By Jeff Butler, Repipe Specialists
Does your property still rely on old copper, galvanized, or even defective polybutylene drinking water pipes from decades past? It’s time to replace outdated drinking water pipes with a modern, reliable plumbing system designed for the future.
Modernizing Pipes for Colorado’s Extreme Weather
As Colorado’s weather becomes increasingly unpredictable, the impact on aging buildings, particularly those with plumbing systems over 30 years old, is a growing concern for homeowners, board members, and property managers. Extreme weather conditions and outdated materials in Colorado, like copper, galvanized, and polybutylene pipes, pose significant risks that can only be mitigated through proactive measures like repiping.
Colorado’s climate is known for its dramatic swings—from scorching summers to harsh winters. These temperature fluctuations can wreak havoc on plumbing systems, especially in older buildings. With approximately 50% of Colorado’s housing stock, including condominiums and multi-family properties, built before 1980 (U.S. Census Bureau, 2021), many are likely to have outdated plumbing systems.Pipes expand and contract with changing temperatures, leading to wear and tear that can result in leaks, bursts, and costly repairs.
Winter is particularly problematic. When temperatures drop, the water inside pipes can freeze and expand, causing pipes to crack or burst. Older pipes, which may already be compromised by decades of use, are especially susceptible to this kind of damage. For properties with aging plumbing, these issues are not just inconvenient but can lead to severe water damage and expensive repairs.
Polybutylene Pipes Are So 30 Years Ago
Polybutylene pipes are made from a plastic resin called polybutylene, which is flexible and resistant to freezing temperatures. The pipes are typically gray in color and are often found in the water distribution system within the walls, ceilings, and floors of homes.
Polybutylene pipes were once a popular choice for buildings constructed between the 1970s, 1980s, and mid-1990s due to their affordability and ease of installation. If your property was built or repiped during this period, it's possible that polybutylene pipes were used.
These pipes have proven to be highly unreliable, particularly in the presence of chlorine and other chemicals in municipal water supplies. Over time, polybutylene pipes become brittle and prone to cracking, leading to leaks and water damage. The pipes were ultimately discontinued in 1996, but unfortunately, many buildings across the US are still experiencing frequent leaks and ongoing maintenance costs due to the presence of polybutylene.
For buildings over 30 years old, the risk of polybutylene pipe failure is high. The material degrades significantly over time, especially in Colorado’s variable climate, making it a ticking time bomb in many properties. Furthermore, many insurance companies either refuse to cover properties with polybutylene pipes or charge higher premiums due to the high likelihood of failure.
Future-Proof Your Community: The Advantages of Upgrading to Modern Plumbing
Repiping involves replacing outdated plumbing with modern, durable materials that can withstand the challenges posed by both time and the environment. For those managing aging properties in Colorado, the combination of extreme weather and outdated plumbing materials like polybutylene presents significant challenges. Repiping offers a proactive solution that addresses these risks, future-proofing your property while protecting both its safety and value.
Modern materials like PEX and copper are better suited to handle Colorado’s extreme temperatures and resist corrosion. PEX is flexible, reducing the risk of freezing and bursting, while copper offers long-lasting durability. Upgrading to these materials can help avoid costly repairs, lower insurance premiums, and enhance your community’s appeal to current and prospective residents.
Leave Copper, Galvanized, and Poly Pipes in the Past
If your property’s plumbing system is approaching or over 30 years old, and you're still unsure if you have polybutylene pipes, it's important to contact a repipe specialist to assess your piping system and discuss the benefits of repiping. By taking action, you can ensure that your property is equipped to handle Colorado’s unpredictable climate and avoid the headaches of plumbing failures down the road.
Jeff Butler founded Repipe Specialists in 1991, and has been working to constantly improve and refine the Repipe Specialists One Stop Repipe Process™ since. Repipe Specialists specializes in repiping occupied multi-family buildings and communities with minimal impact to residents and working closely with onsite property management to ensure a smooth project.
By Max Gajdel, STAN AI
Artificial Intelligence (AI) is quickly becoming an essential tool across industries globally, including in community association management. However, despite its growing presence, there remains a gap between the awareness of AI and its actual usage. As of 2024, over 58% of U.S. adults are aware of AI technologies like ChatGPT, but only 23% have used them, according to surveys from Pew Research Center and Mailbutler (Pew Research Center, Mailbutler).
This gap was further highlighted at the CAI 2023 CEO-MC retreat last September, where only 10% of the over 200 management company executives in attendance reported having ever used AI tools in their work. This discrepancy signals the need for more effective AI adoption, especially within the community management space.
Importantly, this also creates missed opportunities for efficiency and effectiveness within the industry. Bridging this gap is not just about understanding AI’s existence but also recognizing its potential to transform daily operations, and it is crucial for AI to be fully integrated and leveraged in community association management, where it can help create more connected communities.
