- Community Associations Institute: Georgia Chapter
Commons First Quarter 2015 g e o r g i a A Publication of Community Associations Institute of Georgia, Inc. Death and Taxes (and other certainties in our industry) Inside: YES Community Associations Need to File Tax Returns! Death and Injury at THE POOL Collections Against a Deceased owner The Death of FACE-TO-FACE COMMUNICATION ...and more! ©istockphoto.com CAIGA.1st Qtr. 2015.indd 1 3/6/15 4:26 PM Congratulations... Congratulations to The Landings Association in Savannah for recently earning the Green Community Award from Audubon International for our ongoing sustainability initiatives. 2 0 1 5 C O M M I T T E E S Community Service Committee Kelley Moon — Co-Chair Golf Committee Mike Dangler — Chair Celia Ebert, Parkside Management Program Committee Lisa Fuerst, Esq. — Co-Chair Janet Phillips, CMCA, AMS, PCAM, Miye Yi, Esq. — Co-Chair Winter Capriola Zenner, LLC Darren Thurmond, CMCA, AMS, PCAM — Board Liaison Timbers of Vinings Condo Association Veronica Cuellar — Co-Chair American Pool Services Access Management Group Kent Atzinger, CMCA, AMS, EPIC Response NatureScapes Sean Ruthven, CMCA, AMS — Board Liaison Atlanta Community Services Kent Atzinger, CMCA, AMS, PCAM, Access Management Melanie Caceres, Bach, James, Mansour & Co. Sheila Gray, CMCA, Arborguard Tree Specialists Eric Love, Lazega & Johanson LLC George Nour, Gaddis & Lanier, LLC Shandron Pemberton, Karts Landscaping Access Management Group Horizon Painting & Renovations Community Management Associates FirstService Residential Chief Fire Protection Company CMCA, AMS, POSolutions, LLC Teddy Russell, Russell Landscape Jodi Vasquez, Community Management Associates Education Committee Jamie Lyons, Esq. — Chair Neal Bach, CPA, Kevin Carnes, Jay Fraiser, Esq., Kim Gaddis, Esq., Gary Kart, Julie Ketner, FirstService Residential Mark Moore, Esq., Lazega & Johanson LLC Janet Phillips, CMCA, AMS, PCAM, Homeowner Management Services Rob Stein, Esq., Lazega & Johanson LLC Lazega & Johanson LLC EPIC Response Winter Capriola Zenner LLC Homeowner Management Services Winter Capriola Zenner LLC Homeowner Management Services Sweetwater Pools Weissman, Nowack, Curry & Wilco, P.C. Community Management Associates Ashlie Bisig — Board Liaison Stephen A. Winter, Esq., Glenda Bromer, CMCA, AMS, Steven M. Winter, Esq., Mike Crew, CMCA, PCAM, Marc Wise, Rebecca Drube, Esq., Kristalyn Wright, John Farrell, Esq., Lazega & Johanson LLC Green Committee Bekke White, CMCA — Chair Union Bank Homeowners Association Services Ian Mari — Board Liaison Mickel Graham, PCAM, Union Bank Homeowners Services Association Ron Jockers, CMCA, AMS, PCAM, Liberty Lofts Condominiums Tamalla Mallet, CMCA, PDQ Services Ryan Maki, CMCA, AMS, PCAM, FirstResidential Services Richard Maritt, CMCA, AMS, Homeside Properties Dee Neighbors, CMCA, AMS, B Green Services Becky Schmutzer, Lueder, Larkin & Hunter, LLC Julie Stephens, CMCA, AMS, First Citizens Bank Homeowner Management Services Learning You Education Fieldstone Management Community Management Associates Homeowners Advantage Silverleaf Management Group Exclusive Association Management Merrill Walker, CMCA, AMS, PCAM, Advantage Community Management Fundraising Committee Tracy Lanard, CMCA — Chair ommunity Management Associates Michele Richards, CMCA, AMS, PCAM — Co-Chair Community Management Associates Sara Hicks — Board Liaison Parker Young Construction Kimberly Addison, Noreen Balcer, Jane Beasley, CMCA, AMS, PCAM, Emil Bekyarov, Evan Conroy, Esq., Carlyle Douglas, Leslie Fellows, CMCA, Tolley Community Management Barry George, Crabapple LandscapEXPERTS Jimmy Kim, Weissman, Nowack, Curry & Wilco, P.C. Maryann Malena, Marvin Pastel, Esq., Winter Capriola Zenner, LLC Chad Burchfield, Team Pest USA Jeff Creecy, Atlanta Community Services Veronica Cuellar, Austin Outdoor Homeside Properties Dick Patterson, Northwest Exterminating Sherry Perrotta, Greenwood Group Michael Pullen, Disaster One Chris Ruthruff, SafePlay Systems Union Bank Homeowners Association Services Paul Slovisky, AssociationReady Brandon Thomas, Lazega & Johanson LLC Jeanie White, CMCA, Patrick Hixson, Aquascape Environmental Derek Johanson, Esq., Russell Landscape Group Tracy Lettsome, Esq., Homeside Properties Lipshutz Greenblatt Mary Masi, Community Management Associates Terrence Spires, Team Pest USA Brannan Sutherland, Northwest Exterminating Mike Tolley, Tolley Community Management Legislative Action Committee Lanier Coulter, Esq. — Chair Coulter & Sierra, LLC Mindy Waitsman, Esq. — Board Liaison Moore & Reese, LLC Sally Butler, Brown & Brown Insurance of Georgia Mike Crew, CMCA, PCAM, Homeowner Management Services Rebecca Drube, Esq., Weissman, Nowack, Curry & Wilco, P.C. David Durgin, CMCA, AMS, PCAM, Fairfield Plantation Association CAIGA.1st Qtr. 2015.indd 2 David Hill, CMCA, AMS, PCAM, Access Management Dennis Hoffman, PCAM, Community Management Associates, Inc. Tim Huffman, CMCA, AMS, PCAM, Colony House Condominiums Brendan Hunter, Esq., Lueder, Larkin & Hunter, LLC Randy Lipshutz, Esq., Lipshutz Greenblatt Stephen A. Winter, Esq., Winter Capriola Zenner, LLC Pankey & Horlock, LLC Disaster One Mindy Waitsman, Esq. — Board Liaison Moore & Reese, LLC Jeff Creecy, Greenwood Group Alex Caceres, Horizon Painting & Renovations Beryl Grall-Petty, Piedmont Management Dan Henning, PCAM, Community Management Associates, Inc. Glade Johnson, Magazine Committee Joe Larkin, Esq. — Chair Advantage Protective Services Rick Barnes, Jason LoMonaco, Esq., Kim Blair, Wendy McMillan, Faith Brown, Sarah Pritchard, Esq., Gary Caruso, R.S., P.E., Becky Schmutzer, David Hill, CMCA, AMS, PCAM, Sheri Stebbins Pat Hillen, CMCA, PCAM, Rob Stein, Esq., Laura Horlock, Esq., Pankey & Horlock, LLC Public Relations Committee Kevin Carnes — Chair Community Management Associates Ashlie Bisig — Board Liaison Clarence Lau, Esq., Lueder, Larkin & Hunter, LLC Winter Capriola Zenner, LLC NatureScapes Weissman, Nowack, Curry & Wilco, P.C. NFC Amenity Management OnePoint Technologies Tower Roofing Lazega & Johanson LLC Criterium Caruso Engineering Silverleaf Management Group Access Management 4 Seasons Landscape Alliance Association Bank Lazega & Johanson LLC Pam Irwin, CMCA, PCAM, Michael Leavey, Esq., Dorough & Dorough, LLC Kris Leek, Peachtree Pest Control Shawn Mayabb, Horizon Painting & Renovations Marvin Pastel, Esq., Winter Capriola Zenner, LLC Candace Pfab, Brown & Brown Insurance of Georgia Marilyn Ratzel, Esq., The Coulter Law Firm, LLC RC Shanks, CMCA, AMS, PCAM, GW & Associates Lisa Simmons Weibel, Beacon Management Services Arborguard Tree Specialists EPIC Response Sharon Andersson, Community Management Associates Glenda Bromer, CMCA, AMS, Homeowner Management Services Mike Dangler, NatureScapes Dave Lyons, Access Management Group Tracy Henson, Homeowner Management Services Russell Estey, ROOTERPlus! Amanda D’Antoni, Exclusive Association Management, Inc. Nicole Shirley, Membership Committee Elizabeth Alford — Chair Community Management Associates Dale Pendergraft — Board Liaison Tracy Chambers, Erin Byers, Social Committee Bill Wetter — Chair Terrence Spires, Alford & Alford, Certified Public Accountants, Team Pest USA P3 Painting & Renovations HomeOwners Advantage Community Management Associates Crabapple Lake Parc Community Association, Inc. Tracy Chambers, Chuck Negas, Homeowners Advantage Northwest Exterminating Russell Estey, Ken Baggs, CMCA, AMS, PCAM, Mike Curtis, Wayne Forester, RooterPLUS! Team Management Scott Douglas — Board Liaison Community Funding Corporation Hollie Battle, CMCA, PCAM, Chris Goss, Community Management Associates Sarah Jockers, Tower Roofing Beacon Management Services GW & Associates Tracy Lanard, CMCA, Community Managment Associates Kelley Moon, EPIC Response Chuck Negas, Northwest Exterminating Ashley Pafford, FirstService Residential Pat Pou, Esq., Lazega & Johanson LLC Ben Rosenquist, Blueprint Painting & Renovations Dawn Shaddix, Northwest Exterminating Nicole Shirley, Community Management Associates Kristalyn Wright, Community Management Associates Faith Brown, Eleanor Burris, CMCA, Heritage Property Management Services, Inc. Amy Davidson, Aquascape Environmental Dean Donald, CMCA, AMS, PCAM, Team Management Amanda Evans, CMCA, PCAM, Community Management Associates Billy Gray, Gray Contracting Julie Hewell, Silverleaf Management Group Mark Johnson, P3 Painting & Renovations Kathy Kendrick, American Disposal Eric Love, FirstService Residential Lindsey Malone, CMCA, Access Management Group Dave McCord, Team Pest USA Cal McShan, Sentry Management Homeowner Management Services Courtney Prausa, Bob Russell, Atlanta Landscape Group Natalie Sanders, SERVPRO of North Fulton Michael Sedacca, P3 Painting & Renovations Keith Shaddix, ValleyCrest Terrence Spires, Team Pest USA Jarrod Talley, Blueprint Painting & Renovations Jodi Vasquez, CMCA, FirstService Residential Mike Zenner, Esq., Winter Capriola Zenner, LLC Tennis Committee Rhonda Moles, CMCA, PCAM — Chair Community Management Associates Jannette Shockley, Esq. — Board Liaison Lazega & Johanson LLC Jonathan Benator, Esq., Weissman, Nowack, Curry & Wilco, P.C. Alex Caceres, Horizon Painting & Renovations Memrie Creswell, Community Management Associates Dan Crossland, Phoenix General Contracting Amy Davidson, Aquascapes Environmental Sandy Depa, CMCA, AMS, PCAM, Integrity Association Management Joe Dreher, Dreher Insurance Barbara Graves, Ray Engineering Laura Guilmette, Unique Environmental Jennifer Hardy Fournier, Gibson Landscape Tracy Henson, Homeowner Management Services Cindy Hodge, Esq., Lueder, Larkin & Hunter, LLC Mark Johnson, P3 Painting & Renovations Becca Jowers, Heritage Property Management Services, Inc. Tammy Quinn, CMCA, AMS, Heritage Property Management Services Inc. Tradeshow Committee Erin O’Connell, Esq. — Chair Dorough & Dorough, LLC Shaune Huysamen, CMCA — Board Liaison Tribridge Residential Dotty Bonds, CMCA, AMS, Lake Arrowhead Resort Zak Campbell, The McKinley Group Emily Cantrelle, Weissman, Nowack, Curry & Wilco, P.C. Sandy Depa, CMCA, AMS, PCAM, Integrity Association Management Laura Guilmette, Unique Environmental Tracy Henson, Homeowner Management Services Mark Johnson, P3 Painting & Renovations Dan Magee, Greenwood Group Michelle Riley, First Citizens Bank Teddy Russell, Russell Landscape Group Lana Shelton, Lazega & Johanson LLC Sheri Stebbins, 4 Seasons Landscape David Tishey, Allgood Pest Control Bekke White, CMCA, Union Bank Homeowners Association Services Cameron Wilsey, ROOTERPlus! 3/6/15 4:26 PM Community Associations Institute—Georgia Chapter • www.cai-georgia.org A Letter from the Chapter President Georgia Chapter of CAI 2015 precious metals sponsors PLATINUM “We are working hard this year to offer some exciting new changes for the Chapter...” Dale Pendergraft I am very proud to serve as the President of the Georgia Chapter of CAI this year and look forward to a great year for the Chapter. First, I would like to thank my fellow CAI-Georgia board members. We are working hard this year to offer some exciting new changes for the Chapter, including enhanced Precious Metal Sponsorship benefits and an enhanced website. 2015 was off to a great start with our Gala event on January 24th. We had a great crowd at the event, with 280 people registered. Special thanks to the Gala Committee and the Chair, Veronica Cuellar of DisasterOne, for all of their hard work. Everyone commented on how much they liked the new Westin Perimeter location and how much they liked the event. Congratulations to our award winners: Rita Kennedy Award – Kelley Moon, EPIC Response; Leadership Award – Jamie Lyons, Esq. of Lazega & Johanson LLC; Rising Star Award – Tracy Lanard, CMCA of Community Management Associates; President’s Award – Veronica Cuellar of DisasterOne and Educator of the Year – Lisa Fuerst, Esq. of Pankey & Horlock, LLC. We decided to bring back our Hall of Fame Award after a five year break and are grateful to those winners for all they have done for the Chapter: Dennis Hoffman, CMCA, AMS, PCAM, Community Management Associates; Laura Lazar, CMCA, AMS, PCAM, Parkside Management; and Stephen A. Winter, Esq., Winter Capriola Zenner, LLC. Our Bowling Tournament on February 19th offered a brand new networking opportunity for CAI members to bowl and play pool together. It was also a successful fundraiser for our Legislative Action Committee. We appreciate the efforts of the Fundraising Committee and Co-Chairs, Michele Richards, CMCA, AMS, PCAM and Tracy Lanard, CMCA of Community Management Associates in planning and putting together this new event. The Legislative Action Committee has been working hard for the Chapter during this legislative session. I would like to thank this committee and Chair, Lanier Coulter, Esq. of Coulter & Sierra, LLC, for all they do to advocate for community associations throughout the state of Georgia. The committee members put in a huge amount of time during the session monitoring bills and going down to the Capitol to participate in committee hearings. We are excited about our new Charity Committee that was just launched this year. It will give CAI members a chance to support the community through volunteer efforts. Several opportunities to give back are in the planning stages and more news will follow as the committee makes plans for the year. Special thanks to the committee and Co-Chairs, Kelley Moon of EPIC Response and Miye Yi of Winter Capriola Zenner, LLC. I look forward to working with you in 2015 and welcome your input and suggestions. Sincerely, Dale Pendergraft CAI-Georgia Chapter President P3 Painting & Renovations Access Management Group American Property Restoration, Inc. Atlanta Landscape Group Community Association Mgmt., LLC Community Association Underwriters Community Club Management, Inc. Community Management Associates EPIC Response Homeowner Management Services, Inc. P3 Painting & Renovations Parker Young Construction Premier Restoration Russell Landscape Group, Inc. Unlimited Landscape & Turf Mgmt., Inc. Weissman, Nowack, Curry & Wilco, P.C. Winter Capriola Zenner, LLC GOLD Association Management Advisory Group Coulter & Sierra, LLC Dorough & Dorough, LLC The GreenSeason Group, Inc. Heritage Property Mgt. Services, Inc. Homeside Properties, Inc. Horizon Painting & Renovations, Inc. Ray Engineering, Inc. SILVER Advantage Community Management Advantage Pool Management Services, Inc. Alliance Association Bank American Painting & Renovations Atlanta Community Services, Inc. BB&T Association Services Blueprint Painting & Renovations, LLC Exclusive Association Management Gray Contracting Horizonz Property Management Lazega & Johanson LLC Moore & Reese, LLC MTS Sheffield Roofing & Construction, Inc. Owens & Mitchell, PC Pest USA RooterPLUS! Shaben & Associates Silverleaf Management Group, LLC Stillwater Pool Management Sweetwater Pool Service, Inc. Tower Roofing, Inc. Union Bank Homeowners Association Services BRONZE 4 Seasons Landscape A Tow Atlanta Abacus Property Management, Inc. Affinity Pools Alford & Alford, Certified Public Accountants American Pool Service Andersen, Tate, & Carr, P.C. Arborguard Tree Specialists, Inc. Association Capital Bank Bach, James, Mansour & Co., P.C. Broadband Planning Brown & Brown Insurance of Georgia, LLC CertaPro Painters Color Burst Construction Solutions of Georgia, Inc. Criterium-Caruso Engineers Davis Landscape Dynamo Pool Management FirstService Residential Gaddis & Lanier, LLC Georgia Community Management Greenwood Group Jowers & Company, Inc. Lueder, Larkin & Hunter, LLC Marquis Management The McKinley Group Meridian Restoration, Inc. Mutual of Omaha Bank NatureScapes Northwest Exterminating Pankey & Horlock, LLC