Welcome to Ungated

With the flu season rapidly approaching, we are once again reminded by the CDC and other medical authorities that a flu shot can help reduce the incidence of and the effects of this potentially life-threatening disease.  Each year as many as 60 million Americans contract influenza, more than 200,000 are hospitalized, and about 36,000 die from its effects. (Source: CDC)  For more information about influenza consult the CDC's  Influenza Page, the Pandemic Flu page, or your personal physician.

As a service to our members and their communities, CAI is partnering again this year with Care Dynamix to provide flu vaccination clinics at your community or business, saving your residents and employees the need to stand in the long lines common to most public flu shot clinics or to schedule a visit with their individual doctors.  For the same price you would pay to go receive a vaccination at a doctors office or a public health clinic, Care Dynamix brings the service right to you in your community or office.

Check out our website for the 2007 Flu Clinic Registration kit.  Registration can be completed through October and clinics will be scheduled beginning in late October and continuing through December.

Like the swallows returning to San Juan Capistrano, CAI's Annual Law Seminar is returning to Las Vegas in 2008. 

Organized by the College of Community Association Lawyers, the Law Seminar is specifically designed for community association law practitioners, senior industry executives, and anyone else interested in understanding the unique aspects of community association law.

The 2008 event will be held January 25-26, 2008 at:

The Venetian Las Vegas     3355 Las Vegas Blvd, South    Las Vegas, NV  89109

702-414-1000

CAI has contracted for a limited number of rooms at a discounted rate of $269/night.  The reservation deadline for these discounted rooms is December 20, 2007 or until the available block is exhausted.  To reserve your room be sure to identify yourself as a CAI Law Seminar attendee when you call the hotel.

Additional information, including the seminar registration form, format, and schedule, will be posted on CAI's Law Seminar web page in the coming days.

 

I occasionally ask individuals for their permission to use items they have authored in my blog.  Judi Phares' Back Porch column in the current issue of Common Ground really struck a chord with me with its themes of ethics, service, and education (and dogs, since my son recently won the long-standing debate regarding whether or not he needed a dog).  Thanks to Judi for a very thoughtful piece and for permission to use it here.

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What's Good For Max and Muffin....

Judi Phares, CMCA, PCAM

My goal is to be the kind of person my dogs think I am. Tails wagging furiously at supper time, Max and Muffin remind me of this truth. Dogs—more accurately, family members with fur—have an innate sense of loyalty and trust. I’m inspired by their intrinsic belief that people have their best interests at heart and that we will always do the right thing for them.

My dogs have taught me a great deal, so it’s not surprising that I’ve found a correlation between dogs and business. Being the owner of a community association management company, I often make decisions that must measure up to a goal I’ve set for myself: being the kind of person my dogs think I am. The business corollary is that it’s the kind of character worthy of trust and respect.

Doing the right thing in business is at the heart of professional ethics standards. I’m proud that our young industry has established the Professional Manager Code of Ethics to which AMS, LSM and PCAM designees must adhere. It’s a covenant with our clients. As we educate our association boards, we also model for them the reality that governance always drives home: You can’t enforce standards until you have codified and communicated them.

Our professional credentials identify us as qualified service professionals with specialized skills and know­ledge in our field. We don’t earn trust based on our credentials; rather, we earn trust as a result of our actions. Designations demonstrate our degree of commitment and competence. Altruistic service proves we care.

Am I motivated by the welfare of my clients? Am I striving to serve the best interests of the community as a whole, not the special interests of one board member or developer? Let me be clear that altruism and profit are not mutually exclusive. On the contrary, people don’t mind paying qualified, caring professionals to provide them excellent service and treat them well.

By serving a community’s best interests, managers affect the lives and homes of thousands of people. They need to be able to trust us.

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Judi Phares is president of RTI/Community Management Associates, Inc., in Plano, Texas. Her firm is the winner of the 2006 American Business Ethics Award given by the Society of Financial Services Professionals.  She is also a past chair of the Board of Trustees of the National Board of Certification for Community Association Managers.

