Monday, July 12, 2004

Duties and responsibilities of HOA board members

This article is worth a read.

Reserves of $3,000-$6,000 per unit recommended

HOA Boards should accumulate reserves of about $3,000-$6,000 per unit, according to this article. I take these recommendations as being a bit extravagant, driven, perhaps by the wishes of the banking industry, which salivates at the thought of receiving such huge sums of money. Richard Thompson writes,

"As a rule of thumb, the average garden variety condominium should have around $3000-$6000 per unit in reserves, depending on amenities. There are many HOAs that should have much more than that because of deferred maintenance or extensive common elements. Even the most modest properties should have tens of thousands of dollars socked away in reserves. Larger, more complex properties should accumulate reserves in the millions. To truly know what level of reserves applies, a reserve study must be performed by an experienced and qualified reserve analyst. (See for a list.)"

Friday, July 09, 2004

Resources for HOA boards

This Old House offers a wealth of information about home and building maintenance and repairs.

Regenesis publishes a newsletter and offers paid subscribers access to what appears to be a lot of info. I haven't subscribed yet.

What should go in an HOA owners' handbook?

Creating an HOA owners' handbook can be as simple or complicated as you want to make it. The mission of a handbook is to make it easy for owners and residents to follow the HOA's rules and to get things done. The trick is to keep a handbook small and readable so that people will use it.

One way to start is to simply rewrite the HOA's bylaws or covenants into understandable language. This can be done by making a list of topics and writing simple explanations. Another is to write a list of Frequently Asked Questions and answering them.

After the HOA's basic rules have been covered, you can expand your book to summarize rules that have been created and updated by the board of directors since the HOA was formed. The easiest way to do this is to make a list of topics and then research board minutes to find the answers to the questions created by the topics, say pets or parking.

What are the most common topics? Here's a list, which will be edited over time:

1. What can I do to my home without getting permission from the HOA board or a delgated authority?
2. When to I need to get permission before I do something to my home?
3. How do I apply for permission?
4. How long does it take to get permission?
5. Why do I have to get permission?
6. What happens if I do something without getting permission? Are there penalties?
7. How do I get help from the HOA or the management company?
8. Who do I call?

9. Is there a web site?
10. I want to get cable TV. How do I do this and do I need permission?
11. I want to get satellite TV. Where do I put the dish, and how do I get permission?
12. I want to put in some plants. What is the process for getting permission?
13. Are there rules regarding planting flowers, bushes and trees?
14. Do I own any of the land outside my unit, or is it owned by the HOA?
15. What does the HOA do for me when it comes to maintaining my unit?
16. What maintenance responsibilities are mine?
17. Can the HOA require me to spend money to maintain my unit?
18. Snow. When is snow plowed and under what conditions?
19. Trash. How and when is trash picked up?
20. Are there limits to what trash will be picked up by our service and HOA?
21. Pets. What are the rules?
22. Parking. What are the rules?
23. Painting. Can I paint the interior of my unit without permission?
24. Painting. Are there any rules about painting my interior?
25. Painting. Can I paint the exterior of my unit?
26. Remodeling. Do I have to get permission to remodel my kitchen, bath, basement or whatever?
27. Garage doors. Do I have to keep my garage door closed?
28. Holiday decorations. Any restrictions regarding lights and other holiday decorations?
29. Peddlers and solicitors? What are the rules?
30. Parties. What do I do about parking when I have a party?

What house paint to use for townhomes?

Sorting through the exterior paint options for an HOA townhome complex is time consuming, but once I've done my research, we'll have a useful report for all to use.

This Old House explains how to select a paint.

This Old House explains how to select a contractor.

Our management firm doesn't have much painting and paint contracting experience. As a result, I'm talking to paint suppliers and contractors, using my reporting and research skills to figure out how the painting industry works in the Denver area.

Here is what I think happens:

Paint manufacturers all produce pretty much the same product with similar warranties, application processes and life expectancies.

Paint manufacturers market through painting contractors and stores. To attract contractors who will help sell their paint and then apply it appropriately to minimize warranty claims, paint manufacturers try to make using their products as profitable as possible for painting contractors. They do this by giving price discounts that vary depending on the volume of business they do with each contractor. The contractor keeps the discount and marks up the paint. Manufacturers produce paints that require five applications—power wash, primer, coat one, rollback, coat two—plus caulking and other repair work. This creates work and billable time.

In addition, manufacturers work with HOAs and other commercial prospects in developing job specifications, and they share the names of their favorite contractors with prospects. This creates a bond and co-dependence between manufacturers and contractors. It also can be helpful to consumers who know the paints they want to buy and are looking for dependable contractors and vise versa.

We've started by creating specifications for bidding painting contractors. Our process began when I e-mailed specs to our HOA management firm. Our manager then combined my specs with her ideas, and we reviewed them at our board meeting. I'll publish them later.

Now I'm shopping for paint. It is important to talk to and meet with each painting company's representative for your area. Each company offers various degrees of consulting to HOAs, and they all have similar but different requirements about how you have to use their products to qualify for their warranties.

Consumer Reports gives Glidden paints, which are distributed through Home Depot, their highest ratings. HD says it sells its Glidden paints to consumers and contractors at the same price, regardless of quantity. I have contacted the Glidden representative for this area's HD stores. He is visiting our property and will send paint recommendations and a description of Glidden's warranty qualification process.

Lowe's sells a house brand made by Valspar's a publicly-owned company and says it's the sixth largest paint maker in the world. In Denver, Lowe's doesn't have any regular contacts with painting contractors who paint exteriors. This suggests that the contractors are getting better deals elsewhere. The Warranty deal at Lowe's looks pretty simple. Your contractor pressure washes the building and lets it dry 72 hours. Then a Lowe's primer is applied followed by a Lowe's paint. Lowe's offers its top paint, American Prospect, which has a "lifetime warranty" and can be expected to last 12 to 13 years here in Colorado.

Kwal is a paint company based in Texas that serves the Rocky Mountain states. It's claim to fame is that it has established relationships with contractors who follow the processes that it specifies for a job to qualify for its 5 year warranty. It's warranty document is quite detailed, and it requires that a Kwal represenatative sign off on each stage of the job. Its local rep asked to meet with me and faxed me a lot of information about her products and warranty process.