POSolutions, LLC Sears Pool Management zumBrunnen, Inc. 3 CAIGA.1st Qtr. 2015.indd 3 3/6/15 4:26 PM Georgia Commons • First Quarter 2015 Check Your Budget – It May Be Killing Your Reserves By Gary J. Caruso, R.S.,P.E. Criterium-Caruso Engineers “Regularly updated reserve studies ensure the accuracy of the timing and costs of future capital improvements.” ©istockphoto.com A reserve study is a valuable tool in managing capital expenditures and cash reserves. It is only effective when used properly and updated on a regular basis. Generally, reserve studies done in accordance with the standards of the Community Associations Institute (“CAI”) attempt to quantify anticipated capital expenditures over a 30-year period. Most studies will incorporate inflation and rate of return on invested funds and factor this into the calculations. Annual budgets normally account for the capital needs during the next year. Budget components include income, operating expenses, capital expenses and a contribution to the reserves to plan for future expenses. A balanced budget will ensure that expenses and reserve study contributions do not exceed income. Pretty simple. So what can go wrong? Just like the combination of a tree, a ladder and a chainsaw can be dangerous when combined with a homeowner, the combination of borrowing from the reserves for unforeseen expenses; inadequate funding of the reserves; inflation and outdated assumptions are dangerous to budgets. Most experts recommend that Reserve Studies be reviewed and updated every one to five years. New underwriting requirements for FHA loans put a renewed emphasis on reserve funding and may oblige you to complete a new reserve study or update an existing one. Typically, the timing of reserve study updates will depend on the property type, age and the complexity of the inventoried components. Regularly updated reserve studies ensure the accuracy of the timing and costs of future capital improvements. At the close of every year and before each new budget, you should carefully review your reserve study to ensure that you have properly accounted for the costs associated with reserve study items. Some costs associated with reserve study items may have been paid out of operating expenses and some unforeseen costs or operating expenses may have been paid out of the reserves. This would require an adjustment to your reserve schedule. Each association should close their year with a review of their operating budget, reserve funds and documentation of the major capital expenditures that have occurred over the last year. Your anticipated contributions to the reserve fund should be compared to the assumptions in the reserve study. Your actual expenditures should be compared to the anticipated capital expenditures listed in the reserve study. Is it time to update your reserve study? Some of the factors to consider when trying to determine when to update a study are as follows: • Do FHA lending requirements oblige the Association to have a recent reserve study? • Has inflation increased costs significantly since the original study was completed? • Has the rate of return on invested funds changed? • Have there been significant additional assets or components added to the inventory? • Have significant repairs or capital improvements been performed since the last Reserve Study was performed? • Have areas of the common property been significantly damaged by fire, storms etc? • Have significant improvements and additions been made to the property? • Did the anticipated capital expenditures occur as planned and scheduled? • If the Association is using a baseline or threshold funding method, has the reserve fund balance dropped below the prescribed threshold? • Have unexpected expenditures occurred during the period since the origi- Sally Lewis-Butler, CIC, AAI Executive Vice President/Branch Manager Brown & Brown Insurance of Georgia, Inc. f/k/a Insurance Marketing Group 1165 Northchase Parkway SE, Suite 195 • Marietta, GA 30067-6430 EMAIL: [email protected] Main Office Line: 770-952-7725 • Fax: 770-952-7960 www.criterium-engineers.com ® 4 CAIGA.1st Qtr. 2015.indd 4 3/6/15 4:26 PM AAB_Innov_CAI-GA_Hillen_QtrPg_112114.pdf 1 11/21/2014 10:35:53 AM Community Associations Institute—Georgia Chapter • www.cai-georgia.org nal reserve study was completed? • Have any circumstances changed which would affect the communities’ ability to fund the reserves? If one or more of these situations apply to your association, it may be time to consider an update or even a new reserve study. The general rule of thumb recommended in the CAI literature is that one should update with field observations every third year for an association up to 10 years of age and every other year after 10 years of age. At the end of the year, the Association should also review their preventative maintenance program. This program can range from an informal program for properties with few components to a detailed formal schedule for larger and more complex properties. Review your records to ensure that the required maintenance has been performed. An effective preventative maintenance program will ensure that the components reach their expected useful lives. n Quarterly Quote “I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” – Maya Angelou Mission Statement: The Georgia Chapter of CAI assists community associations and their service providers through educational programs, networking, legislative advocacy and publications. Vision Statement: To be the voice of community associations throughout the state of Georgia. G e o r g i a C h a p t e r o f C AI 2015 Board of Directors President............................................................Dale Pendergraft P3 Painting & Renovations Past President/Treasurer.......................................Scott Douglas NCB Pesident Elect............................................................. Ashlie Bisig EPIC Reponse Vice-President.....Darren Thurmond, CMCA, AMS, PCAM Atlanta Community Services Secretary................................................ Jannette Shockley, Esq. Lazega & Johanson LLC Directors: Ian Mari Liberty Lofts Condominiums Sara Hicks Parker Young Construction Shaune Huysamen, CMCA Tribridge Residential Bill Lucas Westbury at Vining’s/Overlook at Westbury Sean Ruthven, CMCA, AMS Access Management Mindy Waitsman, Esq. Moore & Reese, LLC Executive Director.......................................... Julie Jackson Georgia Chapter of CAI Georgia Chapter of CAI PO Box 2943 Peachtree City, GA 30269 Tel (770) 736-7233 Fax (770) 736-7232 E-mail: [email protected] Our Mission: The Georgia Chapter of CAI is the voice of the community association industry in the state. Our purpose is to facilitate the professional creation and operation of community associations through the delivery of high quality education for our multidisciplinary membership. We are committed to building cohesion, integrity and respect. ■■■ The materials contained in this publication are designed to provide accurate, timely and authoritative information with regard to the subject matter covered. The opinions reflected herein are the opinion of the author and not necessarily that of CAI. Acceptance of an advertisement in Georgia Commons does not constitute approval or endorsement of the product or service by CAI. CAI-Georgia reserves the right to reject or edit any advertisements, articles, or items appearing in this publication. ■■■ To submit an article for publication in Georgia Commons, contact Julie Jackson at (770) 736-7233. 5 CAIGA.1st Qtr. 2015.indd 5 3/6/15 4:26 PM Georgia Commons • First Quarter 2015 Quality Collections… By Dot Edwards, PCAM Access Management ©istockphoto.com A re you utilizing the association’s full collection authority as outlined in your community’s governing documents? The governing documents often provide the association recourse when owners fail to pay their assessments. Some common collection remedies include revocation of voting rights, shutting off common area access, delaying leasing privileges, and/or rent assignment, whereby rent is paid to the association. The larger the delinquency list, the greater the collection effort that is required. If your community is facing collection challenges, you should take a fresh look at your collection policy. A collection policy provides a systematic, disciplined approach to delinquencies. The association’s attorney should review any new collection policy before it is formally adopted by the Board. Are you actively attempting to collect money? Consistency is important for successful collections. The longer a balance lingers, the greater the risk that it will go uncollected. Owners who have an outstanding balance either don’t know they have a balance, they dispute the validity of the balance, or they have a hardship. If you communicate with delinquent owners on a regular basis about their ledger, it will significantly increase the likelihood of successfully collecting the money. For small balances, if the association’s governing documents allow, try these common collection practices: • A simple phone call or email may settle these balances quickly. • If you discover that a person has a hardship, see if they can commit to a 60 or 90 day payment plan. • If a person is unable to pay their balance, then explain that in accordance with the collection policy the account will be placed with the attorney for collection action. • Disable access devices. Residents respond more quickly to this single collection item than any other action. You cannot prevent ingress or egress to their unit. However, some documents provide that delinquent owners can be prohibited from parking on the property. “Are you actively • When owners are delinquent they may also lose privileges to utilize all common area services, which could include tennis courts, front desk services, package pick up, etc. attempting to collect money?” Associations are obligated to collect assessments. Failure to collect assessments can ultimately lead to the association’s failure to meet its obligations. The governing documents obligate every owner to pay assessments. It is important to remember this while also remembering not to villainize delinquent owners. Delinquent owners are still members of the community and should be treated firmly, but with respect. It is important to publish the collection policy at least once per year and to make it available on a community website. A comprehensive collection strategy that incorporates all of the association’s tools will ultimately reduce delinquencies and drastically improve collection rates. n Making Financing Easy for Condominium and Homeowners Associations For more than 27 years, BB&T Association Services has been helping condominiums and homeowners associations navigate the lending landscape. Making the loan process easier with a simple application, local underwriting and flexible terms. Talk with us today about your next project or financing need. ■ ■ ■ ■ Concrete restoration Major improvement Landscaping renovation Siding replacement ■ ■ ■ ■ Ron Peck, CAM Senior Vice President National Sales Director 772-486-3955 [email protected] Re-roofing Window and door replacements Emergency lines of credit Insurance premium financing Association Services Branch Banking and Trust Company is a Member FDIC and an Equal Housing Lender. Loans are subject to credit approval. Only deposit products are FDIC insured. © 2014, Branch Banking and Trust Company. All rights reserved. 6 CAIGA.1st Qtr. 2015.indd 6 3/6/15 4:26 PM CAIGA.1st Qtr. 2015.indd 7 3/6/15 4:26 PM Georgia Commons • First Quarter 2015 How to Kill Your Insurability as a Community By Candace Pfab Brown & Brown Insurance of Georgia, Inc. ©istockphoto.com T here is a common misconception that insurance companies are desperate to write coverage and there is an abundance of providers for association insurance. In fact, most companies are currently very selective about which communities they will insure. Weather related property damage claims have been on the rise in Georgia for the last few years, resulting in big losses and more scrutiny by insurance companies. However, there are many steps you can take to make your community more appealing to insurance providers so that you can avoid killing the best offer. Here are a few tips on how to kill your insurability as a community: Don’t keep up the appearance of your community – Most companies use resources like Google Earth™ to determine if the community is in good shape. They look for deficiencies such as overgrown/diseased trees that may damage property, cracked pathways that may result in injuries, unstable fencing, peeling exterior surfaces and distressed roofing on any buildings the company will be insuring. The board should walk the community at least once per year, and after severe weather, to survey any repairs needed and make sure the reserves remain at adequate levels to fund any future maintenance and repairs. High vacancy or rental rates typically lead to higher losses and may affect insurability. Understand any ordinances or laws that may require any bank owned properties to be maintained by them and know any rental restriction provisions in your governing documents to ensure that the permitted threshold has not been exceeded. Don’t pay your bills on time or keep continuous coverage – Most companies will not write insurance for communities that have been cancelled due to failure to pay on time or if the community is without coverage for a period of time. Make sure your community knows what policies you have, when they renew, and how they need to be paid. Sending your payment to the wrong address can result in late fees or cancellation. Insurance companies consider prompt payment history as an indication that the community is being effectively managed and has sufficient financial resources to keep the community in good repair. Don’t respond – Make sure your insurance providers have a valid email address that is checked frequently. Avoid using personal email addresses of board members. Establish an email account for your community that is set up to forward any incoming messages to all board members and make sure all board members have access to the account so that no one person has control of the account. This also enables you to archive correspondence that can be passed onto future board members. Promptly respond to any requests for information for your renewal or safety/maintenance requests from the company. By state law, the insurer must provide a specified number of days for notice of cancellation or non-renewal. If they do not receive the information by the date requested, they might issue notice of termination, which they may not rescind if the conditions are met at a later date. If you know you cannot meet the conditions, you or your agent will need time to find the best new provider. Don’t manage your claims – Insurance companies consider frequency of claims as well as severity of claims. The first step of the claims process should be to prevent any further loss, such as water extraction or covering a damaged roof. Second, determine the scope of damage. Most contractors can provide a rough estimate the same day of evaluation. Understand the deductible on your policy to decide if a claim should be filed. If you file a claim and then later determine the damage is below your deductible, the company may C ontinues on page 4 0 . MEET A BANK WITH 20 YEARS IN THE NEIGHBORHOOD. No matter what size your community is, managing it can be a daily challenge. Union Bank® Homeowners Association Services is here to help. For over 20 years, we’ve streamlined the assessment collections process for community