We have heard a lot of ideas over the past several months regarding how to address the growing number of home mortgage foreclosures across the country.  With the estimate of the number of homes at risk seemingly rising on a daily basis and a general government bail-out almost an impossibility given the federal budget deficit, I thought this idea from Steve Pearlstein of the Washington Post was an interesting market-driven approach to the problem.

http://www.washingtonpost.com/wp-dyn/content/article/2007/08/30/AR2007083001956.html?hpid=sec-business

CAI is currently conducting elections for leaders to join our three Membership Representation Groups (MRGs).  These individuals serve 2-year terms to represent our community association volunteer, professional community managers, and business partner constituencies.  In addition to providing policy guidance and leadership to the organization, the MRGs select individuals to serve on CAIs Board of Trustees.

The election is being conducted electronically and the web site is open to cast your ballots until 11:59 pm EDT on Monday August 27th.  I encourage every member to login to the web site and cast their vote for the individuals who they believe will best serve them and our organization in the coming years.

You can learn more about the candidates and access the voting system at our election page.

Who:  All employers

What: New Federal regulations on employee verification

Where: Nationwide

When: September 14, 2007

Why (you should care): Increased administrative burdens and potential fines and penalties

 

Estimates vary, but it is believed that there are anywhere from 7 to 12 million undocumented immigrants in the United States. In fact, over the past 15 years, the United States has seen an influx of immigrants (legal or otherwise) in numbers not seen since the turn of the 20^th Century.

 

Despite making immigration reform a centerpiece of his domestic agenda, President Bush was unable to push through reforms that would have allowed more qualified, legal workers into the country and would have taken steps to better enforce border security. The collapse of comprehensive immigration legislation has pushed the Administration to get tough on undocumented workers via regulatory means.

 

In August the Secretary of Homeland Security, Michael Chertoff, announced that the federal government is expected to bring a record number of enforcement proceedings against employers in the coming year. In addition, the Administration unveiled new regulations tightening employer requirements for verifying the legal status of employees.

 

On September 14, 2007, new employment verification provisions will take effect. The new regulations will require all employers to take affirmative steps to verify employees whose social security numbers do not match federal records. Under the new regulations, an employee will have 93 days to correct any mismatched information used for employment verification. If the employee is unable to correct the information on the government’s no-match letter, the employer must terminate the employment relationship or risk being in violation of federal immigration law and face substantial fines and penalties. The regulations and verification process are discussed in greater detail on CAI's Political Heads-Up page.

 

In addition to increasing the administrative burden on employers and the risk of fines and penalties, these stepped up verification requirements also hold the potential for widespread workforce disruptions as millions of undocumented workers get caught in the tightening regulatory net. For perspective, it could be like taking the population of Ohio out of the workforce. With an already tight labor market, many employers can expect further challenges in finding and keeping qualified employees.

With literally thousands of pages, CAI’s website is filled with content relevant to virtually every member, not to mention the millions of individual homeowners who live in community associations. With so much content, it’s no surprise that we experience nearly a million visits a year.  It is also no surprise that it is sometimes difficult to find the specific page you are looking for among the myriad of choices available.

As a result of this continued success, we have enhanced our homepage, providing easy-to-use "fly-out" menus that will help visitors navigate to the sections and content they need—with just a single click. 

The new menus are on the left side of the homepage at www.caionline.org. As you roll over any item with your mouse, you’ll see a list of key pages in that section. For instance, when your hold you mouse over Members Only, you’ll see Research Library, Advocacy Center Message Board, Discount Programs and Recruiter Club. All you have to do is click once and you’ll be transferred to that page.

We’ve also added In the Media, a feature that provides links to selected articles involving community associations, CAI and the industry at large. This page will be updated on a weekly basis.

We hope that these enhancements make CAIonline even more helpful to members and non-members alike.  As always, suggestions for future improvements are always appreciated.

I get asked frequently by media, boards, and even prospective home buyers: How do I know if my board is doing a good job?  Basically, what assurance do I have that my community is governed well? 

I typically encourage them to look for three general traits.

