By Ken Kmet, Condo Voice, Clearwater, FL

As buildings age, more attention has to be paid to repairs and replacements. Plumbing problems are more expensive than other repairs because they are hidden. Locating the source of a leak may not be easy, even though wet areas or standing water may be evident. Finding the actual problem source may require the assistance of a professional leak-finding service, as well as invasive tactics, including drywall or concrete removal. Plumbing leaks of every kind usually come with collateral damage, not only to the property owner of the home where the leak originates, but also to the neighbors.

When you experience one leak in a building that is over 20 years old, chances are you will start to see them more frequently. If you live in an older community association, including an HOA, condominium association, townhome community, or other multi-family community, a call to action is needed. You may try to make do, repair the one leak here and there. But living through these repairs is misery to all involved, and expensive. Most of the time the expenses are shared between unit owner and the association, and just how the bill gets shared is not always clear. Just because “you’ve always done it this way,” that doesn’t mean someone took the time to research it properly, and the laws have changed recently in every state regarding who is responsible to do the repair and pay for the repair for each part of the damaged property.

You can look to your condominium documents, HOA bylaws, deed restrictions, and other forms of legal documentation for your community for answers. It may say plainly in these documents that the unit owner is responsible to repair the pipe, but the association must pay for the drywall repairs, regardless of fault, cause, or location. There can be any number of variations on this theme. However, you must also look to your state laws, because they have probably changed since your documents were recorded, and they may take precedence over your documents, depending on many factors. You can always call your attorney and pay for a letter to define the current responsibilities.

However, there is one rule of thumb that I always go by, and that is to look to your property insurance for answers first and last. In other words, follow the money, or better said, those with the gold make the rules. The insurance industry doesn’t play around, and they lobby legislatures all over the country to make laws that favor them, and perhaps not necessarily for the consumer or property manager. For example, recently in Florida, regarding a “pipe burst” event, the law was changed to make the drywall, regardless of location, the responsibility of the community association, even though in most condominium documents, the interior walls, as well as the plumbing pipe (providing it services only that unit), are defined as being “a part of the unit,” and therefore the responsibility of the unit owner. In the past, the association was only responsible for common walls. But now, we look to the insurance industry to explain to us what is the responsibility of the association versus the unit owner.

I use a visual when explaining the principal of “no-gap” coverage. Take your right and left hands, fingers stretched out, and bring them together so that each finger fits into the other. The right hand represents the community association insurance policy, and the left hand represents the unit owner’s insurance policy. The state laws are written so they fit together with no gaps. Theoretically, if both the association and the unit owner call their agents and each file a claim, the adjusters for both companies will determine what is covered under which policy, with no gaps in coverage. The only thing out of pocket for both parties should be the deductibles and/or co-pays.

Let’s take this one step further. If a building experiences leaks, and they become more frequent, then the issue of “neglect” or “negligence” starts to pop up in conversations. The implication is, if you “know” you have pipes that are getting old and need replacement, and claims are adding up on the loss history charts, the insurance company is going to require you, the property owner, or community association, to make significant if not total repairs and/or replacements to stop the leaks. They will not simply keep paying for property damages year after year. They will either increase your premiums tremendously or drop you. If you get dropped, and/or have a large claims history, it may come to the point where you cannot get insurance, you will pay through the nose for it, or you may have to use an insurance company that is not “admitted” (in your state) or even rated well.

By law, community associations have to make “their best effort” to get insurance. Best effort here includes repairing the property as needed to get the insurance at a reasonable rate. Most building owners, boards of directors, and HOA, condominium, and community associations put off the huge expense of replacing plumbing for obvious reasons. However, if you count the cost of premiums that are 10 times more than you are paying now for many years, it makes sense to just spend the money before that time comes on the one-time replacement, eliminate the issue and risk from the picture, and keep low premiums. It makes economic sense to, for example, pay $100,000 to replace the plumbing pipes in a building, than to pay five times your current insurance premium over the next five years, only to have to pay the $100,000 anyway, five years from now.