associations with specialized tools and services powered by Union Bank product solutions and our proprietary Smartstreet® technology platform. We offer a customized HOA lockbox with same-day processing to accelerate payment collection, reduce mail-in times for checks, and provide homeowners with convenient online payment options. Whatever your needs, Union Bank provides solutions that make it easier to control your daily financial operations. Contact us today at 866-210-2333 to learn more. HOAbankers.com Smartstreet.com ©2015 Mitsubishi UFJ Financial Group, Inc. All rights reserved. Union Bank and Smartstreet are registered trademarks of MUFG Union Bank, N.A., Member FDIC. 8 CAIGA.1st Qtr. 2015.indd 8 3/6/15 4:26 PM Community Associations Institute—Georgia Chapter • www.cai-georgia.org To learn more about L&J, scan the image using your smartphone’s barcode app or visit: www.ljlaw.com Supporting the growth and development of our Georgia communities. Lazega & Johanson LLC is a boutique law firm dedicated to excellence in our practice of community association representation and collections. We value the relationships we have with our clients and believe in cultivating and maintaining those relationships by providing personal attention, superior services, and results. Specializing in the following services: Collecting Delinquent Assessments Advising and Training Boards of Directors Enforcing Covenants Interpreting and Amending Governing Documents Reviewing Contracts Resolving Disputes Transitioning Communities from the Developer NEW 24/7 online collection account monitoring and hands-on reporting using new mobile app! CONTACT US TODAY TO GET STARTED! Lazega & Johanson LLC 3520 Piedmont Rd. NE Ste. 415 Atlanta, GA 30305 (404) 350-1192 Tel (404) 350-1193 Fax [email protected] www.ljlaw.com SURROUND YOURSELF WITH QUALITY People’s Choice Award SOUTHEASTERN FLOWER SHOW A A M ALTA A T L A N T A’ S L A N D S C A P E R E S O U R C E COMMERCIAL • RESIDENTIAL • HOA 5209 Palmero Court • Buford, GA 30518 Phone: 770-831-7741 Fax: 770-271-7853 www.unlimitedlandscaping.com GEORGIA LIGHT COMPANY TROPHY BEST IN SHOW ROBINSON WHIMSICAL TROPHY 9 CAIGA.1st Qtr. 2015.indd 9 3/6/15 4:26 PM Georgia Commons • First Quarter 2015 Death and Injury at the Pool – Are You Properly Covered? F ear of water and drowning is one of the top 25 most common fears in the world today. And although drowning is rare when compared with the amount of time humans spend in water, it is a common means of death. In the United States alone, 4,000 people drown annually. Drowning is the leading cause of accidental death among children ages 1-4, and the second leading cause among older children. If you think these numbers are too high, you are not alone. Organizations such as the National Drowning Prevention Alliance, work tirelessly to bring awareness to the general public and to increase funding for learning to swim programs, which are so desperately needed in many areas. Not all drowning occurs in swimming pools. Other common locations are natural bodies of water, bathtubs, buckets and toilets. However, the most common location for people to drown is a swimming pool without a lifeguard, usually a home pool. Coroner’s reports do not always contain information on where the drowning occurred or if supervision was present at the time, making drowning statistics related to community pools difficult to come by. Another reason that accurate statistics on this topic are difficult to find is that quite often a drowning death isn’t really a drowning in the traditional sense. It’s often precipitated by another type of medical emergency that just happens to take place in the water, such as a seizure, stroke, etc. For instance, an older gentleman had a heart attack while swimming laps in an unguarded condo pool in Sandy Springs last summer. Unfortunately he was swimming alone, and no one discovered him in time. ©istockphoto.com By Craig Sears Sears Pool Management “...the most common location for people to drown is a swimming pool without a lifeguard...” Unlike how drowning is depicted in movies, it often occurs quickly and silently, where the people around the victim don’t even realize that he or she is drowning. There are a number of things you can do to help make your pool safer for your community, and reduce liability. Make sure your signage is current with all relevant codes. A “swim at your own risk” sign should be posted at all times, regardless of whether you have a lifeguard. Make sure your pool rules prohibit dangerous activity, including underwater breath-holding games. Make sure your equipment and facility are well maintained to avoid C ontinues on page 12 . Neighborhoods Deserve Legal & Professional Management So you don’t have to, we can . . . Police your neighbors for covenant violations, Collect association dues from the guy across the street, and if necessary, file suit for nonpayment of dues or noncompliance of the covenants. The integrated services of CAM and the Law Offices of Lee Mason cover all these! 101 Devant Street, Suites 904 & 905 770-692-0152 ■ ■ Fayetteville, GA 30214 770-692-0156 fax ■ www.camga.com 10 CAIGA.1st Qtr. 2015.indd 10 3/6/15 4:26 PM 24/7 EMERGENCY RESPONSE BEFORE AFTER • Restoration of Commercial, Industrial, Institutional, • Fire & Smoke Damage Restoration Residential Property • Water Extraction & Restoration • Mold & Microbial Remediation • Structure & Contents Cleaning • Repairs & Reconstruction • Emergency Board-Up & Fencing 770-733-3584 Timing is everything. APR is ready at a moments notice. APR is ready to provide rapid response for any emergency to effectively mitigate the loss and work with Property Owners, Property Managers, Adjusters, Agents, Brokers, and Risk Managers to implement a seamless restoration and recovery plan. CAIGA.1st Qtr. 2015.indd 11 3/6/15 4:26 PM Georgia Commons • First Quarter 2015 The pool...from page 10. injury and that you are compliant with local and federal laws. Make sure your pool fence does not have gaps, and that your pool gate is self-closing and self-latching. Close your pool if the water becomes so cloudy you cannot see the main drains. If you cannot see the bottom, you cannot see a body on the bottom. Inform your residents via newsletters and blogs on the proper usage of your facility and general pool safety. May is National Water Safety Month, the perfect time to remind your residents. Despite your and your pool company’s best efforts, a drowning may still occur at your facility. If that happens, are you prepared? Not all drowning victims die. Many survive, sometimes without consequences. Consequences range from minor to severe, depending upon the length of time underwater, temperature of the water, and the age of the victim. As is typical in other cases of injury related death, lawsuits often follow. Generally speaking, all potential parties are named, and the court is left to determine whose fault it is and what (if any) award should be given to the victim’s family. This begs the question, “Does my association and my pool company have enough liability coverage to handle a claim?” Experts report that in the vast majority of drowning deaths, awards are typically in the hundreds of thousands up to about 1 million. In these cases, 1 million of coverage should be sufficient. If a party is negligent, awards can be much higher. What most people don’t realize is that awards are typically larger if the victim lives, but incurs permanent damage. This is because of the high cost of post care for non-fatal drowning victims. In the case of children, for every child that dies drowning, four others are hospitalized for non-fatal drowning, and three out of those four will suffer permanent brain damage. For those non-fatal drowning victims who suffer brain damage, their lifespan is usually shortened dramatically, and their care costs can be significant, up to $180,000 per year and an estimated lifetime cost of $4.5M. Once a suit is filed, the next step is determining apportionment of liability. If a plaintiff receives an award, it does not mean they will receive the full amount. It also does not mean that only one party will be responsible for payment. Each named party will be apportioned a percentage of the liability, based upon the court’s estimation of fault. This includes the victim. If the injured or deceased party contributed to their own injury or death by acting negligently, they will also receive an apportionment of liability. Examples include victims who dive in the shallow end of the pool, jump or dive off the lifeguard stand, leave their children unattended, injure themselves or drown while intoxicated, or break into the facility after hours. In cases where the victim exhibits negligent behavior contributing toward their injury or death, the final award is likely to be much lower. In the state of Georgia, if the victim’s contributory negligence is deemed more than 50%, he will not be entitled to recover any damages. In summary, there is no easy answer to the question of how much insurance is enough. However, the standard norm for most associations for bodily injury and property damage in an amount not less than $1 million for a single occurrence and $2 million aggregate. The standard norm for most pool management companies is also $1 million. This should be sufficient to cover most losses resulting from injury or death at your pool. However, where negligence on the part of the association or poolcompany plays a role, it may not be enough. When evaluating your association’s insurance coverage, make sure you are covered for how your facility operates and the features on site. If your pool transitioned from operating only with a lifeguard present to “swim at your own risk,” make sure that type of usage is covered. If you have a diving board or waterslide, make sure these features are not excluded from coverage in your policy. If you have removed a diving board or installed a pool safety cover, your carrier should be informed, as this may reduce your premium. When evaluating your pool management company’s insurance coverage, there are two important steps. First, make sure they have appropriate coverage. Some companies have policies through residential carriers that are not designed to cover the types of exposures encountered in commercial pool operations. There are only a handful of carriers that have programs designed for commercial pool maintenance and management companies. Your pool company should be with one of these carriers. Second, consider the coverage to exposure ratio. A company that operates locally managing 50 pools has much less exposure than a company who operates regionally or nationally managing 500 pools. Naturally, the larger company has more exposure and should therefore have more coverage. Comparing the coverage to exposure ratio will help you determine which company actually has superior coverage. If you would like more information on reducing liability for your association, ask a qualified pool management company who understands the concepts of risk management to do a risk assessment on your facility. In addition, you may contact the non-profit Greater Atlanta Water Safety Alliance through their Facebook page at www.facebook.com/ GreaterAtlantaWaterSafetyAlliance. They can help you with risk assessments as well as water safety programs and resources for your community pool. Like their page and send them a message. n CAI Certified Reserve Specialists Capital Reserve Analyses Property Condition Assessments and Evaluations Restoration Plans and Details for Permits Complete Site Reviews Restoration Bid Packages Construction Monitoring Condominium Conversion Reports and Drawings 3985 Steve Reynolds Blvd., Bldg. A Norcross, GA 30093 (770) 923-1122 Fax: (770) 923-0099 E-mail: [email protected] Web: www.ray-engineering.com 12 CAIGA.1st Qtr. 2015.indd 12 3/6/15 4:26 PM Looking for management solutions for your community? When Credentials Matter, Choose HMS. Since 1993, Homeowner Management Services (HMS), has provided the guidance and education board members need to make the best decisions for their community. Choose from full service management or select only the services you need: assessment processing, covenant enforcement, vendor oversight, facility management, community websites, and much more. HMS has what it takes to find the right solutions for your community. AAMC ACCREDITED ASSOCIATION MANAGEMENT COMPANY For more information please contact us at: 770 •667 •0595 [email protected] 1260 Old Alpharetta Road • Alpharetta, GA 30005 www.hms-inc.net Responsive. Respected. Reliable. Celebrating 20 Years of Service to Community Associations. 1993-2013. CAIGA.1st Qtr. 2015.indd 13 3/6/15 4:26 PM Georgia Commons • First Quarter 2015 Yes, Community Associations Need to File Tax Returns! “Did your HOA file a tax return last year?” This is one of the first questions I ask when I meet with a new community association client to conduct an audit or other financial procedure. All too often the response is “No. Do we have to?” Community association management companies are diligent about filing tax returns for their community association clients. I know this because I prepare a lot of returns for community association management companies. Unfortunately, self-managed associations often don’t know about the requirement, and therefore don’t file the returns. My estimate is that at least 30% of self-managed associations don’t file any tax returns, and others don’t follow the correct process. If your association is not filing tax returns, here is how you can get caught up and back on track. Nothing is certain but death and taxes But let’s just focus on taxes in this article. Condominium and homeowner associations, just like any other U.S. corporation, must file federal and state tax returns each year. Just because most associations are considered nonprofit doesn’t absolve them of their income reporting responsibility. In fact, late, missing, or incorrect tax returns could result in unnecessary taxes, IRS penalties, and loss of non-profit status. To file or not to file, that is the question Most residential community associations elect to be taxed under Section 528 of the Internal Revenue code. To qualify, your association needs to be legally organized as an association, generate almost all revenue from homeowner assessments, and use that revenue to maintain the common areas. If this describes your association, most income is not taxable, including: • Association dues and assessments ©istockphoto.com By Neal Bach, CPA Bach, James, Mansour & Company • www.bjmco.com “...late, missing, or incorrect tax returns could result in unnecessary taxes, IRS penalties, and loss of non-profit status.” • Architectural Control/Standards Committee fines and fees, like $25 per day for not replacing pine straw • Late fees and interest on late assessment payments • Resident clubhouse and other facility rentals Certain community association income is taxable, but often that income can be offset by expenses used to generate that income. Potentially taxable income includes: • Bank account interest and dividends • Guest fees, such as non-resident pool usage C ontinues on page 4 0 . PROVEN. PERSONAL. PRACTICAL. Full-service legal counsel to condominium and homeowner associations. For more information, please contact us at (404) 926-4500 or [email protected] Visit our blog: www.georgiaassociationlawblog.com www.wncwlaw.com 14 CAIGA.1st Qtr. 2015.indd 14 3/6/15 4:26 PM YOUR EXTREME MAKEOVER EXPERTS Extreme Customer Service Exclusive Project Tracking Software Superior Craftsmanship & Products Siding • Stucco • Roofing • Gutters Carpentry • Decks • Fences • Concrete Windows & Doors • Painting www.P3-pr.com CAIGA.1st Qtr. 2015.indd 15 770-271-6868 email: [email protected] 3/6/15 4:26 PM Georgia Commons • First Quarter 2015 The Death Of The Statute of Limitations As We Know It? ©istockphoto.com S-D Rira, Llc V. The Outback Property Owners Association, Inc. (2014 Wl 6538085) By G. Lanier Coulter, Esq. Coulter & Sierra, LLC H ave an owner who built a new sunroom on their house without getting architectural approval as required by the governing documents? An unapproved fence? Paint their house a lovely shade of florescent orange? Georgia law is clear that when it comes to enforcing such violations, a community association or any other person or entity entitled to enforce the restrictive covenant has two years from the date of the violation in which to bring a lawsuit to enforce the covenant. (O.C.G.A. § 9-3-29). In other words, there is a two year statute of limitations for breach of covenant claims. (*Note: Specifically excluded from this statute of limitations is the violation for failure to pay assessments or fees—this carries a four year statute of limitations). The statute of limitations is a legal limitation on the time during which a claim can be pursued through the court system. The purpose of imposing a statute of limitations is to ensure diligent pursuit of a remedy by the harmed party, and to protect the interests of the defendant against stale claims which cannot be easily disproved after the passage of time. If a lawsuit is not filed within two years from the date of the violation of a covenant, an association has waived all rights to pursue enforcement or to seek relief requiring the owner to fix the violation. THE LAW OF CONTINUING VIOLATIONS It is easy to determine when the statute of limitations runs on static, onetime or permanent violations, such as the examples given above. The statute of limitations will run two years from the date the unapproved fence was installed or the house was painted orange. However, not all covenant violations involve a permanent structure or improvement. In 2003, the Court of Appeals of Georgia tackled the question of a covenant violation that did not arise out of a permanent fixture, but rather from ongoing conduct of the owner. In the case of Black Island Homeowners Assn. v. Marra, (263 Ga. App. 559, 588 SE2d 250 (2003), there was a restrictive covenant in place requiring certain property to remain in its undeveloped, natural state. The subject property had been mowed at various times spanning three decades. In January 2001, the Black Island Homeowners Association, Inc. mowed the subject property and adopted a mowing plan for the area in question. Two owners filed suit shortly thereafter, claiming a violation of the restrictive covenant requiring the property to remain in its natural state. The Association responded, asserting that the statute of limitations on this claim had begun to run the first time the property was mowed in the 1970s and therefore had long since expired. The Georgia Court of Appeals, however, looked to the law of continuing nuisance to find that the running of the statute of limitations would depend on the specific conduct that allegedly violated the restrictive covenants. It is established law in Georgia that if a nuisance is not permanent in nature, but rather is one that can be abated by the person maintaining the nuisance, every instance of the nuisance would be a fresh nuisance for which a fresh cause of action would lie. In other words, each separate distinct act of nuisance would trigger a new statute of limitations. The Court compared the violation in Black Island to the prevailing law on nuisance, drawing a parallel that each mowing of the property in question constituted a distinct, separate act which constituted a breach each time it occurred and therefore triggered a new violation with a two year statute of limitations. This position was upheld ten years later in the 2013 case of Marino v. Clary Lakes Homeowners Assn., 322 Ga. App. 839, 747 SE2d 31 (2013). In the Marino case, the Clary Lakes Homeowners Assn. brought an action against the Marinos for their violation of a covenant prohibiting garages from being used as storage and requiring vehicles to be parked in the garage. The Marinos responded, arguing, among other things, that the Association’s claim was barred by the statute of limitations, as they had used their garage as storage and parked their cars in their driveway for over 15 years. While not the only question in the case, the Court of Appeals of Georgia held that the statute of limitations had not run, as each instance of parking their vehicle in a location other than the garage was a separate and distinct act which gave rise to a new two year statute of limitations. NO SUCH THING AS A CONTINUING VIOLATION? The issue of the statute of limitations continuing violations from ongoing conduct was again recently raised before the Court of Appeals of Georgia in the case of S-D Rira, LLC v. The Outback Property Owner’s Association, Inc., 2014 WL 6538085 (2014). In this case, S-D Rira LLC (RIRA) and related entities owned property outside of the Outback Property subdivision. RIRA brought a lawsuit against The Outback Property Owner’s Association, Inc. seeking an easement over a private road located within the subdivision for the purpose of accessing its property outside of the subdivision. RIRA (or a related entity) also owned a lot, Lot 10, within the Outback subdivision and had, in 2006, built a road across Lot 10 for the purpose of connecting its property outside of the subdivision to the private road. Accordingly, in addition to seeking an easement over the private road, RIRA was also seeking a determination from the Court as to its right to travel over the road constructed on Lot 10. The Association filed a counterclaim, seeking, amongst other things, an order permanently prohibiting RIRA from driving on its private road and across the road built on Lot 10, arguing that the use of Lot 10 as a road was a violation of the existing covenants binding all lots within The Outback subdivision. RIRA argued that the Association’s claim was barred by the two year statute of limitations, asserting that the Association’s right to challenge its use of the road on Lot 10 as a violation of the covenants expired two years after it was built, in 2008. The Association cited Black Island and Marino in its argument that the statute of limitations had not run. The Association argued that it was seeking to enjoin the use of the road itself, and each time the road on Lot 10 was used in violation of the covenants, it was a separate and distinct act, giving rise to a new two year statute of limitations. In a 6-6 tie amongst the judges, there was almost a rejection/overturning of the Court of Appeal’s previous decisions rendered in Black Island and Marino. Six judges found that Black Island and Marino had taken a departure from previously established law in using the theory of continued nuisance to address a claim for a breach of a restrictive covenant. These judges questioned as to why a tort law concept of continuing nuisance should be applied to a contractual claim for breach of a restrictive covenant and found that neither Black Island nor Marino offered any support or reasonable basis for doing so. They further found that the theory of a continuing violation conflicts with the express language of O.C.G.A. 9-3-29(c) itself, which provides the statute of limitations begins accruing immediately upon a violaC ontinues on page 18 . 16 CAIGA.1st Qtr. 2015.indd 16 3/6/15 4:26 PM CAIGA.1st Qtr. 2015.indd 17 3/6/15 4:26 PM Georgia Commons • First Quarter 2015 STATUTE OF LIMITATIONS...from page 16. tion of any covenant restricting land to certain uses. In other words, these six judges held that the statute of limitations began to run upon the property owner’s very first use of the property in a way that violated a restrictive covenant. Accordingly, the opinion of these six judges sought to overrule Black Island and Marino to the extent both cases used the theory of continuing nuisance to establish a continuing violation of a breach of a restrictive covenant. SO WHERE DOES THAT LEAVE US? SAFE…FOR NOW. The Court of Appeals was split 6-6 on the issue as to whether Black Island and Marino should be overruled and it has clarified that its opinion did not overrule those cases. This means that, for now, Black Island and Marino remain good law in Georgia and we can rely on the argument that each separate and distinct action of a violation of an existing covenant constitutes a separate violation with a two year statute of limitations. However, this position, for the time being, is tenuous and it may be only a matter of time before the issues of Black Island and Marino and continuing violations are raised before and decided by the Georgia Supreme Court. Hopefully, if and when this matter does go before the Supreme Court of Georgia, it will recognize the difficulty the overruling of Black Island and Marino will present for community associations and the enforcement of use restrictions. In the meantime, when it comes to the enforcement of covenants, associations should carefully consider the facts surrounding a violation and its enforcement options and should involve counsel when necessary. n At Shaben & Associates we “Provide Increased Property Values one Neighborhood at a Time”. Let’s put Professional and Quality Community Management Services to work in your community today! SHABEN & ASSOCIATES, INC. SERVICES: Customized Management Services 24 Hour Emergency Service Full Service Management Commercial Office Parks Financial/Accounting Only Condominiums Facility Management Collection Administration Project/Construction Management Developer Services Mike Shaffer, President & CEO P.O. Box 3189 Suwanee, GA 30024-0989 Phone: 770-271-2252 Ext. 203 Fax: 770-271–8433 [email protected] 18 CAIGA.1st Qtr. 2015.indd 18 3/6/15 4:26 PM CAIGA.1st Qtr. 2015.indd 19 3/6/15 4:26 PM Georgia Commons • First Quarter 2015 Plant Death, Irrigation Taxes & Other Landscape Catastrophes By Rick Barnes, NatureScapes S ometimes we hear things that have little meaning to us until long after we hear them. My 9th grade English teacher once said to the class: “All you live for is to die and pay taxes!” The declaration had little resonance at the time, but I can sure relate to it now! These and other certainties of life often become objects of procrastination, avoidance, or total neglect. Unfortunate reactions like this often result in a myriad of unintended and unpleasant consequences. My hope is that, after reading this, you will take steps to be ready to deal with those unpleasant realities that befall the landscape: plant death, resource expenses, and other catastrophes that tax our budgets! ©istockphoto.com Expect the Expected. There once was a 90-foot Tulip Poplar tree about 15 feet off of the right rear corner of my home. It was a magnificent specimen: straight, tall, massive. I had often thought about installing lightning protection on that tree as I knew it was the tallest tree in the area. I procrastinated, and, in August of 2012, the tree was struck by lightning. Tulip Poplars have a high water content, and the heat of the strike immediately caused the water in the tree to boil. With no way for the steam to escape, the tree basically exploded. Fragments were found as far away as 60 feet in my neighbor’s yard, and his air-conditioning unit was fried by the strike. Most of the tree debris that was blown away from the trunk fell straight down- how nothing went through the roof of the house I still consider a minor miracle. The lightning arced all through the wiring of the house: one TV was fried while the other was spared. One garage door opener was ruined, the other perfectly functional. The dryer was fine, but the washer was gone. Computer, gone. The moral of the story: the lightning protection would have cost far less than the expense of repairs and replacements, even with the help of insurance. Did I mention the 60-foot crane that was required to remove the tree over the house from the back? And after all of that, had I put in the lightning protection, I would still have the tree! There are three takeaways here for your property: 1. Budget for arbor-care and protective measures for feature trees in your landscape. 2. Periodically review the trees on your property for health, stresses, or potential damage to people or property. 3. Know that trees die too and have to be removed and replaced. Tax the Water? Well, perhaps not literally, but anyone who pays a water bill is aware of how expensive it is becoming. Even at the higher prices we are all paying for water, it is still a bargain and vastly taken for granted. In some of the poorer countries on Earth, some people spend a third to a half of their waking hours fetching and carrying the water that they use, often from polluted sources. We should feel privileged that we have conveniently located, highly purified water that we can even use on our lawns and shrubs. The rising cost of water may make such practices infeasible in the future: “gray” water that is less pure will likely become the norm for outdoor watering. While the cost of water continues to rise, there are ways to save money on this valuable resource: 1. Manage outdoor irrigation to work with rainfall to provide 1” of water per week 2.Retro-fit existing irrigation systems with water-saving heads, rain-sensors, and more advanced controllers with “smart” technology 3.Landscape with xeriscape principles. Segregate the landscape according to water use: trees and shrubs (lower water use), turf and flowers (higher water use). Beware of other potential Landscape Catastrophes! Survival of the fittest rules the day in the landscape. Let me illustrate: last summer, we had another lightning strike on another Tulip Poplar on a property. Fortunately, this tree was away from people and cars. Within days the tree was viciously attacked by Asian Ambrosia Beetles- a devastating exotic insect pest that attacks ornamental trees in our landscapes. The insects sensed the stressed tree from great distances around and took advantage of its weakened condition. If the lightning didn’t finish off the tree, the insects sure did! As surprising as it may seem, humans can inflict damage, too. Careless use of a grill led to a deck fire, then landscape plants that were charred and crushed. It seems a weekly occurrence to us to be called to a property where a wayward car has driven through a shrubbery bed or hit a tree. Trucks with bad steering seem to be magnetically attracted to flower beds in their prime of color or turf areas that could be mistaken for a golf green. We can rest assured that the calamities will never cease, nor will the expenses to fix them. We can count on that just like, as my 9th grade English teacher said, we can count on death and taxes. The question then becomes how we prepare to respond to the inevitable. Do we anticipate death and taxes, and then prepare and budget? Perhaps we don’t, hide our heads in the sand, and then spend $3000 to remove the tree that we could have protected for a thousand. n 20 CAIGA.1st Qtr. 2015.indd 20 3/6/15 4:26 PM Community Associations Institute—Georgia Chapter • www.cai-georgia.org Build a Strong & Stable Association Atlanta Community Services Ranked in Georgia’s top fteen association management companies by the Atlanta Business Chronicle, Book of Lists, ACS will provide the services and support to build a strong and stable community association. Our experts will help your community stay on top of your association management. Our professional and personal approach will help improve the lives of families in your neighborhood. 