Involvement/participation is also letting your voice be heard. Many of the programs and services provided by CAI start as a request or comment from a member. You drive this organization. Your opinion and participation matters and is of great value to me. We welcome all comments, questions, concerns and of course high fives.

Diane Rullo, PhD

Thank you again for electing me your President.

Matt Vice

Warmest Personal Regards,

Brian Peck

Alan Garfinkel, Esq. 2015 Chapter President 2


central florida chapter update upcoming luncheons All luncheons are held from 11am-1:30pm at the Crowne Plaza in Downtown Orlando. • • •

March 5th - Prevention & Preservation of Association Property April 2nd - Cash Flow Management for Associations May 7th - Social Media (CEU) & Community Broadband

• • • •

June 4th – Insurance Panel August 6th – Accounting (CEU) October 1st - Legal Panel November 5th – Total Control Access

upcoming events More details regarding upcoming events will be posted to caicf.org. Check back regularly for the most up-to-date information! • • • • • •

March 26th - 2015 CA Day Tradeshow (see pages 10-13 for more details) April - Business Partner Roundtable April - Board Member Certification Course May - Board Member Certification Course June - Board Member Certification Course July 9th - Meet the Managers

• • • • • • •

July 16th-17th - M204 Class July 16th - Summer Social September - Business Partners Roundtable Event September - Board Member Certification Course October 22-23rd - M100 Class October 24th - 2015 Golf Tournament December - Annual Meeting & Holiday Gala

interested in getting more involved? join a caicf committee! If you are interested in getting more involved in the chapter, joining a committee is a great thing to consider. Below are the different committees that we currently have active. Please feel free to contact any of the following committees: CA Day/Tradeshow Committee Matt Vice matt@vicepainting.com Christy Borden cborden@lelandmanagement.com Communications Committee Bianca Duffield bsd@associationfirm.com Education Committee Gary van der Laan gvanderlaan@lelandmanagement.com Phillip Masi pmasi@bborlando.com

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Golf Committee Scott Pollock spollock@lelandmanagement.com Brian Peck BPeck@hoa-capital.com Legislative Committee Lou Biron lbiron@sihle.com

Meet the Managers Committee Suzan Kearns suzan.kearns@gmail.com

Membership Committee Paul Melville pmelville@truepropertygroup.com Mary Ann Sheriff msheriff@oldfnb.com Tom Harman tharman@evergladessecurity.com

Sunshine Foundation Committee Jamie Rodriguez rogjamie1@gmail.com

Social/Gala Committee Alan Garfinkel, Esq. agarfinkel@likeyourlawyer.com Gina Holbrook Gina.holbrook@premiermgmtcfl.com


avoiding the courthouse Using ADR and Common Sense to Resolve Community Association Disputes SUBMITTED BY MARGEY MEYER, CMCA, PCAM OF CADREXPERTS, LLC

a

homeowner paints her mailbox pink to support breast cancer awareness. Parents construct a playhouse in their backyard to help their disabled child. A veteran installs an American flag in his front yard. An environmentally and costconscious owner installs solar panels on her roof. A renter nails a small religious object on the front door frame of her condominium unit. In each situation detailed above, the board of directors sued the owner for violating the governing documents of the community association in which the home was located. Was that drastic action necessary or were there alternatives the board could have pursued that would have resulted in a more neighborly, less adversarial, more mutually-beneficial solution? There are three essential steps to resolving issues successfully and amicably before they end up in court (and/or on the evening news or the lead story of news feeds): 1.

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Work with developers to create association-friendly governing documents that empower the board to be flexible in addressing homeowners’ unique issues.

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2.

Establish a relationship among owners, board members and the manager, if applicable, that engenders mutual trust, respect and open communications.

3.

Recognize potential disputes before they become adversarial or confrontational and utilize dispute resolution techniques to work out a solution.

