Wednesday, October 15, 2014

Cleanliness is next to Godliness-especially in a community association!

The fear of this century's next pandemic has increased with the recent media coverage of the growing spread of Ebola. Even without the risk of a highly contagious and fatal disease like this one, most of us already know that contact with crowds and multiple surfaces do increase our odds of becoming ill with any number of viruses. In some communities with retirement-age populations, even everyday illnesses can pose serious health risks. However, when was the last time your community association board discussed what can be done to keep your residents a little healthier?

Here are some basic ideas to consider:
  • In multifamily buildings, it makes sense to install hand sanitizer dispensers or wipes in high traffic areas such as the elevators and front desk. This is also true for homeowners' associations with recreational amenities like clubhouses.
  • Reach out to local healthcare providers and arrange for flu and pneumonia shots to be given inside the community as well as for mobile health screening units to make regular visits. Also, invite medical professionals as guest speakers to attend board and membership meetings and/or to distribute pamphlets and other wellbeing material.
  • Review your protocol for on-site association employees to consistently maintain cleanliness and hygiene standards both in terms of maintaining the association premises as well as expected personal employee hygiene and practices. A security guard constantly handling identification material from people entering the community should routinely clean his or her hands and the surrounding surfaces.
  • Consider adding recreational amenities and services to your community such as a weight room and trainers.

Naturally, for communities who do not wish to fit the aphorism of "no good deed going unpunished", the proper release forms should be obtained from owners for some of the foregoing activities. So, why should your community care about these kinds of preventative health measures?

The most obvious answer to that question is that this community is your home and you either live there with your family or your family and friends visit you there. Your staff's health should be of importance not only because it is tied to productivity but because you care about them. Lastly, the epitome of neighborliness is looking out for each other and one of the best ways to do that is to employ best practices when it comes to common health concerns.

Monday, October 13, 2014

How can your attorney help build your community's brand?

My last blog discussed the importance of building a brand for your community association. Many of you may have agreed with the concept but struggled with the idea of how to achieve such branding for your community.

The obvious people to assist you in this endeavor would be a Social Media specialist, website guru and a graphic artist. However, you may be surprised to learn that an experienced and knowledgeable community association lawyer may be your very best asset in terms of establishing and safeguarding your community's unique brand in the marketplace.

Let's look first at the branding for a typical retirement community.  In order to promote that brand, it would be helpful if there exists an active social structure with abundant recreational activities.  Your association attorney could help create that infrastructure with recommendations for various standing committees, committee structures, Board resolutions creating same, as well as policies and best practices for members of those committees.

As far as fiscal issues are concerned, is your community perceived as doing things as cheaply as possible or as one which spends wisely and delivers value for the assessment dollar?  My law firm, Becker & Poliakoff, is one of the founders of the Communities of Excellence program which spotlights Florida communities and managers who "get it right".  Many of the communities who receive awards for innovation, 

Are your community's rules too loose or too restrictive or your governing documents out of date?  We can look them over for drafting, legality and whether they actually accomplish your goals and bring them up to date with the law.

Are your dispute resolution processes civil and fair or rigid and heavy handed?  We can help set up templates for demand/notice letters and resolutions for fines and suspensions.

How do approach communication at board meetings, between board meetings, between board members, etc.?  Nothing does more to set the tone in the community than open and transparent operations, and that requires a commitment to communication.

Sunday, October 5, 2014

Does your condominium, cooperative or HOA board know if and when it is appropriate to grant a hardship exemption?

I am often asked by boards for whom I am rewriting or amending governing documents to include the right to grant hardship exemptions for a variety of use restrictions. Typically, boards want the leeway to grant exceptions when it comes to leasing or selling units, altering units  or limited common elements, performing maintenance and allowing certain types of architectural changes or improvements.

What many boards fail to understand is that any time an exemption or exception is granted, they are creating a precedent which may render their restrictions unenforceable in the future.

If there is no mention in the governing documents that a board has the right to grant an exemption then a board should not even contemplate doing so.

