september/october 2009 volume 27 • issue 5 · establishing a budget for your property/ tax laws...

In this Issue:

Legislative Changes Affecting Foreclosures and Unoccupied Properties

The 2010 Budget: Project Planning

Financial Checkup

3rd Annual CAI-MN Golf Tournament Winners and Photos

And Much More!

The Recession

has Home Values

Falling

Is There an End

in Sight?

Visit us online at www.cai-mn.com.

Minnesota’s premier homeowners association magazine

September/October 2009 Volume 27 • Issue 5

Minnesota Community Living2

www.bncbank.com

Reasons why you should move your accounts and processing to BNC National Bank

Accuracy • Dependability • Customer Service • Financial Stability

Member FDIC

Lockbox Services

H.o.A.

Toll Free: 866-236-0548 Direct: (612) [email protected]

For more information contact our Business Development expert

Anne Johnson(612) 305-2229

Automated convenience at BNC

Interest bearing Accounts for your AssociationsAre you on analysis today? Are you paying fees for lockbox processing?

We never charge for processing your association payments…No monthly maintenance fee or service charge and no charges for deposits and checks written.*

*Returned checks or ACH payments for any reason will be charged $10 each. *Fees may be assessed if coupons do not adhere to the prescribed formats.

competitive RatesLet those reserve funds work hard for your associations. Ask about our bonus rate program for

new associations coming on board.Do any of your association accounts carry balances over $250,000, exceeding the FDIC insurance limit?

Let one of our sweep accounts solve that problem in a US Treasury backed fund, or use the CDAR’s program which provides FDIC insurance up to $50 million or consult with one of our Wealth Management experts who can help you obtain your investment goals.

our coupon printing discount/subsidy and review process programBased on your deposit balances you may be eligible for a coupon printing subsidy or, regardless of your

company size, we have partnered with one of the largest coupon/statement/newsletter printers to make available print pricing normally only available to the largest of companies.

Our experts will work with you and the printer to insure your coupons are of the highest quality and adhere to our scan line specifications, allowing our processing team to correctly post each payment to the correct homeowner/business.

Let our printing specialists review your printing needs and provide you with a quote.

September | October 2009 3

PresidentMark GittlemanPhone [email protected]

President-ElectHolly Johnson, CMCA, AMS, PCAMLiaison to Vision Awards CommitteePhone [email protected]

SecretaryJonathan EdinPhone: [email protected]

TreasurerMichael P. Mullen, CPAPhone [email protected]

DirectorsPatricia ButlerLiaison to HOTT CommitteePhone [email protected]

Tom Engblom, AMS, CMCA, PCAMLiaison to Golf Tournament CommitteePhone [email protected]

Sarah J. Fjellanger, CIRMSLiaison to Legislative Action CommitteePhone: [email protected]

Mark JohnsonLiaison to Communications CommitteePhone [email protected]

Joel A. Hilgendorf, JDLiaison to Membership CommitteePhone [email protected]

Traci Lehman, CMCA, AMS, PCAMLiaison to Manager Seminar CommitteePhone: [email protected]

Gene SullivanLiaison to Education CommitteePhone: [email protected]

Board of Directors

Legislative Action ChairJohn R. Dorgan, Esq.Phone [email protected]

Communications ChairSteve HoogenakkerPhone [email protected]

Education ChairJoe CrawfordPhone [email protected]

Annual Meeting ChairTBD

Golf Tournament Co-ChairTosh Tricas, CMCA, AMS, PCAMPhone [email protected]

Golf Tournament Co-ChairTom Engblom, CMCA, AMS, PCAMPhone 866.800.4656 [email protected]

Nominating ChairJoel A. Hilgendorf, JDPhone [email protected]

Membership ChairMike Laukka, CMCA, AMS, PCAMPhone [email protected]

Committee Chairs

I am please to announce that the CAI-MN Board of Directors is under-taking an exciting new education initiative in the area of Association Manager education. Much has been accom-plished by the CAI-MN Education Commit-tee and by the CAI

_____________________with regard to industry coursework and certification for Association Manag-ers. Here in the Twin Cities, we have had some great programs and overall good attendance at our events.

At the same time, we are aware that our industry has grown rapidly, is maturing, and new types of educational programming are in demand. Some of the changes in the industry that we are responding to include:

• amoreexperienced,diverse,andwelleducatedmanager population that is interested in more in depth and dynamic programming;

• emergenceofnewindustryissuessomeofwhichare complex and require quick response for devel-opment of educational programming or alterna-tive education formats;

• increasingparticipationbymanagementcom-panies in the national Association Manager certification program and a greater commitment by management companies to industry based educational programming; and

• increasedofferingsofalternativeeducationalpro-gramming for managers outside of CAI-MN that may draw managers from CAI-MN educational events in the future if CAI-MN does not provide great programming.

In response to these changes in the industry and related opportunities, the CAI-MN Board of Direc-tors resolved the following at its last meeting on August 25, 2009:

o approval to hire a paid CAI-MN Education Consultant to oversee the creation of future educational programming for CAI-MN;

o selection of Tim Broms as the Education Consul-tant to CAI-MN;

o establishment of a budget authorization to sup-port the work of the paid consultant; and

o creation of a new Education Committee made up of management company CEOs.

With regard to the Education Committee, the Board has approved changing the structure of the Committee so that it consists entirely of CEOs of management companies that are actively involved in CAI-MN and who are committed to advancing educational programming for CAI-MN within our industry association. From now through the 2010 CAI-MN Annual Meeting, the CAI-MN Education Committee will consist of Mike Laukka; Chuck Schneider; Gene Sullivan; Traci Lehman; and myself. After the 2010 CAI-MN Annual Meeting, the Board of Directors will appoint a new Education Committee Chair who will appoint 5-7 CEOs of management companies to form the Committee.

We came to realize that the structure of our educa-tional programming at CAI-MN was not set up to be able to respond dynamically to changes in the industry. Specifically, the volunteers on the Educa-tion Committee had full time jobs and were not well positioned to put in the additional time that is neces-sary at times to assemble new types of programming. Secondly, in order for management company CEOs to feel invested in devoting more employee time and company money on education for managers, we need to drive an educational program that manage-ment companies find to be valuable to their manag-ers and the services that they provide to clients.

