CONTINUING EDUCATION FOR FLORIDA CAM LICENSEES HOW TO EFFECTIVELY DEAL WITH
CONTINUING EDUCATION FOR FLORIDA CAM LICENSEES HOW TO EFFECTIVELY DEAL WITH RESIDENTS AND VENDORS Human Resource Topic By Rick Larson CONTINUING EDUCATION FOR FLORIDA CAM LICENSEES HOW TO EFFECTIVELY DEAL WITH RESIDENTS AND VENDORS Human Resources Topic By Rick Larson This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. General Manager: Brad Larson Director of Operations: David Larson Director of Publishing and Product Development: Rick Larson Director of Production: Wanda Rising Creative Director: Rose Larson Copyright © 2012 by RDB Ventures, LLC dba Larson Educational Services© Published by Larson Educational Services Royal Palm Square 1400 Colonial Boulevard, Suite #44 Fort Myers, FL 33907 (239) 344-7510 www.LarsonEd.com All rights reserved. The text of this publication, or any part thereof, may not be reproduced in any manner whatsoever without permission in writing from the publisher Printed in the United States of America. Table of Contents Introduction 2 Successful Communication Skills 7 Negotiating Styles 11 Two Types of Negotiations 13 Unrealistic Expectations 16 Escalation of Commitment 18 Anchors 20 Frames 21 Social Styles 22 The Three Steps to Negotiation 27 Combating Subjective Tendencies 28 Appendix 30 Preparing for a Disaster 32 Community Association Manager Continuing Education Requirements 61E14-4.001 Continuing Education Renewal Requirements. (1) All community association manager licensees must satisfactorily complete a minimum of 20 hours of continuing education. Each hour shall consist of 50 minutes of student involvement in approved classroom, correspondence, interactive, distance education or internet courses which courses shall include the required hours at an approved update seminar. No license shall be renewed unless the licensee has completed the required continuing education during the preceding licensing period. (2) Only continuing education courses approved by the Council shall be valid for purposes of licensee renewal. (3) The 20 hours of continuing education shall be comprised of courses approved pursuant to Rule 61E14-4.003, F.A.C., in the following areas: (a) 4 hours of legal update seminars. Licensees shall satisfactorily complete a 2-hour legal update seminar during each year of the biennial renewal period. The legal update seminars shall consist of instruction regarding changes to Chapters 455, 468, Part VIII, 617, 718, 719, and 721, F.S., and other legislation, case law, and regulations impacting community association management. Licensees shall not be awarded continuing education credit for completing the same legal update seminar more than once even if the seminars were taken during different years. (b) 4 hours of instruction on insurance and financial management topics relating to community association management. (c) 4 hours of instruction on the operation of the community association’s physical property. (d) 4 hours of instruction on human resources topics relating to community association management. Human resources topics include, but are not limited to, disaster preparedness, employee relations, and communications skills for effectively dealing with residents and vendors. (e) 4 hours of additional instruction in any area described in paragraph (3)(b), (c) or (d) of this rule or in any course or courses directly related to the management or administration of community associations. (4) No licensee will receive credit, for purposes of meeting the continuing education requirement, for completing the same continuing education course more than once during a biennial renewal period. (5) Course instructors may receive continuing education credit hours in the amount of hours approved by the Council for licensees only once every renewal period for each approved course taught by the instructor. (6) Anyone licensed for more than 24 months at renewal time will be required to have complied with the CE requirements set forth in subsection (1), above, prior to renewal. More than 24 months, means 24 months plus 1 day. Licensees licensed for 24 months or less at renewal time are exempt from compliance with the CE requirements set forth in subsection (1), above, until the end of the next renewal cycle. (7) A licensee shall retain, and make available to the Department and its representatives upon request, continuing education course certificates of completion that comply with paragraph 61-6.015(4)(a), F.A.C., for three years following course completion. (8) All licensees shall comply with all applicable provisions of subsections 61-6.015(2) and (3), F.A.C. Page |1 Human Resources Topic HOW TO EFFECTIVELY DEAL WITH RESIDENTS AND VENDORS Continuing Education for Florida Community Association Managers Page |2 Introduction The Florida community association management industry continues to experience dramatic changes in the marketplace and in the regulatory realm. This course examines methods to effectively communicate with residents and vendors, topics that affect all community associations and, therefore, all community association managers. Learning objectives: How to Effectively Deal with Residents and Vendors: Upon completion of this course, students should be able to: identify negotiating opportunities when dealing with residents and vendors understand the student’s personal negotiating profile list 5 negotiating styles and the important characteristics of each describe the 2 alternative types of negotiations explain conditions under which a negotiation may be impacted by unrealistic expectations list the conditions under which a negotiation may escalate into a conflict describe ‘anchors’ and how they are used when negotiating a contract explain the application of ‘framing’ in a negotiation identify social styles and how negotiating styles should match understand how to combat subjective tendencies list the 3 steps to a ‘win-win’ negotiation identify steps to take to prepare for a disaster list at least 4 sources of information for disaster preparedness Page |3 61E14-2.001: CAM Standards of Professional Conduct Licensees shall adhere to the following provisions, standards of professional conduct, and such provisions and standards shall be deemed automatically incorporated, as duties of all licensees, into any written or oral agreement for the rendition of community association management services, the violation of which shall constitute gross misconduct or gross negligence: (1) Definitions. As used in this rule, the following definitions apply: (a) The word “control” means the authority to direct or prevent the actions of another person or entity pursuant to law, contract, subcontract or employment relationship, but shall specifically exclude a licensee’s relationship with a community association, its Board of directors, any committee thereof or any member of any Board or committee. (b) “Licensee” means a person licensed pursuant to Sections 468.432(1) and (2), F.S. (c) The word “funds” as used in this rule includes money and negotiable instruments including checks, notes and securities. (2) Honesty. During the performance of management services, a licensee shall not knowingly make an untrue statement of a material fact or knowingly fail to state a material fact. (3) Professional Competence. A licensee shall undertake to perform only those community association management services which he or it can reasonably expect to complete with professional competence. Page |4 (4) Due Professional Care. (a) A licensee shall exercise due professional care in the performance of community association management