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  • 10/01/2022 11:44 AM | Anonymous member (Administrator)

    By Arthur Beisner, Rowcal

    The landscape of business management and service delivery is shifting increasingly towards reliance on technology. Technology in business once meant large, complex, and costly machines. Still, today businesses are leveraging computing technology to bring efficiencies to processes while automating away a lot of paper that used to be pushed. The cost of development and deployment of computer programs and software has become such that even small businesses can afford to utilize this technology to their advantage.

    The community association industry is no exception—recent advancements in automation and cloud-based management computing have begun changing the way HOA management has been done for decades. Community associations and management companies have started relying on technology, from primary payment processing web portals all the way to advanced, complex, and sometimes proprietary management platforms that automate everything from account management to work order tracking, and all in between.

    In this article, we will evaluate some of the benefits and some of the pitfalls of deploying technology as a solution in Homeowners Association Management.



    Gone are the days of the carbon copy ticketing system—well, for the most part. Payments processed virtually are becoming almost a rule. Today's systems allow community associations to automate virtually all workflows that used to require forms, stamps, signatures, and a spool of red tape. For example, certain technologies facilitate the entire Architectural Control process via a web portal that speeds communication and houses required documentation. Maintenance requests can be submitted, dispatched, updated, and even invoiced, all from the palm of our hands today. This automation can result in improved service delivery and reduced costs.

    Transparency & Accountability

    When technology is used to automate processes, a welcoming side effect is caused, especially for an industry plagued with mistrust. Timestamps, approvals, and automatic report generation are among many other features that level the playing field for community association boards and management service providers. With proper use of technology, board volunteers can gain insights into their community's finances, projects, operations, and management. And, with cloud-based storage services, board members and homeowners can access association documents with just a few clicks. The result is a tangible improvement in transparency and accountability.


    All of this translates into savings for associations. Of course, there is a cost to using software or computerized systems, just as with any other tool. But tools are only used because they increase productivity. The efficiencies gained from reduced labor and associated costs, the improved transparency and quality controls, and the insights gained from powerful analytics will all ultimately save associations money—not to mention reduced paper costs, storage costs, and mailing costs. The right technology can be powerful in saving both time and money.


    Service Quality

    We've all turned purple while helplessly cycling through phone landing systems. While we all probably agree that, in theory, those systems are designed to improve efficiency, sometimes all we want is to speak to a real human being who can help solve a problem. One of the significant pitfalls of relying on technology is that often service quality can waver as the human element is lost. Not every issue can be resolved with a few clicks and some pre-coded workflow logic. Some issues require problem-solving, empathy, negotiation, or simple human acknowledgment. These are actions that no software, artificial intelligence, or computer program can perform. It's vitally essential that technology be understood and used as a supplement to, and not a replacement of, dedication and commitment to exceptional customer service.

    User Challenges

    In our industry, our work involves an extremely personal subject: people's homes. While business speeds ahead with technological advancements, not everyone is ready to use an app or the internet for everything. The goal of HOA management providers is to provide both effective management and quality service to homeowners. Forcing homeowners to access solutions to their needs exclusively via a channel outside their ability or comfort zone is self-defeating. An app or a portal may be the solution for most homeowners, but additional solutions should be available to those that need them.


    The opposite side of ensuring service quality is setting service expectations. As technology speeds up the pace of transacting business, caution should be taken that proper expectations are always set considering technology's benefits. Just because a computer program can change a maintenance request from pending to dispatched within 0.00294 seconds doesn't mean that it should be the expectation of the end-user or customer. Even basic technology, like email, can fundamentally skew professional expectations, and some people can become accustomed to immediate access to management for non-emergency matters. While technology can seriously improve service delivery, it also creates a false sense of efficiency when considered in a vacuum by an end user. Research, planning, transacting, collaborating, and executing can all still be time-consuming and labor-intensive, even when facilitated with high-speed computer programs.

    In summary, technology has provided incredible advancements and innovation in the community association industry. Leveraging technology for HOA management has been positive for all stakeholders involved. But it's crucial to deploy this technology with an understanding of its limitations and pitfalls.

    RowCal is an HOA Management Company that delivers full-service management and maintenance solutions by empowering Community Managers who are supported by a team of subject matter experts. At RowCal, state-of-the-art technology improves the experience for homeowners, board members, and community managers alike through efficiency, transparency, and accountability.

    Arthur Beisner began his career in the HOA industry by managing a high-rise condominium building in Miami Beach, Florida and has been with RowCal in Colorado since December 2020.

  • 10/01/2022 11:42 AM | Anonymous member (Administrator)

    By Melissa M Garcia, Altitude Community Law

    When I was a little girl, one of my favorite cartoons was The Jetsons. I loved watching all that awesome technology like the flying cars, Elroy’s cool jetpack, and Astro’s treadmill. The Jetsons seemed to be a great predictor of technology today. Maybe we’re still a few decades from jet packing to school, but what about Rosie the robot (Roomba anyone)? Or George calling Mr. Spacely on his watch (aka the smartwatch)? Or Jane’s futuristic food making machine (did you know that NASA can now 3D print pizzas in space)?

    One particular Jetsons-predicted technology is the subject of this article: the virtual meeting. Three years ago, the thought of conducting an annual HOA meeting entirely online would have been unthinkable. Today it is mainstream.  

    So why did virtual meetings become the norm? The pandemic of course. In 2020, social distancing requirements were in place on both state and local levels, with the number of attendees restricted for indoor events. The fear of contracting an easily contracted disease also forced us indoors. And yet, business had to be conducted. So, face to face meetings were forced to go virtual.

    Two years later, not only have we become quite proficient in using Zoom, Microsoft Teams, and other virtual meeting apps, but we’ve come the realize the benefits of conducting virtual meetings. To name a few:

    • Higher attendance rate: We don’t have to carve time out of our busy schedules to drive to an in-person meeting.
    • Accessibility: We are no longer restricted by location. Remote HOA meetings are more convenient because we can attend from anywhere.  
    • Better participation: With in-person annual meetings you could have a full house but very little participation. With the virtual setup often comes better engagement. The cameras are off (and, thus, the pressure is off), so those who wouldn’t typically speak up at a public meeting are encouraged to be more involved. And some are more comfortable expressing themselves when they’re in a familiar environment, such as from home or the office. 
    • Reduced costs: Remote HOA meetings help save money by cutting travel expenses, meeting room expenses, etc.  