If the documents do provide such authority, a board still needs to discuss with legal counsel what the pros and cons are when it comes to exercising that right. Often this right to grant an exemption is tied to the perception that the owner is experiencing a hardship of one sort or another which can be a highly subjective matter.

A classic example of a situation where a hardship exemption might be equitable would be when an owner's tenant dies two weeks into a lease term in a community which restricts leasing to only one time in any calendar year. A board may very well feel that the intent of the restriction to keep the community safe from transient rentals will not be accomplished by applying the restriction under those circumstances.

Boards get into very murky waters when the hardship exemption is being granted to a fellow board member or an owner who is seen as a "friend of the board".

The better course of action when it comes to granting hardship exemptions is to clearly identify in your documents which situations would be eligible for such exemptions.

For example, in terms of leasing and sales restrictions, you might want to clarify that the following situations are eligible for an exemption:

-adding a family member to the deed for estate planning purposes
-heirs taking title to a unit
-death of a tenant within a certain time period after signing the lease
-abandonment of the unit by the tenant within a certain time after signing the lease
-a casualty event rendering the property uninhabitable for a time

These types of exemptions should be identified for other use restrictions and your governing documents amended to take the guesswork out of what does and does not qualify for a hardship exemption.

Monday, September 22, 2014

Does your board undertake "Due Diligence"?

Directors are often told they should "do their due diligence" before making certain decisions on behalf of their associations. How many people actually understand what steps are needed to fulfill that directive?
"Due diligence" is defined as an investigation of a business or person prior to signing a contract, or an act with a certain standard of care.
The foregoing definition, however, might not be enough for some boards or managers to map out a plan. The steps needed to diligently assess something or someone will change depending on the circumstances but what follows are some basic methods to undertake due diligence.
1.      When evaluating a potential association hire, using a thorough application, holding a personal interview, making calls to former employers, requiring a skills test and perhaps even a personality test can all give the board a better picture of the person they may be hiring. Naturally, your board will want to pick and choose from this list depending on the type of employee you are hiring. It is also important that the person with whom the job candidate will be interacting most closely post-hire has some contact during the evaluation process to ensure a productive working environment.
2.      When hiring a professional advisor such as an attorney, accountant, manager, engineer or architect, you will want to confirm that the candidate has the skills and resources your community needs. For example, if you are considering complicated litigation, you should hire a firm that specializes in your specific problem or issue rather than a firm that may only occasionally handle that type of litigation. You will also want a firm that has the resources to continue a protracted fight. When considering any professional advisor, you will want to ensure the individual or company has a good reputation in the industry, a proven track record and verifiable credentials.  Naturally, it is better to hear great things about your candidate from others as opposed to hearing them only from the candidate.  Check out your candidate online. Does the firm or individual have a presence? Can you see what resources they possess? Beware though as not every professional writes his or her own material; sometimes those blogs, papers and summaries are ghostwritten by PR firms. Be blunt and ask your candidate whether or not their written materials are their own. While there is nothing wrong with a targeted marketing campaign, if a professional creates a misleading image that his or her company is larger or more successful than it is, beware. Ask how many employees actually work there and see if their website backs up their claims. Ask to see documentation to verify any success stories. Google can also be a useful tool to see what others are saying about this individual or company.
3.      When hiring a contractor to perform any type of work in the community, be sure to confirm that the contractor's commercial license is active, that the license is the type you need for the work you are requesting and investigate any complaint history and resolution of those complaints with both the State and the Better Business Bureau.  Checking references with associations who previously used your contractor candidate for the type of project you are considering is also essential to your due diligence.
While there are no guarantees that a properly vetted candidate will go on to perform good things for your community, an improperly vetted candidate can spell disaster. Boards who understand the need to perform due diligence tend to avoid costly problems down the road.

Tuesday, September 2, 2014

Five things a community association Board of Directors should never do!

I have represented association boards for more than two decades and served on my own HOA board at one time so understanding the mechanics of a volunteer board comes easy at this point. Part of that understanding, however, is also an acknowledgement that boards often want to undertake certain actions on their own either as a means of cost-savings or because they simply don't understand the repercussions.

