Plumbing failures can occur from a variety of issues, including manufacturing defects, plumbing components that reach the end of their useful life and develop leaks, or something as simple as a nail or screw that penetrates a pipe hidden behind the surface of the wall. Regardless of the cause, it’s important to know how to limit the damage that can occur from flooding caused by a leaking pipe or failed fitting. The following are five tips to keep in mind in the event a leak does occur:  

1. Turn off the water at the shut-off valve.  The valve is typically located near the hot water tank or the furnace room. Commonly the shut-off valve has a red handle. In the event of flooding, if you are not sure which valve turns off the water, it is best to turn off every valve.

2. Call your Association Manager. If you have a Community Association Manager, place a call to their 24-hour emergency line. Most community management companies have an emergency response protocol and can quickly contact the appropriate business partners who will respond and address the initial damage or concerns created by a leaking pipe and/or the resulting flooding.

3. Call your Concierge or Building Maintenance Manager. If you live in a high-rise condo you will likely have a concierge or building manager assigned to your building. Know their phone number and keep it where you can easily find it and contact them immediately in the event of an emergency. They are often well equipped to respond to the situation and limit the damage that can be caused from unmitigated flooding in your unit.  This is especially important in high-rise buildings where water leakage can travel to multiple floors and cause tens if not hundreds of thousands of dollars of damage.

4. Call the local fire department. If you can’t find the shut-off valve or reach any of the other resources we’ve mentioned you may have to call your local fire department. These professionals can often locate the water shut-off valve in a home, condominium, or apartment.

5. Call  an emergency plumber. Most respond to pipe leaks 24-7. Once the leak is mitigated, most companies can work with you and your insurer to get the right scope of work put together and provide the construction services to get you back to normal as soon as possible.

The biggest failure for HOAs originates from the lack of meeting basic responsibilities and expectations. If your association is experiencing issues, such as people who don’t pay their dues or seem to always violate basic rules, then it is common to look upward at your Board’s leadership. These concerns, if not addressed, may expose all homeowners to higher assessments or the possibility of a lawsuit. And, chances are an HOA’s failure is the result of a Board member’s inexperience, ignorance or failure to use resources or a personal agenda that made them run to be on the Board.

1. The expectation of collecting dues from all homeowners.
Collecting association dues can be a daunting task, especially if some homeowners are reluctant to pay them. As a Board member, it is their duty to collect fees in a timely and professional manner, without fear or favor. This can potentially become contentious when the Board has to confront a long-time neighbor. High delinquency rates can impact your association’s cash flow and hinder your HOA.

2. The expectation to review and share the HOA’s financial records.
There is an expectation of Board members to closely watch their association’s spending and to demonstrate fiduciary responsibility with their association.  Far too often, associations experience fraud in some way or another.  In order to prevent this, accounting for every dollar spent helps to assure homeowners that their money is going towards their best interest and prevents fraud amongst your association. To avoid the risk of financial mismanagement, a third party service is recommended and used as an unbiased service to meet financial expectations.

​Community associations are typically obligated to ensure compliance with the governing documents and to take the lawful, reasonable, and necessary steps for enforcement.  Steps can include courtesy notices, formal notices and possibly even a lawsuit.  Determining the best steps to achieve a compliant community starts with assessing what is happening and whether it is a violation – and this starts with the existing governing documents and credible information about the suspected violation.  Next, the desired outcome should be determined based on a variety of factors – legal mandate, process, time, expense, logistics, alternatives, etc. – and a thoughtful, balanced approach tends to be best.  The process may often be as simple as providing some courtesy information and education to the community; and specifically to a non-compliant homeowner, perhaps in the form of a written courtesy-notice.  Unfortunately, a non-compliant homeowner is not always responsive or reasonable, and the process may then necessarily get longer and more complicated (and more expensive).

By: ​Tiffanie Thompson, SentryWest Insurance

Who is handling the funds in your community? 

I hear all the time, “We have procedures in place, that would never happen to us”. 

​While the majority of board members are committed and hardworking volunteers, it only takes one to behave dishonestly. 

Fraud can cause serious consequences for an HOA, including financial instability, increased fees for homeowners, deterioration of community amenities, and legal action against those responsible. 
The potential for fraud and theft grows when these responsibilities lie with one or two individuals on the HOA board, employees or other volunteers. But, with a few tweaks the HOA boards can quickly fill the cracks.

There’s a point in every new community’s life where it must transition from the Developer’s control to homeowner control. Sometimes this can feel like a huge task. With a little planning and coordination, the passing of this baton can be seamless. The Developer’s role is to build the community by installing infrastructure and building out common and home lots. There’s a lot of information to transition so starting early and doing it over time is best. As the Developer, you should know when the turnover should happen, so you can be prepared. Review community documents and make sure they’re completed. Create committees like an advisory, ACC, event, and neighborhood watch. Getting people involved and serving helps them learn the information and creates history, shares knowledge, and shows transparency, which allows you to gain input and even face issues or concerns upfront. Openness and communication builds trust.
Hopefully, management is in place before the transition, but if not, once the transition happens, with an election of a homeowner board, work with their chosen management company to review the community records and documents. The management company will help new board members with getting organized, understanding their positions and roles, and keeping everything rolling, so as information and leadership changes, the day to day operations continue on. Knowing the process of the turnover and reviewing all the documents can be consuming, but it’s worth it for a smooth transition. 