    (Other indirect benefits? No need for makeup. Heck, no need for pants. And that oh so lovely MUTE button.) 

    But we must also acknowledge some of the cons of conducting a virtual meeting, such as:

    • Fewer attendees: For those who choose not to become virtual meeting proficient, we lose participation.
    • Less engagement: After the first 10 minutes your mind starts to wander, you become distracted, you start sending emails and multi-tasking. Limited attention span is a definite possibility.
    • Technology problems: We continue to have technological problems such as connection issues, frozen speakers, the “you’re still on mute” and “I’m not a cat” phenomena. You could call them the modern day seances (“John…are you here?” Make a sound if you’re here. We can’t see you but we can hear you.”)
    • Video call fatigue is real! The feeling of being worn out by endless virtual meetings can hinder rather than foster productivity. And virtual meetings arguably dampen brainstorming. We are so hyper-focused on the face in that box our minds might not think as clearly or as creatively.

    Even with such cons, most likely virtual meetings are here to stay. So, we need to make sure we meet both the legal and practical requirements of holding a virtual meeting, which are different depending on whether one is conducting a virtual Owner or Board meeting. 


    Authority to Hold a Virtual Owner Meeting

    Currently, neither the Colorado Common Interest Ownership Act (“CCIOA”) nor the Colorado Revised Nonprofit Corporation Act (“Nonprofit Act”) expressly authorize a “virtual” meeting. But that’s just because the law hasn’t caught up with technology, at least in terms of terminology. For Owner meetings, C.R.S §7-127-108 of the Nonprofit Act provides:

    Unless otherwise provided in the bylaws, any or all of the members may participate in an annual, regular, or special meeting of the members by, or the meeting may be conducted through the use of, any means of communication by which all persons participating in the meeting may hear each other during the meeting. 

    In the above provision, the method of communication (whether in-person, telephonically, or virtually) is not as important as that all participants must be able to hear each other during the meeting. 

    With respect to a virtual meeting, everyone can hear each other if they have audio on their computer or mobile device. So, conducting a virtual Owners meeting should be allowed under the Nonprofit Act, as virtual platforms allow everyone to hear each another. 

    But if a participant uses the chat box vs. speaking out loud, you are not able to “hear” their commentary. If you enable the chat box feature, then simply have someone read the question or comment aloud. As far as allowing the chat box to be used at all is a different question, as it often leads to sidebar conversations, distracting commentary that is off topic, and other problems. It would be better to disable the chat box feature until certain portions of the meeting when Owner comments are appropriate, instead of throughout the meeting. 

    Finally, keep in mind that the Nonprofit Act defers to the Bylaws. If your Bylaws require all meetings to be conducted in person, or limit or prohibit certain types of communication methods for meetings, then you must follow such provisions. Better yet, amend them out so you can take advantage of the more flexible approach under the Nonprofit Act.

    Notice of a Virtual Owners Meeting

    There is no difference between legal notice for a virtual meeting vs. an in-person meeting. You need to meet the same requirements regarding timeframe for notice (notice but be sent no less than 10 no more than 50 days prior to the meeting), and delivery of notice (snail mail or hand-delivery, physical posting in the community if practicable and feasible, and email notice if you have the ability and if the Owner has requested email notice and given you their email address).

    As far as what must be included on the notice itself, CCIOA provides: “The notice shall state the time and place of the meeting and the items on the agenda.” So, what is considered the “place” of a virtual meeting?

    Some have argued that the place is the internet, and the address is the link provided for the meeting. Others include the management company or other host’s address as the place of the meeting, but make it clear that only virtual attendance is permitted. Again, while the law has not caught up with today’s terminology for virtual meetings, which do not have a physical address, the spirit of the statute is clear that if participants can hear one another, they should be able to meet.

    Check-in at Virtual Owner Meetings/Submission of Proxies

    While both in-person and virtual meetings have the same check-in process, virtual meetings tend to have more problems. Check-in at a physical meeting is relatively easy, as you’re sitting at a table verifying names and addresses against a list, and you’re physically exchanging proxies for ballots. 

    Checking in attendees at a virtual meeting could take a lot longer given its own unique problems. For example, attendees may have signed into the meeting using a mobile device that has a different name or no name at all, so verification is not as easy. Or someone could log on at the last minute with numerous proxies that must now be reviewed by the check-in person. 

    To prevent the above and other problems from happening, the Association should send out instructions well in advance of the meeting, and again as a reminder on the day of the meeting. You should provide for an earlier check-in time than normally used for in-person meetings, in case of technological problems. The instructions should provide the registration and link, user/password, clear instructions on how to log-in, and that attendees must sign in with their actual names (“my iPad” is not sufficient). You should keep individual participants in the lobby until their check-in is complete and their names displayed correctly.

    In addition, your notice should ask for proxies to be submitted as early as possible to avoid delays at check-in time, even if the law allows proxies to be submitted up to the meeting time itself. Note that the law does not require hard copies of the proxies be presented. The attendee could email you the proxy, upload it to the chat box, take a picture and text it to you, or otherwise deliver it to you, as long as you can read the pertinent information.

    Also, keep in mind that C.R.S. §38-33.3-317(1)(n) requires you to keep “ballots, proxies, and other records related to voting by unit owners for one year after the election, action, or vote to which they relate.”  This applies to proxies submitted for all meetings, including virtual ones. 

    You might want to provide an email address and/or call-in number in case people have problems logging in. However, an attendee’s inability to log on or understand the technological aspects of the meeting does not prevent you from holding the meeting. It is the owner’s responsibility to become familiar with the virtual meeting app ahead of time; it is not your responsibility to ensure they are technologically proficient or that their computers or mobile devices are correctly set up.