- Efficiency, or how well does the board safeguard and spend community's resources.  Do they treat their fellow owners money as their own?  Do they ensure that common areas and amenities are protected?  Do they exercise their fiduciary duty wisely?

- Effectiveness, or how competently are things done.  Are repairs made in a timely manner?  Does the condition and operation of the community fairly reflect the general expectations of the residents?  Is the association run in a business-like way?

and perhaps most importantly,

- Transparency, or how well does the board communicate what it is doing and why.  Do all members have access to the same information.  Are critical issues and decisions shared with the membership?  Is homeowner input solicited when appropriate?

The most effective leaders, whether you are talking about community association boards, corporate leaders, politicians, or sports coaches, are those who communicate well and often, engage their constituents in the ownership of the group, are responsive to constituent needs, and make reasonable and competent decisions when appropriate.

In that spirit, CAI has developed some basic governance guidelines for community associations.  We didn't attempt to create a detailed set of specific actions and behaviors for every situation, because of the many different laws that govern associations and the many different governance structures that they operate under.  What we did try to do was identify some of the most frequent areas of confusion and contention and define some expectations that were simple, straightforward, and reasonable.  We call them Community Association Governance Guidelines and they address such wide ranging issues as meetings, finances, debt collection and reserves.

You can find out more and download a free set of the guidelines on our web site.  We hope that this tool inspires communications within communities, encourages boards to set and meet expectations, and leads to better governance in communities of all sizes, shapes, and forms.

J. David Ramsey is a CAI past-president and practices law in NJ.  He recently drafted this summary (Adobe Reader required) of the NJ Supreme Courts ruling in the Twin Rivers case that I think deserves attention.  Most importantly, he speaks to the need for the Court to balance the free speech rights against the privacy and property rights that were in conflict in this case and makes the argument that the courts and not the legislatures are the appropriate venues for such balancing decisions.

Thanks for tuning back in to our long-running show Twin Rivers, Twin Rivers.  After a more than six-year run, we have reached our final episode with today’s ruling from the New Jersey Supreme Court.

 

Anyone with an interest in community associations is familiar with the Twin Rivers saga.  But in case you missed it, our story begins with a handful of residents in this NJ community of 10,000.  They claimed Twin Rivers was not a community association, but a government, and that a variety of community rules were infringing on their rights of free speech and assembly as guaranteed by the New Jersey Constitution.  They enlisted the help of the American Civil Liberties Union, along with Professor Frank Askin and his students at Rutgers University’s Constitutional Litigation Clinic, to have the courts, rather than the residents, determine the rules for their community. 

 

It has been an up and down story throughout.  First the Trial Court found for the defendants.  Then the Court of Appeals issued a partial reversal, finding for the plaintiffs on three issues.  But you can read more about the history of the case and the various court decisions in my previous blog post and on the CAI Twin Rivers page .

 

So let's cut right to the chase.  After a very long and very winding legal road, including an amicus brief filed by CAI on behalf of the Twin Rivers Homeowners Association, the New Jersey Supreme Court unanimously reversed the Court of Appeals, reinstated the Trial Court decision, and ruled today that:

 

• Residents of community associations in New Jersey not only have the right to express themselves, but also enjoy the freedom to set reasonable restrictions governing that expression within their communities
• Associations are not governments for constitutional or operational purposes
• The relationship between homeowners and their association is based on a contractual agreement that is fundamental to the nature of communities like Twin Rivers
• And as is always the case, effective governance is the art of weighing the rights and obligations of the individuals with the interests and responsibilities of the organization as a whole

The Court concluded, "... in balancing plaintiffs' expressional rights against the Association’s private property interest, the Association’s policies do not violate the free speech and right of assembly clauses of the New Jersey Constitution.”  The full text of the Supreme Court decision can be read here. 

 

This is an important victory for homeowners and associations across the country.  It validates and supports almost four decades of legislative history and judicial precedent regarding the status of community associations, it further defines and protects the rights of all homeowners, and it supports the traditional concept that government (whether it be the executive, legislative or judicial branches) should not interfere with private contracts and associations freely entered into.