Replacing plumbing pipes is invasive, it is miserable, and it may seem expensive until you do the math when you bring the insurance factor into the equation. If you have a building that is aging, and especially if you are starting to have leaks here and there, start a reserve now for replacing your plumbing. Being proactive and funding a reserve, as well as conducting a study to establish what the scope of work and eventual cost will be, not only makes good financial sense to your community, but it also shows your insurance company that you are taking steps to reduce the risk, which is the thing they rate their premiums on and whether they will offer you a renewal policy.

This blog submission is only for purposes of disseminating information. It does not constitute legal advice. No attorney-client relationship is formed by virtue of reading this blog entry or submitting a comment thereto. If you need legal advice, please hire a licensed attorney in your state.

By Rose McMillan, Terminix, Atlanta, GA

If you are a property manager, you may think that the idea of calling an exterminator is a nightmare. While dealing with pests of any sort is no picnic, it is far better than simply letting the infestation get worse and worse, which is exactly what is going to happen if you do nothing. If you are performing a property management role for a multifamily property, you need to have an integrated pest management strategy available at your fingertips should you detect a problem.

For Property Managers

Keep an open door policy for reporting pests. Be very clear that there will be no blame or penalties placed for reporting pests of any sort. One great way to keep things blame-free is to allow residents to sign up for weekly or monthly pest control treatments.

Be proactive with your pest control and make sure that you seal up any cracks or gaps in the walls and the baseboards. This keeps pests from entering the building on their own. Seal up the areas where pipe lines enter and leave the unit as well.

Call an exterminator sooner rather than later. For example, if roaches and bedbugs are seen during the day, this usually means that an infestation has gotten quite bad and needs immediate attention. An exterminator can tell you what you need to know about your situation.

Educate your residents by passing out notices with pictures of different pests and what draws them in. For example, people who live in urban areas should be warned about bedbugs and cautioned to avoid picking up furniture on the side of the road.

Put together a sound strategy for integrated pest management by working with a good company that specializes in pest removal. In many cases, a good company of this sort can ensure that you have all your bases covered.

For Residents

All residents should keep their homes tidy to better facilitate good pest management. For example, they should wash their dishes every day, and they should reduce clutter in their home to provide less of a safe haven for pests.

Residents should also throw out old food. This is because insects are drawn to food that is left out and undisturbed, even if the food has not gone bad. This includes old frying oil, which can be put in the freezer and thrown out when it is frozen.

Use bleach if possible to clean up the wet areas in the home. There are many pests that are drawn to the damper areas of the home, and bleach makes it impossible for them to live there. Bleach also sanitizes the areas, making it more pleasant in general.

Do a thorough clean of the home or the unit once a month. This includes sweeping, mopping, and scrubbing. Not only will this discourage pests from coming in your home, you will find that it can also help you detect pests that you did not know were there.

If you are running a large multifamily property, you must be proactive when it comes to pest control. This is not a matter that you can put off, so act before there is a problem. Most pest problems can be nipped in the bud early on if you have the right information at hand.

By Salvatore Friscia, San Diego Premier Property Management, San Diego, CA

I have to admit that recently I started watching a new cable show called “World’s Worst Tenants” on Spike TV. The premise for the show if you haven’t seen it depicts three individuals who are hired by various property management companies to handle unusually odd tenant related issues. The issues range from your basic nonpayment of rent to more bizarre and serious issues that can leave any self-respecting property manager shaking their head in disbelief. The show makes for great TV and entertainment, but on a serious note it can offer some insight to the importance of exterior and interior property inspections.