Let’s start with step #1, where it all begins. Without flexible, enlightened governing documents, the board is hamstrung, limited to those words on paper that specifically instruct them what to do and when to do it, without considering special circumstances. Examples of 20th century language that hinder the board from responding with compassion, common sense and pragmatism are:

• • •

Requiring annual and board meetings to be held at a specific date/day and time Requiring monthly, evening board meetings Requiring a high percentage of owners to attend in person or by proxy to achieve a quorum for an annual or special meeting


• •

• • • • • • •

Describing a confusing and difficult-to-implement election process Placing a cap on assessments, and requiring a vote by the owners to approve the annual budget, increase assessments or impose special assessments Failing to clearly delineate owner and association maintenance responsibilities Failing to specify developer responsibilities for assessments and subsidies Establishing a board of more than seven members Creating multiple sub-associations instead of “villages” or other entities that don’t require separate boards of directors Not mandating ADR (Alternative Dispute Resolution) prior to filing suit Not clearly detailing in simple English the developer’s limited warranty to the association and to each owner Limiting the association’s purposes to enhancing the “health, safety and welfare” of the members without focusing on the three main functions of the association: (1) protecting, maintaining and enhancing the physical condition and property values of the community, (2) operating the association as a sound, nonprofit business enterprise and (3) building a community of neighbors

Conversely, developers could minimize the potential for disputes, reduce risk and ensure the success of the community association by following these 21st century best practices:

• • • • •

• • •

Build it right (duh) Customize the documents—tailor them to the specific facts of each project Prepare realistic operating and reserve budgets that result in realistic assessments Segregate and transfer all operating and reserve funds Hire an independent, professional management company during the planning stage to review draft construction plans and governing documents, and work with the company throughout the transition process Establish a Homeowner Advisory Committee as early as possible in the development process Treat the association as a separate and independent business entity Ensure that marketing material reflects actual construction plans and doesn’t overpromise or increase expectations beyond reality

• •

Transition control of the association in accordance with governing documents and state law Continue to serve on and support the board after transition of control

Now let’s turn to step #2, establishing a trusting, respectful relationship among the board, owners and manager. While some board members see their time on the board as the opportunity to impose their authority on the owners and to run the association as their own little fiefdom, enlightened board members understand their role as leader, conciliator, and policy-maker. Most important, association leaders should be customer service gurus who recognize their obligation to provide responsive, empathetic, reasonable, courteous, compassionate service to their fellow owners and neighbors. Providing exceptional customer service to your members requires board members and managers to embrace the following customer service skills: 1.

Be a good listener Focusing 100% of your attention on the customer, ignoring distractions and interruptions • Not interrupting, allowing the customer to vent and explain his or her issue and position • Asking questions to confirm your and the customer’s understanding of the issue • Not judging the customer • Not letting your ego interfere with really hearing the customer’s complaint – it’s probably not about you but about a perception or action

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avoiding the courthouse cont. • • • •

2.

3.

Paraphrasing the customer’s statements to assure him or her that you are listening and understand Monitoring your and the customer’s body language to determine a consistent or contradictory message Treating customers the way YOU would like to be treated Sincerely, genuinely wanting to help the customer resolve the issue

Admitting when we’re wrong. Yes – it’s okay to acknowledge when we mess up. In fact, the best way to establish a credible, trusting relationship with a customer is to apologize for a mishap even before they know the problem occurred, alerting them to what happened and how you are addressing it. The worst thing you can do is ignore the error or misunderstanding and hope no one finds out. In our business, someone always finds out! Be sure to let your supervisor know as soon as you are aware of the problem and together develop a plan to address the issue.

What should the board and manager do when a conflict arises? Depending on the severity of the dispute, the first step may be to involve legal counsel. However, engaging an attorney at the onset will incur cost and may establish an adversarial relationship from which there is no retreat. Instead, consider:

• •

Remembering that, beyond providing exceptional customer service to their members, board members have a fiduciary duty to the owners always to act in the best interests of the association, in good faith and with diligence in pursuing the best course of action.

We’ve addressed step 1 (working with developers) and step 2 (establishing a relationship of trust and respect among the owners, board and manager) in the process of resolving disputes amicably before they end up in court. In step 3, we’ll discuss utilizing dispute resolution techniques to work out a solution.