Another important element of this change that we intend to accomplish at our next meeting is to change the reporting structure of the Homeowner Training Tract (HOTT). It is our intent to elevate the status of the HOTT Committee so that it reports directly to the Board of Directors. In doing so, we hope to enhance the programming of the HOTT Committee as well.

We were fortunate to identify an outstanding can-didate, Tim Broms, to be the Education Consultant for CAI-MN. Tim has extensive experience as a past CEO of a management company within our indus-try, has assembled educational programming for our industry in the past, and is currently furthering his educational interests as a middle school math teacher.

We do not intend to change the luncheon edu-cational programming that has been lined up for September and October. For subsequent lunch programs, changes will be considered and may be made to the programming currently on the man-ager education calendar. We also anticipate adding additionaleducationalprogramofferings.Moreinformation will follow after Tim Broms’ work unfolds over the next 60 days.

From the President By Mark GittleMan | Cai-Mn President


486 Professionals earn CMCa CredentialAlmost 500 professionals received the Certified Manager of Com-munity Associations (CMCA) credential from the National Board of Certification for Community Association Managers (NBC-CAM) in the first half of 2009.

Professionals must complete a 16-hour course and pass NBC-CAM’s national examination to earn the certification. They must demonstrate competence in developing association budgets and financial reports; providing administrative, operational and manage-rial counsel to association boards and residents; enforcing covenants and restrictions; overseeing payment for community association services; and managing association personnel.

Certified managers must take continuing education courses and ad-here to the CMCA Standards of Professional Conduct to maintain the certification.

The following Minnesota managers received their CMCA during the first half of 2009:

CAI has also awarded designations to almost 300 industry profes-sionals, which includes recipients of the AMS, PCAM, and RS designations. The AMS is the second tier of professional certification and designations for community association managers. The PCAM is the third and highest designation for professional managers. The RS designation recognizes a high level of competency in the conduct of reserve studies.

Professional Community Association Managers (PCAM)

Association Management Specialists (AMS)

Reserve Specialists (RS)• JonathanPettersen,Minneapolis

“Where You live” radio PrograM featuring the Cai-Mn MinuteThe weekly radio program (Saturdays from 11:00 a.m. to 1:00 p.m.), “Where You Live,” with Gene & Toni now features a one minute segment from CAI-MN every week. The program, featured on AM 1570 KYCR, is the Twin Cities’ only radio show that tackles issues and concerns faced by owners of homes, condos, townhomes or apartments. The program is produced by New Concepts Manage-ment, a member of CAI-MN.

Here is a listing of the scheduled broadcast topics:Handyman Horror Stories Sep. 12Rights & Responsibilities for better Communities Sep. 19Establishing a Budget for your Property/ Tax laws Sep. 26How to Improve Your Credit Score: Establishing Financial Stability Oct. 3How to get started in buying & owning rental property Oct. 10Answering Renter Hotline Questions (from the pros) Oct. 17Navigating Financial Problems in HOA’s – part II Oct. 24

“Where You live” to have Cai Ceo toM skiba as a guest on sePteMber 19Tom Skiba, CEO of CAI, will be a guest on the Where You Live radio program on Saturday, September 19. He will be on starting at 11:00 a.m. The topic is “Rights and Responsibilities for Better Communities”

Cai offers flu CliniCs for MeMbersCAI members can now schedule flu vaccination clinics at their companies or in their communities, eliminating the need for residents and employees to schedule appointments with their doctors. Vaccination clinics will be held between Sept. 14 and Dec. 1 in conjunction with CAI’s new partner, Maxim Health Systems. There is no fee for community associations or companies that sponsor the clinics if a minimum of 40 people participate. Influenza, FluMist andpneumoniavaccinationswillbeofferedfor$25,$35and$45,respectively. Medicare Part B and a growing number of managed care organization members can be billed.

CAI-MN Member News

Common Interest Communities | Apartments

651-789-0790www.finalcoatpainting.com

Interior Exterior

MULTI-HOUSING

Enhancing Your Image. Supporting Your Brand.

• LisaAstleford,SaintMichael• TraceyBernier,ForestLake• JaneBristow,Bloomington• DawnButler,Bloomington• ChristopherCampbell,

Minneapolis • JamesChanaka,Minneapolis• MichaelCleary,Eagan• JanCurtis,EdenPrairie• KimDare,Bloomington• StanaGerlach,Minneapolis• KimGilmore,Andover• ReneeGowan,Bloomington• PollyGravelle,Zimmerman• BillHauge,Minneapolis

• RoxAnnHazelton,Cedar• AndreaHemingway,

Bloomington • CharlesHesse,Hopkins• TimothyLaCroix,Champlin• ColleenNesseth,Golden

Valley • JeffPeterson,Savage• KristiRyan,Minneapolis• BrandiSchuknecht,

Minneapolis • KayThiel,Hugo• SherTrombley,Bloomington• HamletVazquez,Minneapolis• CarolynWendell,Hopkins

• AngieBlazek,GoldenValley• JenniferCampbell,Golden

Valley • JenniferCarr,Fridley• MichaelCleary,Minneapolis

• JosephCrawford,NewMarket• MichelleGaskill,Golden

Valley • BillHauge,Minneapolis• MarkKarason,Bloomington

• JillMcMahon,Bloomington • HaloStafford,Minnetonka

member news continued on Page 17


departments3 President’s MessaGe By Mark GittleMan

4 MeMBer news

6 a loGiCal solution to a HydroloGiCal ProBleM

By tony Poetz

7 leGislative CHanGes affeCtinG foreClosures and unoCCuPied ProPerties By nanCy t. PoloMis

8 tHe 2010 BudGet: ProjeCt PlanninG By alan seilHaMMer

10 3rd annual Cai-Mn Golf tournaMent winners and PHotos

13 it’s not My tiMe! By toM enGBloM

14 finanCial CHeCkuP By roBin l. storey

Published by Community Associations Institute — Minnesota Chapter, copyright 2009. All articles and paid advertising represent the opinions of authors and advertisers and not necessarily the opinion of either Minnesota Community Living or CAI–Minnesota Chapter. The information contained within should not be construed as a recommendation for any course of action regarding financial, legal, accounting, or other professional services by the CAI–Minnesota Chapter, orbyMinnesotaCommunityLiving,oritsauthors.Articles,letterstotheeditor,andadvertisingmaybesenttoChapterStaffEditorJoeFlanniganatjoef@cai-mn.com, or at CAI–Minnesota Chapter, 1000 Westgate Dr., Suite 252, St. Paul, MN 55114.