​I’ve donated countless hours in various volunteer positions throughout the years. I’ve been a PTA president, served on professional councils, coached a little league fastpitch team and even did a tour as an elected city councilperson. In each of these scenarios, I had a personal agenda or spark of madness that led me to serve. With my own point of reference and almost two decades of non-profit Board management, I like to think I’ve learned a thing or two about what makes a good governing body tick.
 
Let’s say an involved and engaged homeowner decides to take the leap and serve for the Board. Bright-eyed and bushy-tailed, this new leader begins to learn about the business of running their association. In this fictional scenario, our new Association leader has even taken the time to read their governing documents, review contracts and ask questions about the association’s financial health. Our new community volunteer begins to become dismayed when their questions are answered with, “I don’t know. We’re waiting on our manager.”  As more questions are posed, the same answer is returned, “We don’t know. We’re waiting on our manager.”

These past several years have been indescribably stressful for everyone. Economic concerns after a year’s long pandemic, lack of socialization, mask-wearing, and general fear and anxiety have only increased the slow erosion of kindness and empathy we have seen devolve over the past few years.

In our business, verbal and written abuse have reached new, unacceptable levels, and basic respect and common courtesy are no longer so common. We are told not to take the job personally, but it is personal. It's our livelihood. It's our reputation. It's our name. It is very hard to not take insults and rudeness personally. Our health takes a toll.

​One time I lost 20 pounds in less than six months due to the stress of a position, and I have seen and experienced other managers suffering other stress-induced health issues. I believe it's time for some important behavioral changes in the industry.

​By Michael Madson, MGM Management

Your association may contract with an association manager, but are they qualified?  We’d like the residents and an HOA’s membership to know what a manager has – and has not – been hired to do.
​An association manager has two primary responsibilities: 
1. Carry out the policies set by the HOA’s Board.
2. Manage the association’s daily operations.

Quite often, members assume the manager performs certain tasks that just aren’t in the contract. And, when the manager doesn’t meet their expectations, residents are unhappy. Here are a few clarifications to help you understand the role of an association manager.

·        The manager works closely with the Board – as an advisor – not as a Board member. The manager is not your advocate with, or conduit to, the Board. If you have a concern about your HOA, your first action is to contact your Board or send them a letter or an email.

·        The manager should be available to the membership. However, that doesn’t mean the manager will drop everything to take your call. If you need to see the manager, it’s best to call to arrange a meeting or email them.

Living in a planned community comes with a set of benefits, including access to community amenities, shared spaces, and often a sense of community belonging. However, it also comes with a set of rules and regulations that every owner and resident must adhere to. These rules are typically outlined in the community's governing documents, including the Declaration of Covenants, Conditions, and Restrictions (CC&Rs), Bylaws, and Rules and Regulations.

Unfortunately, not all residents follow these rules, which can lead to frustration and tension within the community. The community association’s Board of Directors is often granted the responsibility and authority to do all things necessary to carry out and enforce the terms and provisions of the governing documents.  When an owner or resident is in violation of the community association’s rules, the Board of Directors may rely on a combination of enforcement tools in order to persuade the offending owner to abate the violation and deter future rule violations.
​
     I. Demand Letters
The least severe enforcement tool available to an association is to send warning notices and demand letters to owners who are in violation. These letters can be sent directly from the Board of Directors, or by the Association’s manager or attorney. 

​If your Association is professionally managed, it’s critical that your Directors & Officers Liability (D&O) insurance extend coverage to your management company.

Pause – which one is D&O again?

D&O protects the Association, the Board of Directors collectively, and individual board members against “wrongful acts” allegations, much like an errors & omissions policy. Essentially, if someone objects to how the Association is being operated, administered, or governed, this is the policy most likely to respond. Common claims include failure to enforce the governing documents, improper handling of an election, challenges to assessments, breach of fiduciary duty, objections to architectural review decisions, and so forth. Like other liability policies, D&O insurance contains coverage for both defense costs (legal expenses to defend the claim) and indemnity payments (money damages, such as a settlement or a judgment, IF awarded to the claimant).
Whether you are a board member or a community manager, it is important to determine the quality of the Association's D&O insurance because the scope of coverage can vary significantly from one provider to the next.

OK, so why should our management company be covered under our policy?  Shouldn’t they have their own insurance?
​
Yes, management companies need their own errors & omissions insurance for their business dealings. However, when acting under the Board's direction as the Association's designated agent, it is reasonable and appropriate for them to be covered by the Association's insurance.