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  • 08/01/2023 9:15 AM | Anonymous member (Administrator)

    By Danielle Holley, Hearn & Fleener

    Thoughts About the Visible Vegetable Garden Rule

    Being an avid flower and vegetable gardener – and not shy to talk about it – I’ve heard from a few friends at the law firms wondering what regulations around “visible” vegetable gardens could look like. I’ll tell you, I do not mind the change.  Also, I see why it causes concern for aesthetically-minded community architectural or landscape committees and the management infrastructure that has to enforce their decisions. This essay is more “thoughts for consideration” than actionable solutions, but I’d love to hear from anyone who has an opinion! 

    The new law, effective August 2023, includes a provision stating an association “may not prohibit vegetable gardens in the front, back, or side yard of a unit owner's property” within single family home communities. I’m calling them “visible gardens” because “front, back and side yard gardens” feels clunky. And honestly, most of us are only worried about the visible areas of another person’s home.

    My first thought is that August is great! The best time to install a new garden is in autumn so you can wake up one spring morning and do the fun part: planting. That said, it doesn’t leave much turnaround time for an association with opinions about this practice. 

    While a covenant community may not prohibit the choice to install a garden, implied language is that an association may regulate visible gardens without prohibiting them. How might that look? Start with the vegetable garden definition. SB 178 defines a garden as “a plot of ground or an elevated soil bed in which pollinator plants, flowers, or vegetables or herbs, fruits, leafy greens, or other edible plants are cultivated.” 

    What is that not? The definition does not expressly permit greenhouses, an orchard, bee-keeping, re-wilding/meadows/use of the whole lot, compost piles, scarecrows, neglected lawns, or marijuana plants (a whole different law). It also does not grant owners permission to do whatever they please. They are simply allowed to have a visible garden plot. 

    Senate Bill 178 was written and passed with intent that the law “removes barriers to water-wise landscaping practices in community associations”. Through that lens and as citizens of the American West – a desert! – I hope most of us engage this process in the spirit of saving water. As professionals working with community associations, we can work to meet association homeowners where they are on their water-saving journeys and how they wish to participate in visible gardening. A lot of them will not care or listen. And a few are about to have a crisis of passion. 

    An example being my own community built in 1962. My neighbors and I have wildly different views on how our front yards should appear, but we all seem to care:

    The woman across the street spends hours in her front yard where she harvests a multitude of flowers and vegetables each season, but it is not pretty. Components of it are stunning, but the overall effect is somewhat unfortunate looking with old pantyhose used to train vines along her front walkway.  

    • Is the association open to an entire lawn being a garden?
    • What kinds of structures will be welcomed? There will likely be plant supports and hail guards, season extenders, tomato cages, squirrel deterrents…

    A man next door to her has planted fruit trees and built hügelkultur berms lined with rocks where he plants pumpkins and gourds each summer. His children are often out there with him planting and picking things while his wife enjoys the shade. I haven’t seen them out yet this year which makes me think they might skip this season. 

    • Berms and some raised bed formats change drainage. To what extent is that acceptable? 
    • What happens when a homeowner chooses to stop gardening/is unable to continue caring for the visible garden?
    • How many seasons/years should a garden plot go unused before it is removed? And what does removal look like? 

    The family just south have a “pollinator garden” (they say) where their children have painted boards and rocks and sculptures… and left them subject to the elements. The area is not my favorite to walk by with its thistle and grasses leaning over the sidewalk, but there are a few sunflowers that emerge each year and the “wild” nepeta is some of the first pollinator food in the neighborhood come spring. And for the record, the whole family sits out front and enjoys it many times each week. They just mowed the weeds so maybe they were observing “No-Mow May”? 

    • Weeds are just happy little plants growing where we don’t want them. Who gets to call a plant a weed?  (Please do not write a list of prohibited or classified plants. You’ll make the news. Also, CSU Extension has a helpful Noxious Weed and Invasive Plants page.) 
    • What makes a space a pollinator garden or sanctuary?  
    • What constitutes a tidy garden? 