    Voting at Owner Meetings

    The Association should review its Bylaws for voting procedures, as there may be a particular voting method that must be used. For the most part, however, Bylaws do not prescribe a specific method of voting, and you’re allowed to vote however you wish, including a show of hands, rollcall, vote via the chat box, use of polling, or other voting tools that might be allowed with the particular platform.

    The one exception is the use of secret ballots. C.R.S. §38-33.3-310(1)(b) requires secret ballots to be used under two circumstances: (i) during contested elections (i.e., more people are running than positions open), and (ii) at the request of 20% of owners who are present in person or by proxy at the meeting.  

    So how does one conduct a secret ballot vote during a virtual meeting? At an in-person meeting you would simply use ballots that have no identifying marks of the person casting the ballot. But for a virtual meeting, you must preserve the secrecy and: (i) show that the attendee voted (for themselves and any proxies they held), (ii) without showing how they voted. Most regularly used virtual platforms cannot meet both foregoing requirements. So, unless you have the technology ready for such vote, which should be secured well in advance of the meeting, you cannot conduct the vote. 

    And what if you don’t know that a secret ballot is needed until the time for the actual vote? For example, nominations from the floor could cause a previously uncontested election to turn into a contested one, thereby requiring secret ballots. Again, unless you have the technology to conduct a secret ballot election, you cannot hold the vote.  Instead, you should announce that no election can occur due to the election being contested and the ability to conduct a secret ballot vote, and that a separate vote will take place sometime after the meeting (whether at a later in-person meeting or by mail). However, you may still want to hold a “meet the candidates” session and record it. That way, if you are conducting a separate vote by mail, you can link to this session. 

    Unruly, Disruptive Owners at Virtual Owner Meetings

    Unfortunately, disruptive and unruly attendees can occur at any meeting, virtual and otherwise. To combat this, the Board should already have in adopted a conduct of meetings policy pursuant to C.R.S.§38-33.3-209.5(1)(b). This policy sets forth the ground rules for the meeting. The rules could include, for example, only speaking when recognized by the chair, timeframe for speaking, only one person speaking at a time, no profanity, personal attacks, or shouting, etc. 

    The conduct of meetings policy is very important during a virtual meeting, as it is easier to interrupt, talk over one another, and sometimes get verbally abusive when you can hide behind the black box. If you believe a meeting is going to be heated, we recommend reading the ground rules at the beginning of the meeting, as a reminder to participants.

    And yes, it is ok to mute the person who continuously interrupts. And yes, it is ok to kick the unruly participant out of the meeting and prevent them from rejoining the meeting. Be sure you have given them ample opportunity to comply with the rules and notate their name and disruptive behavior in the minutes, before removing them from the meeting. And, if you still need to vote on something, you may want to move them into the virtual lobby instead of removing them from the meeting entirely. Once you are ready to vote on an agenda item, allow them back into the meeting to allow them to vote.


    Authority to Hold a Virtual Board Meeting

    The Nonprofit Act language for holding a Board meeting is similar to that for Owner meetings.  C.R.S §7-128-201 provides: 

    Unless otherwise provided in the bylaws, the board of directors may permit any director to participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may hear each other during the meeting. 

    So again, if all directors can hear each other at the same time, they can conduct the meeting virtually.  

    Notice of a Virtual Board Meeting

    The same notice that is required for in-person Board meetings is required for virtual meetings. Check your Bylaws for specific requirements, but typically no notice is required for Board meetings if the Board has already adopted a schedule for the year (e.g. the 1st Monday of the month). 

    However, if the schedule provides for in-person meetings, and you are switching to a Board meeting conducted entirely virtually, then obviously you must provide notice of such change to the directors. The Nonprofit Act provides for a minimum of least 2 days’ notice to directors if the Bylaws do not specify otherwise. Additionally, the law is much for flexible in providing notice to directors for Board meetings, in that neither mail or hand-delivery is required.

    Currently the law does not require notice of Board meetings to be sent to Owners; however, C.R.S. §7-128-203(3) requires the Board to make agendas (to the extent created) available for Owner examination so they can determine whether they want to attend the meeting, whether it’s being conducted virtually or in-person. The same statute requires the Association to inform the Owners, at least annually, of the method by which such agendas will be made available. 

    Attendance of Owners at Virtual Board Meetings

    C.R.S. §38-33.3-308(2) provides that all Board meetings to be open to Owners or their designated representatives, other than when in executive session. This applies whether the meeting is conducted in person or virtually. Therefore, should an Owner wish to attend a virtual Board meeting, you will need to provide them the link and the same instructions previously discussed with the Owner meetings (other than with respect to proxies), so you can verify their right to attend the Board meeting. 

    The Board has the right to mute all Owner participants at a Board meeting until the appropriate time. An Owner’s presence at a Board meeting is to observe only, not to vote, and to participate in a very limited manner. C.R.S. §38-33.3-308(2.5) requires the Board, prior to voting on any issue under discussion, to permit those Owners present to speak on the issue. Again, this applies to both in-person and virtual meetings. At its discretion, the Board may also allow an Owner forum during the Board meeting. However, other than with respect to the foregoing situations, Owners may be muted during the meeting. 

    Virtual Executive Sessions

    Although Owners are permitted to attend Board meetings, the Board meeting may hold an executive session (i.e., closed session) to discuss information that falls within the categories of C.R.S. §38-33.3-308(4). Accordingly, if any Owners are attending a virtual Board meeting, the Board may move them into the virtual lobby while the Board meets in executive session, and then bring them back into the meeting once the executive session is complete.

    The difficulty with virtual executive sessions is that you don’t know whether they are being conducted confidentially. You might have a rogue board member who is allowing a non-Board member to sit in on the discussion, outside of the viewing screen. Given this problem, it would be better for executive sessions to be held in person.