services. (b) A licensee shall not knowingly fail to comply with the requirements of the documents by which the association is created or operated so long as such documents comply with the requirements of law. (5) Control of Others. A licensee shall not permit others under his or the management firm’s control to commit on his or the firm’s behalf, acts or omissions which, if made by either licensee, would place that licensee in violation of Chapter 455, 468, Part VIII, F.S., or Chapter 61-20, F.A.C. or other applicable statutes or rules. A licensee shall be deemed responsible by the department for the actions of all persons who perform community association management related functions under his or its supervision or control. (6) Records. (a) A licensee shall not withhold possession of any original books, records, accounts, funds, or other property of a community association when requested by the community association to deliver the same to the association upon reasonable notice. Reasonable notice shall extend no later than 10 business days after termination of any management or employment agreement and receipt of a written request from the association. The manager may retain those records necessary for up to 20 days to complete an ending financial statement or report. Failure of the association to provide access or retention of accounting records to prepare the statement or report shall relieve the manager of any further responsibility or liability for preparation of the statement or report. The provisions of this rule apply regardless of any contractual or other dispute between the licensee and the community association. It shall be considered gross misconduct, as provided by Section 468.436(2), F.S., for a licensee to violate the provisions of this subsection. (b) A licensee shall not deny access to association records, for the purpose of inspecting or photocopying the same, to a person entitled to such by law, to the extent and under the procedures set forth in the applicable law. (c) A licensee shall not create false records or alter records of a community association or of the licensee except in such cases where an alteration is permitted by law (e.g., the correction of minutes per direction given at a meeting at which the minutes are submitted for approval). (d) A licensee shall not, to the extent charged with the responsibility of maintaining records, fail to maintain his or its records, and the records of any applicable community association, in accordance with the laws and documents requiring or governing the records. (7) Financial Matters. A licensee shall use funds received by him or it on the account of any community association or its members only for the specific purpose or purposes for which the funds were remitted. (8) Other Licenses. (a) A licensee shall not commit acts of gross negligence or gross misconduct in the pursuit of community association management or any other profession for which a state or federal license is required or permitted. It shall be presumed that gross negligence or gross misconduct has been committed where a licensee’s other professional license has been suspended or revoked for Page |5 reasons other than non-payment of fees or noncompliance with applicable continuing education requirements. (b) A licensee shall not perform, agree to perform or hold himself or itself out as being qualified to perform any services which, under the laws of the State of Florida or of the United States, are to be performed only by a person or entity holding the requisite license for same, unless the licensee also holds such license or registration; provided, however, that no violation hereof shall be deemed to have occurred unless and until the authority administering the license or registration in question makes a final determination that the licensee or registrant has failed to obtain a license or registration in violation of the law requiring same. (c) A licensee shall reveal all other licenses or registrations held by him or it under the laws of the State of Florida or the United States, if, as a result of such license or registration, a licensee receives any payment for services or goods from the community association or its Board. (d) Violation of any provision of Section 455.227(1), F.S., or of any part of this rule shall subject the licensee to disciplinary measures as set out in Section 468.436, F.S. Page |6 HUMAN RESOURCES TOPIC: HOW TO EFFECTIVELY DEAL WITH RESIDENTS AND VENDORS Key topics in this unit: Negotiation Opportunities Negotiating Profile Negotiating Styles Two Types Of Negotiations Unrealistic Expectations Escalation of Commitment Anchors Frames Social Styles Combating Subjective Tendencies The Three Steps to Negotiation Disaster Preparation Page |7 Successful Communication Skills In this unit we will cover the keys to achieving ‘win-win’ negotiations. What’s mine is mine! What’s yours is negotiable How do most CAMs rank as negotiators? Limited experience Little or no training Lack patience WORKSHOP: What are the Negotiating Opportunities? This is a large group brainstorming session. Fill in the blanks as you discover negotiating opportunities. ______________________________ Page |8 CAM Fiduciary Duties 1. Skill, care and diligence 2. Obedience 3. Loyalty 4. Disclosure 5. Accounting 6. Confidentiality Definitions: Advocate: To plead in favor of Advise: To recommend a course of action to; to counsel or give information or notice to; to apprise; to inform Negotiate: Communication with a view of coming to confer regarding a basis of agreement; Working side by side with another party or parties to achieve a mutually beneficial and satisfactory result Page |9 P a g e | 10 P a g e | 11 Negotiating Styles SUBSTANCE = task to be accomplished RELATIONSHIP = balance of emotion and reason A = Defeat: High substance - Low relationship: win-lose competition; pressure, intimidation, adversarial relationships. The negotiator is attempting to get as much as possible. Defeat the other party perhaps a one shot deal. B = Collaborate: High substance - High relationship: searching for common interests with the other party; problem solving behavior; recognizing that both parties must get their needs satisfied for the outcome to be entirely successful. Collaborative behavior and synergistic solution. Win-Win outcome. C = Accommodate: Low substance - High relationship: focuses on harmony and avoidance of substantive differences; yields to pressure to preserve the relationship; places interpersonal relationships above the outcome. D = Withdraw: Low substance - Low relationship: feelings of powerlessness, indifference, resignations, surrender; taking whatever the other party concedes. E = Compromise: Moderate substance - Moderate relationship: compromise, meeting half way, looking for tradeoffs; conflict resolution. NOTE: You may adopt any of the five styles at any time depending on the circumstances. It is suggested that the Collaborate style offers the greatest versatility and most enduring satisfaction. P a g e | 12 WORKSHOP: Negotiating Styles In small groups determine the negotiating style of each client or customer based on the information provided. A. Board member to another Board member: Well if that’s what you think we should do, then I guess we’ll just have to go with that. I mean, I don’t want to make you or the other members mad. Negotiating Style: ___ A Accommodate ____________________ B. Seller Client at offer presentation: Look, we can’t do all the giving here—the price, the possession, the property. Just what, exactly, is the buyer willing to concede? Negotiating Style: ___ B Compromise ____________________ C. Vendor at contract presentation: Requiring us to perform our services on Thursday mornings presents a real problem for us. It means revising a contract on another property, hiring an additional part-time employee, and dealing with equipment storage that wouldn’t be required if we performed our services on Wednesday mornings. What is the Board’s reason for making this the service time? Negotiating Style: ___ C Collaborate ____________________ D. Board member at a meeting: Well, if that’s what you all want to do then I guess that’s what we have to do. There isn’t anything I can do to change it. Negotiating Style: ___ _ D Withdraw ___________________ E. Board member considering a proposal from a potential vendor: Okay, this is it. If they don’t want to play ball with us and follow all of the terms we’ve required then we’ll get a proposal from another company and this vendor can shove it! Negotiating Style: ___ ___ E Defeat _________________ P a g e | 13 Two Types Of Negotiations Negotiations and negotiation issues are in two categories: Limited and Expanded Limited Negotiations. The parties are concerned with how a fixed pie will be divided. Limited issues can only be resolved such that one party’s gain is the other party’s loss . The more pie one party receives, the less pie the other party receives. Example: Expanded Negotiations. Expanded negotiations have the potential to expand the size of the pie available for the negotiators to divide. They are characterized by a win-win orientation . They create value in two ways: 1. Extend the range of issues 2. Identifying or incorporating issues which the two sides value differently Example: P a g e | 14 Expanded Resolution When parties value items differently, they can make concessions on issues they value less in exchange for concessions on issues they value more. That increases the size of the pie for both parties. WORKSHOP: Negotiating Scenario Resolve the following negotiating scenario in small groups, moving from a limited to an expanded resolution. Use the bottom of this page to assist in your decisionmaking. A prized prospective employee has been offered another job for slightly more money by a competing management firm. She really wants the position with your firm but feels that she owes it to her family to take the higher paying position. ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ _____________________ P a g e | 15 Subjective Tendencies in Negotiation P a g e | 16 As a negotiator you should have two goals: 1. Increase your size of the pie 2. Maximize your share of the pie These efforts are inhibited by the following subjective tendencies: Unrealistic Expectations a. You Undervalue assets and what you have to negotiate with: Example: What negotiating style did you use? _Accommodate________________ Brainstorm in small group to add an example of your own: ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ________ P a g e | 17 b. Overconfident: You think you know how a negotiation should end, so you shut out new sources of information. 1) “Look, either the seller can accept this offer as prepared, or we have a tentative appointment to see the FSBO across the street tomorrow morning at 10:30 a.m.” 2) “Mr. Seller, either you list with us at that price and under those terms, or you’ll need to find another listing company.” TOWN HALL a) What negotiating style did you use in the above statements? __Defeat_____________________ b) Which of the two types of negotiations did you use? Limited or Expanded? ___Limited______________________ Brainstorm in small group to add an example of your own: __________________________________________ __________________________________________ __________________________________________ __________________________________________ __________________________________________ P a g e | 18 Escalation of Commitment You feel you have failed if you have not reached agreement so you escalate your commitment during negotiation until you sometimes accept a resolution that actually makes you worse off. You are discussing your company’s management program with the Board at an interview. You’re under pressure because your firm has just lost a big contract and you are having your quarterly review with your manager next Tuesday at 9:00 a.m. The Board tells you that if you want their management contract you, among other things, must personally agree to visit the property weekly, attend all Board meetings, and give investment advice. After presenting your proposal the Board tells you that they can’t accept your management fee. If you want the contract you’ll need to lower your fee by 15%. Dejected, but needing the contract, you agree to their terms. P a g e | 19 What negotiating style is used by the Board? _________________________________ What negotiating style did you use? _______________________________ What were the issues if you consider only limited negotiations? ____ _____________________________________ _________________________ What might the issues be in expanded negotiations? ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ____________________________________________________ P a g e | 20 Anchors Using choices that were reasonable in the past that may not be reasonable today. “Vendor, unless you’re willing to drop your price by 15% there’s no way I can make this fly.” “Vendor, in today’s market place, unless your proposal is within 5% of our budget you won’t stand a chance of getting the contract.” “Board, it’s customary that you would accept, reject, or counter the proposal on presentation. Now, what would you like to have me do here?” Brainstorm in small group to add an example of your own: ______________________________________________ _______________________________________________ _______________________________________________ ________________________________________________ P a g e | 21 Frames Framing is a negotiating technique in which the negotiator offers a perspective by directing the client to concentrate on an aspect of an issue within the frame, and to ignore other aspects of the same issue which fall outside this frame. Some clients may see framing as manipulative because it creates a different perspective for the decision maker. Choose frames wisely. “Board, what this counter means to you is a saving of an additional 73¢ per day. Are you willing to risk losing this Vendor over 73¢ per day?” Which negotiating type is being used in this statement? ___Limited negotiation______________________ “Vendor, is the hourly rate that important to you, or is it really the amount of money you’ll walk away with for the year that’s important?” Which negotiating type is being used in the above statement? ___Expanded negotiation______________________ “Board, rather than focusing on the fact that our fees are slightly higher than the other firm, I would like to present the advantages you’ll receive in services when you hire my firm.” Which negotiating type is being used in the above statement? ____Expanded negotiation____________________ P a g e | 22 Social Styles Use the questionnaire and chart on the next page to assess your social style. Plot the two average scores on the chart. Assertiveness Ratings I perceive myself as: Responsiveness Ratings I perceive myself as: P a g e | 23 Quiet........................................... Talkative 1 2 3 4 Open...............................................Closed 4 3 2 1 Slow to Decide ..................... Fast to Decide 1 2 3 4 Impulsive.................................... Deliberate 4 3 2 1 Going along .......................... Taking charge 1 2 3 4 Using opinions ...........................Using facts 4 3 2 1 Supportive................................ Challenging 1 2 3 4 Informal ......................................... Formal 4 3 2 1 Compliant....................................Dominant 1 2 3 4 Emotional............................... Unemotional 4 3 2 1 Deliberate............................. Fast to Decide 1 2 3 4 Easy to know.........................Hard to know 4 3 2 1 Asking questions ............. Making statements 1 2 3 4 Warm................................................. Cool 4 3 2 1 Cooperative ............................. Competitive 1 2 3 4 Excitable............................................ Calm 4 3 2 1 Avoiding risks .......................... Taking risks 1 2 3 4 Animated................................. Poker-faced 4 3 2 1 Slow, studied ............................. Fast-paced 1 2 3 4 People-oriented ......................Task-oriented 4 3 2 1 Cautious....................................... Carefree 1 2 3 4 Spontaneous ................................. Cautious 4 3 2 1 Indulgent ............................................ Firm 1 2 3 4 Responsive .......................... Nonresponsive 4 3 2 1 Nonassertive.................................Assertive 1 2 3 4 Humorous ...................................... Serious 4 3 2 1 Mellow................................. Matter-of-fact 1 2 3 4 Impulsive...................................Methodical 4 3 2 1 Reserved ...................................... Outgoing 1 2 3 4 Lighthearted.................................... Intense 4 3 2 1 Total Score = / 15 = Total Score = / 15 = P a g e | 24 Plot your score on the chart below to determine your social style. Use your Assertiveness Score for the horizontal axis and your Responsiveness Score for the vertical axis. Low Responsiveness 1 ANALYTICAL DRIVER 2 Low Assertiveness 1 2 3 4 High Assertiveness 3 AMIABLE EXPRESSIVE 4 High Responsiveness Example where the Responsiveness Score is 3.0 and the Assertiveness score is 3.5. The social style for the example is “Expressive.” P a g e | 25 AMIABLE: (High Responsiveness, Low Assertiveness) The amiable person likes other people's company, though is more of a listener than a talker. Expressive people find them useful, because they are prepared to listen to what they are saying. They are loyal, personable and show patience when dealing with other people. They may however not be perceived as people " who get things done " because they spend more time developing relationships with others. They are also unlikely to take risks as they need to have the feeling of security. In difficult situations, they are likely to avoid the situation and lack conviction of their feelings and if pushed likely to make promises that they cannot keep. Drivers often find them frustrating because they want a straight answer and the amiable can find this difficult to deliver. Characteristics: Loyal, personable, patient, Uncomfortable with risk, NonConfrontational, Dislike pressure, Enjoy the company of others. In conflict: Likely to be " passive", lack conviction, avoidance, Solution: Reassure, Support, Confirm commitment Basic Need: Security EXPRESSIVE: (High Responsiveness, High Assertiveness) The expressive likes the company of other people, though unlike, the amiable this is because they need to " express " themselves. Amiables complement them very well, unless the expressive becomes too aggressive and puts them off. They can be good people to have at a party, because they're enthusiastic, dramatic and "interesting" people to have around. However, if they don't receive the attention they crave, they can get upset and even "difficult" to deal with. In conflict, they become emotional, prone to exaggeration and unpredictable. The best way to deal with this is to let them calm down. Try not to fuel the fire by saying anything controversial. Characteristics: People orientated, centre of attention, positive, emotional, talkative, enthusiastic, dramatic. In conflict: Unpredictable, emotional. Solutions: Allow them time to gain composure, Ask questions, problem solve. Basic Need: Recognition P a g e | 26 ANALYTICAL: (Low Responsiveness, Low Assertiveness) Analytical people can appear unsociable, especially to Amiables and Expressives. They may seem serious and indecisive. This is because they need to look at every conceivable angle before they feel satisfied. A consequence of this is that they are persistent in their questioning and focus on detail and facts. However, once they have made a decision, they stick with it as they invariably feel that it is infallible. In conflict, they can "whine", become sarcastic and are often negative. Characteristics: Serious, mull matters over, Indecisive, persistent, ask lots of questions, attention to detail. In conflict: whining, sarcastic, negative Solution: Keep to the facts, Don't agree with them, listen attentively Basic Need: To be correct DRIVER: (Low responsiveness, high assertiveness) Drivers are task orientated and expect efficiency from everyone they come into contact with. Little emphasis is placed on building relationships with other people. They can be perceived as aggressive and uncaring, especially by amiables, though are often needed to take risks and push things through. In conflict, they will try to " steam roller " over anyone who comes in their way. Characteristics: Task orientated, clearly defined goals, committed, determined, risk takers, efficient. In conflict: Aggressive, rude, abrupt, Solutions: Be assertive and firm, have a solution to the problem, listen. Basic Need: To be in control P a g e | 27 The Three Steps to Negotiation Step 1: Preparation 1. Brainstorm a list of possible negotiating points 2. Set reservation and target prices 3. Find out as much as you can about the other party Step 2: Bargaining 1. Build rapport 2. Continue gathering information 3. Exchange information 4. If you reach an impasse: a. Keep focusing on interests, not positions b. Make a small concession if necessary—then insist on receiving one in return c. Allow for silence 5. Maintain objectivity in the presence of irrationality and emotion 6. Negotiate for the long term—allow for wins on both sides 7. Don’t win the battle but lose the war. Negotiations may need to be reopened following inspections and appraisals. Step 3: Settlement 1. Settlement is the final step in a negotiation 2. Remember to negotiate to the end 3. Put a ribbon around it so small details don’t later become big problems P a g e | 28 Combating Subjective Tendencies There are several issues to consider in combating subjective tendencies. 1. Determine your BATNA __ Best Alternative to a Negotiated Agreement ____ “If this doesn’t work, what’s my next step?” 2. Reservation Price The value below which you would rather accept impasse and settle for your best alternative “My absolute bottom line at which I’ll accept no less.” 3. Target By setting a target, you shift your focus from getting just enough to getting what you want. “What’s my ideal in this situation?” 