AI’s most effective application today comes in the form of automating communication with homeowners and residents, ranging from managing daily inquiries to scheduling bookings and work orders. This not only reduces the workload on community association managers (CAMs), but also improves response times and resident satisfaction.
Board meetings are another important point of discussion. A community or HOA’s governing documents often dictate that board meetings consist of two parts—open sessions and executive sessions. Homeowners in most states have a legal right to attend open sessions, but most boards make the mistake of not inviting them, making board meeting minutes a vital necessity.
However, transcribing and summarizing board meetings is traditionally a time-consuming and error-prone process. AI can now transcribe discussions in real-time and create accurate summaries that can be quickly distributed to all relevant parties. This automation not only saves time but also ensures that records are accurate and readily available.
In times of emergencies, such as during the recent Hurricane Beryl, AI becomes a crucial asset in maintaining clear and effective communication. Custom-built AI assistants can automate the sending of alerts, coordinate evacuation efforts, and provide residents with real-time updates, ensuring their safety through these unforeseen events. Moreover, AI can be set up to handle emergency-specific tasks, such as building tailored AI assistants connected to weather monitoring sites, providing residents with critical information and guidance when it is needed most.
AI can even act as a sales assistant for community management companies, and become a tool that can sell prospective board members on choosing you, and directly help generate more management contracts. AI can custom-build an experience that can align your company’s services to the needs of a board member who might be on the lookout for new management.
In this instance, AI analyzes the behavior of website visitors in real-time, determining their likely intent based on their interactions with the site. It can guide them through a personalized journey—whether it’s directing a homeowner to a portal for accessing important documents, or showcasing available services to board members. It can then ask relevant questions to gather information, qualify the lead, and even schedule a follow-up meeting or call with a human representative.
With the content that community managers often have to generate on a weekly basis, AI can also serve as an invaluable writing assistant, especially when it comes to generating personalized communications tailored to specific needs. By being trained on a community’s governing documents, AI can create customized community notices, draft responses to homeowner emails, and craft outbound text blasts for specific situations.
Whether it's a reminder about upcoming board meetings, emergency alerts, or general announcements, AI can always ensure that the tone, language, and content are consistent with the community’s standards and legal requirements.
AI can also enhance the owner portal experience by offering a personalized web chat feature for homeowners that provides real-time assistance. Even when owners face difficulties logging in, they can still access answers to community-specific questions directly through the portal. This AI-driven chat support ensures that owners receive the help they need without the hassle of navigating through login issues, making the portal more user-friendly and accessible.
By streamlining communication within the portal, AI helps to resolve common queries quickly and efficiently, improving overall user satisfaction.
Within the community management space, managing online reputation is paramount to driving growth. From handling Google reviews to responding appropriately to comments on social media pages, a community management company’s online footprint can heavily influence an HOA’s decision to pick it as their next management firm.
AI can play a crucial role in this by automating many aspects of media and public relations management. For instance, AI can monitor reviews and online chatter in real-time, flagging negative comments for immediate attention and even automatically posting responses that align with the company’s brand voice. Additionally, AI can also assist in drafting press communication, ensuring that it is consistent and aligned with ongoing marketing strategies.
Looking forward, the potential of AI in CAM is even more exciting. AI has now evolved to directly interact with homeowners through voice assistants and live virtual avatars. These AI-driven interfaces offer a more personalized and engaging form of communication, making interactions with residents more human, while offering round-the-clock 24x7 support. Such advancements could radically transform the homeowner experience, making AI an integral part of daily life in community management.
What’s more, AI has the potential to revolutionize the budgeting process in association management. By analyzing historical financial data, predicting future expenses, and generating detailed reports, AI can assist in creating more accurate budgets. This automation saves significant time and improves the precision of financial planning, particularly during budgeting seasons.
Additionally, AI can automate the creation of any workflow for community managers, customized by property or even down to a specific homeowner automation..
For example, you could automate communication for delinquencies to reduce AR across your associations. Using workflow automations, you could simply describe your problem and desired outcome to an AI assistant and it automatically creates a workflow connecting your management software and other apps you use to complete the tasks. Imagine in this case, you directed an AI assistant to pull a list of delinquent accounts every month, put it into a spreadsheet and send out a collections email that includes the ACH form and bank link to encourage payments. The assistant could follow up persistently tracking if the owner made payment and if not, generate a report for your attorney or board highlighting difficult accounts for further action. This could all happen automatically without you lifting a finger!
The future of AI in community management will likely see even more sophisticated and beneficial implementations going forward. The current gap between AI awareness and usage is significant, but it is one that community association managers can bridge easily by embracing the technology. The capabilities of AI extend far beyond what many might realize, offering tools that can enhance efficiency, reduce workloads, and improve the quality of services provided to communities.
By exploring and integrating AI into their operations now, CAMs can take full advantage of its current capabilities and prepare for even greater advancements in the future.