Calendar

oCtoBerfundaMentals of CoMMunity volunteer leadersHiP

October 10, 2009, 8:00 a.m. - 4:00 p.m.Dorsey Ewald Conference CenterBy Oct. 2: $75/Member, $100/Nonmembers. After Oct. 2: $100/Member, $125/Nonmembers

ManaGers lunCHeon

“Herding Your Cats: Dealing with Non Compliance Issues”October 14, 2009, 11:30 a.m. - 1:30 p.m.Dorsey Ewald Conference Center$30-early, $40-late/members; $50/non-members. CEs: 1.5

HoMeowner traininG traCk

“Building Community”October 28, 2009, 6:00 - 8:30 p.m.Location TBDMaple Grove, MNFree/homeowners, $30 per manager, $15 per manager who brings one homeowner, Free for managers who bring two or more homeowners

noveMBerManaGers lunCHeon

“Records Retention and Electronic Communications”November 11, 2009, 11:30 a.m. - 1:30 p.m.Dorsey Ewald Conference Center$30-early, $40-late/members; $50/non-members. CEs: 1.5

2009Index

features

Association Dues Assurance Corporation .... 18

Birch Lawn Maintenance ................................ 12

BEI Exterior Maintenance .............................. 13

BNC National Bank .......................................... 2

Breiwick Companies ....................................... 19

Carlson & Associates, Ltd. ............................... 7

CA Banc/CondoCerts ...................................... 20

Cities Management ............................................ 9

Construct-All Corporation .............................. 15

Construction Consulting & Inspections, Ltd. ....8

Gassen Companies ........................................... 7

Felhaber, Larson, Fenlon, and Vogt .............. 19

Final Coat Painting ........................................... 4

Hammargren & Meyer, P.A. ............................. 5

Heaton & Associates ...................................... 15

Hellmuth & Johnson, PLLC. ....................... 9, 18

Horticulture Services, LLC ................................ 7

Johnson & Lindberg, P.A. ............................... 14

Levin & Edin .................................................... 16

Minnesota Exteriors, Inc. .................................. 7

Omega Management ....................................... 6

Reserve Advisors ............................................. 15

RJF Agencies .................................................. 17

Stock Roofing Co. ........................................... 13

Strobel & Hanson............................................ 15

Thomsen & Nybeck ........................................ 16

[ ADS ]Index of Advertisers

SMARTDECISIVE

&The Best Value in Construction Law for Community Associations

That’s what our clients tell us. At Hammargren & Meyer, we’re smart, decisive lawyers focused exclusively in the areas of law that we know best.

For prompt responses and straightforward answers, call Hammargren & Meyer.

(952) 844-9033www.hammarlaw.com

Thank You 2009 Annual Partners

Platinum CABanc/CondoCertsGold BEI Exterior MaintenanceSilver Breiwick Companies Carlson & Associates, LTD. Hammargren & Meyer, P.A. Hellmuth & Johnson, PLLC Levin & Stein Thomsen & Nybeck, P.A.Bronze Gittleman Management Corp. Omega Management, Inc. Schoenfelder Painting Strobel & Hanson, P.A.

Register online at www.cai-mn.com

for More inforMation reGardinG an event, Call sCott

franzMeier at 651.290.6278 or visit tHe Cai-Mn weB

site. online reGistration is availaBle at www.Cai-Mn.CoM.


Many structural elements of your multi-unit homes exist for the sake of one fundamental goal - keeping water out. Your roofs,

siding, windows, doors, drain tile, sump pumps...they all function to keep the rain and snow-melt moving away. While these ele-ments all function well when installed prop-erly, they can perform even better with a little help from a rather simple solution: gutters.

Heavyrainandnaturalsnowmeltrollingoffyour eaves creates ruts, destroys landscaping and worst of all leads to basement flooding. Consider this:

1 inch of rain on 1 square foot of roof yields 0.6 gallons.

That’s 60 gallons for every inch of rain on 100 square feet of surface area.

With an average US duplex roof being 4,800 sq ft and the average precipitation in the southern half of Minnesota being 34 inches, you’ve got 97,920 gallons of water racing toward your foundation every year.

Gutters might be the solution you need before your association installs an irrigation system or sump systems.

Mostguttercontractorsofferavarietyofcolors and they’ve got the timeline down to a science. The process is rather non-invasive as they only need to access the exteriors. Ironi-cally, however, they can’t work in the rain. Rain work is generally an insurance “no-no” duetoroofandscaffoldingslippage.

Drain tile working in concert with your gutter system is an additional option toward foundational peace of mind. A small trench is dug heading away from the building then a hole is dug a little deeper at the end and filled with rocks. A molded plastic pipe is then placed in the trench. One end is at-tached to the downspout, the other drains to the end of the trench into the erosion-resistant rocks. This moves the rainwater an even safer distance (and down about 3’) away from the structure.

One increasingly popular alternative is the rain barrel. These items are the definition of “green” and can save a lot more than the environ-ment. Rain barrels are a dry season option to turning on the sprinkler, thereby reducing the utility bill. A barrel with hole in the top and a spigot at the bottom is placed underneath a downspout so rainwater fills the barrel itself. Residents (or your landscaper) use the water for their flowers and lawns during dry times. If you’ve ever visited an extremely dry climate, you’ve seen these next to a lot of home and on many roofs, but in a much larger size. Those that are used in Minnesota’s continental climate are more discreet and decorative. You can pick your styles and colors.

Gutter prices range widely depending on the type of material you use. Vinyl and plastic are about the cheapest and you’ll get what you pay for with almost assured maintenance required within two or three seasons. Copper gutters look beautiful and function well, but the price is rather high startingaround$10/ftjustforthegutters.The downspouts are priced separately and are generally a little more per foot. Copper gutters are normally installed on higher end homes and are custom fitted so the price can be much higher depending on the layout.