4. The Importance of Information Information is the key to finding trade offs. Consider asking the client to allow you to share what would otherwise be considered confidential information in order to move toward an expanded decision. (Collaborative/expanded negotiations) P a g e | 29 Analyze Interests vs. Positions Positional Negotiating 1. People tend to stick to their position which could lead to adversarial behavior 2. Positional negotiating creates a “win-lose” scenario. Interest Negotiating 1. Effective interest negotiating focuses on interests of the participants rather than their positions 2. Participants will create a variety of solutions before the outcome is decided so the result is a “win-win” scenario. P a g e | 30 Appendix Common judgment errors often undermine our abilities to negotiate optimal agreements: Under or overconfidence: 1. Because of under confidence we fail to value our assets adequately 2. Overconfidence in our own strengths may keep us from considering all relevant information and end up with no deal or a suboptimal one 3. Asking questions, exchanging information, listening carefully to the other party, consulting with others, and taking time to evaluate alternatives thoroughly can all help in assessing issues realistically and rationally. Escalation of commitment: 1. Out of desire to accomplish something or to win, we escalate our commitments to irrational levels. 2. Control escalation of commitment by evaluating our BATNA and by establishing a firm reservation price. Overcompetitiveness: 1. We become too competitive and succumb to the myth of the fixed-pie. 2. Then, we take your-loss-is-my-gain positions and fail to explore the full potential of a negotiation. 3. Focusing on underlying interests rather than stated positions is essential for overcoming excessive competitiveness. Both sides can win! P a g e | 31 Irrelevant anchors: 1. We anchor our bids and offers around historical figures, industry standards, or even first offers which often have little or no relevance to the current negotiation. 2. Information is the key to avoiding irrelevant anchors. Research, ask questions, and listen. 3. Base figures on the most relevant data and reject irrelevant figures. Biased framing: 1. We frame problems narrowly, take biased perspectives, and fail to consider the most critical issues. 2. Consulting others, calling in third parties, and testing alternative assessment models can help us gain new perspectives on negotiation issues. Unrealistic risk assessment: 1. We either overestimate risks or underestimate them. 2. To improve our risk assessment we need to list both risks and rewards and assess the probabilities. How To Negotiate A Better Solution 1. Understand your own goals 2. Evaluate your BATNA, and set your reservation price 3. Take your time, ask questions, research information, and exchange information 4. Search for trade-offs and opportunities to expand and improve your agreements 5. Then evaluate proposals thoroughly, staying open to expanded solutions and focusing on your interests rather than winning. P a g e | 32 Preparing for a Disaster A. Disaster FAQs Question: Please discuss whether there are changes for association requirement to repair to air conditioning equipment on the roofs of high rises. Answer: This issue confuses both board members and unit owners. The laws changed in 2009. The condo master policy must include coverage for all HVAC – that means air conditioners, air handlers, compressors, duct work, etc. Having insurance coverage doesn’t mean the association is always responsible for repairs to air conditioners though. The association is only responsible for casualty losses – not wear and tear, not unavoidable damages as a result of age, etc. If your a/c unit is 15 yrs old and cannot be re-installed after roof work – that is not a casualty. If your a/c stops cooling – that is not a casualty. If your a/c unit is hit by lightning, that’s a different story. Question: Responsibility for damages to condos that are in foreclosure and have not yet been auctioned by the bank. Answer: The association still wants to take actions necessary to mitigate further damage to the building. So, that means you would still board up windows, remove items that must be removed to prevent or minimize mold and get the a/c working for the same reason, etc. It is money well spent (and should, for the most part, be included in insurance coverage), even if you suspect you will never recover the money from the deadbeat owner or the bank P a g e | 33 INFORMATION PROVIDED BY THE DIVISION OF FLORIDA CONDOMINIUMS, TIMESHARES, AND MOBILE HOMES AND FLORIDA DEPARTMENT OF COMMUNITY AFFAIRS, DIVISION OF EMERGENCY MANAGEMENT No one wants a disaster, but there can be some comfort in the fact that your association has prepared in advance. A written plan is a valuable piece of information that enables your association to respond effectively to emergencies. Furthermore, the plan provides a permanent record of decisions and acquired knowledge, thus eliminating dependence on individuals who may later move away from the association or who may no longer be employed by the association. While the plan will not immunize your association from disasters, it will affect the outcome of emergency situations by reducing the amount of lost lives and property. A. The Role of the Condominium Association 1. Operate the condominium for the health, safety, comfort, and general welfare of the unit owners. 2. Protect employees, equipment, supplies, facilities, and unit owners from disaster 3. Create an emergency/disaster response and recovery plan 4. The plan should contain the procedures and provisions that the association would rely upon to protect employees, unit owners, and other resources during disaster/emergency situations. 5. The plan will tell how the association will accomplish the necessary actions to protect employees, unit owners, equipment, supplies, property, and facilities. 6. It should include emergency telephone numbers, call down rosters, resources listings, maps, and charts, etc. 7. The plan should include a step-by-step procedures for cooperation with local governmental officials (i.e., emergency management officials) to (1) notify/warn all affected persons, (2) evacuate affected persons from association facilities, (3) provide adequate shelter on site or in public shelter (if approved by emergency management officials), (4) obtain mutual aid from other associations, businesses, etc., P a g e | 34 (5) report situations and request assistance from local emergency management officials, (6) communicate with employees and personnel who are working at different facilities. B. The Association Disaster Planning Process The first step in preparing a disaster plan is to review the governing documents to determine if they assist or hinder the effectiveness of a disaster plan. Then get participation from all affected parties and establish a working relationship with local emergency management officials to determine what the local disaster threats are and what the local community is doing to prepare itself. Once this first step is taken, the following planning process steps are recommended: 1. Research Establish the situation base under which planning is to be accomplished. You cannot plan in a vacuum but must develop an in-depth knowledge of your community and association facilities prior to actual plan development. This is accomplished through collecting, analyzing, and applying data. a. Review Existing Plans and Procedures – Before doing any planning, review existing plans, action checklists, vulnerability analysis, etc., to determine where there are deficiencies if any. Don’t reinvent the wheel. b. Vulnerability Analysis – The plan must be responsive to the hazards that may threaten the association. It is not sufficient to merely identify the hazards; you also should analyze the potential impact of these hazards on the Association. c. Identify Existing Resources – A compilation of the resources (both equipment and people) that the association has for meeting emergency situation requirements to help develop operational concepts. d. Capability Assessment – Assess the association’s capability to adequately protect its employees, unit owners, equipment, and facilities by measuring available resources and levels of training and disaster response experience against the potential needs as determined by the vulnerability analysis. P a g e | 35 2. 