 

So as the curtain finally comes down on our story, CAI thanks all those involved for the time and energy brought to this important precedent setting case.  We hope that association boards, as well as individual homeowners, will look to the NJ Court’s opinion for guidance and inspiration in developing, implementing, and administering reasonable rules in their communities.

 

 

As a matter of law, a federal agency only has the specific authority granted to it by Congress. That’s why CAI looked skeptically at the latest attempt by the Federal Communications Commission (FCC) to claim authority to regulate an association’s ability to enter into exclusive agreements with video service providers.

 

You see, the FCC looked at this issue several times in the past, but quickly determined that they didn’t have the authority to regulate services in this area.  But this time they suddenly ‘discovered’ an existing statute that they were not previously aware of that grants them this power. After this amazing revelation, the FCC issued a call for comments on what effected parties think about this claim. CAI made sure the voice of community associations was heard.

 

In short it’s about market power and access. Associations and developers use exclusive contracts to obtain an expanded set of services for their residents.  Such agreements are a strong incentive for service providers to invest the thousands and even millions of dollars required to extend their networks to serve new communities on the growing edge of an urban area. Limiting an association’s right to enter into such contracts diminishes an association’s ability to negotiate with providers to obtain bulk rates, quality service commitments, facility upgrades and new services for their members. 

 

But even if you disagree, the FCC, like all federal agencies is required to obtain a legislative mandate before it can extend its regulatory authority. The ‘discovery’ of a provision in existing law that the Commission previously overlooked shortchanges the democratic process. If there exists a growing problem with such contracts (a subject certainly open to debate), then the FCC is required to petition Congress to expand its powers accordingly. That way the debate will be open and transparent, rather than taking place in the less visible and more opaque world of regulation drafting.

 

Traditionally an agency or commission can take anywhere from several months to several years to review comments and follow up with either a determination, a call for additional comments or a proposed rule. We will be watching.

 

A copy of CAI’s comments can be found here. It’s just another example of our work to protect associations from over-regulation.

 

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Well, it has been a while since I posted:  Blame a West Coast trip for the CEO-MC Retreat, some early summer vacation days with my family, and an unplanned altercation with my appendix.  Today's post is about leadership, or more properly an opportunity for our members to participate in the leadership of our organization.

CAI's governance consists of a Board of Trustees supported by three Membership Representation Groups (MRGs), who are elected to represent our three core constituencies, community volunteer leaders, professional community managers, and business partners.  In addition to representing their particular groups, MRGs provide policy input to the Board, assist staff in reviewing and designing programming, and help set the organizations direction through our annual planning and review process.  Most importantly, each MRG selects from among its membership individuals to serve on the Board of Trustees.

MRGs typically meet in person twice a year, at a planning retreat in January/February and at CAI's National Conference in April/May.  In addition, each MRG meets via conference call throughout the year.

MRGs are composed of CAI members elected by their peers to serve for a two-year term.  The key requirements for participation on the MRG are a membership in good standing in the organization and a willingness to serve.  You can learn more about each MRG and how to nominate yourself for an open MRG post by submitting an on-line application no later than July 19th.  An electronic election open to all members will be held in August to select new MRG members for service beginning January 1, 2008.  Watch your email for an alert when the election opens.

I invite you to consider nominating yourself for one of these open positions.  CAI's continued growth and success is dependent on the leadership, vision, and participation of our members.

Last week, Nevada Community Associations had a noteworthy victory. After a groundswell of homeowner complaints, industry concerns and some furious grassroots lobbying, Nevada Governor Jim Gibbons took a bold move and vetoed a sweeping bill that would have greatly expanded the state’s regulation of community associations.

 

The legislation, which passed both chambers nearly unanimously, would have:

 

• Allowed unit owners to alter the facade of their unit, even if it was a common element of the association.
• Regulated association newsletters, requiring them to print opposing views without limitation or ability to edit out inappropriate content.  
• Prohibited transfer fees assessed when a unit or home is sold. 
• Banned association from enforcing speed limits and other moving violations on association roads, endangering public safety.  
• Limited a board’s ability to protect and build association reserve accounts by only allowing reserve assessments in a limited set of circumstances.