Aluminum and steel seamless gutters are the most popular and the most durable. Most come with a lifetime warranty on the product and 10 – 15 years on the installation. Installa-tionwarrantyisdifferentasthereisasealantused on the end caps that can wear down. The seamless aspect is made possible by a machine that actually transforms a giant roll of alumi-num into what you see on the building. It is known as a “K” style gutter due to its shape when viewed from the end. Aluminum and steel can be rolled out at nearly any length. Aluminum gutters for a large project can usu-allybefoundfor$5-$7perfoot.Thepricedepends on the company and will reflect their willingness to come back for repairs if needed. Estimates are almost always free.

We’ve seen fancy ground irrigation set-ups, expensive sump-pump installs and flooded basements all because water was allowed to be near the foundation. Gutters might be your multi-unit’s straightforward solution to sim-ply keeping the H2O away from your HOA.

A Logical Solution to a Hydrological Problem keePing h2o aWaY froM Your hoa

by tony Poetz, Production suPervisor, new exteriors by sma, inc.

Omega Management, Inc.

763.449.9100www.omega-mgt.com

30 years of association management experience

Reserve Plans are included in our management

program

Proactive management, including weekly

property visits

Smart, expert, professional advice

Managingto make a

difference


Another legislative session has come to a close. Although overshad-owed by budget disputes, budget cuts and unallotments, there were

afewchangestolawsaffectingforeclosureof mortgage and association liens and vacant properties.Mostchangesaffectthemechan-ics of the foreclosure procedures, but a few changes were clearly aimed at addressing the growing number of foreclosures and the problems related to vacant properties.

HoMeowners May now PostPone sHeriff’s sales

Previously,asheriff’ssalecouldbepostponedby the foreclosing creditor only. However, a homeowner now has the right to request that asheriff’sforeclosuresalebepostponedforupto five (5) months from the originally-sched-uled date of the sale. In order to postpone the sale, the homeowner need only complete and record an affidavit, and provide a copy oftherecordedaffidavittothesheriffandtothe foreclosing creditor. The creditor is not required to publish any notice of postpone-ment or even to modify its published Notice of Sale. In exchange for the right to postpone the sale, however, the homeowner agrees that

the redemption period following sale after such postponement is reduced to five weeks. As a result, the foreclosure process is not unduly extended by any such postponement.

A homeowner may request a postponement only once, even if there are foreclosure pro-ceedings commenced again after reinstatement during the postponement, and the postpone-ment option is available only on homesteaded residential properties (one to four dwellings). Postponingthesheriff’ssalegivesahomeownermore time to reinstate the loan by paying the amount in default (the back payments), as opposed to being forced to pay the entire loan balanceoffduringtheredemptionperiod.

Such postponements may prove to be a boon for associations governed by the Minnesota Common Interest Ownership Act (MCIOA), so long as the foreclosure sale still takes place after the postponement. MCIOA allows the association to retain a “superlien” for assessments accruing during the six months prior to the date on which the redemption period expires, so whether the redemption period is five weeks or six months, the association is entitled to collect

six months’ assessments from the foreclosing lender. Further, the lender takes full title in justfiveweeksafterthesheriff’ssale,mean-ing the association has a new “dues paying” member (the lender) on the books sooner.

If the delinquent homeowner is able to reinstate the mortgage during the period of postponement, that homeowner retains own-ership and possession of the home. If the homeowner is also delinquent on his or her association assessments, the association may then be in a position to pursue collection of those unpaid assessments more aggressively.

Only time will tell how many homeown-ers take advantage of the opportunity to postponesheriff’ssales.

Cities Gain riGHt to seCure vaCant BuildinGs

EffectiveAugust1,2009,ifabuildingbecomes vacant and is deemed hazardous because it has not been secured—and the building could be made safe by securing it—the city may order the owner of the buildingandholderofthesheriff’scertificateto secure the building. If the building is

Foreclosures continued on Page 18

Legislative Changes Affecting Foreclosures and Unoccupied Properties by nancy t. Polomis, esq, hellmuth & johnson, P.a..

Tom Lemke Office 763.493.5500 Direct 763.391.5506 Fax 763.493.8980 Cell 612.369.1524

[email protected]

The Siding and Window Specialists Since 1947

8600 Jef ferson HighwayPO Box 266Osseo, MN 55369 -0266minnesotaexteriors.comLic #2877

MINNESOTAEXTERIORS INC

SPECIALIZING IN ASSOCIATION

LANDSCAPE MAINTENANCE

SINCE 1989


The 2010 Budget: Project Planningdo it now or faCe inflation!2009 in most corners of the country has been a horrific year for the cash flow of associations. Unit owner bankruptcies and foreclosures have stripped associations of a tremendous amount of association dues. We all have fingers crossed that 2010 will see the foreclosure pace having well slowed. Those units that were not paying could then be filled with financially healthy, dues paying, happy homeowners.

As we all painfully know, this financially stressful experience began way back in the summer of 2007. We have been wrapped up in this difficult time for a long time. Typi-cally, what most community associations have done during this period is controlled their expenditures in a very draconian fashion. Deferred maintenance that really needed to be addressed prior to now, has not. The leaky roof is now rotting the roof sheathing and trusses. The parking lot is all chopped up. But, because there has been a very constrained budget and likely reserves are depleted to ac-cess cash to support operations with so many non-paying units in foreclosure. There maybe only 2 options to fund a capital maintenance project: Special assessment or obtaining loan.

One of the things that is a coming real-ityasresultofourgovernment’seffortsto stimulate the economy is going to be inflation. It’s not a maybe. It will occur as all the economists are reaffirming regularly in the news. The only maybes are WHEN and HOW MUCH. Logic suggests, as soon as the economy begins picking up, inflation will be stimulated. The guess is that 2011 will be the year inflation will start growing out of control. What is inflation? Inflation is raising prices. Inflation is increasing interest rates. Inflation is very painful and prob-lematic. Does anyone remember Decem-ber 1980 when the Prime rate was 21.5% because inflation was around 10%?

2010 is likely the last best year to get your capital maintenance projects done on the cheap. Because of the terrible condition of the economy, contractors are available and hungry for work. The prices of construction material are down. Interest rates are low. This is a perfect storm of conditions to get a

project done in a least cost manner. Waiting beyond 2010 is going to be the worst of all possible conditions. The economy will be improving which means the contractors will become busy. Thus, their prices go up as their availability contracts. As demand for building materials increases, prices go up. The imbalance of government intervention of the past few years is going exacerbate the extent of price increases: inflation.