3. 4. C. Planning Environment a. Demographics – How many employees does the association have? How many association operating locations? What kind of access does the association have to the public transportation network? What kind of barriers (rivers, roads, bridges, etc.) could impact on movement to/from locations? b. Resource Requirements – Examine resource deficiencies (people, equipment, etc.), and identify areas (financing, warning systems, etc.) which should be upgraded or changed to fit emergency response needs. c. Needs -- A determination of disaster preparedness needs relative to association vulnerability and available assets should be made. d. Unique issues -- An identification of disaster-related issues that the association is likely to encounter due to the uniqueness of the condominium form of ownership should be made. Plan Development a. Write the plan b. Print and distribute the plan in sufficient numbers to meet the needs of the association. c. Provide copies to the local emergency management agency and, where appropriate, to the local service agencies, i.e., police, fire, public works, etc. Review/update the plan annually as major changes occur. Hazard Analysis In order to determine the emergency need of any community, knowledge of the types of hazards that might and do exist in that community is essential. Hazards that may affect condominiums in Florida will vary from location to location. For example, condominiums located in low-lying coastal areas are susceptible to wind and tidal surges, while those located inland are susceptible to wind as well as rain-induced flooding. Whatever the location, the basics of hazard analysis for the Association should include: P a g e | 36 • Review of potential hazards. • Identification of vulnerability. • Identification of other factors which may compound the susceptibility of the Association to particular hazards, (i.e., inadequate flood drainage, seaward of the duneline, etc.) • Identification of potential obstacles to evacuation (i.e., bridges, railroad crossings, low causeway approaches, etc.) • Estimation of hazard impact on the association to determine the building's structural adequacy. Local insurance adjusters or construction engineers could do building and site evaluation. The association may not have an expert to determine hazards or the association's vulnerability; however, such data is readily available. Frequently, local emergency management officials have identified the hazards relative to probability and/or location. The following issues are addressed in the Condominium Act, and are presented in order to assist in preparing a disaster plan. D. Emergency Powers If a state of emergency is declared where the condominium is located, the board can: contract for debris removal without bids. prohibit unit owners, family members, tenants or guests from entering the condominium property upon advice of emergency management officials or licensed professionals. (i.e. the condo is unsafe for one reason or another) require residents to evacuate in the event of a mandatory evacuation order. authorize removal and disposal of wet drywall, insulation, carpet, cabinetry, or other fixtures on or within the condominium property. levy special assessments without approval of the unit owners. borrow money and pledge association assets without prior unit owner approval. P a g e | 37 The emergency powers expire when the state of emergency expires for that area. E. Hurricane Shutters There are actions the association can take now to mitigate losses in the event of a storm. The simplest is to have a professional inspect all hurricane shutters to confirm they are operating properly. If not, the board can then address the issue directly with the home owner. Many governing documents allow the association to perform repairs on an owner’s account if the owner fails to do so after notice. Prevention is the key. In 1991, the legislature enacted an amendment to the Condominium Act, which became effective on April 1, 1992, requiring boards to adopt hurricane shutter specifications for each building in the condominium. The amendment requires the specifications to include factors such as color and style, as well as other factors that the board determines relevant. The specifications must also comply with applicable building code requirements. If unit owners want to install hurricane shutters or other hurricane protection that comply with the board's specifications, the board cannot refuse to approve the installation. Another amendment, which became effective on October 1, 1994, allows the board to use association funds to install and maintain hurricane shutters on or within common elements, limited common elements, units, or association property. Before the board can do this, however, the approval of a majority of the total voting interests in the condominium must be obtained. Upon such approval, the board must then determine whether the cost of the project will require the association to obtain competitive bids as required by the Condominium Act pursuant to §718.3026, F.S. According to §718.113(5), F.S., if laminated glass, designed to function as hurricane protection and which complies with the applicable building code, has been installed the board may not install hurricane shutters, hurricane protection, or impact glass or other code-compliant windows except upon approval by a majority vote of the voting interests. Pursuant to §718.115(1)(e), F.S., a unit owner who has previously installed this type of laminated glass, or who has previously installed hurricane shutters in accordance with the April 1, 1992, amendment, may receive a credit equal to the pro rata portion of the assessed installation cost assigned to each unit. However, the unit owner will still be responsible for the replacement, operation, repair, maintenance, and pro rata share of expenses for those P a g e | 38 hurricane shutters installed on common elements and association property by the board in accordance with the October 1, 1994, amendment. The Condominium Act gives the board the irrevocable right of access to a unit when it is necessary to operate the shutters in order to prevent damage to the common elements or to a unit or units. F. Insurance The two basic types of coverage for unit owners are homeowners insurance, and flood insurance. A homeowner’s policy is the standard coverage most people have. It is written in several formats and only covers water damage if the wind opens the roof, windows, or some other parts of the building. The homeowners’ policy does not cover damage caused by water rising to a point where it seeps in around doors, windows, etc. This type of damage is covered by flood insurance. Consequently, unit owners in flood hazardous areas participating in the National Flood Insurance Program should purchase flood insurance to cover potential flood damage. The association should also maintain adequate insurance coverage on common elements and should purchase endorsements to some items normally not covered by the basic building insurance. Some of these exclusions, which are among those usually held in common by the association, are as follows: • Fences, property line walls, and seawalls • Trees, shrubs or plants • Outdoor equipment • Structures and other property located over water (i.e., piers) The Board of Directors should review the association's documents