Max Gajdel is the Co-Founder of STAN AI, the largest AI assistant for community association management companies in North America. As former community managers, Max and STAN Co-founder Bogdan Raic founded STAN AI in 2018 and have over 20 years of association management expertise.
By Corey T. Zurbuch, Brownstein Hyatt Farber and Schreck, LLP
On May 22, 2024, Governor Jared Polis signed House Bill 24-1334 into law, which became effective on August 7, 2024. The bill, sponsored by a broad coalition of representatives and senators reflecting bipartisan support, was introduced to increase the availability of broadband internet service to multiunit buildings (condominiums and apartments) and mobile home parks. It is aimed at enhancing access to high-speed internet services by streamlining the process for broadband providers to install necessary infrastructure in these types of residential properties. While the law focuses on increasing the rights of tenants in multiunit apartment buildings, it also applies to the tenants of condominium unit owners and affords them the same rights to access broadband internet as tenants in an apartment building.
Highlights of the New Law Codified as C.R.S. 29-27-501 through 503 Include:
The bill was supported by various broadband providers, technology advocates, and some housing rights groups. Supporters argued that the bill is essential for expanding broadband access in underserved areas, particularly in multiunit residential buildings where internet connectivity is often lacking or inadequate. Opposition came from some property owner associations and environmental groups concerned with the potential loss of property rights. Property owners expressed concerns about potential disruptions and damage to their properties, while environmental groups raised issues about the potential for environmental harm during the installation process.
This legislation was part of a broader effort to bridge the digital divide and ensure that residents in multiunit buildings have reliable access to broadband internet. House Bill 24-1334 was accompanied by three other broadband-related bills. House Bill 24-1336 expanded broadband funding uses to allow greater focus on middle-mile infrastructure, fiber networks, and high-cost areas in Colorado. House Bill 24-1234 continued the High-Cost Support Mechanism (HCSM) operated by the Colorado Public Utilities Commission (PUC), which provides financial aid for affordable and reliable telecommunication and broadband services in rural communities. Finally, House Bill 24-1036 continues the Rural Broadband Equipment Sales and Use Tax Refund, under which broadband providers receive a refund on state sales and use tax for property installed in a target area to provide broadband service.
Despite this flurry of legislative activity, there were no changes to the Colorado Common Interest Ownership Act (“CCIOA”) specifically addressing whether an owners’ association can prohibit the installation of broadband internet. For now, at least, CCIOA remains silent on this issue.
Corey T. Zurbuch practices real estate law, including community association related matters, with Brownstein Hyatt Farber and Schreck, LLP in Denver, Colorado.
By Nicole Stone, LMI Colorado
Water efficiency is not a buzzword anymore, it is a term that is here to stay and a term that everyone in the green industry is paying lots of attention to. Today, irrigation systems have shifted from a supplemental water system to a lifeline keeping landscaping healthy and turf green. As we become more reliant on irrigation systems, we also increase our dependency on the mechanics of these systems.
Today’s landscape irrigation systems have greatly advanced in technology. Products range from Netafim, MP Rotators, MPR nozzles, mini-click sensors, pressure regulating heads, ET Water, Two-Wire systems, Weathermatic clocks, and the list keeps going as these all are all designed to help conserve water.
From the controller, heads, fittings, pipe, and other components of an irrigation system; wear and tear and maintenance become critical to the system's lifespan and the efficiency of the system being installed or even upgraded. Whether it is installing a new irrigation system or upgrading an older irrigation system, water efficiency needs to be the priority when discussing design, renovation, or upgrades. However, incorporating these new products into an aging system takes proper planning and proper implementation.
The first step toward implementing water-wise irrigation components into an existing system would be to have an audit done. The good news is even though a system is older does not immediately imply the system can’t be upgraded or retrofitted to become more efficient. Once you have completed the audit the next will be to replace, maintain, or upgrade which will depend on many factors.
Start by reviewing the repairs, downtime, and costs for the annual repairs along with looking at the type of repairs. Consistent breakdowns can be a sign of an improper original installation, root pinches from aging plant material, and wear and tear on parts. Next, the efficiency of a system becomes critical as the reliability has shifted greatly on our irrigation systems to keep our landscape lush. As you look around the property have bed lines changed, has the original intent of the irrigation been shifted to meet the changing landscape design? All of these factors will play a role in the longevity and efficiency of an irrigation system.
Once you have your irrigation system running efficiently routine maintenance becomes a critical aspect. Just like a tune-up or oil change on a car maintenance is required to keep your irrigation system functioning to the best of its capabilities. Routine maintenance can include checking heads, raising and lowering heads, inspecting the valves and solenoids, and the master valve. Incorporating into your maintenance programs weekly/bi-weekly system checks can assist in keeping your irrigation system functioning with the least amount of downtime.