    Last but not least, here are some general technology tips for your virtual Board or Owner meetings:

    • Schedule and send out invitations well in advance
    • Provide clear instructions on how to sign in
    • Test equipment
    • Use software that everyone’s comfortable with
    • Remind people to test their connections
    • Have expert on hand to handle technical difficulties
    • Reboot your computer ahead of time
    • Clear your desktop screen
    • Don’t bring your laptop to the bathroom!!
  • 10/01/2022 11:40 AM | Anonymous member (Administrator)

    By Nicole Hernandez, PCAM, CIC, CCIG

    Almost every day we hear a story or read an article about a cyber-attacks.  With increasing cyber events and associated losses, it’s reasonable for community associations to be concerned about potential exposure and liability and are often left wondering “how do we protect ourselves?”

    Many communities work with management companies and third-party contractors to handle the management of the Association’s records. (Keep in mind when we are talking about data and records, this includes both digital formats as well as paper files.) However, the exposure is often identified too late when there is an event that causes a loss.  Although a management company is contracted to manage the association’s records, the records are still the custodial responsibility of the association and in the event of a loss, the HOA could be responsible for providing data breach response.

    Cyber liability policies include coverage for what can be the most expensive part of a cyber event; navigating the response to the event for the individuals affected.  The State of Colorado requires that individuals affected by such an event be notified and offered credit monitoring services. As you can imagine, when we are talking about larger communities that contain hundreds or even thousands of units, this can be quite an expense for the association’s operating budget to take on.

    Coverage for data breach response offered by a cyber liability policy often includes coverage not only for the notification and credit monitoring, but also for legal support, computer services, public relations and notification management expenses and associated costs.

    In addition to the data-breach response services covered under a cyber liability policy, liability coverage is also part of the policy.  The liability coverage part of the policy is meant to address any regulatory response, defense, penalties, expenses, and costs associated with the event.

    Fortunately, there are a number of products being developed and available to cover an HOA’s cyber exposure.  Many of the top HOA program carriers have developed a product designed to protect an HOA from this exposure and offer varying limits of coverage. Minimum coverage limits offered are typically $25,000 to $50,000.

    Recent market reports have reflected an increase of carriers offering cyber liability coverage which is increasing the limits of coverage available in the market significantly. Although cyber liability & data breach response premiums are currently inflated, the additional availability should eventually help steady premium rates.  In a community association, the cyber liability premium will be scaled based on the number of homes in the community.  

    A well-rounded risk management program not only includes proper coverage for associated losses the community may face, but also proper measures to protect against such loss.  Ensuring education, policies & procedures and resources for Board members and management company employees is a key foundation for any cyber risk program.  


    With over twenty years of Community Association experience, Nicole understands the structure of Community Association Management and the challenges Managers and Boards face daily. Nicole combines that background with a passion for education and her community.  She utilizes this foundation to provide risk management and insurance services to HOAs across Colorado along with CCIG’s specialized HOA team.

  • 08/01/2022 12:02 PM | Anonymous member (Administrator)

    By Aaron J. Goodlock, Orten Cavanagh Holmes & Hunt, LLC

    Among the lessons to be learned in the wake of Champlain Towers is the importance of financial and project planning. Owners and residents expect certain returns on their investment and, as a general rule, associations have a duty to protect, preserve and enhance property in the community. Besides avoiding catastrophes, planning for maintenance, repair, and infrastructure enhancements provides numerous additional benefits such as increasing marketability and value of homes and mitigating liability risks.

    Prudent planning presents both opportunities and challenges as communities approach a new post-pandemic era and continue to navigate evolving housing markets, adapting to changes in technology, and managing aging infrastructure. Community associations that embrace proactive long-term planning are poised to be much more successful.

    Financial and project planning requires involvement and participation by various stakeholders, including board members, management, and homeowners. It requires knowledge and a commitment to invest in the future of the community through:

    • identifying needs
    • budgeting
    • performing regular maintenance and repairs
    • preparing and updating reserve studies
    • establishing long-term goals and objectives
    • creating and implementing long-term financial plans
    • educating members about the need for, and benefits of, investing in the community

    Planning to address long-term maintenance, repair, and replacement of aging infrastructure is a fundamental element of fulfilling the association’s legal duties and responsibilities. Boards of directors owe fiduciary duties to the association and owners to exercise sound business judgment in meeting and fulfilling maintenance obligations, including adequately budgeting for routine maintenance and operating expenses, as well as funding reserves for future capital repairs, replacements, and improvements.

    In conjunction with maintaining and updating infrastructure, investing in modern technology and capital projects to incorporate contemporary amenities, facilities, and services is a great way to revitalize and add value to communities. Modernizing and/or repurposing antiquated or obsolete facilities can add substantial value to communities for current and future residents. For example, instead of repairing old, outdated equipment, consider replacing it with more modern energy-efficient, sustainable equipment. Modern equipment may be more expensive to purchase and install, but it could substantially reduce future maintenance and energy costs. 

    Balancing competing needs and interests such as addressing infrastructure versus investing in modern facilities can be challenging and difficult. Boards of directors and management must be cognizant of the community’s needs and desires, as well as the financial constraints and limitations. Most associations do not have sufficient funds to invest in every project or idea, so prioritization is key. Associations should solicit input and feedback from owners, in addition to engaging experts who can assist with improvement analysis and planning.

    Whether your community is addressing aging infrastructure, investing in new technology, or both, boards of directors should rely on the advice of qualified professionals to assist in developing long-term plans, strategies, and analysis. Associations are encouraged to seek assistance from professional community association managers, reserve specialists, financial advisors, engineers, and sustainability experts. By engaging specialists to assist the community, associations and boards can develop better, more sustainable and cost-effective solutions, while simultaneously limiting risks to the association for lack of due diligence or informed decision making.

    In June, 2022, Colorado Governor Jared Polis vetoed House Bill 1387, which would have required mandatory periodic reserve studies. However, despite any mandatory statutory obligation, performing regular reserve studies serves as a critical planning tool. Conducting reserve studies enables associations to anticipate large capital expenditures and evaluate areas of risk. Reserve studies help to determine what projects need to be done, as well as when they need to be done and how the association should be planning to fund those projects. For example, reserve studies may identify structural building components with significant deferred maintenance or conditions that pose an imminent safety threat. Issues involving significantly deferred maintenance (e.g., structural water damage) or conditions likely to result in physical injury (e.g., cracked or broken sidewalks) should be considered “high-priority” projects. Reserve studies can also help plan for lesser-priority projects in the future by estimating the remaining useful life of capital assets and major shared components (e.g., utilities, roofs, siding, water and sewer pipes, HVAC and boiler equipment, recreational facilities, drainage facilities, landscaping, etc.).