for provisions relating to insurance and should inform unit owners about the form of insurance carried by the association. Unit owners should be advised to purchase additional coverage for personal property protection and for potential losses that may exceed the coverage purchased by the association. Unit owners should be instructed to keep policy numbers where they can be readily accessible in the event they must leave before an emergency/disaster situation or when reporting damages. P a g e | 39 In addition, associations in flood-prone areas should become familiar with the National Flood Insurance Program (NFIP). Additional information on flood insurance may be obtained from local insurance agents or by calling the National Flood Insurance Program (toll free 1-800-427-4661), or by contacting: Department of Community Affairs, Division of Emergency Management (National Flood Insurance Program), 2555 Shumard Oak Boulevard, Tallahassee, Florida 32399-2100, (850) 413-9959. The Condominium Act, under §718.111(11), F.S., states: (a) A unit owner controlled association shall use its best efforts to obtain and maintain adequate property insurance to protect the association, the association property, the common elements, and the condominium property required to be insured by the association pursuant to paragraph (b). If the association is developer controlled, the association shall exercise due diligence to obtain and maintain such insurance. Failure to obtain and maintain adequate property insurance during any period of developer control shall constitute a breach of fiduciary responsibility by the developer-appointed members of the board of directors of the association, unless said members can show that despite such failure, they have made their best efforts to maintain the required coverage. The declaration of condominium as originally recorded, or amended pursuant to procedures provided therein, may require that condominium property consisting of freestanding buildings where there is no more than one building in or on such unit need not be insured by the association if the declaration requires the unit owner to obtain adequate insurance for the condominium property. An association may also obtain and maintain liability insurance for directors and officers, insurance for the benefit of association employees, and flood insurance for common elements, association property, and units. Adequate insurance, regardless of any requirements in the declaration of condominium for coverage by the association for “full insurable value,” “replacement cost,” or the like, may include reasonable deductibles as determined by the board. An association or group of associations may self-insure against claims against the association, the association property, and the condominium property required to be insured by an association, upon compliance with §§ 624.460-624.488, F.S. A copy of each policy of insurance in effect shall be made available for inspection by unit owners at reasonable times. P a g e | 40 (b) Every hazard insurance policy issued or renewed on or after January 1, 2009, to protect a condominium building shall provide primary coverage for: All portions of the condominium property as originally installed or replacement of like kind and quality, in accordance with the original plans and specifications; All alterations or additions made to the condominium property or association property pursuant to § 718.113(2), F.S. The coverage must exclude all personal property within the unit or limited common elements, and floor, wall, and ceiling coverings, electrical fixtures, appliances, water heaters, water filters, built-in cabinets and countertops, and window treatments, including curtains, drapes, blinds, hardware, and similar window treatment components, or replacements of any of the foregoing which are located within the boundaries of the unit and serve only such unit. Such property and any insurance thereupon is the responsibility of the unit owner. The foregoing is intended to establish the property or casualty insuring responsibilities of the association and those of the individual unit owner and does not serve to broaden or extend the perils of coverage afforded by any insurance contract provided to the individual unit owner. Beginning on January 1, 2009, the association shall have authority to amend the declaration of condominium, without regard to any requirement for mortgagee approval of the amendments affecting insurance requirements, to conform the declaration of condominium to the coverage requirements of this section. (c) A condominium unit owner’s policy must conform to the requirements of § 627.714, F.S. G. Document Provisions Insurance coverage and provisions should be adequately and clearly stated in the association's documents. Examples of insurance provisions the association may want to address in the documents include, but are not necessarily limited to, the following: 1) Description of the condominium and association property that is and is not covered under the association's policy. 2) Insurance Trustee -- The board may have the option of designating an Insurance Trustee, which may be a bank, trust company, attorney, P a g e | 41 or other person or entity that receives insurance proceeds for the benefit of the unit owners and/or respective mortgagees. 3) Distribution of Proceeds -- Describes under what conditions and how insurance proceeds will be distributed to or for the benefit of the unit owners and/or mortgagees. 4) Reconstruction or Repair after Fire or Other Casualty -- Describes provisions for determining whether or not the damaged property is to be reconstructed or repaired and how expenses are to be funded. This may also include provisions for condemnation. 5) Termination -- Addresses the requirements for termination and what happens when the condominium is terminated. H. Reserves The board may elect to establish reserve accounts for use in the event of a disaster. The funds should be restricted to disaster repairs, emergency supplies, and to compensate for deductibles and possible insufficiencies in insurance proceeds. MISCELLANEOUS TIPS TO SPEED UP RELIEF While there is little that can be done to prevent a disaster from occurring, there are steps that can be taken prior to an emergency that will speed up the relief and recovery efforts. A. Inventory of Association Documents Responding to a disaster will be delayed if documents essential to the decision making contain unworkable restrictions. For example, the declaration of condominium may provide for automatic termination of the condominium in the event the condominium becomes uninhabitable unless two-thirds of the voting interests vote to rebuild. In the aftermath of a disaster it is difficult to locate a sufficient number of members to hold a meeting in order to carry out the vote. If the documents require the appointment of an insurance trustee, and the association is unable to find a trustee, the association may find that insurers are unwilling to turn over insurance proceeds to the association. You should periodically review the condominium documents with your association attorney in order to ensure that your documents are up to date and will not encumber a recovery from a disaster. Copies of the association documents and/or a summary of pertinent provisions should be maintained at a second location away P a g e | 42 from the community. Among the documents that should be maintained are: (1) Articles of Incorporation of the association; (2) Declaration of Condominium; (3) Association By-Laws; (4) Rules and Regulations; (5) Amendments to the