Collecting Assessments — The Wall Street Journal

The Wall Street Journal is noticing the quandary faced by many associations who find themselves faced with owners who won’t or can’t pay their bills, and lenders who won’t do anything about it.  Today’s article reports on a new Florida law which makes it easier for homeowner associations to collect rent from tenants in delinquent units, and intercept that rent that would otherwise go to the defaulting owner.  Utah has a similar provision, which was repealed and reenacted in the 2011 Utah legislature as part of Senate Bill 167; that same bill also makes provisions which may make it more feasible for associations to “non-judicially foreclose” against unit owners who are in default.

Assessment collections are, of course, of critical importance to Utah condominiums and HOA’s, so we’ll be discussing these new changes — and whether and how they can help Utah associations, at our seminar at Daybreak this Saturday, at the City Creek Center on June 7, and in Park City on June 11.  And, based upon requests that we have received, we’ll likely be presenting the seminar on other dates in June as well.

So, register here for one of the sessions.  And if you can’t make one of them, subscribe to this blog, so that you’ll be certain to hear of, and perhaps even help to choose the dates and times for, other sessions.

Risk Transfer in Associations

I’m in Lebanon, N.H. tonight, preparing to teach the CAI M205 Course, Risk Management.  A main focus of the course is that communities (and their boards and managers) should manage risks through various approaches, including risk transfer to others.  One of the points that should come out is summarized as follows:

Some associations set a high deductible and transfer responsibility to the owner for insuring losses to his/her unit that fall below the association’s deductible.

And that, of course, is what the 2011 revisions to the Utah Condominium Act and the Utah Community Association Act are designed to facilitate. Your association should take advantage of the opportunities which will be allowed by this new legislation.
To learn more about this method of risk management, sign up for one of our upcoming courses.

Links to 2011 Legislation, Service Providers

Here, for the attendees of the seminar who requested access to the bills discussed at today’s seminar, are links to the bills:

Senate Bill 167 — the major bill, referenced as “UCIOA lite,” which significantly amends association governance, collections and insurance.

House Bill 104 — requiring all Utah community associations to register as a prerequisite to lien-based assessment collections.

House Bill 175 — dealing with record keeping and disclosure requirements

Senate Bill 89 — modifies associations’ obligations respecting reserve accounts

Senate Bill 117 — modifies the voting requirements for community associations that want to amend their declarations.

And here, as requested, is a link to the Community Association Institute’s service provider directory.  This list will lead you to members of the Community Associations Institute, which indicates commitment to that professional trade association; you may also wish to find providers that have received professional designations from CAI.  This database allows you to locate community managers who have earned their Certified Manager of Community Associations (CMCA) certification through NBC-CAM; Association Management Specialist (AMS), Large-Scale Manager (LSM), and Professional Community Association Manager (PCAM), through CAI. Also listed are professionals who have earned the Reserve Specialist (RS) and Community Insurance and Risk Management Specialist (CIRMS) designations, members of the College of Community Association Lawyers (CCAL), and companies that have earned the Accredited Association Management Company (AAMC) designation.

Our Upcoming Seminar On the New Laws

I recently sent a flyer out to community associations across the state, announcing an upcoming seminar on the many changes to Utah’s Community Association Laws. Unfortunately, many clients and followers were not on that list. Since you should clearly be aware, and are encouraged to attend, I quote from the flyer, with my apologies for the oversight:

For several years, the Legislative Action Committee of the Utah Chapter of the Community Associations Institute has been advocating for a major recodification of Utah’s law respecting condominiums and HOAs.  When it became apparent that such a recodification was not possible, the legislature focused on several issues, in a number of different bills.  These bills will make sweeping changes in how all Utah community associations will operate.

Major changes include new provisions respecting the collection of assessments, including changes which may allow for non-judicial lien foreclosures; clarification and expansion of associations’ insurance obligations; increased obligations for reserve accounts and related disclosures, and notice and record disclosures.

And perhaps most significantly, a requirement that all associations – regardless of size – register and remain registered with the Utah Department of Commerce as a prerequisite to lien-based assessment collections.

This $25 course will be taught from 9 a.m. to noon, on three different dates, at three different locations: May 14 at the Utahcondolaw Training Center at 466 East 500 South, SLC, 84111; May 28 at the Daybreak Community Center, 4544 West Harvest Moon Drive South Jordan, 84095 and June 11 in Park City at 3247 Santa Fe Road.

If you want to attend, register online here, or give us a call at 801.519.2555.  We’d love to see you.

Condominium Changes from the 2011 Legislature

Pat Bagley Cartoon from the Salt Lake Tribune

Setting aside for a moment whether or not I agree with Pat Bagley’s cartoon, no one will deny that the Utah State Legislature was busy this year.

In between such important matters as establishing the state gun, assuring that our influenceable youth know that we’re a republic (and NOT a democracy), and protecting you from knowing what you might have said to them (in a now-protected text message), they passed several bills that will change the way that community associations (condominiums and homeowner associations) will insure themselves and their members, decide upon the amount of reserves, and collect past due assessments.

Over the next several weeks, I’ll be trying to figure out what all of this means.  When and if I do, I will share it with you.

Oh, and let’s not forget — now you need to register your association with the government.  And you have less than 4 months to do it.  (Sounds like Socialism to me…)

Oh, and one other thing; your association isn’t a democracy, either.

New Legislation Updates

That widget to the right is a listing of the legislation pending before the Utah Legislature that looks, with a week left in the session, like it might pass.  By clicking on the links, you will get taken to the Utah State Legislature web page, where you can get a copy of the bill, in its latest version.  There’s also additional information on that page as to what the status of the legislation is, and when (and if) additional public hearings will be held.

When it’s all done, we’ll let you know what it all means, with some Utahcondolaw seminars.

UCIOA Lite?

I’m at the Utah Chapter of Community Association Institute’s Annual Legislative Review, and Bruce Jenkins is explaining the plans for the introduction of a streamlined version of the Uniform Community Interest Ownership Act in the 2011 legislature.

As described in the materials distributed, the proposed legislation:

(1) Proposes a new and extensively vetted insurance scheme applicable in both condominium and all other community associations that: (1) eliminates the need to reference declarations for coverage determinations, (2) ensures that the common area structures and the entire unit (including additions and upgrades) are covered ty the association’s insurance, (3) allows an association the flexibility to choose whether to notify carriers of claims that they believe are under the deductible, (4) eliminates ambiguity between the association’s policy an an owner’s policy, (5) provides for a mechanism for an association to allocate a deductible among owners to insure for that allocation, and (6) eliminates the ill-advised practice of establishing associations that rely upon owners obtaining insurance to cover losses in attached housing (housing in which multiple units are attached).

(2) Provides a basic infrastructure of minimal regulation so that community associations other than condominiums have the basic necessary legal framework to assist in sustaining long term functionality.

(3) Updates and clarifies those statutory provisions related to the collection of assessments in condominiums and community associations including adding important clarification to the existing practice of nonjudicial foreclosures and providing specifically for the right of any owner to opt into the judicial process and require the oversight of a court in any assessment foreclosure proceeding.