    As a board member or manager, determining which projects to prioritize can seem daunting or overwhelming, but it can also be very rewarding and valuable. By identifying and prioritizing projects in advance, associations can significantly reduce the level of financial and legal risks, and substantially increase the value and desirability of the community. 

    Associations are encouraged to consult with their professional advisors to develop long-term financial and capital improvement plans.

    Aaron J. Goodlock is an attorney at Orten Cavanagh Holmes & Hunt, LLC.  He provides general counsel and transactional services to community associations throughout Colorado. 

  • 08/01/2022 11:59 AM | Anonymous member (Administrator)

    By Bryan Farley, RS, Association Reserves - Colorado

    When living in a homeowner association, what are the things to think about? Some considerations may include: location, amenities, how much are the dues and assessments?

    One important topic that may be only discussed every five years is, ‘Is the Reserve account adequately funded’? 

    Based on statistics of over 70,000 homeowner associations, the answer most likely no. On average, about 40% of associations are in the ‘Fair’ range, meaning that there is a 10%-20% chance of risk of special assessment. Approximately 30% of associations are in the ‘Weak’ range where the risk of special assessment and deferred maintenance jumps to 30%-60%. However, 30% are ‘Strong’ range and experience a less than 1% chance risk of special assessments and other cash flow issues. 


    How can a savvy owner know whether or not their association is at risk for special assessment and why should they care? 

    A special assessment is fee levied on current homeowners to cover expenses or projects. For example, if there is a 10 unit condominium with a $30,000 roof to replace and no money in their reserve account, then each owner must pay a $3,000 special assessment to cover the cost of replacement. The reason this is a problem is that this situation can be easily avoided if the prior board and owners had been putting money away for this predictable expense. If a potential buyer is not aware that the reserve account was not sufficiently funded for this expense, then once they move in, the new homeowner will have to foot the $3,000 bill.

    A Reserve Study is the tool used to establish whether or not an association is at risk for a special assessment or deferred maintenance as well as providing direction and recommendations to current owners on how to be proactive with their funding. A professionally completed Reserve Study will ensure that every owner, regardless of when they happen to live at the property (or when a project needs to be paid for), will pay a fair and equitable portion of the reserve expenses. 

     A Reserve Study helps boards explain how funding for the maintenance of the common area elements benefits all owners right away, as well as in the long run. As soon as an Association begins to implement the Reserve Study report, current member-owners benefit in several ways:

    • Reduced conflict. Assessments based on a Reserve Study are founded on hard facts and objective analysis. Owners may still disagree about how quickly to top off their Reserve Fund, but with the report in hand; discussion can proceed from a baseline of accepted facts.

    • Predictable costs. Without a Reserve Study, owners never know when the next maintenance surprise will bring about a sudden Special Assessment. Once leaders start to act on the Reserve Plan, owners know what to expect, and develop confidence in their Manager and Board.

    • Enhanced resale values. Savvy buyers take Association fees into account when they decide how much to offer for a unit. One of the most frequent objections selling agents hear from prospects is, “How do I know fees won’t go up after I buy?” A professionally-written Reserve Study is the best response to this concern, because it provides exactly the disclosure buyers are entitled to and the assurance they need. 

    • Lower costs. Deferred maintenance will only be more expensive the longer it is ignored. For example, do you suppose a wood siding project cost more in 2019 or in 2022? If a board in 2019 deferred a large siding project in hopes that they would have more money in the future may be shocked to find that the costs for the exact same project have now greatly increased.

    In addition to the points above, the Reserve Study will also promote fairness among all owners, present and future. A Reserve Study must provide the following factors when providing funding recommendations: 

    1.Adequate Reserves when Required

    2.Budget Stability

    3.Fair Distribution of Contributions

    4.Fiscal Responsibility


    To elaborate, the Reserve Funding Plan must provide adequate funds when they are expected to be required at a future point in time. If $30,000 is needed in the year 2025 for a new roof, the Funding Plan should yield a Reserve Balance of at least $30,000 in that year. Because associations are corporations and their members expect the corporation to be run in a stable manner, it is important that the budget be designed for year to year stability. Large assessment changes from year to year indicate instability, and homeowners deserve a degree of stability in order to plan their own budgets.

    To be fair to the owners and to stay away from accusations of “self-dealing”, it is important to offset inherently unstable periodic Reserve expenses with a stable Reserve income stream. It is fundamentally unfair (and potentially irresponsible) to burden one set of owners with the cost of a replacing a Reserve component that deteriorated over a period of many years. This means that in addition to spreading the Reserve contributions fairly among the present unit owners, it is important to spread the Reserve contributions fairly among current and future owners. 

    Board members are “fiduciaries” (caring for the assets of others), and they have to act in a fiscally responsible manner, making sound, business judgement decisions. Board members are corporate officers of multi-million dollar Real Estate corporations. A Reserve Study will act as the board’s guide in making responsible, informed plans as they fulfill their job to “maintain, protect, and enhance” the assets of the corporation.

    Rather than being in the dark about upcoming projects, current homeowners should utilize the data provided in a Reserve Study to assess the current trajectory of an association’s reserve account. This data, provided by a credentialed professional, will bring insight and order to a distracted and cluttered housing environment and allow homeowners to make wise decisions about the care of their properties. 

    Bryan Farley, RS is the president of Association Reserves, CO/UT/WY. Bryan has completed over 2,000 Reserve Studies and earned the Community Associations Institute (CAI) designation of Reserve Specialist (RS #260). His experience includes all types of condominium and HOAs throughout the Rocky Mountains.