One of the most common reasons for community association litigation is covenant enforcement. One of the primary reasons for board members deciding to sue is the misconception that approving a variance would mean “setting a precedent” which supposedly opens Pandora’s Box and prevents the board from rejecting similar requests. Many board decisions involve discretion—where the board looks at the specific facts and decides whether the request can be approved under the covenants. While state statutes and governing documents must be reviewed first, if the variance request is reasonable, the board should make every effort to approve it. Really? Yes! Work with your attorney to craft a resolution to allow the variance, using the “whereas” provisions to detail the specific circumstances under which the board is allowing the exception and with which other owners must comply in order to obtain identical approval. Such variances, provided that they are properly documented and supported by the facts, do not vitiate 8

the covenants or require the board to approve all similar requests. Only if the covenant has been openly and continually ignored could the association be said to have abandoned the covenant and made it unenforceable.

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Stop sending emails or letters and pick up the phone. Real people talking with real people can accomplish miracles – or, at least, reduce frustration and misunderstandings. Offer to meet with the owner at his home or neutral venue to discuss the issue in person. Invite an impartial third-party to help resolve the dispute. Using the services of a trained, certified mediator, or a less formal “dispute resolver,” can quickly reduce emotions, help identify the real issues, and encourage all sides to work together to craft a mutually-agreeable solution. Keep your cool. Remain calm and collected. Don’t get defensive. Ask for help from a colleague or supervisor. Sometimes, just letting the customer talk with someone else resets the conversation and allows for a fresh approach to resolving the issue. Remember the listening skills detailed in step 2.

There you have it; the very-much-condensed version of preventing, reducing, and resolving community association-related disputes. To be an even better dispute resolver, search “alternative dispute resolution” on Google or YouTube or in the Research Library at www.caionline.org or check out the books available from Amazon or your local library. There are plenty of resources available to help you prepare for and resolve conflict in community associations without ending up at the courthouse!

Margey Meyer, CMCA, PCAM, is the President of CADRExperts, LLC (Community Association Dispute Resolution Experts). Learn more at www.cadrexperts.com.


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Community Association Institute Central Florida Presents

TRADESHOW 2015

JAZZ UP YOUR ASSOCIATION ✥ FREE Education Classes Available to Registered Attendees

✥ Exclusive Board Member Perks: - Free Valet Parking for Board Members

✥ Over 145 Vendor Expo Booths

- Free Board Member VIP Area

✥ Thousands of Dollars in Raffle Prize Giveaways

- Board Member Only Rapid Check-In & Registration Lane

MARCH 26, 2015 EDUCATION: 11:00AM - 3:00PM 11:00am - 2:00pm - HOA & Condo Board Member Certification Class (CEU) 11:30am - 1:30pm - Legal Panel 1:30pm - 2:30pm - Insurance Disaster Preparedness (CEU) 2:30pm - 3:00pm - Legal Panel

TRADESHOW: 2:00PM - 6:00PM AFTER PART Y: 6:00PM - 7:00PM AFTER PARTY PRESENTED BY:

Register Now at:

CAICF.ORG

HILTON ORL ANDO | 6001 DESTINATION PKW Y | ORL ANDO FL 32819


D O FO

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Tradeshow Floorplan Restrooms located in main hallway to ballroom

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VIP Courtyard

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Tradeshow Entrance Hallway

REGISTRATION

Unavailable Booth

Booth Pricing REGULAR - 8x10

PREMIUM

Sponsorship Discounts PLATINUM

GOLD

SILVER

$700 - Members

$1,000 - 10x10 - Single

100% - Discount

50% Discount

25% Discount

$1,200 - Non-Members

$2,000 - 16x10 - Double

on regular booth

on regular booth

on regular booth

or 4some at golf tournament


Sponsorship items

Sponsorships Logo & Company Name on Entry Marquee

PAPER ITEM IN TOTE BAG

Keep the advertising going...place a company give away in the tradeshow tote bag that all attendees will receive.

Ad in Tradeshow Program Logo on Tradeshow Map Logo & Company Name on Website

ENTRY MARQUEE SIGNAGE

This signage hedges the double sided conference entry doors. Size and location of your company logo are relative to your sponsorship level.