Today we have lots of new waterwise irrigation technology, remember it is about finding the best solution for your situation. When installing, upgrading, or retrofitting Colorado irrigation systems is also good to remember the climate cycle. Colorado has a harsh freeze/thaw climate cycle that can weaken fittings, pipes, and heads has been directly correlated to lessening the life cycle of these components. After reviewing all the elements and determining the best efficiency technologies for your irrigation system you can start planning your implementation process and start your journey to a waterwise and tech-savvy irrigation system.
Nicole Stone, VP of Business Development for LMI Colorado is originally from Nebraska but a Coloradan at heart, has been working in the Green Industry for over two decades. She is experienced in construction, estimating, irrigation, and all facets of landscape maintenance.
By Russell Munz, Community Financials
This article expands on the 2024 Insurance and Ethics issue article about the pros and cons of outsourcing in community management. It explores new trends and offers practical advice on how communities can benefit from outsourcing various functions.
Overview of Outsourcing in Community Management
Outsourcing has been a common practice for communities, involving specialized services such as Reserve Studies, Insurance, Legal Counsel, Structural Engineering, Construction Project Management, and Tax and Audit work. Communities have also outsourced tasks like mailing and payroll. Recently, there’s been a shift towards outsourcing additional functions to streamline operations and manage costs effectively.
Emerging Trends
1. Monthly Accounting
Self-managed boards are increasingly hiring external accountants for monthly dues collections, bill payments, and financial reporting. This approach reduces the workload on volunteer board members and can make the Treasurer’s position more appealing. Outsourcing accounting can lower fixed costs, provide backup staff for continuity, and improve system efficiency. Some boards are even separating accounting from managerial roles for better checks and balances or choosing to outsource accounting to avoid the need for in-house staff.
2. Software and Systems as Part of Outsourcing
Modern software solutions are also part of the outsourcing trend. Tools like AP automation and bank lockbox check scanning help automate payment collections and streamline data management. These systems can be integrated into comprehensive community management software, reducing manual data entry and minimizing errors. This integration improves overall efficiency and saves time. Outsourcing election services can alleviate the stress of handling elections for volunteers and managers. Services that manage online and paper voting, along with meeting support, help ensure a smooth electoral process. Communities that are self-managed may outsource resale and refinance paperwork to reduce the risk of delays or errors, which could otherwise jeopardize sales. This also saves valuable volunteer time. Minute-taking is another task often outsourced to allow board members and managers to concentrate on more critical meeting activities. Specialized services ensure accurate and efficient documentation.
3. Additional Outsourcing Areas
Elections
Resale and Refinance Paperwork
Meeting Minutes
Legal Considerations
When outsourcing, it’s crucial to address several legal aspects. Contracts with service providers should clearly outline the scope of services, responsibilities, and liabilities. Include performance metrics and dispute resolution procedures to manage expectations and address issues effectively. Data protection and privacy are also essential, especially when handling sensitive information. Ensure compliance with relevant data protection laws and implement measures to safeguard community data.
Cost-Benefit Analysis
A financial analysis can help communities evaluate the costs versus benefits of outsourcing. Compare the expenses of maintaining in-house management versus outsourcing to identify potential savings and improvements. This analysis can provide a clearer picture of how outsourcing might impact your community’s budget and operations.
Best Practices
To successfully implement outsourcing, select service providers carefully and manage contracts effectively. Regularly monitor the performance of outsourced services to ensure they meet your community’s needs. Establishing clear communication channels with service providers can also help address any issues promptly and maintain service quality.
Potential Challenges
Outsourcing can present challenges, such as ensuring the quality of service and integrating new systems with existing processes. Address these challenges by developing strategies for effective oversight and managing service provider relationships. Additionally, you’ll want to see reviews or references say that communication with the company meets expectations. This will help ensure that outsourcing arrangements align with community goals and expectations.
Future Trends
Stay informed about emerging trends and technologies in outsourcing. Advancements in software and service models can impact community management practices. Understanding these trends can help communities stay competitive and take advantage of new opportunities to enhance their operations.
Evaluating Outsourcing Opportunities
Examine your community’s current practices and assess whether outsourcing could provide benefits. Are you getting the value you expect from current services? Is your board focused on high-value tasks? Research the market, obtain proposals, and consider whether outsourcing could improve efficiency and effectiveness. Taking these steps can help you make informed decisions about outsourcing and optimize your community management strategies.
Russell Munz, CMCA is a licensed CAM in 6 states and founder of Community Financials, a remote monthly accounting service for HOAs and condos nationwide. They provide systems and services to make accounting and operating communities easier. You can learn more about Russell at Community Financials website or LinkedIn.