aforesaid items; (6) Insurance Policies (7) Construction Plans: a. Architectural Plans and Specifications, b. Engineering/Civil, c. Engineering/Structural and Mechanical, d. As-built drawings; (8) Owner Roster: a. Record title owners, b. Emergency contact information, (9) Bank Accounts, along with a list of authorized signatures; (10) Contracts: Maintenance and Operation All contracts should address cancellation in the event of the destruction of a community. (11) Employee Information: a. Full Name, b. Date of Birth, c. Social Security Number, d. Person to notify in event of an emergency. B. Video/Photographic Records In addition to maintaining the information listed above, the association should create either a video or photographic record of the community P a g e | 43 and maintain a copy of the record off-site. All of these records should be updated periodically. POST-DISASTER RECOVERY The major ingredients for a speedy recovery following disasters are predisaster planning, availability of aid, public awareness and community involvement. Recovery from widespread disaster sometimes presents serious challenges to public agencies in stricken communities. The demands on government relief organizations may be overwhelming and new problems may arise for which no authority or procedures are defined. Therefore, the association should anticipate as many contingencies as possible that may be encountered during recovery from disasters and have procedures in place to deal with them. The following is a brief description of disaster recovery issues and activities that the association should plan for in advance. A. Communications Coordinator Many communities are evacuated prior to a disaster. The association should identify person(s) to serve as a communications coordinator. The name, address, and phone number of this person should be provided to every owner so that, in the event of a disaster, when the ability to communicate with other owners or the board is disrupted, the communications coordinator can facilitate communication among residents of the community. The designated person may be a professional engaged by the association for that purpose. Regardless, every officer and director should be instructed to contact the communication coordinator within a fixed time period after the disaster occurs to provide an address and phone number where they can be reached. Efforts should be made to locate all owners. Additionally, the board should designate a location from which they will function in the event of a disaster. B. Survey the Property Depending on the nature and extent of the damage, it may be necessary to evacuate or shore-up a structure, obtain security to protect against criminal acts and/or prevent further damage. Photograph or videotape the storm damage. C. Contact Employees The communications coordinator should maintain a detailed list of all vital information and services utilized by the association. The coordinator should be provided with a list of all vendors, copies of all P a g e | 44 outstanding contracts and a list of professionals employed by the association (accountants, attorneys, insurance agents, etc.), as well as necessary information, e.g., copies of bank accounts, location of all association funds, including C.D.'s and/or other investments, insurance policies, and the names of the architect and engineer who designed the building. It may be necessary to suspend or cancel on-going contracts, such as pool and lawn services, following a disaster. D. Damage Documentation Timely disaster assistance to individuals and the entire community is based on information on property losses. Relief agencies will like to know the following: • Amount and extent of property damage • Number of people injured or killed • Number of people needing food, clothing, shelter, medical and other assistance • Cost of replacing or repairing damaged property • Losses covered by insurance Associations can speed up the assistance process by ensuring that the above data is collected quickly and accurately. Unit owners identified in the resource list as real estate brokers, insurance agents, construction engineers, etc. should be requested to assist in damage assessment and other information gathering activities. Also, a list of absentee owners along with their insurance agents would be useful in contacting these individuals and in collecting information on losses. E. Repair of Common Property Even though federal disaster grants are available for the repair of properties such as driveways, sidewalks, swimming pools, etc. owned by private non-profit organizations, condominium associations (albeit private and non-profit) are not eligible for the Small Business Administration (SBA) home disaster loan normally provided to individuals and businesses. Consequently, associations should work out alternative means of repairing damaged common properties before disaster strikes (i.e., insurance, dedication of roads to local governments, self-insurance, etc.). F. Imposed Limits to Repair P a g e | 45 Following a disaster, structures located below the line of mean high water cannot be rebuilt without the permission of Florida's Division of Beaches and Shores in the Department of Environmental Protection. Sometimes the Division may establish a field office in a disaster area or co-locate with other relief agencies in the Disaster Assistance Center and may authorize emergency permits for repairs of structures (i.e., stairs, walkways, decks, patios, etc.) in order to prevent further damage. However, permits will not be issued in the field office to rebuild where destruction is complete, or to create new lands or permanent major or minor structures that did not exist prior to the disaster. Associations with property located in the areas under the jurisdiction of Florida's Division of Beaches and Shores should become familiar with the Division's procedures so that post-disaster repairs may be carried out without unnecessary delay. G. Debris Removal Debris removal after a disaster could be a time-consuming unpleasant task; nevertheless, it is one chore that must be performed in order to get the association back to normal. Procedures should be established to address the following: • Contracting for debris removal on common property • Record-keeping on the cost of debris removal • Purchase of insurance coverage for debris removal INFORMATION SOURCES A. All Hazards - Local Emergency Management Agency - Local Library - Newspaper and Other Media - Local Historical Society - Regional Planning Councils - Florida Department of Community Affairs, Division of Emergency Management P a g e | 46 B. Flooding - U.S. Army Corps of Engineers - U.S. Geological Survey - Florida Department of Environmental Protection - Water Management District C. Coastal Erosion - Florida Department of Environmental Protection, Division of Beaches and Shores - National Oceanic and Atmospheric Administration (NOAA), Coastal Programs Office - U.S. Army Corps of Engineers D. Climatic Hazards - National Weather Service - Public and Private Utilities E. Fire Hazards - Local Fire Department - Florida Fire Marshall, Department of Insurance - Florida Department of Agriculture and Consumer Services, Division of Forestry F. Chemical Hazards - Florida Department of Environmental Regulation - U.S. Environmental Protection Agency G. Disaster Preparedness for Elders - Department of Elder Affairs 4040 Esplanade Way Tallahassee, Florida 31399-7000 Phone: (850) 414-2000 P a g e | 47 FAX: (850) 414-2004 WEBSITE: www.myflorida.com E-mail: [email protected]
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