Another very important circumstance that has developed over the past couple years is construction defects. Remember that the economy downturn started in mid 2007. The obvious response of a contractor that is beginning to feel the financial strains of a slowing economy is to cut corners. Cutting corners on a project that is new construction or a conversion into a condominium results in defects. Defects will cost the associa-tion lots of money. Being likely that your new community has defects and inflation is going to occur in 2011, it is prudent to find those construction defects now verses letting them show themselves in a few years after the defect has allowed expanded dam-age. The smartest thing a new association could due for itself right now is to bring in investigative engineers to inspect the property. Find any potential construction defects and deal with them now. Obviously, those defects are not going away. They have the potential of causing more damage. There may be an opportunity for recourse against the developer if you act now. The cost of making the repair is going to become very much more expensive after 2010.

Important in your project planning is the source of funds. It is going to be tough to be able to levy a special assessment after what your unit owners have been through for these past couple years. If you plan on obtaining a loan to finance your capital maintenance projects, you will need to be presenting a sound financial position to the bank. Banks are very skittish about taking on any type of borrower that might even show the smallest degree of weakness. The best thing you can do is plan your 2010 budget to show proper planning and healthy cash flow. You must

have a bad debt expense in your budget. If you have a delinquency level of 15% in you’re A/R aging, you need to have at least that level of bad debt expense in your bud-get. You might not believe it or like it. But, if you think you are going to need to convince a bank that you have enough contingency in your cash flow for all eventualities, you had better do some aggressive planning. After that large bad debt expense is in your budget, you need to have a healthy Net Excess avail-able for contribution to reserves. This all adds up to the potential of a large amount of cash build up of reserves if the bad debt expense is not as troublesome as the contin-gency has prepared you for. But, that is not a problem. Excess funds can be used to reduce the amount of loan that is being requested or allow for loan prepayment. As indicated throughout, you have a small window of op-portunity to get capital maintenance projects done inexpensively. Do not squander the opportunity by leaving yourself unable to qualify for a bank loan to fund the projects.

by alan seilhammer, senior vice President, ca banc


Powered by SenEarthCo®

“When everyonehas access you doless hand-holding.”

Cities Management

With Cities Management, your most demandinghomeowners have their needs met. Our technologyputs account information at their finger tips—plusassociation rules, regulations, and maintenancerequests. Get more management for your money.Contact Cities Management today.

612-381-8600www.citiesmanagement.com

“Trouble.”

“Who’s onthe phone?”

Your Single Source for Construction Defect Questions and Answers.

Our Construction Defect Practice Group provides litigation services and counsel to community associations with construction defect issues, including water intrusion, stucco defects, leaking windows, ground heaving issues, and other construction-related problems.

Since there are strict time limitations that apply to all construction defect claims, it is important to understand your rights and take action quickly. Contact Robert Keena today for your free initial consultation at [email protected] or 952-746-2113.

10400 Viking Drive, Suite 500, Eden Prairie, MN 55344P 952-941-4005 • www.hjlawfirm.com


Cai-Mn 3rd annual golf tournaMent

Congratulations Winners!15th Place Team Prize – Score: 67 JohnLabattPremierHomeImprovementLLCTrey Labatt Premier Home Improvement LLCChad Ricksh Premier Home Improvement LLCSean Ricksham 10th Place Team Prize – Score: 65 David Bruneau Community Development Inc.JamesChanaka CommunityDevelopmentInc.Kari Miller Community Development Inc.Ben Smith Community Development Inc. 5th Place Team Prize – Score 64 Paul Balfanz Burke, Wheeler & Associates, PAMatt Drewes Thomsen & Nybeck, P.A.Brent Rolling Burke, Wheeler & Associates, PAAaron Rolling Thomsen & Nybeck, P.A. First Place Team Prize – Score 56 Keith Alverson MikeJacobs AmericanBuildingContractors,Inc.JoshMoe AmericanBuildingContractors,Inc.Wayne Srsen American Building Contractors, Inc.

Closest to the Pin Andrea Hemingway Gittleman Management CorporationBob Cochrane Longest Drive Angela Anderson Restoration ProfessionalsJ.B.LarsonCondominiumResources,LLC Longest Putt Andrea Hemingway Gittleman Management CorporationTim Swanson BNC National Bank


Thank You Sponsors!

BEIExterior Maintenance

American Building Contractorswww.abc-mn.com

Hammargren & Meyer, P.A.www.hammarlaw.com

BEI Exterior Maintenancewww.beixm.com

TitleSponsor

TournamentSponsors

Minnesota Community Living12 Minnesota Community Living12

3100 Spruce Street • St. Paul, MN 55117www.birchlawn.net

Turf Maintenance • Fertilization and Weed ManagementShrub & Perennial Management • Irrigation Management • Snow Management

[email protected]

Professional Landscape Maintenance

Locally owned and operated since 1978

Par 3’s and Hole-in-One SponsorCABanc/CondoCerts

Golf Cart Sponsor Birch Lawn Maintenance

Giveaway Bag SponsorDorglass, Inc.

Putting Contest SponsorKiser Construction

At the Turn SponsorStock Roofing Co.

Beverage Cart SponsorsCommunity DevelopmentConcierge EnterprisesSmartstreet, A Division of

RBC Bank

Lunch Bar Sponsor Prescription Landscape

Lunch Sponsors Avvid TechnologiesPlehal Blacktopping

Dinner Bar SponsorHellmuth & Johnson, PLLC

Dinner SponsorGiertsen Company

Driving Range Bar/ Bvgs SponsorThomsen & Nybeck, P.A.

Trophy SponsorNew Exteriors by SMA, Inc.