By Gabrielle Fuerst, CAP Management
Sustainability is no longer just a buzzword in today’s real estate market. It has become a key factor significantly influencing property buying decisions. Understanding how sustainability initiatives impact property values has never been more crucial. Encouraging associations to pursue sustainability projects is not only ‘the right thing to do’, but is provides material financial benefits that result from energy - and water -saving projects. This allows HOAs to spend their money more wisely on preventative maintenance and other capital improvement projects, rather than excess energy costs. Additionally, projects associated with resource conservation tend to have short payback periods, often less than 10 years, especially if the association takes advantage of federal tax credits such as the Federal Investment Tax Credit for solar. As a result of the Inflation Reduction Act, this tax credit and many others are now available as direct payments to HOAs, whereas before, HOAs were not eligible.
A second, more intangible financial benefit can be found in the increased property value from these building improvements. Energy efficiency and renewable energy technologies may be expensive to purchase and install up-front, but they reap continuous benefits for the entire useful life of the equipment. These additions thereby offer added value to the resident, who will benefit from decreased energy costs and rebates for electricity production for years to come. These improvements prepare communities for the future and enhance their resilience in the face of an increasingly unpredictable climate. What do these increases in property values amount to?
The Value of Going Green
A property can see a 3%–4% boost in value with the addition of solar panels. This means that the value of a $300,000 home will increase by $9,000 - $12,000. Denver, with its ample sunshine and supportive incentives, is particularly well-positioned to benefit from solar energy. According to the National Renewable Energy Laboratory (NREL), solar installations not only lower reliance on traditional energy sources and provide long-term cost savings on energy bills, but they also make properties more attractive to environmentally-conscious buyers.
Upgrades such as high-efficiency HVAC systems, new windows, and advanced insulation can boost property values by 1% to 5%. Practically, this means an average home can see added value of $8,000 - $20,000. Cities that have strong energy efficiency programs like Denver report significant benefits from these improvements. Energy-efficient homes are not only more appealing but also promise lower utility costs—a major selling point for potential buyers (ENERGY STAR) (Energy.gov).
In Denver, LEED-certified properties can experience an 8% to 10% boost in value, as a result of the growing demand for sustainable and energy-efficient buildings. These properties often command higher rents and resale values, reflecting their enhanced marketability and reduced operating costs (Vert Energy Group) (Sysconverge) (ULI Colorado) (Rocky Mountain Institute).
Electrification measures, such as modern electric heating and cooking systems, can increase property values by 2% to 6%. In cities with advanced electrification programs like Denver, this impact is even more pronounced. By converting fossil fuel-burning appliances to electric power, homeowners can enjoy reduced utility bills and cleaner, more efficient energy use. This shift aligns with broader trends toward energy efficiency and sustainability, further supporting property value increase (Schneider Electric Blog) (Rocky Mountain Institute).
Why It Matters for HOAs in Denver
With these sustainability initiatives, HOAs can capitalize on the growing demand for green homes, improve marketability, and reduce operating costs through available incentives.
Sustainability is not just a trend but a strategic advantage in the real estate market. By investing in solar panels, energy efficiency upgrades, green certifications, and electrification measures, property owners and HOAs in Denver can significantly enhance property values while contributing to a more sustainable future. Stay informed about local market trends and available incentives to make the most of these opportunities.
Gabrielle Fuerst is the Chief Sustainability Officer of CAP Management and helps CAP’s properties navigate relevant legislation and implement resource-saving projects. Merihan Ahmed is an Impact MBA Fellow with Colorado State University’s Impact MBA program, which focuses on using the private sector for social good and proving the business case for sustainability.
By Rob Kabza and Nate Skrdla, ASR
Fire safety is a critical aspect of building design and construction. Understanding fire ratings for building materials and adhering to best practices can significantly reduce the risk of fire-related incidents and enhance occupant safety.
Fire Ratings for Building Materials
Fire ratings are a measure of a material's ability to withstand fire and limit its spread. These ratings are essential for ensuring that buildings can resist fire long enough to allow safe evacuation and to minimize structural damage. Key fire ratings include:
Best Practices for Fire Safety
Implementing best practices in fire safety involves a combination of proper material selection, design considerations, and maintenance procedures. Here are some essential practices:
Conclusion
Fire safety is a multifaceted discipline that requires careful consideration of building materials, design, and maintenance. By understanding fire ratings and adhering to best practices, building owners and occupants can significantly reduce the risk of fire-related incidents, ensuring a safer environment for everyone.
About Rob Kabza, President of ASR Companies – Rob has over 30 years of construction management experience in Colorado, with a primary focus on project management, construction operations and reconstruction projects. He oversees production and quality management, and provides leadership for all projects from the preparatory planning phase through the construction completion. Rob received his B.S. in Construction Management from Colorado State University.
About Nate Skrdla, Director of Construction at ASR Companies – Nate has over 25 years of Construction Management in Project Planning, Project Management and Purchasing experience. His focus is on Trade Partner, Vendor and Supplier relations. He supports the production team in meeting project goals, timelines, and budgets. Nate received his B.S in Construction Management from the University of Nebraska at Kearney.