4485 Tench Road • Suite 2511 • Suwanee, Suwanee GA 30024 Email: [email protected] Specializing in Townhome, Condominium and Homeowner Association Management How Can We Serve You? Financial & Administrative Package Assistance with the collection of assessments, paying of bills and invoices and all other normal association-related administrative tasks. Financial/Administrative Plus Covenant Administration Assistance with nancial and administrative areas of association and require a ‘third party’ to address Covenant violations and perhaps Modication Call Us Today! 770-904-5270 Full Management Package Provides complete oversight of association operations. ACS will provide Financial/Administrative and Covenant Administration services. Our Complete Services The primary goal of our support services is to benet our Associations. Our secondary goal is to offer our homeowners a qualied service company to assist them in repairs and services at a reasonable rate. www.atlantacommunityservices.com 21 CAIGA.1st Qtr. 2015.indd 21 3/6/15 4:26 PM Georgia Commons • First Quarter 2015 CAI-GA Gala 2015... (left) Angie and Travis Jinright, Scott Cathey and Amy Robinson of Russell Landscape Group (right) Barbara Walters, Joe Mayfield, Billy Gray and Amy Rader-Gray of Gray Contracting (above) Gala sponsor sign (above) Great Turnout at the Gala (below) Danielle of Broadband Planning and Erin O’Connell of Dorough & Dorough, LLC (above) Mike Crew, CMCA, AMS, PCAM of Homeowner Mgmt. Services, Dean Donald, CMCA, AMS, PCAM of Team Mgmt., and Pat Pou of Lazega & Johanson LLC (above) Tracy Henson of Homeowner Management Services and Andrea Roderick of The McKinley Group (below) Vicky Sand, Bill Gourley and Jimmy Kim of Weissman, Nowack, Curry & Wilco, P.C. (above) David Nichols of Community Mgmt. Associates, Chris Dicks of Ed Castro Landscape and Brandon Jackson of Greenwood Group 22 CAIGA.1st Qtr. 2015.indd 22 3/6/15 4:26 PM Community Associations Institute—Georgia Chapter • www.cai-georgia.org (left) Kelley Moon of EPIC Response and winner of the CAI Rita Kennedy Award, and Ashlie Bisig of EPIC Response (below) Eric Henning of Community Management Associates (below) Bradley & Shari Griffin of Atlanta Landscape Group (above) Dennis Hoffman, CMCA, AMS, PCAM of Community Mgmt. Associates, winner of the CAI Hall of Fame Award, and Dale Pendergraft of P3 Painting & Renovations (right) Tracy Lanard of Community Management Associates, Dale Pendergraft of P3 Painting & Renovations and Julie Jackson of CAI-Georgia (above) Scott Douglas of Community Funding Corp., and Veronica Cuellar of DisasterOne, winner of the CAI President’s Award (right) Jamie Platt Lyons, Esq., of Lazega Johanson LLC , winner of the CAI Leadership Award, and Dale Pendergraft of P3 Painting & Renovations. (below) Dale Pendergraft of P3 Painting & Renovations, and Laura Lazar, CMCA, AMS, PCAM of Parkside Management and winner of the CAI Hall of Fame Award (above) Lisa Fuerst of Pankey & Horlock, LLC, Educator of the Year winner and Dale Pendergraft of P3 Painting & Renovations (left) Dale Pendergraft of P3 Painting & Renovations and Stephen A. Winter, Esq., of Winter Capriola Zenner LLC, winner of the CAI Hall of Fame Award Continues on the next pages. 23 CAIGA.1st Qtr. 2015.indd 23 3/6/15 4:26 PM Georgia Commons • First Quarter 2015 2015 CAI-GA Gala...continued from previous page. (left) David Nichols and Amanda Evans, CMCA, PCAM of Community Mgmt. Associates, Russell Estey of RooterPLUS!, and Hollie Battle, CMCA, PCAM of Community Mgmt. Associates (above) Silverleaf Management Group (left) Steve & Lisa Weibel of Beacon Management (above) Eric Henning, AMS, PCAM and, Erin Byers of Community Mgmt. Associates, Tracy Henson and Glenda Bromer, CMCA, AMS of Homeowner Mgmt. Services, and David Nichols of Community Mgmt. Associates (left) Melanie and Alex Caceres of Horizon Painting & Renovations (below) Scott & Debra Douglas of National Cooperative Bank (left) Teresa Womack of Northwest Exterminating, Keith Shaddix of ValleyCrest and Dawn Shaddix of Northwest Exterminating (below) Robert Hopkins and Ashley Fullenkamp of DisasterOne, Sheri Stebbins and David Kitchens of 4 Seasons Landscape (below) Judy & Joe Dreher of Dreher Insurance (above) Elizabeth Heath and Wayne Urqhuart of Homeowner Management Services and Faith Brown of Tower Roofing. 24 CAIGA.1st Qtr. 2015.indd 24 3/6/15 4:26 PM Community Associations Institute—Georgia Chapter • www.cai-georgia.org (below) Bill Seatz, Leisa Ballew, Dee Stewart and John Stewart of Association Mgmt. Advisory Group (above) Shaune Huysamen of Tribridge Residential, Ella Huysamen, Dan Magee of Greenwood Group, Sarah Magee, Jodi Vasquez, CMCA, of FirstService Residential, Marc Vasquez, Jarrod Talley of Blueprint Painting & Renovations, Catherine Talley, Darlene Janis of Atlanta Community Services, Ben Rosenquist of Blueprint Painting & Renovations, and Alex Fiero (above) Nancy and Ian Mari of Liberty Lofts Condominiums (above) Russell Estey of RooterPLUS!, Dean Donald, CMCA, AMS, PCAM and Bill Wetter of Team Mgmt., Craig Sears of Sears Pool, Keith Collopy of Mutual Omaha Bank, Terrence Spires of Pest USA, Billy Gray and Michael Anthony of Gray Contracting. (above) Jill and Merrill Walker, CMCA, AMS, PCAM Advantage Community Mgmt. (left) Teddy Russell of Russell Landscape Group, Kristalyn Wright of Community Management Associates, Kevin Carnes of Arborguard Tree Specialists, Tracy Chambers of Homeowners Advantage, Mark Johnson and Dale Pendergraft of P3 Painting & Renovations, Chris Johnson of Ameristar Roofing, and Mike Sedacca of P3 Painting & Renovations (above) Nicole Shirley of Community Management Associates and her date (left) DisasterOne group photo (right) Julie Ketner of FirstService Residential, Emilio Olarto, Mindy Waitsman of Moore & Reese and Ashlie Bisig of EPIC Response 25 CAIGA.1st Qtr. 2015.indd 25 3/6/15 4:26 PM Georgia Commons • First Quarter 2015 ©istockphoto.com I.O.U. THE WALKING DEBT: Collections Against a Deceased Owner W e’ve all heard the expression that “you can’t squeeze blood from a stone.” The same adage may apply when the sole owner of a property who is obligated to pay assessments dies. An association that is owed money cannot initiate or maintain a lawsuit against a dead person and the debts of the deceased are not transferred to his relatives.1 What can an association do when an owner’s obligation to pay assessments terminates at death but title lives on in the name of the deceased? In Georgia, when a person dies without a will, or “intestate,” title to real property vests immediately in that person’s heirs at law. If an administrator is appointed, however, title vests in the administrator until distributed back to the proper heirs.2 When a person dies with a will, or “testate,” property vests in the personal representative named in the will until distributed to the beneficiaries.3 This is typically accomplished with a deed from the executor to the beneficiaries.4 There are two scenarios where liability for assessments due after the death of the owner is certain. The first is when there is no will and no administrator is appointed, but the heirs are known. Those known heirs will be responsible for assessments due after the date of death of the owner.5 The second scenario is where there is an administered will and a deed conveys the property to the beneficiaries. Those beneficiaries named in the deed will be responsible for assessments due from the date of conveyance. Unfortunately, there are several other scenarios where liability is far less certain. For instance, what happens when a homeowner dies and no heirs come forward to claim an interest or to present a will? What happens when there is a will, but the personal representative does not administer it or does not convey the property to the beneficiaries? What happens when the heirs or beneficiaries are determined in a properly administered estate, but they do not wish to inherit the property? These scenarios are common when a property has little or no equity at the time of death of the owner. An association’s remedy to collect assessments due at the time of death by the decedent is generally limited to a claim against the estate.6 If an estate was opened with the filing of a probate case, the association may give notice of its claim for payment according to priority relative to other creditors.7 If no estate was opened, a creditor such as the association, can be appointed as administrator8 or offer a will for probate.9 There is also a provision for appointing the county administrator for the purpose of commencing a lawsuit against the estate.10 As interesting as these options may seem, the bottom line is that a living heir or beneficiary cannot be forced to take personal responsibility for property owned by the deceased.11 Moreover, it is unlikely that a person of means will die and not have anyone come forward claiming an interest in inheriting the deceased’s assets. Typically, if the deceased owned any valuable assets at the time of death, relatives will immediately act to protect the value of those By Stephen A. Finamore, Esq. Lueder, Larkin, & Hunter, LLC • www.luederlaw.com assets and to preserve any inheritance they may be due. The owners who were not fulfilling their obligations during life are usually the ones who will not have any heirs or beneficiaries come forward to administer their estates after death. In those cases it will not be cost effective to pursue unwilling heirs or beneficiaries. Without any realistic or practical options for collecting the sums owed from the estate of the deceased, the association is left only with its lien rights against the property itself. For associations subject to the Georgia Condominium Act or Georgia Property Owners’ Association Act, the most effective course of action may be to foreclose the association’s lien. Regardless of who may have an interest in inheriting the property, those rights can be foreclosed for unpaid assessments secured by the association’s lien.12 Although there will not be any personal liability attributed to anyone, the association can obtain possession of the property. This may be particularly prudent when there are relatives living at the property having no personal obligation to pay assessments. In that situation, the association may also seek to enforce other remedies such as water suspension, towing, and rent assignment when available. If no such remedies are available, simply waiting for the lender’s foreclosure may be the next best action. Information regarding the deceased owner’s assets and family is key. Any contact made with any individual claiming to be related to the deceased owner should be documented. Obtaining copies of death certifications, court orders, and other documents verifying the details of the estate will provide critical insight regarding the viability of available options the association may have. The association should consult with its counsel to determine the best course of action. n Footnotes: 1 Goff v. Nat. Bank of Tifton, 170 Ga. 691, 153 S.E. 767 (1930) 2 53-2-7 3 53-8-15 4 53-8-13 5 Villas at Stone Mountain Condo. Ass’n, Inc. v. Blair, 311 Ga. App. 718, 719, 716 S.E.2d 718, 719 (2011) 6 53-7-40 7 53-7-41 8 53-6-20 9 53-5-2 10 53-6-40 11 53-1-20 26 CAIGA.1st Qtr. 2015.indd 26 3/6/15 4:26 PM CAIGA.1st Qtr. 2015.indd 27 3/6/15 4:26 PM Georgia Commons • First Quarter 2015 Do you have a community that loves to socialize? The CAI Green Committee with the help of our generous CAI members would love the opportunity to provide your community with a container garden. Please reach out to Barry George of Crabapple Landscape for more details. November 11th, 2014 was a special day for CAI’s Green Committee! Special thanks to Mary Ann Maleana, Green Committee member & Communications Chair for Crabapple Lake & Parc Community Association, for coordinating homeowners from the community, the CAI Green Committee and Roswell City Councilmember Nancy Diamond for a Community Container Garden Ribbon‐Cutting Ceremony. Representatives from the community were invited to join CAI's Green Committee to share what they have learned about 'going green' and to help promote greener choices in neighborhoods. One of the Green Committee's many annual service projects is to build container gardens in community common areas. Vendors have donated labor and materials needed to install the containers, but it is up to the community to turn the containers into gardens. The containers for this community garden were installed in early October thanks to Barry George of Crabapple Landscape Experts and Paul Slovisky of Aquascape Environmental. Crabapple Lake & Parc Community Pool Committee Chair, Lynn Thomas, serves on the Green Committee and deserves thanks for coordinating this effort with CL&P Community Garden Chair, Jeanie Witcraft‐Shiau and working with both vendors to see this project through. CL&P knows how to get the kids involved in the community; Jeanie Witcraft‐Shiau organized the first planting in mid‐October, and thanks to Jeanie and her crew of volunteers two boxes filled with dirt became a beautiful vegetable garden. Crabapple Lake & Parc Community Association, is managed by Sherry Perrotta, Atlanta Community Services, Inc. Interested in learning more, come to a Green meeting this year! Please contact Committee Chair Bekke White, Union Bank or one of our members: Marvin Pastel, Leslie Fellows, Barry George, Emily Cantrelle, Dick Patterson, Carlyle Douglas, Paul Slovisky, Brandon Thomas, Jeanie White, Noreen Balcer, Chris Ruthruff, Chuck Negas, Emil Bekyarov, Maryann Maleana, Evan Conroy, Lynn Thomas, Sherry Perrotta, Michael Pullen, Jane Beasley, Christy Barber and Board Liaison Ian Mari. 28 CAIGA.1st Qtr. 2015.indd 28 3/6/15 4:26 PM Great Expectations Expect quick solutions to your problems Expect honesty and fairness — absolutely no hidden fees Expect a company you will be able to trust Expect 100 percent focus on community association management — not leasing, sales or real estate activities Expect guidance and support for your board to ensure the highest standards each and every day Expect only highly experienced people directly involved with your community Expect us to exceed your highest standards 11735 Pointe Place Roswell GA 30076 770.751.8333 www.communityclubmgmt.com CAIGA.1st Qtr. 2015.indd 29 3/6/15 4:26 PM Georgia Commons • Third Quarter 2014 The Certainty of Death and Taxes By Pamela J. Irwin, CMCA, PCAM Community Management Associates D eath and taxes may not be the most pleasant subject to discuss but it is an important topic. It can be an unpleasant surprise to take over the management of a homeowners association only to learn they owe back taxes. As a point of clarification, property taxes would only apply to homeowners associations. Common property of a condominium association is subdivided among the owners. You may receive a notice of intent to issue FIFA from the city or county. This notice is not referring to the Fédération Internationale de Football Association or as Americans call it, soccer. If you receive a notice of FIFA, (Fieri Facias) it is a directive from the court to the sheriff, marshal, or other authorized officer, requiring them to seize, levy upon, or sell at public auction sufficient property to satisfy the amount due on the judgment. This is serious and needs to be addressed promptly. Call the city/county clerk’s office to make payment arrangements ASAP! Sometimes, the city or county will experience some sort of hiccup with their reporting or billing software and the tax bills are not mailed or maybe they were lost in the mail. It has happened to me. One