Closest to the Pin Sponsor: MenUS Bank

Closest to the Pin Sponsor: WomenCedar Management

Longest Drive Sponsor - MenLevin & Stein

Longest Drive Sponsor - WomenCertaPro Painters - Women

Longest Putt Sponsor - MenCenterPoint Energy

Longest Putt Sponsor - Women Gassen Companies

Hole SponsorsACI Asphalt ContractorsAsphalt Associates, Inc.BNC National BankBreiwick CompaniesCABanc/CondoCertsCarlson & Associates, Ltd.CertaPro Painters - Twin

CitiesGiertsen CompanyGolden Valley Heating & Air

ConditioningLawn RangerMajesty Companies LLCNew Exteriors by SMA Inc.Northrup Roofing &

RemodelingReserve Advisors, Inc.RJF Agencies, Inc.Schoenfelder PaintingTenet Painting

Additional Sponsors

Cai-Mn 3rd annual golf tournaMent


As I travel through seven Midwest states for Community Associa-tion Banc I listen to various radio stations between office visits. I continue to hear this popular lyric about its not my time reflect-ing if you only had a short time to live as follows by Three Doors

Down - It’s not my Time! The lyrics mirror the life of an association and their committee volunteers “ I look ahead at all the plans we made and the dreams we had I’m in a world that tries to take them away oh’ but I’m taking them back cause all this time I’ve been to blind to understand what should matter to me its not we have its what we believe.”

Attending numerous board meetings relating to loan presentations I see unit owners that feel its not their time to assist the board in the decision making process by volunteering.

Unit owners need to step up to the plate assisting the board in the deci-sion making process thru volunteering as a committee member. The board benefits from input of committees working at the will of the board when assignedspecifictask.Thecommitteewillcreateeffectiveleadership;developspecific task or goals; time frames to accomplish the goals; methods to ac-complish goals; progress and recommendations to the board. The committee is a Group of individual’s organized to represent everyone. In the formation of a Group the following entity is formed: Goal | Reward | Organization | Union | Procedure.

Usually a community association bylaw and sometime its declaration will name certain committees that are required or allow for the appointment of other com-mittees that be required from time to time. Typically committees are focused by 3 subgroups consisting of mandatory, standing, and ad hoc. Each com-mittee implements is own distinct characteristic to support the board in their policy making decisions. The Mandatory Committee is vital during election, nominations, and architectural standards. The Standing Committee creates the steady flow of budget-ing, grounds, social, newsletters, pools, and rules including disputes. Finally the most unique Committee is the Ad Hoc created for a one time issue to make recommendations to the board within a specific time frame. On the humorous side the board should not create or assign volunteers to com-mittees simply to keep them busy or not to complain to the board during meetings. The board should take the commit-tee recommendations serious, meaningful task, adequate au-thority to complete the task, and public recognition for their performance. As time progresses the committee volunteers will mature to potential board members

It’s not my time to volunteer I have to much work, they won’t listen,Iwon’tmakeadifference,themeetingsaretoolongorthe meeting date is the wrong day. Unit owners should volun-teer to create family tradition, self esteem, sense of responsibil-ity, self protection, issue resolution, and sense of community.

“I’ve been to blind to understand what should matter to me its not we have its what we believe.” Make it your time tomakeadifferenceinyourassociationtheresultwillcre-ate a greater sense of community living for the association that it is your time!

It’s Not My Time!By Tom Engblom, AMS, CMCA, PCAM

BEIExterior Maintenance

RoofingSiding DecksCarpentryAsphalt & ConcreteWindows & Doors

MN #20241131

405 West 60th StreetMinneapolis, MN 55419

(612) 861-6243(612) 861-6243

Exterior Construction, Repair and Replacement

Individual Unitor Complex Wide

GAF MATERIALSCORPORATION

GAFFax (612) 861-6267Web: www.beixm.com

Email: [email protected]


Financial CheckuptWo Proven WaYs to iMProve Your bottoM line

by robin l. storey is President oF smartstreet, a division oF rbc bank

If it’s been a while since your homeowners as-sociation or management company has taken a good, hard look at your payment process-ing and cash management processes, you may not be taking advantage of some important innovations. The good news is that these innovations are now road-tested and easy to implement. Here’s an exploration of two simplesystemsthatcanhelpmakeyourstaffmore efficient, save you money and help you increase your investment earnings. 1. loCkBox serviCes desiGned for tHe sPeCifiC needs of assoCiations Are your administrators still handling payments manually? If your association or management company opens envelopes, posts payment information, fills out deposit slips and goes to the bank, these activities can add up to significant administrative timeforyourstaff.Nowthere’sabetterway:automated processing.

Automated processing often includes lock-box services. “Lockbox” isn’t a very good descriptive term for it. I’ve often talked

with people who say they first assumed that “lockbox” meant a safe deposit box, or some type of reserve account. Quite simply, a lockbox is a cash management tool that pro-videsacost-effectivewaytooutsourcethemost routine duties associated with payment processing, saving you time and money.

Lockboxes aren’t new in and of themselves. They’ve been around since the 1930s, when they were used primarily to speed up mailed payments. Payments could be sent to a post office box, where the lockbox service could pick them up and deliver them, without waiting for the post office to sort and deliver them. Modern use of lockboxes dates from the late 1990s, when computer-imaging tech-nology made it possible for advanced lockbox systems to create electronic payment files.

Here’s how it works today: rather than receiving payments at your office, you ar-range for them to go directly to the lockbox company, which can usually accept checks. Checks are read by scanners, so there are typically very few reading errors. Payment processing is generally faster than by manual means, so payments are credited faster. An accounting department can upload these files directly into its accounts receivable system without ever having to type in a payment. Some systems can even read the handwritten amount on a check and com-pare it to the amount on a coupon. If the amounts don’t match, an operator flags the payment for review. Payment information – including scans of checks and a wide variety of statements and reports – is available to you online right away.

At Smartstreet, because we work exclusively with community associations and management companies, we’re also set up to handle member checks, coupons and statements – both paper and electronic – and to handle exceptions, such as when a member includes correspondence or makes an unusual type of payment.

The associations we work with often say they have been able to reduce time spent on rou-tine payment processing and have often been abletoredeploystafftoworkonotherthings,suchasgrowingthecompanyorofferingmore

and better customer service to members, while their payment processing is being done better and more efficiently – and at a lower cost, be-cause Smartstreet doesn’t charge for payment processing with qualifying deposits.

How do you find the lockbox service that’s right for your association? Here are some ways to find the one that best fits your needs:

• Seekoutprofessionalrecommendations.Notalllockboxservicesofferthesamefeatures or deliver the same level of per-formance. Ask other management compa-nies and associations what has worked for them – and why.