 

In the end, the effective efforts of all parts of the CAI team were able to convince the governor to veto the bill. The Nevada Chapter, the Nevada LAC and CAI’s national staff stepped up with alerts and talking points on the bill’s substantial negatives. Association volunteer leaders also worked diligently to get the word out to homeowners. It made a difference. On Friday, June 15, the governor vetoed the bill. 

 

Of course the challenge is just beginning. The bill sponsors have vowed to overturn the governor’s veto when they reconvene in 2009. CAI’s Nevada members will be working hard to build bridges between sessions. In the meantime, I congratulate them on the success of their efforts.

 

 

 

One of the frequent criticisms we face is that CAI does not support homeowners and is beholden to and run by the some small cabal of attorneys, community managers, demonic board members, or (insert your favorite group to hate here) for their personal benefit. 

Of course this couldn't be further from the truth, but as the Soviets proved for over 70 years, the "big lie" actually works better than the small and inconsequential lie.  They demonstrated that if you say something often enough and powerfully enough, and don't allow any deviation from the message or alternative viewpoints, eventually people will come to accept it as truth or "pravda".  That is the tactic we face with some of the folks who would abolish every association tomorrow and destroy trillions of dollars of equity in the process just because they don't like the idea of community associations and/or how their particular association is run.

The truth (which is much more prosaic and boring) is that CAI's governance, public policies, and programs are set by a broad-based group of volunteers including homeowners, managers, and a wide variety of business partners.  Each of these groups contributes to and participates in the leadership of CAI.  In fact, one of our most frequent challenges is finding consensus among this very diverse group of members, particularly on critical and controversial public policies.  But when we do, it can be a very powerful statement, because it brings together many voices in a strong message. 

A quick example: Recently the Colorado Legislative Action Committee was successful in supporting the "Homeowner Protection Act of 2007".  This important bill not only protects and maintains the rights of every association in Colorado, but it also protects every single individual homeowner in the state as regards construction defects in their home and their ability to have problems corrected in a timely manner.  So how is it that we don't care about homeowners?  And this is just one example in one state.

The reality is that CAI's legislative activities, educational programs, and books and other reference materials support strong, effectively managed, and fiscally efficient associations.  By making associations better and stronger we help make communities better places to live, ensure boards are responsive to all their residents, and help preserve community value and values. 

Our annual CEO-MC Retreat is coming up in just over 2 weeks.  If you haven't registered yet you probably should hurry as there are only 30 slots remaining. 

Not sure what to make of this story in the context of the overall housing market, but new home sales were up over 16% in April, versus expectations of 0.2%.  It looks like a sharp decline in prices has jumpstarted the market at least for the short term.  Also, it is important to remember that new homes are only about 15% of overall real estate activity.

New homes sales rise 16.2 percent in April

Reuters
Thursday, May 24, 2007; 10:30 AM

WASHINGTON (Reuters) - Sales of new homes rose 16.2 percent in April, the sharpest climb in fourteen years, while prices fell a record 11 percent, according to a government report on Thursday that showed home builders taking extraordinary steps to move houses.

New single-family home sales rose to an annual rate of 981,000 units from a revised rate of 844,000 in March, the Commerce Department said.

Analysts polled by Reuters were expecting April sales to rise to an 860,000 unit pace from a previously reported rate of 858,000 units in March.

In April, the median sales price of a new home fell $28,500 to $229,100 from $257,600 in March.

There were 538,000 new homes for sale in April, a fall from the 546,000 reported in March. It would take 6.5 months to clear that inventory at the current sales pace, less than the 8.1 months recorded in March.

Thursday's data comes a day ahead of another key report that measures the pace of existing home sales -- which represent 85 percent of the housing market. Analysts polled by Reuters are expecting April existing home sales to rise to 6.14 million unit pace from the 6.12 million in March when that data is released Friday.

Sales were mostly up across the regions, with the South recording the largest gain at 27.8 percent. The Midwest saw a decline of 4.0 percent while the Northeast was up 3.8 percent and the West was up 8.5 percent.