year, I received tax bills for all my parcels. Then, there was some sort of software upgrade and the new system reverted back to old mailing addresses. Thus, I did not receive property tax bills the following year since they were sent to the previous address. If you don’t notice, this could go on for years. Then suddenly, once the city corrects the problem, you receive a notice the homeowners association owes not only their past due taxes but interest and penalties. This can be painful. Treasurers aren’t always watching for this sort of discrepancy either. There’s not an easy way to track down the tax bills for a property if you don’t know all the parcel identification numbers. Typically, we rely on historic data to pay the taxes each year. You may find for ten years you’ve been paying property taxes for three parcels of land then out of the blue you learn there’s a fourth and you owe ten years of property tax. In an ideal world, each homeowners association should have all parcel identification numbers provided to ensure all the property taxes are paid each year. If you are uncertain you have all the parcel identification numbers for your property/properties, you may need to enlist some help. Your attorney may be able to pull the applicable tax map with the recorded subdivision plats to determine if all the common areas of the community “In an ideal world, each were accounted for using what parcel identification numbers you homeowners association should do have. Tax records may show the prehave all parcel identification vious management firm as the numbers provided to ensure all the contact or the developer’s address so you’ll need to have the inforproperty taxes are paid each year.” mation updated. The attorney can help with this as well if you’re unsuccessful trying to correct the address online. The other grim topic is death. It affects property management as well. If an owner of a unit or single family home dies and there is not a partner with the right of survivorship, then often the property is left to someone, such as a family member, if there is a will. Following the death, the executor will file the deceased’s will in probate court, where a judge will determine the validity of the will. If the will is considered valid, all property and assets are distributed according to the terms of the will. The rightful heirs or beneficiaries of the estate will take title through the will. The assessments owed to the association are to be paid by the estate/new owner. This is a sensitive time for the C ontinues on page 4 0 . One Call. One Hour. One EASY Solution. www.ROOTERPLUS.com www.ATLANTACOOLINGPROS.com A RATED PLUMBING • SEPTIC SERVICES • SEWER & DRAIN • HEATING & AIR 30 CAIGA.1st Qtr. 2015.indd 30 3/6/15 4:26 PM Community Associations Institute—Georgia Chapter • www.cai-georgia.org Swimming Pool Management for Community Associations Customized Weekly Service • Chemicals Repair and Renovation Pool Supplies • Safety Equipment Leak Detection Phone: 770-992-4322 Fax: 770-650-0078 [email protected] Atlanta’s source for Association Community Management Creating a Sense of Community for more than 25 years Services tailored to the needs of your homeowner or condominium association. Full service management, accounting and maintenance 1100 Northmeadow Pkwy., Suite 114, Roswell, GA 30076 Voice: 770-777-6890 ext. 127, Fax: 770-777-6916 Visit our web site at : www.accessmgt.com 31 CAIGA.1st Qtr. 2015.indd 31 3/6/15 4:26 PM Georgia Commons • First Quarter 2015 Death of a Judgment By Laura C. Horlock, Esq. Pankey & Horlock, LLC ©istockphoto.com S o you got your judgment against the delinquent owner who has never paid a dime of assessments. You dance around with the other Board members, waiving the judgment in the air, hardly believing that justice has finally come. But what happens if you can’t collect the judgment? How long can you wait to enforce the judgment? How long will the judgment last? Does a judgment ever die? Judgments will die if you wait too long to do anything, but keeping a judgment alive is relatively easy. When you get a judgment for past due assessments, ask the clerk of court to issue a Writ of Fieri Facias (a Fi Fa) on the judgment. A Fi.Fa is a fancy Latin word for a document that allows the county sheriff to seize and sell the judgment debtor’s property to satisfy the debt. It also is a document used to record the judgment in the county records so the judgment will attach as a lien to the judgment debtor’s property. So the Fi.Fa. is a very important part of the judgment and requesting the court to issue and record a Fi.Fa. should be the first thing you do after you get a judgment. Once you record the Fi.Fa, the judgment is good for seven years from the date of recording. You can renew the judgment in seven years by sending the Fi.Fa. to the Sheriff to enter Nulla Bona, which is, for all practical purposes, a fancy word for “renewing the judgment.” However, this must be done before the seven year deadline. If you fail to renew the judgment within the seven year deadline, then the judgment goes dormant and can’t be enforced. Why would you want to do this? If you haven’t been able to collect the judgment for seven years, what’s the point? Isn’t it for all practical purposes dead anyway? Maybe. Some debts just can’t be collected or are for such a small amount, and they aren’t worth the time and trouble to renew. However, if the judgment is a big judgment, there are good reasons to keep the judgment alive, even after seven years. Renewing a judgment is easy and inexpensive, usually less than $50.00 in court and sheriff’s fees. So you don’t have much to lose by renewing the judgment. But more importantly, a recorded judgment is a very easy form of passive collection. The recorded judgment attaches to all of the judgment debtor’s real estate in the county in which the judgment is recorded. You can also record the judgment in any other county in Georgia, and it will attach to any real estate owned in those counties as well. If the real estate sells, then your judgment should get paid as part of the sale - as long as the judgment hasn’t expired. If the judgment debtor tries to refinance his existing mortgage, then the lender will require the debtor satisfy the judgment as part of the refinancing – as long as the judgment hasn’t expired. Likewise, debtors will occasionally “lay low” for a long time after your judgment is entered, perhaps hoping that you will forget about them. You never know when the judgment debtor is going to pop back up on the radar with a new job. Keeping the judgment alive gives you an opportunity to collect the old debt. Because of this, you don’t have much to lose by renewing the judgment. As with any legal matter, there are a number of ins and outs relating to recording a judgment and keeping it alive. Be sure to consult your attorney when a matter like this comes up so you’ll know how it applies to your specific situation. n pick the right tools for your next project. With community association lending expertise like ours, you’ll get the job done right. take that to the bank. Keith Collopy Regional Account Executive 770-871-0442 Toll Free 866-800-4656, ext. 7534 [email protected] mutualofomahabank.com AFN46052_0913 Member FDIC Equal Housing Lender EQUAL HOUSING LENDER 32 CAIGA.1st Qtr. 2015.indd 32 3/6/15 4:26 PM Community Associations Institute—Georgia Chapter • www.cai-georgia.org Here we grow again! We are proud to announce that our company has been awarded the property management contracts for the following Atlanta communities: Brookwood Park Condominium Association, Inc. The Orchards of Brannon Oak Farms Community Association, Inc. Legacy Ridge Homeowners Association, Inc. Welcome to the Heritage Family! February 2015 Building Better Communities Since 1982 Heritage Property Management Services, Inc Corporate 500 Sugar Mill Road Suite 200 B Atlanta, GA 30350 South Metro 805 East Lanier Avenue Suite C Fayetteville, GA 30214 “Experience the difference” (770) 451-8171 [email protected] www.heritageproperty.com A higher level of engagement. CAI Annual Conference & Exposition April 29–May 2, 2015 Caesars Palace Las Vegas Texting, talking and tweeting are all great ways to stay in touch, but nothing compares to faceto-face interaction. The best way to meet people, build deeper connections with colleagues and strengthen peer networks is through real interaction. And the best place to interact with your community association peers is at the CAI Annual Conference and Exposition. Bring a higher level of engagement to your personal and professional network and meet face to face at the Annual Conference. 33 CAIGA.1st Qtr. 2015.indd 33 3/6/15 4:26 PM Georgia Commons • First Quarter 2015 Death of HVAC By Shawn Mayabb Building Performance Institute, Inc. Certified Envelope Professional and Building Analyst, Horizon Painting and Renovations Here are 10 tips for hiring an HVAC contractor and making your purchase. 1. Do research through the internet and customer satisfaction websites like Angie’s Lisa, Kudzu, etc., and check the Better Business Bureau. 2. Ask for referrals from friends, neighbors, and family members. ©istockphoto.com W ell guys it’s that time of year again where we are fighting with ourselves on whether we should repair or replace the Heating, Ventilation and Air Conditioning (HVAC). Hopefully, this article will help. Here are three easy and inexpensive ways to keep the system running efficiently with fewer problems. First, there are different types of filtration options for the HVAC system. A typical 1” filter, media filters and mechanical air purifiers. These need to have regular maintenance by either a licensed technician or the homeowner. The 1” filter should be replaced once a month and the media filter and mechanical air purifiers should be serviced according to manufacture specifications. A dirty filter will slow down the air flow and make the system work harder. This is an energy waste and it also shortens the life span of the motor. Second, having a twice yearly system check performed by a licensed professional will keep the system operating efficiently and catch any potential problems before a system would fail. Lastly, make sure there is sufficient clearance around the outdoor unit for air flow. Don’t plant bushes or trees too close to the unit. Don’t build a fence or in any other way try to conceal the unit by putting a barrier too close. This will keep the air from being allowed to flow freely through the unit. There may come a time when you have to decide whether to repair or replace. Nursing an older unit along may seem like you are saving money, but in reality, you are spending more on energy costs than what the unit is worth. The website “energystar.gov” recommends replacing the air conditioner or the heat pump after 10 years of service. The gas furnace has a recommendation to replace after 15 years of service. For homes that have electric heat and air, you need to replace the air handler at the same time you replace the heat pump. These are a matched set designed to work together. Depending on what caused the system to go out, by only replacing one item of the set, the same issue could cause the new piece to stop working due to contamination of the refrigerant passing between the two. “...should [we] repair or replace the Heating, Ventilation and Air Conditioning (HVAC)?” 6. The consultant should spend a significant amount of time inspecting the existing system and asking questions about the performance of your system and any problem areas you may have with its ability to heat and cool. A Manual J calculation should be done to examine whether the existing system is sized correctly. If the system is oversized, it will heat or cool rapidly. This makes the home feel uncomfortable. It is also an energy waste. If the system is undersized, it will run longer and it will be harder to maintain even temperatures and not be able to reach a desired temperature. 7. Get a written estimate from each consultant. Make sure they include model numbers of the equipment proposed and the final price. The best equipment isn’t cheap and cheap is not always the best. 8. Make sure to have a written contract that both parties have signed before any work begins. If the consultant hasn’t signed the agreement, you don’t sign the agreement. 9. The company you choose needs to do a Quality Control Audit a couple of days after installation. This should be performed by a licensed service technician. 4. Ask the consultants that visit with you if they have any rebates or special offers. This is one of the biggest purchases you will make for your home. 10. Make sure the company you choose files all your registration for warranties and processes any rebates or incentives with local energy providers. 5. Look for Energy Star qualified products. These products meet strict energy efficiency guidelines set by the U.S. Environmental Protection Agency. The U.S. Department of Energy, U.S. Environmental Protection Agency, EnergyStar.gov and your local government licensing agencies all have more information so you can make the best decision for you and your family. n ShingleS Slate tile Cedar Shake PVC tPO ePdM Built uP COatingS • rePlaCeMent • rePair • MaintenanCe 770.592.9889 40% Discount for CAI Members. 3. Ask for references from the contractors you have chosen. Then make sure you call and check the references. www.towerroofinginc.com Providing quality professional roofing since 1985 SOlar Siding gutterS Paint 34 CAIGA.1st Qtr. 2015.indd 34 3/6/15 4:26 PM (800) 522-6314 | www.cmacommunities.com CMA Puzzle Ad.indd 1 Puzzled by Homeowner Complaints? 2/22/12 1:53 PM CMA can provide the missing piece for your Homeowners Association! Our People Make the Difference We specialize in managing Associations, large and small, mid-rise and high-rise condominiums as well as master planned communities. CMA delivers professional, effective, cost-efficient management — customized to your Association at a price you can afford. CMA builds long-term relationships with Board Members and Homeowners. Managers are rigorously trained in customer service. View your account online in real time – ANYTIME. Timely responses on e-mail and phone calls. Utilizing top-notch vendors to enhance the community and each Homeowner’s investment. No hidden fees. 24-hour emergency support. 