• Askspecificquestionsabouttechnology.Most lockbox services will tell you they have “the latest technology.” You can find out more by asking about specific features: Dotheyofferonlinecheckandcouponimages? Electronic files for your account-ing system? These features add the greatest value to the collection process. You should also ask whether the company develops and maintains its own technology or whethertheylicenseanoff-the-shelfsoft-ware system. If they don’t have in-house IT,theymaynotbeabletoofferyouasmany customization options and they will probably have higher development and maintenance costs, which — one way or another — they’ll pass on to you.

•Askspecificquestionsaboutwhatit’sliketo work with the provider. Once you nar-row down your choices, ask each lockbox service a few candid questions:§ Is the lockbox service in-house or out-

sourced? (In-house lockbox services are normally customized for the industry, provide a higher degree of functionality and are integrated with the payment processing – thus providing a higher level of service.)

§ How frequently and when do you make processing deposits?

§ How long should I expect mail deliv-ery to your location to take? (This is especially important if you’re using a national service located in another state.)

§ Doyouhaveenoughstaffforpeaktimes?§ What reports do you provide your

customers?

Construction defect problems?

Construction defects can havea devastating impact on yourassociation. Johnson & Lindberg'sskilled attorneys offerstraightforward advice. Put experience on your side.

Call attorney Mark Peschel for a free consultation.

JOHNSON & LINDBERG, P.A. 7900 International Drive, Minneapolis, Mn (952) 851-0700

www.johnsonlindberg.com

johnson_2.5x4.5_bleed.pdf 2/4/07 8:33:09 PM


CONSTRUCT-ALL CORPORATION

WE WORK WITH ALL INSURANCE COMPANIESwww.construct-allcorp.com

MEMBER 24 HourService

763-427-5900

Bonded Licensed Insured

ASSOCIATION INSURANCE REPAIR

´ Fire´ Smoke´ Wind

´ Water´ Vandalism´ Emergency Services

ALL INSURANCE CLAIMS WELCOME

With you.

Every step of the way.

For your no-cost proposal, please call Nik Clark at (800) 221-9882 or visit reserveadvisors.com

At Reserve Advisors, our clients expect a high level of quality and service, and we deliver. We’re fully committed to you

during every step of the reserve study.

Let our experience

and expertise be your guide.

Serving all of Minnesota from our Twin Cities office.

§Doyouofferimagesofchecksandcoupons?Howgoodisthe image quality?

§ How do you handle checks without coupons (called “excep-tions”)? Do you return the checks to us to research or let us verify and post online?

§ What do you do with odd correspondence that sometimes gets included in our envelopes?

§ How do you handle checks from online bill-pay services?§ What are your error rates? How do you respond to errors?§ What is your fee structure?

2. assoCiation-sPeCifiC CasH ManaGeMent serviCes Does your financial institution understand the specific needs of homeowners associations and management companies? If not, you may not be getting the guidance you need to maximize the returns on your deposits. Take a look at your cash management picture and ask yourself the following questions:

• Aremyreserveaccountsperformingaswellastheyshould?• AmIearningthemaximumreturnsonmymoneymarketdeposits?• AremyCDdepositsproperlyinsuredthroughFDICcoverage?• Aremynon-CDassetsadequatelycoveredbyprivateinsurance

if they’re not covered by FDIC insurance? • DoIhaveeasywaystomovefundsaroundasneededtoget

the best return on my money? • DoIhaveaninvestmentmanagerIcantrustforassistancewith

investments that meet my association’s regulations and criteria?

If you’re not sure, look for a financial services company that spe-cializes in the association industry and ask for a detailed no-cost evaluation. It’s the best way to make sure your association is mak-ing the right cash management decisions and investing wisely.


Over 20 Years of Experience in the resolution of construction

defect claims on behalf of condominium and

townhome associations

To schedule a free initial consultation with

us, or a free initial inspection by a qualified

consultant, contact managing attorney

Jonathan A. Edin at 651-222-2155

750 Landmark Towers345 St. Peter Street

St. Paul, Minnesota 55102PHONE (651) 222-2155

FAX (651) [email protected]

MINNESOTA STATE CHAPTERS P O N S O R

The Talent You Need is Here.

Our talented Community Association Team includes:

Partners (pictured left to right) David J. McGee, Gretchen S. Schellhas, Matthew A. Drewes, Christopher P. Renz, William E. Sjoholm; and Associates Ryan J. Wood, Debra M. Newel, Natalie R. Walz, Ivory L. Ruud, Nathan J. Knoernschild

Thomsen & Nybeck’s commitment to serving the needs of community associations and those that work with them is stronger than ever. Whether you need assistance with collections or have bigger issues like construction defects, our talented team of lawyers will deliver results.

(952) 835-7000 | www.tn-law.com

Our new address as of October 1, 2009: 3600 American Blvd. W., Suite 400, Bloomington, MN 55431

The Time You Need it is Now.


Vaccinations for the H1N1 virus (more commonly known as “swine flu”) will be available later in the year in accordance with the federal priority lists. Availability will be announced to CAI members via e-mail. “Wearepleasedtobeabletoofferthisopportunitytoourmembers,”saysCAI Chief Executive Officer Thomas M. Skiba, CAE. “This is an easy, no-cost way for community associations to provide a valuable service to their residents, and for businesses to provide a convenient and important benefit to their employees.” “The single best way to protect against the flu is to get vaccinated each year,” says the Centers for Disease Control and Prevention (CDC). More than 200,000 people are hospitalized every year in the United States due to flu complications, and about 36,000 people die from flu-related causes. While the community or business will be primarily responsible for pro-moting the clinic, Maxim Health Systems will provide flyers and posters to promote the clinic, as well as language to use in other promotions. To sign up, members need to complete and return a short online form. It can be accessed in the members-only section of the CAI website at www.caionline.org. The form can be faxed to (304) 776-2047 or e-mailed to [email protected].

hellMuth & Johnson adds neW attorneYHellmuth&Johnson,PLLCispleasedtoannouncethatJackBouquethasjoinedthefirm.

Bouquet joins the firm as Of Counsel with more than 40 years of experience. He practices in the areas of real estate law, community association law, corporate andbusinesslaw,estateplanning,andprobate.Jack

is licensed to practice law in the state of Minnesota.

