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What to consider?

While things may seem a whirlwind and a bit of a blur, now will be the time to select a quality management company. Experience and expertise will advise you and guide the association through close out.

 

First things first – if you haven’t reviewed the governing documents ask the Manager to give you a brief overview of the governing documents. Go over a copy of the development plans with the property manager and discuss the common areas, streets, dawn to dusk lights and any unusual details of the development, like a detention or retention basin, adjoining subdivision, etc…

 

If any original trustees/directors have changed – make sure the proper legal course in resignations and appointments has been followed and be sure to communicate that with the manager. Copies of any of this documentation and any amendments must be provided and on file with the association records. 

 

If multiple builders or another builder is involved, or if Lots have been sold or exchanged in some way shape or form, it is absolute that all parties involved are advised on governing documents. It will also be necessary to alert them and their homeowners to any assessment responsibility.

 

Communicate any known or pre-conceived thoughts on the budget and or assessments. The budget will ultimately provide for the type of assessment required and will also consider the working capital fees collected in the case of shortfall, or building healthy reserves. A well informed manager will be able to give constructive feedback on these, particularly when contrasting “maintenance fee” and “maintenance free.”

 

Decide on specs, bids or proposals for services. If you have one company you are set on engaging for lawn, snow removal, or an irrigation company who is completing installation – be sure to provide contact information to the manager. If you are not seeking bids, you should advise as to why and the manager should memo the association file and prepare a statement to that effect with your signature.

 

Discuss Insurance requirements. Do the governing documents provide for (builder) payment of assessments – this becomes a consideration when a four pack or even attached homes are built – one is sold but the other(s) require insurance coverage. Governing documents are all written a bit differently so you may also wish to address this with your attorney.

 

Discuss valuations of any pool, clubhouse, monuments, gates, gazebos, playgrounds, sports courts, etc., as well as any lakes, detention or retention basins. Discuss any wooded areas, meadows or streams – who is responsible -how they will be handled. The manager will need to convey these types of costs to the Insurance Company for association coverage.  

 

Builder insurance differs greatly from association insurance coverage – so this too is another area where a well informed manager can guide you. Some insurance companies do not provide coverage on new developments due to liability considerations – and or some insurance companies do not include developer/builder(s) under Directors and Officers Insurance coverage.    

 

Pass any documents, irrigation or landscape specs, plans, paint color, siding or roof information as well as any warranty information that may be in place. It would also be extremely helpful and beneficial to provide a copy of the landscape plan approved with Planning and Zoning.

 

Determine how architectural requests/approvals will be coordinated and handled. Most management companies have a set process or procedure already in place. You will need to advise who the sign off person is and provide contact information on all trustees or directors as the (builder) board.

 

Not all management companies follow the proper role of authority in this measure – so this is important. As developer/builders, you are the decision makers and you as trustees/directors hold absolute authority in the association prior to any elections. If management companies are signing off on architectural approvals or contracts – your potential liability may be compromised.

 

If you have chosen to release this authority to them, you may wish to follow up with your legal counsel on creating a release of authority and designation of approval process or form.  

 

As developer/builder you may at some point in some association find it necessary to release and relinquish your responsibility. This is yet another area where your attorney can offer professional legal advice.

 

Another important point to note is your attorney as developer/builder should not be or serve as the association attorney. This represents a true conflict in the role of builder/trustee/director. The association should be represented separately from any developer or builder business aspects.            

 

Discuss any recreation or amenities that will be included. Any staffing of a clubhouse, pool, etc., if that is applicable. Any specs, designs, or plans should also be provided to the manager on behalf of the association for sound historical knowledge.

 

Ask the manager to review election status with you in accordance with the governing documents and discuss when the elections will take place.

 

Consider transition and turnover.

 

Communicate with your sales staff on any of the above topics so that they are well informed and can provide clear and concise answers to homeowners.

 

By this point, things should be coming into a much better focus. And if you’ve still hesitated on selecting a management company – contact IPM now!

 

contact@innovativepm.biz

 

Copyright Innovative Property Management, LLC 2007

 
 
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Innovative Property Management, LLC,
223 Salt Lick Rd., #339
St. Peters, Missouri 63376
Phone: 314-402-9667 Fax: 636-244-7980

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