I noticed that usually the trio of characters hired to resolve the tenant related issues would indicate that the out of state owner or property manager had lost communication with the tenant and in most cases both were unaware of the property condition. This dangerous combination usually lead to disastrous situations leaving the rental property completely destroyed, and in some cases declared uninhabitable by city, state, and federal laws. I can’t help but think that regularly scheduled inspections would act as a deterrent in the outcome of some of these situations.Here at SDP Management our company policy is to conduct two exterior and one interior inspection annually. At the lease signing we advise the tenants of this policy and make it known that the property owner and the management company have a vested interest in making sure that the condition of the property is maintained. The exterior inspections are done randomly and documented via photo log. The interior inspections which are preceded by 24 hour written notice are detailed in a report. If concerns or violations are found during the course of either inspection, a notice of cure or solution to remedy the problem will be issued to the tenant before the situation gets out of control or causes damage to our client’s property.

Inspections are not intended to be viewed as “Big Brother” looming but more like a friendly reminder that the property management company will enforce the tenants contractual lease agreement to maintain the property in a certain condition. In some instances we hold raffle drawings and issue gift cards as a “Thank You” to unsuspecting tenants for maintaining curb appeal and general upkeep of their rental property. Keeping both parties happy (owners & tenants) may not always be easy but when you conduct regular exterior and interior inspections you may just avoid being on the next episode of “The World’s Worst Tenants.”

In order to keep our finger on the pulse of all things property management (see what we did there?), we rely on the experience and expertise of you, our friends in the real estate world, to help us put together an accurate picture of what’s happening in property management. What trends in the rental market have you seen as of late? How does the market differ across geographic regions?

To that end, we’ve put together a very quick, very painless survey we’d like you to take. All of the questions have to do with residential rental properties, so if you know a thing or two, please dive right in. We’ll add your data to the other responses, slice it and dice it, and post our findings for your reading pleasure.

Thanks in advance!

By Ken Kmet, Condo Voice, Clearwater, FL

Trending now within city and state governments is the notion that operational costs and budgets for 2013 will call for either higher taxes or fewer services. The sluggish economy, along with property values remaining still or down, is not helping avoid tax increases. Tax increases are not popular or politically welcomed, which means local governments nix services as the first option (even though raising taxes may be inevitable). So now you’re probably asking, “What does this have to do with community associations?”

If governments have to cut services, the first to go are usually the non-essential services with large budgets, i.e., the parks and recreation department. In addition to the traditional parks, city and county swimming pools may be closed, as well as ballparks, gymnasiums, tennis courts, and playgrounds. The total cost to operate these services and facilities is not just the cost of paying employees to police, repair, and maintain them. The costs for lighting and security are significant, as is the cost of liability insurance. The trickle-down effect to HOAs, condominiums, townhomes, neighborhoods, and deed-restricted communities will be that their common areas will become, in effect, private parks and recreational areas. Thus the resident, and resident’s family and friends, will use these facilities more. This will increase community associations’ operating budgets for repairs and maintenance, as well as increase the rate of aging, which will in turn force an increase in reserve budgets for their replacement costs.

The covenants of most community associations allow for reservation of these facilities by the members for private parties and event use. Some communities charge a usage fee, but others don’t. For the ones that don’t, this may mean they will have to increase their budgets for their common areas and facilities, and consider whether to charge their residents fees to cover these costs that spike only because of these events. Communities will have to answer the question, “Is it fair to charge the entire community for a cost that is only associated with one member or a couple of members?”

There will also be an increased demand from the general public, as well as family and friends of members, to reserve or rent these facilities for their own private events. Each community association will have to weigh the income that can be generated from these rentals versus the wear and tear. They should also consider that their own members may get blocked out of using the facilities as often and as freely as they are used to. It may be wise to review your existing rules and regulations regarding the use and fees associated with using your common facilities.

Many people use public parks and recreational facilities for weddings and other family-related events. For example, if an owner has a family member or friend that is planning a wedding, and your community has a very nice clubhouse, swimming pool, and deck area, that owner/member may get pressured to request the use of your community’s facilities for that wedding. Perhaps your community does not charge now. Perhaps you don’t have a limit on the number of people that can attend an event that is privately reserved. You may not have a rule that allows or restricts catering events on common areas. Closing public parks and recreational areas and facilities will bring pressure to use private community common areas and facilities. This pressure and increase in requests for use by members may be cause enough to review your community’s reservation request procedures, rules of use, and fees.