30-day termination clause in contract. Open door policy to CMA Executive Staff. Voted #1 in the industry for the last eight years. Comprehensive Financial Management. State-of-the-art IT technology. Managers are strategically placed to manage in the areas in which they live. Atlanta | Nashville | Greenville | Athens (800) 522-6314 | www.cmacommunities.com CAIGA.1st Qtr. 2015.indd CMA Puzzle Ad.indd 135 3/6/15 1:53 4:26 PM PM 2/22/12 Georgia Commons • First Quarter 2015 Proving Your Collections Case: The Death of the “Balance Forward” Ledger By Benjamin Ost, Esq. Dorough & Dorough, LLC “Prove it!” Whether it is one kid calling another kid’s bluff on the playground or Robert Kraft, owner of the New England Patriots, demanding proof of “Deflate-gate,” the idea of backing accusations with evidence is essential to the American ethos. This spirit arises from the very heart of our justice system – that people are “innocent until proven guilty.” Anyone who has spent time trying to collect unpaid community assessments has heard those words – whether they come from the homeowner, the association attorney, or the Judge. A recent Georgia case has resoundingly issued the same challenge and the wise association will heed the warning. A Case Like Any Other Hayek et al. v. Chastain Park Condominium Association, Inc., No. A14A1134 (Ga. App. Sept. 25, 2014). The case began like any of the hundreds, if not thousands, of association assessment cases pending in Georgia courts at any given time: the condominium association’s ledger showed years of delinquency for a unit owner. The community association manager “The unit owner... sent a letter to the owner. No response. The file was sent to the association’s attorney who sent another, filed an answer sterner, letter threatening litigation. Still no response. denying the amount Suit was filed. That got a response. The unit owner, surprising no one who has worked in collections owed.” before, filed an answer denying the amount owed. In the Hayek case, as often happens, the association filed a motion for summary judgment which was supported by the affidavit of the property manager and a ledger showing the amounts owed by the delinquent owner. The trial court granted the Association’s motion and entered judgment in its favor for almost all of the amounts requested (after shaving a little off the top of the attorney’s fees and expenses of the suit). The unit owner appealed the decision, complaining, among other things, that the evidence of the amounts owed was insufficient and inadmissible. Admissible Evidence: a Simplistic Summary of a Boring, but Important Legal Issue Evidence is essential to a plaintiff’s case. Not just any evidence will do, however. Watch any episode of “Law and Order” and you’ll see that just because the murder victim’s second cousin can attest that his brother’s girlfriend heard the alleged murderer say that they were coming for the victim with a gun in each hand does not result in a conviction. Evidence must be admissible. Generally, this means that the person providing evidence has to have personal knowledge of it and must be available to testify regarding the facts. In the context of an association collection case, the evidence of the debt is usually in the form of a ledger. Therein lies the problem – odds are good that if an owner has been delinquent for years there is no single board member or community association manager who has been around long enough to have personal knowledge of each and every unpaid item on that ledger. Georgia law lends Associations a hand in the form of the Business Record exception to the hearsay rule. Overly simplified, any person charged with keeping the ledger can swear to its accuracy even if they did not personally enter every item on it as long as it is a record of the Corporation and it meets several other criteria. C ontinues on page 3 9 . • For the last 35 years we have provided high quality, customer focused swimming pool management services in Atlanta. • We have highly trained lifeguards, turn-key service, repairs, construction and chemicals. • As a proud partner of The Pool Management Group we’re able to offer our customers the industry leadership, resources, and rewards of a national company. atlanta-pmg.com | 770-992-7665 36 CAIGA.1st Qtr. 2015.indd 36 3/6/15 4:26 PM Fire, Fire, Water, Water, Storm Storm or or Mold Mold Damage? Damage? 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Right! 1.888.303.9288 1.888.303.9288 CAIGA.1st Qtr. 2015.indd 37 3/6/15 4:26 PM Georgia Commons • First Quarter 2015 The Inmates are Running the Asylum — A Perspective Shift CAI-Georgia 2015 Calendar of Events E veryone has a custom currency. An effective teacher taps into this to connect with what a student values most: A child fascinated with Transformers toys more easily learns the alphabet if provided ‘transformer’ letters that twist into characters. As we mature, these currencies become an overlooked language, but still shape our interactions. In many ways, they are our native language. When we talk about running a transparent organization, we are really attempting to overcome the confusion and conspiracy that crops up as these ‘languages’ muddy the translation. It is not always easy bridging the gap into a universal language. In the two months leading up to the annual meeting for a particular homeowners association, some owners, along with the Board treasurer, were accusing other Board members of mismanagement. The revolt crystallized due to renewed enforcement of leasing restrictions and regulating community access. The discontented shared a common currency of individualism and special distrust of authority. When it came to determining terms of service for the election, this group challenged the validity of all meeting Minutes stretching several years. At a special town hall meeting, the Board, management and legal counsel attempted to clarify using English. The ‘language’ of the crowd overshadowed all reasoning. One failed translation: The term of service is not linked to the office title (president, secretary, treasurer) held by the person. Over the past year, some Board members had been appointed into empty spots. Afterward, the Board reassigned officer positions, but the original length of term for each Director remained unchanged. To the homeowner group, this was a shell game. If the leadership had addressed the crowd in the currency of individualism, not legalism, it might have looked like this: No Board member joyfully inflicts misery on him or herself by coming up with rules that make mad neighbors. Board members have to live under the same rules as their neighbors. We all value the freedom enjoyed within the ‘castle’ of our home and don’t want someone needlessly someone sticking his or her nose in our business. Communicating this, followed by the reasons for why the regulations were critically important, would have been more effective: This particular community is in dire need of a one million dollar bank loan to address safety issues. The banks will refuse to lend unless the leasing situation is reigned in. In a way, it’s the lending system that is infringing on our individualism. They have the money and get to call the shots. We homeowners may decide that giving up this freedom for a bank loan is not worth it. But we then must be prepared for a huge special assessment. Sharing the above, not once, but seven times in several different ways to offset a misinformation campaign, was able to bring the crowd in for a soft landing at the annual meeting. They were actually able to conduct all their crucial business within sixty minutes and get everyone out at a decent hour. Leading up to the meeting, the rogue Board member had tried to worsen the situation by leaking inaccurate information about the finances. But by the time of the annual meeting, every homeowner had a copy of the financials and could see that everything was in order. It later came out that this Treasurer had never reviewed or understood any of the financials, despite coaching for her duties when she was first appointed. Although the election placed the ‘crazy’ homeowners on to the Board, they had learned enough in the final days to move cautiously with a broadened perspective. It is now up to them to tap into their shared currency with those that elected them. n ©istockphoto.com By David Hill, CMCA, AMS, PCAM Access Management January June M-100 Class – Community Leadership 01/22/15-01/23/15 Century Center Marriott 8:30 AM – 5:30 PM Casino Night 06/12/15 Roswell Historic 4:00-8:30 PM Gala Awards Dinner 01/24/15 The Westin Perimeter 6:00-10:00 PM CAI National Law Seminar 01/28/15-01/31/15 San Francisco, CA February Bowling Tournament 02/19/15 Brunswick Bowling 4:00-8:30 PM March Speaker Luncheon 03/20/15 Cobb Energy Center 11:30 AM – 1:30 PM April Tennis Tournament 04/24/15 Windward Lake Club 11 AM – 5 PM July Manager Luncheon 07/31/15 Location TBD 11:30 AM – 1:30 PM M-201 Class 07/30/15-07/31/15 Century Center Marriott 8:30 AM – 5:30 PM August CAI-Georgia Neighborhood Expo 08/27/15 The Retreat at Perimeter Summit 1-7 PM September Speaker Luncheon 09/18/15 Hyatt at Perimeter 11:30 AM – 1:30 PM October CAI National Conference 04/29/15-05/02/15 Las Vegas, Nevada CAI-Georgia Golf Tournament 10/15/15 Heritage Golf Links 11:00 AM – 5:30 PM May November Social 05/07/15 Location TBD Time TBD Social 11/05/15 Location TBD Time TBD Speaker Luncheon 05/15/15 The Westin 11:30 AM – 1:30 PM December M-203 Class 05/28/15-05/29/15 Century Center Marriott 8:30 AM – 5:30 PM Luncheon – 12/04/15 Location TBD 11:30 AM – 1:30 PM 38 CAIGA.1st Qtr. 2015.indd 38 3/6/15 4:27 PM Community Associations Institute—Georgia Chapter • www.cai-georgia.org PROVING YOUR CASE...from page 36. The Decision: the Death of the “Balance Forward” In the case above, the owner appealed the association’s judgment on the grounds that the ledger was inadequate proof of the amounts alleged. The specific issue? On the ledger were several large entries with very general descriptions; including one entry for many thousands of dollars described only as “balance forward.” The Court of Appeals agreed with the owner and sent the case back to the trial court for a review of the amounts owed. The reasoning? The “balance forward” entry was not specific enough in that it did not provide what the amount was comprised of (was it for interest, late fees, assessments, or fines? – we may never know) and the community association manager’s affidavit shed no further light on the subject. The Implication: Why Associations Should Care Many collection suits have similar ledgers and it is likely that most board members or community association managers can adequately prove a “balance forward.” The reasons for such “balance forward” entries vary, but commonly arise when (1) an association switches to a new community association management company; (2) the entry comes from a third-party as a lump sum, such as a law firm or collection company; or (3) the association simply has not been doing the best job with its records and the result is annual or semiannual entries for large, unexplained amounts. The Court of Appeals has sent a clear message with its unceremonious treatment of the ledger with a “balance forward.” Associations and their agents are now on notice that courts will no longer accept ledgers with amounts that are not adequately described, itemized, and sworn to by a board member or community association manager. Fear not! Your community association attorney can help ensure that your association is keeping financial records sufficient to get your judgment! n Looking for a New Pool Management Company? Sears Pool Management has been Atlanta’s premier pool Management and renovation company since 1997. Pool Maintenance Renovations & Repairs ADA & VGB Compliance Experts Pool Covers & Furniture Salt Systems Chemical Controllers Lifeguard Certification & Staffing Swimming Lessons Sears Pool Management Customers Experience: Unmatched Customer Service- We’re open 7 days a week in season and offer 24-hour emergency pager service. Strong and Proven Track Record- With over 15 years in business, we have a reputation for high quality service delivered with integrity. Experienced and Certified Staff- We boast the most highly trained and industry certified staff in town, with American Red Cross Lifeguard Instructors, CPOs and APSP Technicians on staff year round. 770-993-7492 www.searspool.com Like Sears Pool Management Consultants on 39 CAIGA.1st Qtr. 2015.indd 39 3/6/15 4:27 PM Georgia Commons • First Quarter 2015 kill insurability...from page 8. death & taxes...from page 30. family while they are grieving so please be reasonable with the demand for payment. If there is no will, the person who is next of kin can file a petition for probate to open the estate and serve as personal representative as the executor or executrix. He or she must collect the assets, pay or resolve any claims or bills and the expenses of the estate proceeding, keep other interested persons/ family members informed of the progress of the estate administration, file the final tax returns, prepare an inventory of accounts, and distribute the assets to the persons entitled to receive them. This process takes a minimum of eight months and often takes a year or longer. In the event the deceased property owner had no heirs, the estate and all assets would be assumed by the State. To satisfy any taxes/liens owed the property, it would be sold by the county. This may motivate you to draft your own personal will if you don’t already have one for peace of mind and concern for those left behind. n have already incurred some investigation expense that will impact your loss history. For any claims paid by the insurance company, complete all repairs promptly so that the company can close the claim. Typically, estimates, on the high side, are used for loss history until a claim is closed. When practical, advise your insurance provider of any steps taken to prevent any repeat of losses experienced. Address any homeowner reports of potentially hazardous conditions in a timely manner to prevent loss and avoid any claims of negligence by the board. In summary – Manage your community like a business and keep the communication flowing with your insurance providers to keep your community’s insurability alive! n tax returns...from page 14. • Non-resident clubhouse or facility rentals • Payments for easements, like cable lines or cell towers GADDIS & LANIER, LLC Your Neighborhood Attorneys We are a full service community association law firm providing collections, covenant enforcement, litigation and corporate governance services to condominium, townhome and homeowners association clients. (404) 459-7055 Main (404) 459-6001 Fax [email protected] www.gaddislanier.com 5555 Glenridge Connector Suite 200 Atlanta, GA 30342 Filing annual tax returns Community association tax returns are due by March 15th for most communities, or 2.5 months after the fiscal year-end for communities that don’t follow calendar year accounting. As an example, if your association’s fiscal year ends on June 30, your tax return is due September 15. In either case, you can also file for a six-month extension if you need more time to prepare your tax returns. While catching up on missing tax returns can be somewhat daunting, the process of filing an HOA’s annual federal and state tax returns is fairly simple and inexpensive. There are two potential IRS forms used. The “standard” IRS form 1120H applies if your association meets the following criteria: • 85+% of units (homes, condos, etc.) are used as residential. • 60+% of revenue is from association members rather than sales of goods or services. • 90+% of expenses go to support the operation and maintenance of association property. The more extensive and complicated Form 1120 may be required if your association doesn’t meet the above-mentioned criteria, or if it is filing late. It’s always best to review filing and form options with a CPA who has experience working with community associations. Services: Repairs: Customized Pool Maintenance Services Openings & Closings Bathroom Cleaning & Supplies Equipment Energy Audit Equipment Repair Salt Systems Safety Covers Plastering Tile Energy Saving Equipment Landscape Lighting Office: 678-341-2040 Fax: 866-557-1390 Toll Free: 855-577-7665 www.stillwater-pools.com /stillwaterpools Don’t shoot the messenger I sometimes receive calls from panicked board members when they first discover their community association hasn’t filed taxes in years – or ever. Technically, those associations need to catch up by filing all back tax returns. But let’s also be reasonable. If an association’s financial records are only available for the previous five years, let’s focus on filing tax returns for those five years and then keep current going forward. It’s most important to show that your association is remedying the situation as quickly as possible. Read this before having tax returns prepared down