CONDO LIFESTYLES
FHA Mortgage Requirements She then turned her attention to new Federal Housing Administration (FHA) requirements for that Agency to approve mortgages in associations. “FHA is also a hot topic,” she said. “Each association has to determine its own needs but while it’s always good to be aware of what requirements are today, (those) can very easily change tomorrow.” Some FHA changes approved in September, 2012: • allowable delinquencies can be up to 60 days but for no more than 15% of the units, giving associations more time to work with owners to get back assessments paid to meet that guideline. • Previously a single investor could not own more than 10% of the units in an association but that limit has been increased to 50% as long as the other 50% are owner occupied. • New fidelity bond requirements have been established providing that HOA policies have an endorsement covering the management company as an agent or its employees that work under the direction of the HOA.
Legal Q & A Comstock took questions from the audience. Q- Didn’t an association always have the right to prohibit smoking in the units?
Q- If you have an accounting firm do your budget, does it have to be licensed as a manager?
A- In common areas you did but in the units is a little more challenging issue. Trying to enforce any such restriction raises a lot of legal issues.
A- Those who keep books are exempt from manager licensing but you have to look at the full scope of duties that your accountant performs to determine this. (someone who does a budget usually has to be a licensed manager) A cautious firm will be careful to see they don’t cross over the line into management.
Q- Does the licensing of two-way radios also affect the two-way radios that must be installed in Chicago high-rises for fire department use? A- No, they are not covered by the licensing requirement.
Q- Some of the language in the manager licensing law is confusing regarding when you have to have the license.
Q- Is manager licensing required for a self-managed association? A- It doesn’t apply to them. Volunteers serving on the board don’t need licensing. However, if any member is being compensated to perform duties that would commonly be performed by a manager, that individual would need to be licensed.
A- If you are new, you have up to two years to qualify for the license. One can’t hold oneself out as a CA manager until licensed, however, someone may need the two years to meet the educational requirement and some people don’t pass the test the first time.
Q- Can condo boards charge for cable and internet on a percentage of ownership interest basis? A- Yes, as would be done with all other common expenses.
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CONDO LIFESTYLES
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