  • 08/01/2022 11:47 AM | Anonymous member (Administrator)

    By Mary Sarah Schweiger, Citywide Banks 

    Are you a board member or a manager of an HOA covenant community? If yes, you understand that it can be hard and expensive to keep your community looking its best. One possible solution to consider is obtaining a loan from a local bank to complete the entire capital improvement project all at once. 

    Imagine: The buildings are damaged and continue to worsen right before your eyes. Or the community has a sewer system that is slowly but surely falling apart, causing backups. Or, the roads and the parking lots have lived their best lives and require serious repair. Or maybe it is time for a paint refresh. What does an association do? Does the reserve account carry a high enough balance to complete these capital improvement projects, and is there enough left over to facilitate emergency projects? Can the community continue to afford the band-aid solutions that prolong these projects? 

    If you are like most HOA's, you have put aside money in your Reserve account regularly; however, the project could cost more than what you have saved. Plus, it would be dangerous to deplete the reserves in the event there is an emergency in the future. Obtaining a loan can get the job done faster, lessen the strain on your reserve account, and allow the Association to pay overtime to lessen the strain on the homeowners.

    This is not always the most straightforward task, and it can take some time. Here are some initial questions and answers to help you decide if your Association should seek a loan and how to get started:

    • The first step is to always speak to your local banker. 
      • Each bank is different in its loan requirements. It is good to understand the information you will need to start the process and build that relationship with your banker early in the project.
    • Check your governing documents. 
      • It is essential that the Association's documents allow the Board of Directors to borrow money and pledge future assessments and enforcement rights to the bank to secure the loan. If this is not in your governing documents, you may need to make an amendment. I would seek an opinion from your attorney.
    • Who can approve obtaining a loan?
      • Usually, borrowing money requires a vote of the homeowners. Does that mean 2/3 of the homeowners? Or does that mean a majority of the homeowners present at a special meeting? Can you do this at the annual meeting of the members? Or does it have to be a special meeting with special notice requirements? Or maybe it is as simple as the board of directors' approval. Your governing documents will guide you. 
    • What is the financial health of your Association? 
      • Are you a healthy association with few to no delinquencies? Are you able to meet your operating budget on a monthly basis with the monthly dues you collect? Or are you dipping into your reserves on a regular basis to make ends meet? Could your operating budget afford a loan payment? Or do you need to increase dues or get a special assessment to repay the loan? 
      • Remember, the income of the Association is what the homeowners pay to the Association. What comes in must be able to pay the expenses, i.e., water, electricity, management fee, trash, landscaping, etc., including the transfer to the reserve account. You will want to continue to transfer to the reserve account because it ensures future projects will be supported as needed. The Association will continue to stay healthy above and beyond the loan.

    - What is the entire scope of the project?

    • Do you have a clear picture of the whole project and all parties needed to complete the project's scope? What is the project timeline, and what is the estimated cost for completion? Do you have a company you know and trust and want to work alongside? Have they provided a complete bid to do the work? Are they reputable in the community?
    • It is always best practice to obtain 3-4 bids for comparison. Try to compare apples to apples. Ask for references. Get to know these companies. What is their customer service like after the project is completed? 

    Ask questions, this will help start the process. Your next course of action will depend on the answers to these questions. Maybe you will need to start with amending the documents and cleaning up delinquencies. Or perhaps you just need to amend the budget and set a special meeting for the homeowners. Feel free to reach out to your local banker with questions or concerns. 

    A little about me, I have been a banker at Citywide Banks for the last 15+ years. I take care of the HOA portfolio at Citywide Banks and have experience lending to Associations across Colorado. I have sat on an HOA board for eight years and have experienced a lot (embezzlement, large million-dollar capital improvement projects, insurance claims, etc.)! We are creative at meeting the needs of the community. Citywide Banks prides itself on being a Community Bank, helping communities across Colorado. I am always happy to help and share my experiences and knowledge. Feel free to contact me at

  • 08/01/2022 11:43 AM | Anonymous member (Administrator)

    By April Ahrendsen, CIT Bank

    Does your community association need to fund a big project? Whether it’s tackling deferred maintenance, making emergency repairs, or upgrading landscaping, you have options to cover the costs – and financing may be the right choice.

    Three Options for Big-Ticket Projects

    1. Reserve funds can be a good choice if they’re available and the project meets the community criteria.
    2. Special assessments can be used to raise funds without permanently increasing assessments to cover a specific project within a particular timeline. 
    3. Financing can be a smart option when reserve funds are unavailable, the project does not meet the criteria for using such funds, or special assessments place financial difficulties on your homeowners. 

    Three Tips for Seeking a Community Association Loan 

    Get your papers in order. Banks are highly regulated institutions, so they’ll need to examine your documents carefully. 
    • Make sure the community documents are complete and current. It can be extremely difficult to underwrite a loan if they aren't.
    • Know what the association can and cannot do. If, for example, the bylaws require approval by association members before the board seeks a loan, be sure to have that approval in hand. 
    • Consult with your legal counsel to resolve any ambiguity before you begin your application. 


    Be specific about your HOA project’s scope and cost. Banks that specialize in HOA lending to community associations often provide project-specific financing. It may be for façade work, new roofing, drain systems – almost anything – but remember:
    • An itemized budget is key.
    • The bigger the project, the more complicated the variables will be.
    • You may want to hire an experienced construction manager to define the project specs, evaluate contractor bids and prepare a detailed budget presentation as an extra cost in the short run could be more than offset by savings later.

    Work with an experienced community association lender. A financial provider that understands community association banking can offer:
    • Products that streamline the HOA lending process
    • Creative solutions for difficult situations
    • Flexible loan structures, competitive rates, and expedited loan processes

    Working with a financial provider with experience in community association lending can be especially beneficial. The bank’s experts can help you through the loan process – even attend your board and membership meetings – and assist you with gaining the necessary approvals you need to move your projects forward. 

    1. Get your papers in order. Banks are highly regulated institutions, so they’ll need to examine your documents carefully. 
    • Make sure the community documents are complete and current. It can be extremely difficult to underwrite a loan if they aren't.
    • Know what the association can and cannot do. If, for example, the bylaws require approval by association members before the board seeks a loan, be sure to have that approval in hand. 
    • Consult with your legal counsel to resolve any ambiguity before you begin your application. 