While the following is certainly  not an all-inclusive list when it comes to ill-advised actions , these five do come with significant and sometimes costly results if a board goes it alone. So what are the five things your board should never do?

1.      Negotiate the Legal Terms of a Contract.  Yes, we all know that you and your fellow board members previously signed legal contracts in your business careers and sign them personally now and again but doing so on behalf of your membership without having those contracts properly reviewed and negotiated by your association attorney is just bad business, period.

Boards can and should discuss with potential vendors what they want the business terms of a contract to look like: how long the project should take, what materials will be used, what it will cost, etc. However, ensuring that the contract language used actually garners you the results you negotiated is your association attorney's job and not yours.

2.      Fire an employee or vendor without seeking prior legal advice.  I am often asked at social gatherings by family and friends whether or not someone can be sued for this thing or that thing. My answer is always the same "Yes, if an attorney can be found who is willing to file suit (and let's be honest there is usually that attorney out there) then you can and likely will be sued."

Firing employees and terminating contracts with vendors are two areas fraught with the potential for retaliatory lawsuits. Tell people you no longer want them and many do not go quietly into the good night. There are legal issues involved with firing employees, particularly older employees so this is yet another area where expert guidance is absolutely crucial prior to taking action.

3.      Amend the governing documents. Far too many boards get this one wrong. They either use the retired personal injury attorney from out of state to draft changes to their documents or they task their reluctant manager with doing so.

Granted, if you are looking at an amendment as simple as changing the date of the annual meeting, it can seem like overkill to have your attorney draft a one-sentence change. However, some boards attempt to draft amendments with significant changes such as implementing age and occupancy restrictions which can subject the community to liability if they get it wrong. It is also important to remember that amendments should not be drafted in a vacuum-they must be crafted with an eye towards eliminating any conflict amongst similar provisions in each of the association's governing documents as well as written to ensure statutory compliance.

4.      Threaten Legal Action before doing your due diligence.  If you are going to threaten legal action, it would be prudent to determine beforehand if you actually have the legal authority to do what you wish to do. Threatening and losing often does more harm than not pursuing an action at all. Not only will you lose face, you will also likely wind up paying your opponent's attorney's fees and costs. Check with your attorney first to ensure that your contract, your governing documents or the law allows you to safely take the stance you wish to take.

5.      File an insurance claim for property damage without assistance. The process of becoming whole after a covered loss seems simple enough,doesn't it? Your association paid a (likely hefty) insurance premium and when you are damaged, you would think filing a claim is the only action needed. You would, of course, be wrong and perhaps a tad naive. In order to level the playing field, boards must acknowledge that the playing field isn't level to begin with and must enlist the assistance of experienced professionals (namely, your association attorney) to file and shepherd  their claim through an often artificially complicated process.

Sunday, August 17, 2014

How to start building a valuable brand for your community association? Part II of our Branding Series!

My last blog discussed why you should start considering your community's brand and how you are viewed in the marketplace by potential purchasers, vendors and even your local government officials.

Today's blog will focus on the steps you need to take to build a brand that will make you proud to call your community home.