SPONSORSHIP RECOGNITION AT BOOTH

Show that your company is committed to CAI and the Association Management industry. Your company will be provided with sponsorship recognition signage that can be displayed at your booth for all attendees to see.

HIGHLIGHTED IN DIRECTORY AS A SPONSOR As a sponsor, the attention of nearly 1,000 attendees will be drawn to your company name every time they look in the Tradeshow Program.

LOGO ON TRADESHOW MAP

Why not stand out from the rest of the pack! The top tradeshow sponsors will receive their company name, logo, and highlighted booth location on tradeshow map which will be used by attendees.

Logo & Company Name on Quarterly Newsletter Paper Item in Attendee Tote Bags Themed Sponsorship Recognition at Booth *includes specialty name badges Highlighted in Directory as a sponsor Monthly Luncheon Announcement of Sponsorship Logo on Attendee Tote Bags Admission into VIP Happy Hour (board member only) *only 10 spots available Booth at 1 monthly luncheon Regular Tradeshow Booth 1st choice of booth location & surrounding exhibitors (adjacent companies)

PRICING & AVAILABILITY

After Party

Entry / Hallway

$4,000 - x1

$3,000 - x1

“The Voodoo Lounge Sponsor” SOLD OUT

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“French Quarter Contributor” SOLD OUT

VIP Co

“Bourb Supp

$4,0

SOL


Cajun King

Beaded Benefactor

Large

Full Page

Parade Patron

Medium

Medium

1/2 Page

1/4 Page

Large

Medium

Small

Large

Medium

Small

Large

Medium

Small

Sponsorship items MONTHLY LUNCHEON ANNOUNCEMENT OF COMPANY’S SPONSORSHIP

Your company will be recognized as one of the top sponsors of the 2015 CAI Tradeshow at each monthly CAI Luncheon until the event. Attendees of these luncheons are experienced in the industry and the gateway to your success.

TOTE BAG - LOGO

Tote bags of nearly 1,000 will be handed out as attendees enter the show. The Cajun King will have their large logo placed on one side and the Beaded Benefactors will share space on the other side.

AD IN TRADESHOW PROGRAM

Every attendee at the tradeshow will be given a program that includes a map with booth locations and tradeshow accommodations. You will stand out from the pack with an advertisement (1/4 page up to a 1/2 page) depending on your sponsorship level.

Includes Speech

TRADESHOW BOOTH

$4,500 (x1)

$2,000 (x4)

$750 (x12)

SOLD OUT

3 LEFT

4 LEFT

ourtyard

bon Street porter�

000 - x1

LD OUT

Security

Supplies 6 security officers - may be split

A regular booth is included with the sponsorship package, a value of $700. This does not include upgraded or premium booths. If you want a premium or upgraded booth, just pay the difference.

Photography

Supplies professional photographer and printing services

NOTE: Cajun King and Beaded Benefactor

sponsorships are not available for management companies.

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cash vs. accrual reports SUBMITTED BY BB&T, MEMBER FDIC AND EQUAL HOUSING LENDER

v

ariety may be the spice of life, but it can lead to confusion when the subject is financial reporting in the condominium and homeowner association industry. Survey the financial statements of any 10 associations, and you will likely find six or seven different accounting systems in use. The primary focus of periodic financial reports in Common Interest Realty Associations (CIRAs) is to track actual expenditures against the planned budget for the period, which is typically a year. We often see such reports prepared on the “cash basis” of accounting, which reports income when actually collected and expenses when bills are actually paid.

principles and the preferred method in the CIRA Audit and Accounting Guide of the American Institute of CPAs. If accrual accounting is so superior, why then is it not more commonly used – especially since the necessary software is readily available and reasonably priced? The short answer is time and money. Consider the following:

• Those who spend time analyzing CIRA financial reports know that cash basis reports generally are appropriate only for the smallest associations with the simplest finances. Much preferred is “accrual basis” financial reporting, which summarizes all income earned for the period, whether actually collected, and all expenses incurred during the period, whether actually paid. The accrual method normally eliminates the reporting inconsistencies resulting from circumstances such as the bookkeeper being on vacation or an authorized board check signer being away on a business trip. While no single authority requires accrual accounting for CIRAs, it is the only method approved by generally accepted accounting

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Most professional management companies have made significant investments in developing or modifying accounting and reporting systems to best fit the needs of their client associations. Many customized systems are oriented to cash flow reporting, not accrual accounting. Good systems are a key element in a management company’s growth and success, and they are not likely to change proven systems. Managers are more concerned with monthly cash flow and timely information for their boards than with assuring that interim financial reports will pass an auditor’s scrutiny.