By Greg Kelly, Senroc Technologies
In an era where our personal and work lives are more connected to digital technology than ever, it is crucial to establish a strong first line of defense to protect our virtual worlds. Fortunately, you have access to tools that make learning the basics of cybersecurity easy and effective.
Cybersecurity is the implementation of safeguards to protect our digital assets, including ourcomputers,networks,anddatafromcyberattacksaimedataccessing,altering,ordestroying sensitive information. Picture a scenario where a property manager receives an email requesting payment from a well-trusted security vendor for a homeowners’ association in their portfolio. Unbeknownst to this property manager, the email account of the security vendor has been compromised and a threat actor is sending invoices with wire transfer information to their own bank account. Without safeguards to assist in verifying the authenticity of the email, there is a higher chance this property manager could inadvertently send funds to the threat actor resulting in financial losses for the HOA. With proper cybersecurity practices and tools in place, this scenario is avoidable!
The Importance of Cybersecurity for HOA Property Managers
For HOA management companies and their property managers, implementing a cybersecurity plan is not just a “should do”, but a “must do”. It is their fiduciary duty to their clients to take the steps necessary to protect the client’s interests. Property managers are highly trusted professionals who require an elevated level of access to perform everyday functions for their customers. With this high level of access comes a high level of responsibility. The consequences of a failed security effort can be devastating for a management company as well as their clients. Potential consequences can range from access to HOA bank information, unauthorized approval of money movements such as wire transfers as well as submittal and approval to pay invoices.
The Importance of Cybersecurity for Board Members
Board members are the lifeblood of an HOA and provide important decision making to ensure the health and financial vitality of their community. With this influence, they also take on a level of risk and face potential consequences when not taking steps to improve their cybersecurity stance.The most common result of a poor cybersecurity stance is a compromised identity. Once a threat actor has access to an email account, they are now the digital representation of you. For typical HOA tasks such as submittal and approval of invoices or check signatory authority, a compromised account could lead to money being stolen from the HOA through seemingly normal means.
Some Simple Ways to Implement Cybersecurity
The first step is to grasp how essential cybersecurity is. Check!
The next steps are to implement practical protective measures that can greatly diminish the threat of being the next victim of cybercriminals. Here are a few useful tips everyone should use.
Practice recognizing phishing
Phishing is an attempt to steal personal information or break into online accounts using deceptive emails, messages, ads, or sites that look like sites you already use. Threat actors will use your trust with reputable companies, friends, or acquaintances, to get you to access fraudulent websites, or files, designed to capture your sensitive data. These attempts can be difficult to spot, but taking some extra time can help identify potential scams. Here are a few quick points of things to pay attention to:
Take steps to secure your accounts
All of us are probably guilty of using some variation of the same password across many of our accounts. While it is convenient, it can also be an easy way for threat actors to gain access to one or more of your accounts. If they know you login to your email account with one password, they can try that same combination of email address and password for other common accounts (ex. banks, shopping websites, etc.). For this reason, it is a good idea to use strong and unique passwords for each service you use. Since it can be daunting to have so many different passwords, you can use a trusted password manager to help you keep track of passwords across different services. In addition, you should always take advantage of multi-factor authentication (MFA) whenever a service offers it. It’s an easy way to help keep a threat actor out of your account even if they have gained access to your password.
Verify with a call
This one almost seems too easy, but simply making a call when questioning the validity of something can be the most effective way of thwarting a fraud attempt. Some threat actors are smart to put a phone number on their medium of choice, so if you are looking for a phone number for a provider use known good sources such as a company website or your own known contacts to ensure you have a real phone number.
So, there you have it! Ensuring the safety of data and information is a collective duty that needs constant watchfulness and proactive security measures. Those in charge of managing and governing HOAs must take this obligation seriously so those living in their community can thrive. The very nature of the HOA industry in the digital age makes property managers and board members a prime target. Takingtheproperstepstoestablish a strong cybersecurity stance ensures you fulfill your fiduciary responsibilities of HOA communities you lead.
Greg Kelly is the founder of Senroc Technologies, a Managed IT Services company in the Denver area since 2013. With over 13 years of experience working within the HOA Management industry, he brings a unique perspective to marrying the HOA and IT worlds.
By April Ahrendsen, First Citizens Bank
As a homeowner, making sure your dues are paid on time is crucial. Timely payments ensure everything runs smoothly and you avoid late fees or penalties. But with so many payment options available, how do you choose the best one? In this article, we'll dive into four popular methods: mailing a check, using an eCheck, setting up an ACH transfer, and paying with a credit card. We'll break down the pros and cons of each for homeowners, and even touch on how Positive Pay can help prevent fraud for HOAs with a business account.
Let’s get started!
Primary Methods for Paying Homeowner Dues
When it’s time to pay your homeowner dues, you have several options. Here’s a quick look at each:
- Mailing a Check: The traditional way of sending payments.
- eCheck: A digital version of the paper check.
- ACH Transfer: Direct bank-to-bank transfers.