    1. Be specific about your HOA project’s scope and cost. Banks that specialize in HOA lending to community associations often provide project-specific financing. It may be for façade work, new roofing, drain systems – almost anything – but remember:
    • An itemized budget is key.
    • The bigger the project, the more complicated the variables will be.
    • You may want to hire an experienced construction manager to define the project specs, evaluate contractor bids and prepare a detailed budget presentation as an extra cost in the short run could be more than offset by savings later.

    1. Work with an experienced community association lender. A financial provider that understands community association banking can offer:
    • Products that streamline the HOA lending process
    • Creative solutions for difficult situations
    • Flexible loan structures, competitive rates, and expedited loan processes

    Working with a financial provider with experience in community association lending can be especially beneficial. The bank’s experts can help you through the loan process – even attend your board and membership meetings – and assist you with gaining the necessary approvals you need to move your projects forward. 

    The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the views of CIT, a division of First Citizens Bank. For any matters concerning your specific needs and objectives, you should seek the professional advice of your own independent legal counsel, insurance advisors or other consultants.

  • 08/01/2022 11:39 AM | Anonymous member (Administrator)

    By Jennifer Kinkead, RowCal

    Have you ever found yourself looking at a set of association financials that appear to be a bunch of codes that need deciphering? Imagine the pressure of being a new community manager at your first Board meeting, and you are expected to explain the association's financial position. The financial portion of the meeting is inching closer, and your worst fear of having to explain this outlandish financial blueprint is before you. At that point, you find yourself thinking, “How can I explain the financial state of the association if I cannot properly read the financials?” 

    I am confident we have all felt like this at one point or another in our careers. The great news is that you will become more familiar once you know how to properly read an Association’s financial statements. This incredible knowledge will empower you to provide a simplified overview that you can confidently share with your Board members and homeowners. I hope to help you comprehend the “story” your association’s financial statements tell by highlighting the key points to focus on when reading them. The best way to decipher any code is to simplify it! 

    To begin, you must become familiar with the accounting method(s) your association practices as there are three common accounting methods in this industry: Accrual accounting, cash-basis, and modified-accrual accounting. The most common methods used are accrual accounting and modified-accrual accounting. 

    The first part of this story can be compared to a “table of contents” or a list of what a financial package should contain on a monthly basis. The community manager should receive a financial package that includes: a Balance Sheet, a Revenue and Income Statement, an A/R Aging Report, and Bank Statements/Check Register. These items I have just listed can be compared to chapters of your association’s financial storybook. 

    The balance sheet is the part of the story that shows the financial position of the association. There are three essential items to verify when reading an association’s Balance Sheet. First is the operating account balance to ensure there are enough funds in the account to pay the monthly bills; next is the reserve funds balance to ensure there are enough funds for expected and unexpected reserve expenditures. The last key point is the receivables balance to ensure the association is not exhausting more monthly funds than received. It is important to ensure an association does not have more money in one account than is protected by FDIC insurance ($250,000.00.) The Balance sheet is a helpful way to see if there are any potential cash-flow problems.

    The next chapter in the financial story is how the association operates compared to its budget. This information can be found in the Revenue and Income Statement. This statement is a side-by-side comparison of how the association is operating or spending vs. how the association budgeted. The budget is a planned, estimated expenditure for the fiscal year; however, it does provide the framework to evaluate revenue and expanse in relation to the current budget. Those two columns will not always match up, which can be described as a variance. Any variances are the key points to focus on when reading this statement, as there are two distinct types of variances. A real variance is a result of over-spending or under-spending, and a timed variance is due to the timing of the expense. Timed variances occur as most budgets are typically divided into 12-month increments, but contracts only last for a 6- or 8-month period. When a timed variance happens due to a contract, the budget will typically balance towards the end of the fiscal year. You want to focus on any variances the association may be facing and explain the reasons to your Board members. 

    As you navigate your financial packet, you will approach the most crucial part of your association's financial story, the A/R Aging report. This report is a detailed record of any owner who may be delinquent on their monthly assessments. You will be able to view each owner by unit address, the amount(s) they are past due, and the length an owner has been past-due. By using this report, you can ensure the association is collecting those funds according to the Collection Policy of the Association. If this number is large, this could indicate the association may be facing a cash-flow problem. Make sure you involve the Board and association's attorney on the progress of this report. 

    Coming to the end of our story, we will then find the bank statements and check register. When looking at the bank statements, you want to focus on ensuring it reads the same as the balance sheet. It is important to verify if the account balance has remained positive each month. The check register is a great tool to view who was paid and the details of the payments. It is also a record of those payments if you need to reference them at any time. 

    Knowledge is power! Remember, you gain financial knowledge by knowing how to read a financial package properly. By focusing on the key points listed above, you can confidently tell your association’s financial story, as each association has a unique story to tell.

    Jennifer Kinkead is a Supervising Community Association Manager with RowCal Denver. Her career began in the Association accounting department five years ago before progressing into a Community Manager role. Jennifer takes pride in educating her colleagues on the importance of association financials, budgeting, board education, and appropriate time management.

  • 08/01/2022 11:32 AM | Anonymous member (Administrator)

    By Jake Brooks, AGS Construction Inc.

    Everyone wants their community to be the absolute best it can be especially when it comes to safety, security, and appearance. Some boards will do everything possible to keep their reserves robust, dues stable and special assessments from occurring. In this environment many managers find themselves being asked to delay scheduled maintenance and capital improvement projects even when it comes to life safety issues. Kicking this proverbial can down the road proves to be exponentially more costly in the future in more cases than not.

    As professional managers part of your responsibility is to educate board members, provide them with expert opinions on defects, options for repair and judiciously execute actions on your community’s behalf. It is the job of a good restoration contractor to not only provide an estimate on cost of repair but to also act as a consultant and find solutions that strike a balance between maintaining a budget and addressing life safety issues and improperly constructed assemblies that may be present and need of repair in a community.