For these reasons, we often see hybrid reports that provide budgetary comparisons and selected information about cash balances, assessments/fees receivable from unit owners and accounts payable to vendors and service providers. Such reports often are identified as “modified cash” or “modified accrual”


T H ANK YO U TO O UR 2015

TRADESHOW SPONSORS CAJUN KING

BEADED BENEFACTOR

VIP COURTYARD

AFTER PARTY

PARADE PATRONS

ENTRY HALLWAY


cash vs. accrual reports cont. and normally do not provide a consistent way to compare one association’s financial status to another. Self-managed CIRAs have relied historically on volunteers with accounting and computer skills to develop and run their internal reporting systems. Those systems are only as good and current as the talents of the people responsible for their implementation; and they often are not appropriate for a CIRA. Considering all the factors affecting CIRA financial reporting, it is easy to see why there is little consistency or comparability between associations. So why are these shortcomings a problem? A common response is that prospective purchasers of a CIRA home don’t really care about the financial stability of the association, or comparability to other associations. Their main concerns are how the property looks today and the amount of monthly association fees. Experienced unit owners realize that this short-term view is not consistent with the primary purpose of the CIRA, i.e. – the preservation and enhancement of the values of the units themselves. The longterm view requires an understanding of the association’s current finances and its plans to address the deterioration of its common property over time. A less obvious requirement for a comprehensive reporting system is the need of third parties, such as insurers, banks and mortgage lenders, to evaluate the stability of the association. This is of particular importance when the CIRA seeks a loan to fund major repairs and replacements or storm cleanup and restoration costs. Often the only reliable financial reports available to loan underwriters is the prior year’s audit – if one was even done. Information critical to the banks, such as the actual cash reserves, reserve studies and funding plans, the history of special assessments, the average amount of unpaid unit owner fees, bills or accounts payable, and a record of previous borrowings and repayments, may not be readily available. A loan to a CIRA is a business loan from the bank’s point of view, and as with any business loan request, the bank needs to know how the loan will be repaid. A cash flow projection is an important component of the loan request package. Failure to provide any essential information in a timely fashion slows down the process, potentially causing problems with contractors or weather limitations. An unusual reporting problem can occur after a CIRA obtains a loan. The funds needed to pay off the loan, plus interest, often 16

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are a new line item in the annual expense budget. The source of the money to meet this expense will be either an increase in the annual assessments, a series of special assessments or some combination thereof. On occasion insurance proceeds may be a repayment source as well. The collateral to secure the loan is the association’s pledge of its right to collect assessments from its unit owners. While the impact on the CIRA’s annual budget is significant, the total expenses are offset by the necessary increase in assessments. However, the balance sheet of a CIRA with an outstanding loan often looks unusual – depending on how the association assesses its members. This can occur because the loan is recorded in full as a liability of the association from the day the loan proceeds are received, but the assessments needed to repay the loan will be spread over several years. Since the CIRA does not generally own the buildings, roofs or other common elements, it has no assets to record on its books as it pays for the major repairs and replacements. The resulting out of balance condition appears as a deficit, and can be substantial if the loan repayment schedule is spread over several years. The deficit is not necessarily a measure of poor management, but it does cause the CIRA’s financial reports to look less than healthy. If the deficit continues over time and the association needs to obtain subsequent loans, it will likely become a factor in any bank’s decision regarding new loans. Some accounting practitioners suggest that a future assessment receivable from unit owners – equal to the unpaid balance of the loan – be recorded as an asset to more accurately reflect the present financial condition of the CIRA. Much attention has been focused in recent years on the accounting principles – or lack thereof – utilized by major public companies. We believe accurate reporting, with full disclosure, is at least as important in the CIRA industry, since the financial stability of an association affects what is, for many unit owners, their largest asset – their home.


