Molly Foley-Healy

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On Saturday morning, State Senator Linda Newell, who represents most of the South Metro Denver area, held a phenomenal Town Hall Meeting which focused on homeowners’ associations (“HOAs”) and related issues. The turnout for the meeting was excellent and the participants were there to learn and share their stories in a collaborative manner. It was my pleasure to share information about HOAs and to lead this great group of folks in discussing HOA-related issues. It was also an honor to work with Senator Newell who is one of those rare legislators who truly works across the aisle in this hyper-partisan political world we live in. 

While many issues were discussed, a noticeable trend at the Town Hall Meeting was the challenges faced by self-managed HOAs. In particular, the challenges associated with the maintenance, repair and replacement of physical components of structures the HOAs are responsible for and budgeting and setting assessments at a level necessary to meet these obligations. One homeowner shared her story of trying to sell her unit in a condominium association, only to be thwarted by the fact that the concrete patio on the back of her unit is pulling away and is in a horrible state of disrepair. This patio is the responsibility of her HOA and it doesn’t look like the HOA has the funds necessary to deal with the problem. 

 

Let’s face it; serving on the board of directors of an HOA is a big responsibility. The boards of self-managed HOAs have the same responsibilities as the boards which benefit from the advice and assistance of professional community association managers. Without the expertise of these professional community association managers, many self-managed boards struggle to obtain the information necessary to carry out their responsibilities and to fulfill their fiduciary duty to the communities they serve. 

 

So what are these folks to do? Here are some tips:Continue Reading Senator Newell’s Town Hall Meeting Highlights Challenges of Self-Managed HOAs

After a wonderful holiday weekend, it’s time to saddle up and get back to work! For management and boards of homeowners’ associations (“HOAs”), that means budget season is now in full swing. While community association managers play a pivotal role in assisting boards with the creation of budgets, it’s ultimately up to each board to adopt a budget that’s in the best interests of the association they serve. That means boards must be fiscally responsible when creating their budgets. 

Over the past few years, boards have understandably been reticent to do anything to increase assessments. For some HOAs, especially some condominium associations, that has meant making a decision to defer routine maintenance and to either not fund reserves at all or to fund them at a low level. While kicking the reserve can down the road may seem like a short term solution to an assessment increase, if put off too long, this can become a recipe for a fiscal nightmare. 

 

When facing the question of whether – or at what level – to fund reserves, boards should ask themselves the following questions:Continue Reading Budget Season: How is your HOA handling reserves?

FHA officials have informed CAI National that they anticipate revisions to the condominium guidelines will be released this week.  However, based upon this communication, CAI is not convinced these changes will be sweeping or substantive in nature.  For more information from CAI National, check out FHA Signals Release of New Condominium Guidelines.  And as always, you can count…

In an effort to stem losses from foreclosures, Fannie Mae and Freddie Mac have just announced a policy change addressing short sales.  CAI National released the following update outlining these changes.

“Fannie Mae and Freddie Mac have announced changes to short sale policies to help more borrowers avoid foreclosure and stabilize neighborhoods. Mortgage servicing companies will begin using the new short sale procedures in early November.

A short sale allows a homeowner to sell their home for an amount less than the value of the existing mortgage. While Fannie Mae and Freddie Mac incur losses in a short sale, these losses are significantly lower than the costs of foreclosure. As a result, the short sale is quickly becoming a preferred foreclosure alternative for both Fannie Mae and Freddie Mac. Continue Reading Fannie Mae and Freddie Mac Change Short Sale Requirements

CAI National recently released the following communication addressing plans by the U.S. Government to shrink Fannie Mae and Freddie Mac.  It is currently unknown whether, or to what extent, this course of action will impact the financing of mortgages in community associations.Continue Reading U.S. Government Announces Plans to Shrink Fannie Mae & Freddie Mac

As I was driving to work this morning, I was reflecting on some of the less than constructive communications I have witnessed in the community association context lately. I don’t know if it’s the heat that’s getting to everyone or if the ugly presidential campaign is starting to rub off on us, but it seems like some folks have lost the ability to be constructive and to think before they act or speak. 

Whether it’s a homeowner to homeowner dispute, homeowner to board dispute, board to homeowner dispute, homeowner to manager dispute or any other combination – everyone needs to take a deep breath and think before they act. It’s also a good rule of thumb not to blast off that nasti-gram or leave a blistering voicemail in the heat of the moment. Continue Reading You Catch More Flies With Honey

Yesterday, the Denver Post ran a story entitled Rebuilding to test covenants after Colorado Springs wildfire. The story focuses on the Mountain Shadows Community Association which was devastated by the Waldo Canyon fire. The Post reports that 346 homes were destroyed in this community made up of custom homes, patio homes, condos and townhouses. 

While the ashes of this devastating fire have barely cooled and the broken hearts of the residents cannot possibly have healed, the story anticipates fighting over rebuilding and the inability of architectural review committees “to enforce the covenants and rein in rebellious property owners.” The story essentially focuses on ways to control homeowners as they attempt to rebuild their homes and their lives.

 

Unfortunately, the story misses the most important point – this is the perfect opportunity for the homeowners in Mountain Shadows to come together to build consensus on a vision for the community they would like to rebuild. With the exception of being required to comply with applicable local, state, and federal laws and ordinances, governing documents of HOAs can (and should) be updated to fit the priorities of the owners in the communities the documents govern.  Here are some thoughts for the folks at Mountain Shadows, and any other HOA for that matter, facing the task of rebuilding:Continue Reading Colorado Springs HOA Has Unique Opportunity to Build Consensus and Community

As we continue on our journey to examine traits which make HOA residents happy, productive and reasonable members of their communities – let’s recap the first two traits we have examined: 

Trait #1: Happy and effective HOA residents understand that they must be familiar with and comply with their governing documents.

Trait #2: Happy and effective HOA residents get informed before reacting negatively.

 

When we delved into Trait #2, I mentioned that it’s not uncommon for residents of HOAs to react negatively to board decisions which affect their wallets and pocketbooks. Let’s face it – that’s just human nature. Trait #3 dovetails into this common reaction and calls on HOA residents to be realistic about the finances and obligations of their HOAs.

 

Trait #3: Happy and effective HOA residents understand that money doesn’t grow on trees.Continue Reading Happy and Effective HOA Residents: Trait #3

Yesterday I began posting a series of blog entries outlining traits of happy and effective residents in HOAs. While members of the boards of directors of HOAs certainly have a significant role in creating vibrant, healthy and livable communities – residents of HOAs play an equally important role in fostering cooperation and reasonableness. Here’s the first trait I outlined yesterday on our journey to discover how residents can do their part to make their associations a great place to live:

Trait #1: Happy and effective HOA residents understand that they must be familiar with and comply with the governing documents of their HOA. 

While it’s imperative for residents to understand and comply with the governing documents of their associations, we can’t stop there. Controversies in HOAs can arise over issues that have little to do with complying with the governing documents. This is particularly true when boards make tough decisions to increase assessments or even levy a special assessment. As a result, we arrive at Trait #2.Continue Reading Happy and Effective HOA Residents: Trait #2