- Credit Card: Quick and easy payments.
Now, let's take a closer look at each method, starting with the good old-fashioned check.
Paying Dues by Mailing a Check
Pros
1. Familiar Method: Sometimes, the old ways are the best ways. Mailing a check is familiar and straightforward, especially if you’re not too keen on digital payments.
2. Record Keeping: Physical checks give you a tangible record of your payment, which can be handy for personal accounting.
3. No Additional Fees: Generally, there are no extra fees when you send a check. It's a cost-effective method as long as you have checks and stamps.
Cons
1. Time-Consuming: Writing and mailing checks can take time. Plus, there’s the wait for the check to be delivered and processed.
2. Risk of Loss or Theft: Checks can get lost or stolen in the mail, potentially delaying your payment and exposing you to fraud.
3. Delayed Processing: Mail delays can push your payment date, and the recipient might take a while to process the check.
4. Lack of Tracking: There’s no way to know exactly where your check is or if it will arrive on time, adding some uncertainty to the process.
Mailing a check is like sending a letter — it has its charms but also its risks. Let’s see how eChecks stack up in comparison.
Paying Dues via eCheck
1. Convenience: eChecks can be issued online, so you don’t need to worry about writing or mailing physical checks.
2. Lower Fees: Typically, eCheck transactions come with lower fees compared to credit card payments.
3. Security: eChecks are processed through secure online platforms, reducing the risk of loss or theft.
4. Efficiency: eChecks are generally processed faster than mailed physical checks, with funds often transferred within a day or two.
5. Control: eCheck payments offer greater control since you can schedule payments and manage them easily online compared to ACH.
1. Setup Required: Similar to ACH, setting up eCheck payments means you’ll need to provide your bank account information, which can be a concern for some people.
2. Processing Time: While faster than mailing checks, eCheck processing can still take a day or two, which might not be quick enough for urgent payments.
3. Bank Charges: Some banks might charge for eCheck transactions, although these fees are usually lower than credit card fees.
eChecks offer a convenient middle ground between traditional checks and more modern digital payments. But what about ACH transfers?
Paying Dues via ACH
1. Low to No Fees: ACH transfers typically have lower fees compared to credit card payments.
2. Automated Payments: Can be set up for automatic withdrawals, ensuring timely payments and avoiding late fees.
3. Security: ACH payments are securely processed, minimizing the risk of loss or theft associated with mailing checks.
4. Direct Transactions: Money is directly transferred between bank accounts, making it a straightforward option.
1. Setup Process: Setting up ACH payments may require providing sensitive banking information to your management company, which can be a concern for some.
2. Processing Time: ACH transactions may take a few days to process, which can be an issue if immediate payment confirmation is needed. The homeowner does not get to choose the payment date.
3. Potential for Overdrafts: Automated withdrawals can lead to overdrafts if the account balance is insufficient.
4. Availability: As restrictions and regulations increase more management companies are opting not to offer ACH as a payment option. In addition, there is the task of receiving and securing the payment information from cybertheft.
ACH transfers are secure and low-cost, but setting them up requires a bit of preparation. Let’s explore how credit cards compare.
Paying Dues via Credit Card
1. Convenience: Just type, click, and you’re done! This method saves the time and effort needed to write and mail checks.
2. Rewards and Cashback: Many credit cards offer rewards points or cashback for purchases, which can add up over time.
3. Immediate Confirmation: Transactions are processed quickly, giving you immediate confirmation of your payment.
4. Payment Tracking: It’s easy to track and manage payments through monthly statements or online accounts.
5. Safety: Credit card transactions are generally secure, and many cards offer fraud protection that can help resolve unauthorized charges quickly.
1. Fees: Some service providers charge a convenience fee for credit card payments, which can add up.
2. Interest Charges: If you don’t pay the balance in full each month, interest charges can accrue, leading to higher overall costs.
Using a credit card for payments is fast and convenient, but it’s important to be aware of potential fees and interest charges.
Positive Pay for Homeowners Associations
Positive Pay: This is a fraud prevention service that many banks offer to businesses and HOAs.
Here’s how it works: You provide your bank with a list of the checks you've issued, including details like check numbers and amounts. When a check is presented for payment, the bank compares it against your list. If the details match, the check is cleared. If not, the bank flags it for review. This way, only checks you’ve authorized get processed, helping to prevent fraud
Choosing the Best Payment Method
Choosing your payment method depends on your priorities.
- Convenience: If this is your top priority, credit card payments or eChecks might be your best bet.
- Cost: If you're looking to save on fees, ACH transfers or mailing a check are generally cheaper.
- Security: For the highest security, consider eChecks or ACH transfers.
- Speed: Need quick processing? Credit card payments are usually the fastest, followed by eChecks.
- Control: Want to keep tight control over your payments? eChecks and credit card payments offer excellent tracking and management options.
Ultimately, the best method is the one that fits your lifestyle and needs. Evaluate the pros and cons, and choose the option that gives you peace of mind.