welcome new members! BUSINESS PARTNERS

Mrs. Janna M. Laine

MANAGEMENT COMPANY

Arias Bosinger, PLLC Mr. Carlos Arias

Ms. Sally Russell

Titan Management Ms. Lisa Siders

ClaimsMax Adjusters, Inc. Mrs. Tara Munoz Cleanwise Outdoor Cleaning Company Mr. David Beaty Cloud 9 Services Mr. Rick Fender Global Security Group, LLC Mr. Mark Adams Hogan Landscapes, Inc. Mr. Brett Hogan Lanco Paints & Coatings Mr. Tim Lynn Restoration 1 CFL, LLC Mr. Brian Christensen Spies Pool, LLC Mr. Todd Koonts Universal Contracting Mr. Jordan Grow

MULTI-CHAPTER BUSINESS PARTNERS C1 Bank Ms. Patricia E. DuBuque, CMCA, AMS, PCAM Pilka & Associates, P.A. Ms. Daniel F. Pilka, Esq. Viking Security Associates, LLC Mr. Joey Thompson

Ms. Emma K. Doras Aegis Community Management Solutions, Inc. Mr. Charles Jerome Simpson CCMC Mr. Steve Waring CCMC Mr. Tom Harman Everglades Security Solutions Mr. David Colin Furlow Leland Management, Inc. Mrs. Jessica Garza Premier Association Management of Central Florida, Inc. Mrs. Stacey Loureiro Premier Association Management of Central Florida, Inc. Ms. Anita Roberts Premier Association Management of Central Florida, Inc. Mr. Joseph Michael Alamo Royal Arms Condominium Association Mr. David Grace Sentry Management, Inc.

VOLUNTEER LEADERS Mrs. Elizabeth Perez Indian Point Homeowners Association Mrs. Caroline Ramos Indian Point Homeowners Association Mrs. Linda Sgallata Indian Point Homeowners Association Mrs. Lenora Shanks Indian Point Homeowners Association Mr. David Gordon North Shore at Lake Hart Homeowners Association Mr. Mark King North Shore at Lake Hart Homeowners Association Mr. Don Zaremba North Shore at Lake Hart Homeowners Association

Welcome to the Central Florida Chapter of CAI! We hope to see you at our next event. Jump right in and get involved!

interested in joining the cai central florida chapter? Homeowners, Managers, and Business Partners can

MANAGERS

become members. If you provide products or services to

Mr. Kevin R. Batterberry

community associations, CAI can give you direct access

Ms. Lori Dann

to thousands of potential customers and provide unique

Mr. Louis Andrew Frashuer

opportunities through networking luncheons, socials,

Mr. Raymond David Heine

and other great events. Visit caicf.org to learn more!


hoa property taxes BY CAI PRESS, A DIVISION OF COMMUNITY ASSOCIATION INSTITUTE

if

a community association holds legal title to common areas and facilities, its members run the risk of being taxed twice. The first tax is on the value of a lot or home. That tax reflects the value of the common areas and facilities and the owner's right to use them. The second tax is allocated because the owner must pay a share of the association's property tax.

benefit of other properties. The value of the benefited property should reflect the existence of these rights. Association-owned property - reserved by covenant for the exclusive use and benefit of owner members - has little value for tax purposes, since many of the beneficial rights to such property have been transferred to the members' property.

To avoid double taxation, community associations can follow these simple steps:

Association property has limited value in the marketplace since non-owners generally may not use it. Typically, it is unacceptable as security for a loan, because foreclosure would result in ownership without beneficial use or ownership subject to beneficial use by association members.

• • •

Alerting associations that separately owned common property may be subject to inequitable taxation on common property. Informing associations of the steps available to resolve double taxation. Altering state and local government officials to the inherent inequities of double taxation. Enabling those who draft association documents to avoid the pitfalls that could result in assessments to association property.