the “block” Recently, the board treasurer of a self-managed community association asked me to review their tax returns after having them prepared at the strip mall location of a national tax services provider. The board treasurer questioned why the association had just paid over $5,000 of income taxes. Good question! It turns out that the tax preparer incorrectly categorized the community association and used the wrong tax return form. Once we recalculated the return using the correct IRS forms and formulas, the tax due was actually $0. We refiled the correct tax returns and the association received a full refund. Who let the IRS in? Don’t be the board member who caused the IRS audit. When you hire a qualified CPA with community association experience, filing tax returns (even back returns in most cases) will be a pretty straightforward process. Make annual tax returns the first agenda item for the first board meeting of every year. Please let me know if you have specific questions. n 40 CAIGA.1st Qtr. 2015.indd 40 3/6/15 4:27 PM Community Associations Institute—Georgia Chapter • www.cai-georgia.org The Death of Face-to-Face Communication By Kim Blair NFC Amenity Management A few years ago, I shared an office with the community association manager for an active adult community of 800 homes. Most of the residents were retired and spent their leisure hours exercising, playing games, socializing or attending meetings for numerous committees. Because the community association manager’s office was located near the entrance of the community clubhouse, it was not uncommon for residents to stop by the front desk to say hello, pick up an activities calendar or sign up for an upcoming social activity. On many occasions, residents would use this time as an opportunity to ask a question about a recent Board decision or inquire about landscaping or other services that involved their homes and community. As was customary, the residents often asked to speak to the community association manager who, despite sitting on the other side of the wall, instructed his staff to say he was busy or unavailable. The residents would then go home and call or email him, but he wouldn’t respond. Day after day, the same residents would come by, ask to speak to the community association manager, and then walk away upset that once again, he never talked to them. In fact, the staff and I used to take bets on how many messages he would have to receive before responding to a resident on any given day. Would it take five messages? Five phone calls? Ten emails? The more the community association manager ignored the residents, the more emails and calls his staff had to field. We became experts at helping angry retirees calm down when they were ignored. After a while, the difficulty of dealing with the absentee community association manager took a toll and many employees left. The community association manager was eventually let go. Working as a lifestyle director for the active adult community gave me an opportunity to get to know the residents and hear their life stories. Many had successful careers and were retired CEO’s, business owners, physicians, decorated war veterans, or deacons at their church. Many had endured painful losses: the loss of a spouse, a child, a job, or their health. Many loved to talk about their grandchildren, their travels, their pets and their gardens. Many were lonely and just wanted to be heard. For them, being heard was more than just an email, particularly since some didn’t have a computer, and more than just a phone call since many had difficulty hearing. These residents wanted an in person, face-to-face conversation with each other and with the manager of their community. Being ignored just exaggerated the fact that they were not being heard, which translated into not being needed. Being needed, after all, is essential for their happiness. Community association management is a difficult job and I can’t imagine how stressful it must be handling the long list of complaints and requests that come through a manager’s office on a daily basis. I don’t pretend to know how to handle the communication that is so essential to one’s job. What I do know is that a friendly handshake and warm smile can only be exchanged in person. Wouldn’t five minutes of face-to-face dialog that acknowledges a resident’s voice be much more effective then thirty minutes of hastily written email exchanges or ten minutes of “phone tag” with voice mails that never get heard? Imagine that the community association manager for the active adult community agreed to set aside a time each week for coffee with the residents or allowed a three-hour window of time devoted solely to meeting with folks in his office. Imagine that he said little, but listened intently to resident suggestions or complaints while nodding and smiling with understanding. Imagine that the residents were greeted with a warm handshake and made “Wouldn’t five minutes of face-to-face dialog that acknowledges a resident’s voice be much more effective then thirty minutes of hastily written email exchanges...” to feel important. Think how much time would be saved in multiple email exchanges, voice mail retrievals and constant interruptions daily as the staff had to tell the residents, once again, that the community association manager was unavailable. If face-to-face communication is valuable to residents of an active adult community, then surely it is valuable to most communities managed by homeowners associations. With face-to-face communication, body language and nonverbal cues often give clarity and help calm people that are upset. It is much more effective when handling a disgruntled resident to nod one’s head in acknowledgement, smile if appropriate and say ‘yes, I understand’ then engage in confrontational electronic dialog. With emails and texts, the message is often sent in haste, causing it to be misread or misunderstood. How many times have we all hit ‘send’ and instantly regretted our mistake? Research has shown that a warm handshake and smile lowers blood pressure and makes us happy. According to neurologist Shekar Raman, MD, “a hug, pat on the back, and even a friendly handshake are processed by the reward center in the central nervous system, which is why they can have a powerful impact on the human psyche, making us feel happiness and joy. And it doesn’t matter if you’re the “touch-er” or “touch-ee”. The more you connect with others -- on even the smallest physical level -- the happier you’ll be.” When residents are happy, they truly feel part of a community. And in a community, face-to-face communication should not be dead. n 41 CAIGA.1st Qtr. 2015.indd 41 3/6/15 4:27 PM Georgia Commons • First Quarter 2015 Sustainable Washing — Myth Busters By Marvin Pastel, Esq. Winter Capriola Zenner, LLC • [email protected] A fter dinner have you ever wondered what’s more sustainable: washing the dishes by hand or using the dishwasher? Mused when setting the breakfast table: should I use ceramic plates or paper plates? Or when washing clothes: is there any benefit to the new cloth washing detergents, or using hot water instead of cold water? We all probably have an instinctual answer, or an answer we believe we heard somewhere (i.e.; a myth). The answer to these questions/myths may surprise you. More surprisingly, the answers are not the same for all of us. Framing the sustainable question is important. A lot more goes into the production of a clean plate than simply the running of a dishwasher or the scrubbing by hand. Consider also the ‘cradle to grave’ footprint of the dishwasher. Much energy and resources are used in the manufacture and distribution. Consider the impacts of when the dishwasher reaches the end of its lifecycle and becomes waste. In contrast, a kitchen sink is a multipurpose item that you already have in your house, versus the additional dishwasher footprint. Individual sustainability is often hard to quantify. The answer to this question may depend on several different factors, including size of household, amount of dishes used per day, efficiency of the home’s water heater (boiler vs. flash), fuel source of energy provided to the household, the city’s wastewater treatment plant capacity/advanced treatment and other possible unnamed factors. The question we need to make sure we are always examining is: taking into account all sources of sustainability: water, energy, manufacturing, distribution, product duration, product reuse, etc., and our personal use, which method is more sustainable? Straight away from the above, we know the dishwasher starts this environmental ‘race’ far behind. Does it catch up? New dishwashers are very energy efficient and use very little water. Most people wash their dishes while constantly running hot water, and that method uses more water and more energy than a dishwasher. Choosing the light wash or air dry cycles, can further reduce your dishwasher’s energy substantially; lowering the household water temperature favors hand washing. Let’s dig deeper. Dishwashers typical use one gallon of water per person per day. New efficient dishwashers use significantly less energy, as well as water, compared with machines from 10 years ago. The benefits of installing an efficient machine will be realized through both energy and water savings. Dishwashers are used between 0.1 and 0.2 times per person per day. Many new dishwashers do not require pre-wash or pre-rinse of the dishes before loading. Clearly the potential water savings from dishwasher efficiencies greatly vary in different households. When comparing only the water used inside the dishwasher, hand washing uses an average of 23 gallons more per session or up to five times that of a new dishwasher. However, this is based on (1) a single sink method of hand washing versus a separate wash and rinse tub; and (2) fully loading the dishwasher and assumes no pre-rinsing or pre-washing dishes before loading them into the automatic dishwasher; habits that vary from household to household. So which method of cleaning your dishes is better for the environment, dishwasher or hand-washing? As we see, the water and energy savings realized from new efficient dishwashers or methods of hand washing can vary greatly depending upon the practices of a household. If you’re an average household following average practices (i.e.; dishwasher older than 10 years and single sink dish-washing), neither method is very sustainable. Clearly, installing a new automatic dishwasher offers the potential for significant sustainability over hand-washing, especially when dishwashers are fully loaded when operated and the user does not pre-rinse the dishes unnecessarily. On the other hand, if you’re up to the task and have a double sink, you can conserve now by double sink washing until you replace your dishwasher. What’s greener: Ceramic or Paper plates? As with dishwashers, ceramic plates start behind, but not by nearly as much. Paper plates are usually made from around 40 to 60% post-consumer paper and most of the rest comes from lumber by-products. While its takes a lot of energy to make, package, and ship them, let’s compare that to ceramic plates. Ceramic plates are generally made from recycled glass or mined. Here to, much energy is used to make, package, and ship them. On top of this, ceramic plates have got to be washed. Paper plates of course do not need to be washed, but then there is the waste issue. As for the paper plates and similar disposable items (plastic utensils), you have transporting costs again and again over long distances. Recycling may appear to be the easy way out for the disposal of those paper plates and plastic forks. Paper plates, if soiled, often cannot be recycled. Many paper plates have coatings that make it impossible to reprocess. Not all grades of plastic can be recycled. And even if your community could recycle each and every disposable fork or cup, they still require energy–and water–to create new batches of paper or plastic goods. Then we have the issue of landfills and the methane gases that result from millions of tons of garbage simmering over hundreds of years. What’s the verdict? If you have an old dishwasher, and you’re not up to double-sink washing, paper plates are your clear winner. On the other hand, if you have a state of the art dishwasher, and use it sustainably, ceramic plates are a clear winner. For those in-between, your individual factors will determine. Likely it’s a draw. Sustainable Cloth Washing Looking at laundry in the context of the life cycle of clothes, up to 80 percent of our clothing’s lifecycle impact comes from washing and drying. It takes a lot of energy to heat the wash water and run the dry cycle. So let’s clear one myth right out of the box. According to Harvard University, washing in cold water is every bit as effective as washing in hot for everyday loads; it helps your clothes last longer (hot wears them out), and it uses 1/10th of the energy needed to run a hot wash! Switching to cold water washing will contribute to dramatic energy savings. If all U.S. loads of laundry were switched to cold washing for 1 year, it could power the Empire State Building for up to 86 years. When looking at water consumption, the average household does almost 400 loads of laundry each year, consuming about 13,500 gallons of water (7 swimming pools worth). A ten year old top-loading washing machine uses twice the amount of water as a newer front-loading washing machine. Cloth washing uses a lot of chemicals in detergents, fabric softeners, and drying sheets. Conventional detergents contain ingredients that aren’t good for you, your clothes, or the aquatic ecosystems. The phosphates in conventional laundry soaps cause algal blooms that negatively affect ecosystems and marine life. Eco-friendly detergents are readily biodegradable and phosphatefree and are made from plant- and vegetable-based ingredients (instead of petroleum-based), which means they’re healthier for the planet, from production to rinse cycle. These are often gentler on the skin, too. Fabric softeners can be replaced with a cup of white vinegar added to the washer during the rinse cycle. Vinegar naturally balances the pH of soap, leaving your clothes soft and free of chemical residue. Ditching the dryer sheets is a must. They are full of cancer-causing chemicals and neurotoxins such as toluene and styrene. They also break down organic fibers, shortening the life of your fabrics. If you want, toss a sachet of dried organic lavender in the dryer for a healthy, sweet scent. Concentrated laundry detergents offer an extra green boost. They have reduced packaging and a smaller carbon footprint (because more useful product can be shipped using less space and fuel). Wal-Mart now sells only concentrated laundry detergents; soon it may be the only kind you can get. Drying racks can significantly reduce your drying energy. Air cloth drying doesn’t have to be an all or nothing choice. Using a drying rack for those few items that take forever to dry or for the delicate items can significantly reduce your drying cost. Cleaning the lint filter frequently will increase efficiency and shorten drying time. From these examples we can see the question isn’t so much, which is better. Rather, often it’s how we preforming these tasks. Being sustainable doesn’t mean we have to change our habits from dishwasher to hand washing. Rather it means being conscientious about washing the dishes. Run it at night and let the dishes air dry, instead of using the drying cycle. Buy green detergent and cloth wash in cold water. Try these changes. 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