Jackisacertifiedrealpropertylawspecialist,certifiedbytheMinnesotaState Bar Association (MSBA), past chair of the Hennepin County Real Property Section, member of the MSBA’s MCIOA committee (charged with reviewing all proposed changes to the Minnesota Common Inter-est Ownership Act), past chair of CAI-MN and currently a member of the CAI Legislative Action Committee.

thoMsen & nYbeCk to reloCate offiCes on oCtober 1Thomsen & Nybeck, P.A. is pleased to announce that it will be moving its officestotheNorthlandExecutiveOfficeCentereffectiveOctober1,2009.The firm’s new address will be 3600 American Blvd, Ste. 400, Bloomington, MN 55431. The firm’s phone and fax numbers will remain the same.

MarY felix ProMoted to ProPertY Manager suPervisorMary Felix was promoted to Property Manager SupervisoratGassenCompanyonJuly1,2009.Mary joined Gassen Company in 2007 with extensive experience in the building trades and customerservicebusiness.InJanuary2009,sheassumed the position of Trainer for new Property

Managers. Mary continues with the training program, serves on the Membership Committee for CAI-MN and is working on obtaining her PCAM designation. Congratulations to Mary Felix!

We’ve been here. We’ll be here.Long-term dedication to your association.

Community Association Insurance Services(763) 746-8000 www.rjfagencies.com

Association Risk Management & Insurance

• Adapting to your needs• Protecting your future

Commitment

• Unique solutions to control risk• Priority claims support

Advocacy

• 20+ years helping associations• Multiple markets aligned to

your current and future needs

Experience

member news continued From Page 4


not secured, the city may do so, and the costs associated with securing the property may be assessed against the property. “Neighborhood associations”—which by definition would include homeowners associations—may request that they also be notified of such demands. Associations are encouraged to notify city officials of the association’s desire to be notified of vacant buildings in the community. While many associations are usually aware of vacant homes in the association, requesting formal notice from the city ensures that the association is “in the loop” regarding those properties.

lenders now Have oBliGation to seCure vaCant BuildinGs

Previously, foreclosing lenders had the right, but not the obligation, to enter foreclosed properties to secure them and protect them from waste and trespass. As of August 1, 2009, however, if a property is vacant or unoccupied and the holderofthesheriff’scertificatehasknowledgeof facts that support a court’s determination that the property has been abandoned, the certificate holder has a duty and obligation to enter the property, make reasonable inspections, change the locks on the doors, install locks on windows, and ensure that all locks are functioning prop-erly. Such certificate holders may (but are not obligated to) board windows, doors and other openings, install alarm systems, or otherwise

prevent or minimize damage to the property from the elements, from vandalism, trespass or other illegal activity. The costs related to secur-ing the property may be added to the balance due or the costs allowable on redemption.

Cities Have riGHt to reduCe redeMPtion Period for aBandoned ProPerties

As many associations know, the typical six-month redemption period following a foreclosure sale can be reduced to five weeks if the property has been abandoned. Evidence of abandonment would include, for example, boarded windows and smashed doors, as well as terminated utility service. The right to request such a reduction was previously limited to the foreclosing party (usually, the first mort-gage holder). Such lenders often opted not to seek an order reducing the redemption period because of the cost and time involved.

The foreclosure statutes have now been modified to allow cities to make a motion to a court to request a reduction in the redemp-tion period. If this right is exercised by cities, it should allow cities to minimize the time that abandoned properties are owned by the homeowner that has abandoned the property, and allow lenders to market and sell the properties more quickly.

While these new statutory provisions will not necessarily solve the problems associated with vacant properties, they do impose a higher duty upon foreclosing lenders to monitor their properties and to take steps to protect them from trespass and the elements. It is also hoped that the changes will shorten the time periods that a property is vacant and shorten the time period a foreclosing lender (or association) must wait to market and sell an abandoned property.

Foreclosures continued From Page 7

The Easiest Maintenance Decision You Can Make.

Associations face numerous maintenance decisions. However, when it comes to maintaining your association’s legal affairs, look no further than Hellmuth & Johnson.

Hundreds of associations and property managers look to us as the definitive source for legal expertise, education and counsel. As one of the first firms in Minnesota to focus on this specialized area of law, we know the many challenges of running and managing an effective home owners association.

For attorneys who know associations, call us or visit our web site www.mncommunityassociation.com.

10400 Viking Drive, Suite 500, Eden Prairie, MN 55344P 952-941-4005 • www.hjlawfirm.com


David Eide612.373.8520

Fred Krietzman612.373.8418

Timothy Hassett651.312.6006

Rich Voelbel612.373.8544

Steve Yoch651.312.6040

www.felhaber.com

• General corporate matters, enforcement of covenants, restrictions and management issues

• Document interpretation and amendments

• Collection of assessments and foreclosure of assessment liens

• Dispute resolution and litigation, including construction defect litigation

• Applicability and options under the Minnesota Common Interest Ownership Act (MCIOA)

• Project development and documents

• Turnover of developer control

Providing LegaL ConsuLtation to

Homeowners assoCiations sinCe 1975

member of: The Community Associations Institute & The Minnesota Multi Housing Association

Trina Sjoberg612.373.8536

Snow Removal Landscaping Lawn Care Stump Removal

11681 Eask Laketowne Drive - Albertville,

763.767.9230www.breiwick.com or

National Corporate Member of Community Associations Institute. Community Association Banc is a division of Mutual of Omaha Bank.

Member FDIC Equal Housing Lender

Community Association Banc

Visit us at mutualofomahabank.com

Tom Engblom CPM PCAMVice President / Regional Account Executive312.209.2623Toll Free 866.800.4656, ext. [email protected]

Community Association Banc is Now a Division of Mutual of Omaha Bank and Stronger Than Ever • Online cash management systems• Lockbox and digital imaging services• Online ACH and credit card payment systems• Loans for property maintenance and development

CondoCerts simplifies the process of obtaining and distributing community association data and documentation with our online document delivery system.• Real-time account access 24/7• Automated resale and refinance disclosure packages• Dedicated customer service teams

september/october 2009 volume 27 • issue 5 · establishing a budget for your property/ tax laws...

Documents