Associations - the professionals who work for them - must work through technical and legal issues to properly assess the value of the common areas that affects property taxes. The ad valorem property tax is the primary source of funding for local governments. It is based on property valuation - what a buyer will pay a seller. Determining the valuation or tax assessment of association-owned property is complicated by the easements granted to owner-members. It is also complex because of restrictions and reservations placed on the property by deeds or other recorded documents.

If property taxes are imposed on the association property, the community should appeal the assessed valuation based on the transfer of value to the benefited lots or homes of the association members. By doing this, the overall property taxes of the community may be lowered. If association property is not reserved by covenant for the exclusive use and benefit of owner-members, or if such property is available to others for a fee, the local government may impose a tax assessment on the property. Community associations faced with common-area taxation should carefully analyze the issues before deciding to pursue a resolution. Associations with properly drafted legal documents should have the weight of case law and precedent on their side. The process may seem complex, lengthy and costly but the direct financial rewards can be substantial. © CAI Press, a Division of Community Associations Institute. No part of this article may be reproduced in whole or in part without written consent. Please direct inquiries

An established principle of law is that the value of a property is reduced by the rights and easements carved out of it for the

to cai-info@caionline.org. For more information about this topic, see "Property Taxes and Homeowner Associations" at www.caionline.org/shop.


master gardner volunteer program The Orange County Master Gardeners will be hosting an opportunity for interested individuals to meet Master Gardeners on April 29, 2015. Check-in begins at 8:45am. The informational program will be from 9am to 11:30am.

gardens in a “Florida-Friendly” way. The program will include a guided tour of the Exploration Gardens, which highlight plant materials suitable for Central Florida. For additional information on the UF-IFAS Master Gardeners in Central Florida visit orange. ifas.ufl.edu/mg. To register for this event, visit gardenflorida. eventbrite.com or call 407-254-9200. LOCATION INFORMATION Orange County/UF-IFAS Extension Education Center 6012 S. Conway Road Orlando, FL 32819 407-254-9200

Join us to discover how Master Gardeners deliver information to residents on designing, planting, and caring for landscapes and

Fulfilling the requirements of Condos and HOAs in Florida Audits - Compilations - Reviews Tax Returns - Budgeting - Filings ➢ ➢ ➢ ➢ ➢

Big 4 Auditing Expertise CAI Gold Sponsors Reliable Financial Oversight Competitive and Fair Pricing Professional and Personable

CONTACT INFORMATION Janice Oberwetter Master Gardener Orange County Florida 321-431-1167

MEET A BANK WITH 20 YEARS IN THE NEIGHBORHOOD. No matter what size your community is, managing it can be a daily challenge. Union Bank® Homeowners Association Services is here to help. For over 20 years, we’ve streamlined the assessment collections process for community associations with specialized tools and services powered by Union Bank product solutions and our proprietary Smartstreet® technology platform. We offer a customized HOA lockbox with same-day processing to accelerate payment collection, reduce mail-in times for checks, and provide homeowners with convenient online payment options. Whatever your needs, Union Bank provides solutions that make it easier to control your daily financial operations. Contact us today at 866-210-2333 to learn more. HOAbankers.com Smartstreet.com

Contact us today to address your CPA needs.

407-678-1020 or info@MapiliCPAs.com

©2014 Mitsubishi UFJ Financial Group, Inc. All rights reserved. Union Bank and Smartstreet are registered trademarks of MUFG Union Bank, N.A. Member FDIC.


THANK YOU TO OUR 2015 MEDALLION SPONSORS! platinum Alliance Association Bank Angius & Terry, LLP Asphalt Restoration Technology Systems BB&T Association Services Becker & Poliakoff, P.A. Bouchard Insurance

Glickstein, Laval, Carris, P.A. HOA Capital Advisors Leland Management, Inc. Modern Plumbing Industries, Inc. Sentry Management, Inc. The Association Law Firm PLLC

gold Mapili CPAs LLC

silver

Greystone Management Company Larsen & Associates, P.L. Union Bank HOA Services

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CE N TRAL F L O R I D A T I M ES | 1 S T Q UARTER 2 0 1 5

CAICF | First Quarter 2015 Newsletter  
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