    In the past few years, we have all dealt with personal increases in cost of living, food, fuel and more. The same can be said for our industry. Much of the increase in construction cost is driven by a combination of the availability of skilled labor and the materials needed to make the necessary repairs. In the past year major suppliers of coatings have had to increase prices five times, siding has increased nine times, and roofing materials have increased by more than  thirty percent! Every building component has experienced the same increase and to add to that have become harder to obtain in some cases. Unfortunately, today this trend is the “rule” rather than the “exception” and right now the forecast is that this trend will continue going forward.

    To control job related costs, part of planning for any capital improvement project should include partnering with a reputable contractor that is aware of the above-mentioned supply chain issues, has access to available skilled labor, can meet the desired start/end dates, and has the experience to provide viable solutions for any type of project. The reality of what is requested and what can be provided are, in some cases, not the same. A knowledgeable contractor should be able to provide the insight it takes to produce viable solutions to overcome all these obstacles all while acting as a trusted consultant.

    For most contractors there can be a lengthy delay in scheduling quality crews between the authorization of work to the actual mobilization of resources. Additionally, depending on materials selected, this length of time could be even longer. Most companies will not commit resources to a project with out a fair degree of certainty that materials will be available for work to begin. Depending on the type of restoration and time of year this could potentially extend project start dates by months due to weather patterns and conditions needed for application of certain products such as stucco, roofing, sealants, and coatings. 

    The good news is by choosing a contractor that also acts as your project consultant there is a solution when moving forward with capital improvement and restoration projects. These contractors typically have in-house tradespeople, solid working relationships with design professionals, long term relationships with material suppliers, storage yards and warehousing capabilities. Having in-house tradespeople allows for better control of not only quality but also scheduling of resources to any given project. Having good relationships with design professionals allows for timely resolutions to the “known unknowns” we all encounter due to poor existing conditions. Long term relationships with material suppliers results in preferential treatment during product procurement. Having the ability to store and warehouse materials helps mitigate potential price increases and price fluctuation by being able to buy in bulk.  This also ensures there will be no lag in production due to delivery delays. Combine all these qualities and you have a contractor that can preform the repairs necessary to any community with little to no setbacks from the supply chain.

    So, avoid kicking that can down the road any longer by partnering with a contractor that can educate your boards on expected price increases for the foreseeable future and help them maintain their reserves, preserve the stability of their dues, and keep special assessments to a minimum.

    Jake Brooks is the Business Development Manager at AGS Construction, Inc (2022 CAI-RMC Titanium Sponsor). Jake has over 21 years of construction experience focusing on large scale HOA complexes and commercial and residential projects. Jake is experienced in building envelope, structural, civil and concrete repairs. He has an extensive knowledge of and experience with building materials. Jake is known for the creative solutions he offers for complex solutions. Jake can be reached at

  • 08/01/2022 11:28 AM | Anonymous member (Administrator)

    By Gene T. West, RBC Wealth Management  

    When we discuss the best practices for investing association reserve funds in today’s world, it is probably best to review a bit of history with this topic. Community Associations began to take hold during the 1970s. During the 1980s, association reserve accounts began to grow. At the time, interest rates were substantially higher than today. The 10-year US Treasury Note was yielding 9.04% on January 2, 1986, compared to about 3% +/- today. Virtually all the reserve assets of HOAs in the 1980s were sitting in bank savings accounts or money market accounts when the 10-year US Treasury Note was as high as 12.02%. Since ‘real’ rates were so high, no one cared about ‘investing’ the funds. The 1990s brought lower rates and slightly more sophisticated investing by community associations. In 1996, the 10-year treasury had declined to 5.58%. Laddering, or staggering maturities became popular. This was, and still is, a great way to provide liquidity and may guard against the risks associated with dramatic moves in interest rates. Making use of other US government securities like GNMA mortgage bonds also came into play. By 2005, the 10-year treasury yield had dropped further to 3.89%. Using a financial advisor specializing in HOAs was becoming more popular, and a small percentage of communities were using mutual funds. On 7/8/2016, the 10-year treasury closed at a then record low yield of 1.36%. Association boards were patiently waiting for rates to go higher. But they didn’t. From 2016—2021 associations struggled with the concept that inflation was outpacing the earnings of the reserve account, and most all associations were losing purchasing power on their reserve fund assets (inflation being higher than the rates earned) every day. Most association boards are now discussing this concern. The fact is, if earnings in a reserve account do not keep up with inflation, there is generally only one way of making up this difference. That is by raising assessments. Remember, every dollar you earn in a reserve account is one less dollar that needs to be assessed to owners.

    Today, we spend a lot of time discussing the definition of ‘risk.’ Is risk defined as the possibility you could lose money on an investment? Or is risk defined as the possibility that you could lose purchasing power because of inflation? Each board must prioritize its concerns on this topic.

    When it comes to ‘best practices’ in today’s world, we see boards taking one of two avenues. Those boards who define risk as the chance you could lose money, will continue to invest reserve funds as we have done in the past: laddering CDs, treasuries, and making use of other government securities like GNMA’s. The boards that view risk as not keeping up with inflation will invest a portion of their reserve funds in non-US Government instruments in order to obtain a higher return.

    The bottom line on reserve accounts is that this money is being put aside to spend at a future date. Associations must always have cash available when assets need to be repaired or replaced. Laddering CDs or treasuries can be essential in any investment strategy. Using a financial advisor specializing in Community Associations may assist in improving the chances of the association having a strategy. It may also help fulfill any obligation that each board member has to their community and can assist with a more proactively maintained community.

    Gene T West

    Senior Vice President - Financial Advisor

    Investment and insurance products offered through RBC Wealth Management are not insured by the FDIC or any other federal government agency, are not deposits or other obligations of, or guaranteed by, a bank or any bank affiliate, and are subject to investment risks, including possible loss of the principal amount invested.

    RBC Wealth Management does not provide tax or legal advice. All decisions regarding the tax or legal implications of your investments should be made in connection with your independent tax or legal advisor.

    Interest rates sourced from FactSet web application.

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