  • One of the easiest things you can do is to secure your community's web address which is also known as your URL (Uniform Resource Locator). Securing your association's URL is relatively expensive and prevents others from using that URL to either create confusion or, worse, set up a site which denigrates your community. Once you do set up a website for your association, you will find that site to be useful in terms of disseminating information about ongoing community projects, increasing transparency in your association operations and facilitating participation by your members. The most successful association websites have residents coming back again and again to check on news, list items for sale, download requested information and to participate in surveys about ongoing and upcoming projects.
  • Take a look at your signage both physically throughout the community as well as your letterhead, your website and all other printed and electronic material. What kind of image does your font and logo portray? Is there consistency throughout all your communication portals which convey a consistent and polished image or are there varying approaches which create disparate and even confusing images?
  • Speak with your association attorney about the types of policies you wish to create to support the brand you are building; these policies can pertain to security, occupancy, volunteerism, common area usage, civic involvement, ecological sensitivity and more. You will also need legal assistance to trademark your logo, craft an employee handbook and create the proper protections on your association website and other communication portals.
  • Decide if Social Media is something you could manage to further enhance your brand. A Facebook page, Instagram andTwitter accounts might attract new purchasers and employees but they can also detract from your brand if those channels are left to languish.  Social Media is not something which can be managed sporadically; successful use of this medium requires constant tending and the right tone. The effective use of Social Media can portray your community as a harmonious, well-run neighborhood and it can do this in a fraction of the time that old-fashioned networking and social events would take to build a similar image. The point of Social Media should be to start a dialogue not to make a point. Social Media portals are becoming more and more important for communities with a significant percentage of absentee owners as a necessary tool to keep those people informed and involved. If you do decide that Social Media is right for your community, your association attorney can assist in ensuring that your passwords and accounts are owned by the association.
  • If your community is professionally managed, address your branding expectations in your management agreement and revisit those expectations on an ongoing basis. In fact, your choice of management company and other professional advisers also contributes to your community's branding. A self-managed community will naturally present a different image than a professionally managed one. A folksy feel in a 15-lot HOA might benefit from a brand perspective from self-management. However, a high-rise tower's brand might suffer entirely in the absence of professional management. An on-site manager, a portfolio manager, a handyman who lives in an empty unit, a bookkeeper sitting in the association office and valet and concierge service all bring different aspects to your brand. A community lacking in retained advisers such as attorneys and accountants can also detract from your brand building efforts. Finally, it is important to remember that the reputation of the advisers you choose also contributes to your brand so choose them wisely.
It is no coincidence that the communities with the most positive brands are also those with the greatest level of volunteer involvement, the highest property values and the most membership satisfaction. Successfully branded communities also enjoy greater involvement with local public policy makers. Your community's branding (or lack thereof) will go a long way towards attracting or repelling the purchasers, renters, employees and vendors you want.

Sunday, August 10, 2014

Building and protecting a brand for your community association-Part 1 of a 3--part series on Association Branding!

I just returned from the TOPS Software CAMfire conference in St. Petersburg and was mightily impressed with the entire program. I was honored to have been one of four keynote speakers as well as having been asked to teach a class along with Pilera Property Management Software owner, Ashish Patel, and to serve on a Social Media Panel with some very talented ladies: Gina Holbrook of Premier Property Management; Andrea Drennen of TOPS, and Ashley Capps of Trapp Online.

Not surprisingly, Social Media was a very large focus of the conference. For my keynote speech, I decided to address a topic most people would not readily connect with private residential communities-branding.

When you are asked to think of iconic brands, names like Nike, Apple, Starbucks and Coca Cola probably come to mind very easily. These companies all engaged in costly, strategic and sustained brand building over many decades to ensure that their company names would convey a recognizable, memorable and successful image to their customers and potential customers.

When you think of iconic community brands you might draw a blank. You might not even understand what the concept of branding has to do with the private residential community you call home. Whether you realize it or not, the community association in which you live or provide services has a brand in the marketplace, it just might not be the brand you ultimately want associated with your community.

Think of the most upscale community in your city and ask yourself how you know what you know about that community. The communities with the best brands carefully cultivate their image and thee the steps needed to protect their brand with not much being left to chance.

If you think branding is irrelevant to your community, think again. Branding (or the lack thereof) goes a long way towards attracting or repelling potential purchasers, quality renters, talented employees and honest vendors.

Want to know how your community's brand manifests itself?  Start by asking what kind of reputation your community has in the market. When was the last time you asked neighbors outside your community, local realtors and others in your area how they would describe your association? Is your community seen as stodgy or hip? Flexible or rigid? Upscale or budget-friendly? Is yours the trendy upscale high-rise catering to young professionals in an urban area or is your community more the laid-back, family-friendly suburban enclave? The list of possible brand permutations is vast.

In Part II of our Branding Series, we will discuss some of the things you can do to start building your community's brand.