Here is a short list of questions that should have good answers when it comes to the use of your community’s common areas and facilities.

1. Do you have enough guest and non-reserved parking?
2. Will the noise disturb the residents?
3. Are their any restrictions on how long the facility can be used?
4. Is the reason for reserving the facility even a part of the process of reserving it?
5. Do you charge a deposit, in case there are damages?
6. Is there an option to pay the association’s staff to clean up after the event?
7. Are there any types of activities or events for which the facility cannot be used?
8. And, of course, there is always whether or not you allow consumption of alcoholic beverages on the premises during these events. Check with your insurance agent when considering the rules of use. Are you protected if someone gets drunk and drives away from your facility under the influence, and they hurt themselves or someone else?

The point of this article is to get you thinking about your common areas. When was the last time you reviewed your request procedure, rules of use, and fees you charge? The odds are you may be receiving more requests for unusual events, along with more noise, and more people than you have ever had to deal with before.

The bottom line is, as access to public facilities becomes more restricted or eliminated, the pressure on using private facilities, such as your community’s clubhouse, pool, or common areas, will increase. Give it some thought. Review your current guidelines for use. Take preventative actions to make sure you upgrade your related rules and regulations as necessary, and anticipate this increase in the volume and types of use. This economy has caused changes in all our lives and in our communities that we did not expect. But we do have to stay ahead of the curve to protect the assets of our communities for our members. Be proactive instead of reactive to prevent a problem, and your community will be better for it!

By Linda Day Harrison, theBrokerList, Chicago, IL

The other day a property manager asked me how one can make money for their company and building, using Twitter, Facebook, LinkedIn or any other online network. It was a great question. I believe so many property managers, leasing agents and real estate professionals are confused about how these tools can be used.

Networking sites are just that: tools. For example, just because you use Twitter, you will not make money. Twitter is a vehicle to carry a message with the potential for your message to be read by many more people without paper, postage or labor to stuff an envelope. So if you want to get the word out about a property you are leasing for instance, the goal is to touch as many people with your message as possible.

How do you do that? Well if you are a leasing agent there are companies with many employees in a given market that you want to do outreach to. It is very difficult and time consuming to create email lists of those contacts and maintain current emails. Those businesses have employees who want to live as close to work as possible. By reaching those businesses, you have a very good chance that the employees at the company also follow their own company on Twitter, Facebook or LinkedIN. By sharing your information through their stream of influence, you are touching a wider audience. Yes, you have touched the company, but they touch many more people as well. Also, you can build up a great list, which is all part of the public domain and much easier to track and maintain than say a single person’s email address.

If you can imagine the postcard, brochure or three fold flyer we all used to market our vacant apartments or spaces in the past, it was a stagnant piece of paper that might be read and maybe shared, but highly unlikely. Also, you needed to maintain actual email addresses as well for each contact. All of that is outdated almost as soon as you collect it. People move around, but company Twitter, LinkedIN and Facebook pages do not!

Today, that postcard takes the form of a “post” hence the term is so closely related to the term postcard! So now you can post to that source or stream and that post does not go away. It is very powerful and lives online forever. So if you send a “post” today on any virtual business network, like Twitter or a business Facebook page or a LinkedIn status or your network du jour, your “post” does not get thrown in the garbage can. It is still alive, searchable and quite possibly being shared.

So the moral of the story is that our fundamentals are the same, but our tools are different. We are greener, using less manual tasks, such as folding, stuffing, labeling, merging, stamping and doing more outreach and online networking. As well as more researching of who to follow and who to reach. There is no difference in the fundamentals that you need to create a powerful, target market list, it is just that when you send the “post” you are pushing a tweet button or a share link, in lieu of the manual labor we are most accustomed to. The plus of all of this is that once you get your outreach system in place, it actually begins to expand as opposed to a paper mailing list or labels which actually becomes stale and outdated. The outreach and contacts you build via your Twitter or Facebook or LinkedIN outreach, if done thoughtfully, can become an extremely valuable and powerful tool for filling vacant apartments or finding new employees, or giving your customers property updates. It truly is about quality and connecting to those people who are your target market and are likely to share your news and help to expand your reach!