Paying and managing homeowner dues doesn’t have to be a hassle. Whether you prefer the traditional method of mailing a check, the convenience of a credit card, the security of an eCheck, or the reliability of an ACH transfer, there’s an option that’s right for you. And with tools like Positive Pay, your HOA can add an extra layer of security to your payments. Choose the method that best suits your needs, and stay on top of your dues with ease.
This information is provided for educational purposes only and should not be relied on or interpreted as accounting, financial planning, investment, legal or tax advice. First Citizens Bank (or its affiliates) neither endorses nor guarantees this information, and encourages you to consult a professional for advice applicable to your specific situation.
April Ahrendsen - Vice President – Regional Account Executive First Citizens Bank, is responsible for the business development of Association Banking products and services. With over 19 years of experience in the HOA banking industry, April is a native Idahoan and an active member of the Community Associations Institute, where she chairs one committee in Colorado and is the Idaho CAI board President. She is dedicated to continued education and industry improvement, presenting to associations across multiple states and writing articles on HOA lending and investments for CAI chapter magazines.
By Kevin Lucas, RealManage
Nobody LIKES to have those hard discussions with board members and homeowners on the reality of the Association’s financial health, but it is increasingly becoming a necessity within the HOA industry. Over the past 10 years, we have endured dramatic price increases across the board, including basic labor rates, material price increases in some industries of more than 100%, and insurance premiums that have skyrocketed. It is a rarity for an HOA board to adjust assessments in a timely manner when these increases occur, as most often the increase is realized after an annual budget has already been ratified. So, each year the board is faced with not only planning for another unknown increase, but also trying to make up for previous increases that were realized after the last budget ratification process. In most instances, a board is stuck playing catch-up when it comes to financial health.
It is imperative that CAMS and boards have those hard discussions on the reality of the financial impact of previous increases and potential future increases, when preparing for the upcoming budget process and ongoing conversations with homeowners. Simply stated, within an HOA, there are two ways to balance a budget – 1) Reduce costs incurred to reduce the cash outflows of the association; and/or 2) Increase inflows of cash through the increase of assessments.
Most associations have already been working on reducing costs, and as a result, most associations are at the BARE MINIMUM of services being provided. This “tightening of the belt” by most boards has worked in reducing the overall assessment increase, but many homeowners are now noticing the reduction in the services performed by the HOA.
The only other way of balancing a budget is to increase the cash inflow, by increasing assessments, to cover the additional costs and recoup the previous unbudgeted increased costs that most associations have already incurred. The conversation of increasing assessments always comes with negative connotations, as nobody likes to pay more for the same services (or even reduced services), but just as homeowners are now paying much higher prices for gasoline, bread, and beer, the vendors that perform the services are all paying for higher priced gasoline, labor, and insurance.
When CAMS and boards sit down to discuss the upcoming budget, a discussion based in reality is required. Review the costs incurred that were higher than the budget, to determine the total amount of previous year’s shortfall that needs to be recouped, have a legitimate discussion on anticipated costs for the upcoming year on those items that historically have been higher than anticipated, and then also have a conversation regarding service level changes that have occurred (or are still on the table to occur in the future), before any budget discussions are held. By documenting the shortfalls realized, service level reductions instituted, and cost increases anticipated, the board can then list out the necessity of an assessment increase in black and white when presenting a proposed budget to homeowners. There is nothing wrong in being cordial when having those discussions, but laying out the facts of the association’s current financial position is necessary to avoid rumors, differences of opinion, and assumptions.
The discussions are never easy when it comes to the financial impact of increased assessments on individual homeowners, as it will have a very personal impact on each individual differently. It is important to remind homeowners that the HOA is a business that is in charge of running a community, versus a community trying to run a business. Hard decisions are the responsibility of the elected board members to move the organization in a positive direction to help the overall health of the community. By presenting the FACTS in a very concise and easy to understand presentation, it is easier to educate the homeowners on the reasoning behind the proposed assessment increase, along with the alternatives of not making the hard decisions. Showing compassion of the impact these decisions have on individuals is a necessity, but it is important to stay focused on the overall impact on the community, as opposed to the individual.
This can be considered a harsh approach, but the presentation of FACTS, ALTERNATIVES CONSIDERED, and the ANTICIPATED IMPACTS of those decisions can be considered a “Tough Love” approach when presenting information to homeowners. When decisions can be boiled down to basic math – more funds need to come into the HOA to pay for the higher costs incurred to avoid the reduction in the level of services – homeowners may not LIKE the results, but they can understand why decisions were made as they were.
Kevin Lucas CPA is a Financial Manager for RealManage and has been in the industry as a Management Company Owner for 20+ years, before joining the RealManage team. Financial Stewardship has always been my priority, with individual compassion sprinkled in, but I feel that Association Financial Health is our industry’s top responsibility.
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