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News & Updates

Scheduled telephone outage

Wednesday, July 19th, 2017

Cadden Community Management phones will be down Thursday, August 3rd from 1:00-4:00 PM to switch over from regular phone lines to fiber optic. We apologize for the inconvenience during this upgrade to our phone system. If you need to reach your community manager during this time please contact them by email.

Reserve Fund

Wednesday, July 5th, 2017

The following article is an excerpt from the annual Cadden Community Management board training seminar.

Reserve Fund and Reserve Studies
Susan Rodriguez, CAASP™
Cadden Community Management

What is a Reserve Fund?

• A reserve fund is money set aside specifically and solely for the replacement of EXISTING assets with finite useful lives.

• It is not a rainy day or slush fund that is intended to be used when the association gets low on cash in the operating account.

• Reserve funds are reserved for the particular components within the community that the homeowners association is responsible for (such as roads, roofing, stucco, fencing, paint, and equipment.)

Do we really need a Reserve Fund?

There is no State provision mandating a reserve fund, but……
• Required by the Association’s Covenants, Conditions & Restrictions (CC&Rs – 10.3.B)
• Required by Lenders
• Required to be disclosed by statute (Resale Disclosure 33-1806)
• Establishes guidelines for the community

Do we REALLY need a Reserve Fund?
• Yes, yes you do.

It is your Fiduciary duty, as a Board member, to ensure your community has Reserve Funds

Maybe we can get away without Reserves:
• We’ll just “pay as we go.”

• This means Special Assessments are likely.

• Special assessments are wildly popular and your membership will probably be thrilled to hear about them. (SARCASM)

Maybe we can get away without Reserves:

• I don’t intend to sell my home, so who cares about the lenders? My neighbors are not moving, either. Ever.
• I won’t be around when it needs replacing, anyway, so why should I care?
• Can’t predict when things need to be repaired or replaced
• Fiduciary Duty

#1 – Best response for all arguments against reserves?

• Board members can be sued for inadequately funding Reserves!

Where SHOULD reserve money come from?

• Budgeted Contributions (monthly, quarterly, semi-annual and yearly financial contributions from homeowners)

• Close of Escrow contributions as directed in CC&Rs

Unpopular methods of funding Reserves:

• Special Assessments

• Loans

How much do we need?

Tool for ensuring adequate funding: Have a Reserve Study conducted for your community.

A Reserve Study? What’s that?
• A detailed inventory of community assets
• Forecast of yearly budgets for Reserve Contributions
• Schedule of planned major expenditures

Do I really have to have a Reserve Study?

• Assists in planning/scheduling for maintenance and future expenses to prepare yearly budget
• Gives the association a blueprint for financial stability – funding for future.
• Banks are now requiring for loans
• Proper funding should alleviate a special assessment (fingers crossed).
• Can assist in explaining to homeowners why dues are increasing.

How do we get a Reserve Study?
• Professional Company
• Full reserve study (starting from Ground Zero)
• Update with site visit (uses your previous reserve study for baseline)
• Update with no site visit (uses the previous study but no in person re-evaluation of assets)
• Do-It-Yourself

How much is this gonna cost us?

Depends on several factors:
• DO YOU HAVE LOTS OF STUFF? (Amenities in your community)
• HOW BIG IS YOUR COMMUNITY?
• Starting $800-and up

Reserve Studies – Keep it updated:
• 3-5 years
• A higher number of amenities or gated communities? Consider more frequent update.
• Inflation rates change
• Number of paying members change
• New homes, vacant homes, foreclosures etc
• Before any large dollar improvements
• After major emergency

OK, what do I do with this Reserve Study now that I have it?

• Determine your funding goal, based on the information the study contains.
• Percentage funding
• Threshold funding
• Baseline funding

The better your funding, the lower your risk of a special assessment.

Consider a Reserve Fund Policy

This policy could cover:
• Expenditures
• What funds will be used for
• How/Who expenditures be authorized
• Is there a minimum $ amount?
• Primary source of funding Reserves
• IF the HOA borrow from Reserves and how to repay
• How often will Reserve Study be updated?

Few things to remember…
• Having a Reserve Fund
• Should not be used to pay monthly expenses
• CC&R/Disclosure requirement
• Reduce need for loan or special assessment
• Fiduciary Duty
• Detailed list of reserve items and lists years for required maintenance years
• Show future expense to help in bidding
• Future expense to prepare yearly budget
• Explain importance to homeowners and reason for dues increase

July Birthdays at Cadden

Saturday, July 1st, 2017

“Happy Birthday” wishes go to:

Ashley Gutierrez, Linda Hansen, and Susan Rodriquez

Thanks for all your hard work!

Cadden is now closed for lunch

Tuesday, June 20th, 2017

Beginning Monday, June 26, 2017, Cadden Community Management will be closed for lunch between 12:00 – 1:00 PM.

Who Is My Property Manager?

Thursday, June 8th, 2017

Seems like a simple question! However, when you live in a Homeowners Association it is not that simple.

Living in a neighborhood with a Homeowners Association comes with the responsibility to understand and comply with the Covenants, Conditions and Restrictions (CC&R’S) and Rules and Regulations for the community. This applies to the owner occupant, as well as an owner leasing their property to another. If the tenant in that property does not abide by the rules, ultimately the owner is responsible.

Many Homeowner’s Associations will hire a Management Company to take care of the day to day operations of the community, including enforcing the CC&R’s, the rules and regulations by performing site tours. These managers are referred to as Community Managers, HOA Managers and Sometimes Property Managers. Many times, a tenant who lives in an Association will confuse the HOA Property Manager with the Real Estate Property Manager that is hired by the owner to take care of their individual property. An HOA property manager is not responsible for collecting rent, taking care of repairs in the home (usually), nor advising tenants of their responsibility in their lease agreement. It is the owner or their Real Estate Property Manager’s responsibility to supply the tenant with all pertinent information including CC&R’s, rules and regulations that they will be subject to by living in that neighborhood.

HOA Manager:

• Hired by the Board of Directors to manage the Association.
• Prepares financial statements, budgets, meeting notices.
• Arranges care and maintenance of the common areas.
• Enforces the Governing Documents (CC&R’s etc.)
• Site visits to identify noncompliance issues.
• Sends out violation letters.
• Attends Board Meetings.
• Communicates with Homeowners and Board Members.
• Investigates complaints.
• Keeps the Board of Directors informed of changes in State Statutes that govern Homeowners Associations.

Real Estate Property Manager:

• Hired by an individual owner to Manage their rental property.
• Find and qualify potential tenants for their rental property.
• Prepare Lease, provide Governing Documents to tenant.
• Collect rent and deposits.
• Communicate with HOA Manager if a noncompliance issue occurs.
• Arrange repairs and maintenance for owner’s rental.
• Provide owners financial statements for their rental.
• Comply with Governing Documents in regards to number of pets, lease term, sign restrictions.

If you are a tenant, and are having an issue with the rental property you are living in you need to contact the Real Estate Property Manager, Not the HOA manager. Make sure before you rent any home you ask the person showing you if it is located in an Homeowners Association. If it is, request a copy of the Governing Documents before you sign a lease agreement. This way you have the opportunity to review what you will be subject to as an occupant of the property, and if agreeable sign the lease. If you object, the best course of action would be to keep looking for a property that fits you better.

Malea Norris
Owner/Associate Broker
Vista Point Properties
www.vistapointaz.com
520.461.1401 o
520.907.4638 m

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