By Linda Day Harrison, theBrokerList, Chicago, IL

As a property manager, you hire landscapers or onsite staff to care for your grounds because proper greenery can really increase the property’s value. But how much do you know about plants and how much time do you spend learning how to incorporate plants into your property? Here is a list of things every property manager needs to know about plants, along with some inspiring thoughts to save money and create community spirit!

The Basics:

Annuals – Plants that grow for one single season.

Perennials – Plants that will return year after year.

Ground cover – A plant that is low growing and generally prolific (i.e., it spreads). Ground cover is great for the base of other plants as an accent. Also, depending on the area of the property, it can hide ugly areas or hard-to-grow spaces. Grass is one of the most successful ground covers, especially if you want a tall grass look. Grass comes in a ton of varieties, so do a little research on what you want before you lay the seed.

Zones – A zone refers to your climatic region; you need to know your zone when shopping for plants, shrubs, and trees. Each region has a number, and that number is vital to understanding what plants will work in your zone and what plants won’t. For example, if you live in an area with harsh winters and you want your plants to return the following year, you may want your plants to be covered for Zone 5a/5b. Check out your zone number here.

Water – Caring for your plants should be as low maintenance as possible, but obviously plants need water to become established and in times of drought. Don’t throw money away by installing a new plant and then forgetting about it. That is wasteful to your property owner! Water new plants diligently the first year. That way the plant will come back and require little to no water the following year (subject to your climate). If a drought occurs, do the best you can to remember the plants, even if some areas have water restrictions.

Exposure – If you’ve put a plant in a certain location on your property and it’s not doing well, more than likely it is due to poor placement. Time after time I find plants placed in areas with tons of shade, when in fact they should be in areas that receive a massive amount of sun. If you are not sure about the best location for a plant, look to the Internet for a quick answer. Every variety has a detailed description on what exposure is best. Follow what the plant description describes and simply relocate the plant. If the plant is struggling, consider moving it to a container and giving it some tender loving care for a while. Once it regains its strength, move it to the new location and water, water, water! The last thing anyone wants to see on a property is a dead or struggling plant!

Money Saving & Community Building Tips:

Grow Your Own – There are beautiful plants that spread so prolifically that you can literally place a single plant in a certain area of the property and use that spot as an incubator to grow more plants each year for future areas, thus saving your property money on future plant expenses. Examples include plants such as hostas, coneflowers, lamiums, daylilies, salvia varieties, wildflower varieties, tall grasses, and sedums. Not only do these plants save you money outside, around your property’s grounds, but these prolific plants can also save money on decorative plants used inside, in lobbies and other common areas.

Seeds – If your property has no money for plantings or landscapers on a grand scale, consider buying seeds. Creating a beautiful landscape when money is tight can be done with seeds. I always like to plant the seeds in small pots and watch the little sprouts very closely. If you live in an active community, it’s easy to get your residents involved. Find volunteers to help watch the sprouts and water them. Once grown, move them to larger pots until the little plants are established and strong enough to be put into the ground. You can also find custodians and other staff members to get involved to help nurture the plants. You will be surprised by how many folks who live or work on your properties have a green thumb. Before you know it, for a few dollars you will have large, full-grown plants!

Flower or Vegetable Gardens – If you have a property with land to spare, consider organizing a community garden. Give the residents the space and a community storage shed or closet to store tools and supplies. Let everyone get involved and create a garden for everyone to share. Grow plants or vegetables for the property or a nearby homeless shelter. This is a great way to grow more plants for the property, and it’s also a great resident activity.

Plants can really bring a property to life. Properly kept grounds can make your property very inviting to new and existing residents. It also shows owners that you take the extra initiative to make their properties look as attractive as possible, which only makes you look more marketable to other potential owners. Plants can be a property manager’s best friends!