    The teacher who lives between my house and the pollinator garden has a formal “Midwest” lawn with irrigated Kentucky bluegrass bordered by pink roses, white iris and purple salvia. I have never seen her enjoying it, but contractors are often tinkering with the irrigation and spraying the shrubs. I think it’s pretty. I also think she overwaters and allows dubious chemicals. 

    • What happens when chemicals from her lawn impact the pollinator garden? What happens when what she perceives as weeds creep into her lawn? Who is the nuisance? 
    • How could we encourage neighbors who do not want a visible garden to help save water? 

    My front lawn is xeric with a few tomatoes hidden close to the house in a small irrigated patch. We don’t sit out there often, but when we do, neighbors often stop to comment happily on the changes we have made. It is south-facing and used to be a large rectangle of bluegrass. We could not water enough after May/June to keep it from going dormant. 

    • What water wise solutions might a community consider that are not visible gardens? 
    • Who pays to change the irrigation?

    All this to say, what fits the greater neighborhood and the ethos of our neighbors? Do we want to encourage encounters with people as they walk by us doing the gardening? Do we want to proudly suggest that our people are water savers? Pollinator supporters? Do we hope that our neighborhood – like an un-bumper-stickered mid-price car – will not announce anything except its relative sensibility and safety? 

    I like to think about these things. It feels impossible to ask an association board or landscape committee to craft guidelines that speak for an entire community, but that is literally what our government has asked associations to do. They’re tiny villages of people doing their best to live good lives and they hope their neighbors won’t take exception to their choices.  

    As suggestions to get started “allowing visible gardens” a committee might consider the following: 


    Since the intent of the law is to “encourage water-wise behavior”, an association might ask owners who want to install visible gardens to pay for/install/administer the appropriate watering devices and/or hand water their garden. It would be ineffectual to allow the same watering routine for bluegrass to continue once all or a portion of it has been removed in exchange for a garden. It is worth noting that Denver Water does not regulate how often a vegetable garden is watered although they do put restrictions on turf irrigation. 

    Design and Installation

    Keeping with the spirit of the law, an association should not set aesthetic guidelines that make installation of a new garden cost prohibitive. Remember that vegetable gardeners are often thrifty types and may upcycle materials that are more charming than attractive. Associations have the right to regulate these options.  

    A committee should consider what might be acceptable or unacceptable. They should also consider the longevity of the materials being used. At what point does a raised bed need to be repaired or replaced?


    Anyone who has googled “front yard garden” knows the number one rule is to keep things tidy (so as to not ruin it for the rest of us). The term “tidy” leans subjective, but I think reminding neighbors of the concept is fair enough. 

    Vegetable gardens are not always lovely and aesthetics do matter. An organized and tidy plot, even if you subscribe to chaos theory, can go a long way toward making the space unobjectionable. 

    For me, this also means cleaning and repairing my vegetable plots in the fall. I leave plant skeletons up all winter in my flower gardens as critter habitat. This might not be a choice I would make if my only gardens were visible to the neighbors. 


    If nothing else, spending more time in your front garden means you’ll meet the people who walk their dogs. 

    Should the community choose to welcome visible gardens, consider hosting a vegetable exchange at the end of the summer. It could be as simple as a table in the shade near the clubhouse or mailboxes with a sign: “Leave Your Surplus, Take Our Surplus”. It could be as involved as a potluck!

    Maybe in the spring, the community encourages a plant exchange? 

    If the neighborhood is jumping in with both feet, perhaps a garden tour in August? Or a garden construction event in October? Maybe you invite/hire a landscaper to teach your homeowners how to install water-wise irrigation for their new gardens in April. 

    How neat would it be to see how much water the community is allowing to stay in the watershed? What that means in real dollars? 

    At the end of the day, we are working to improve the home values and experiences of community association homeowners. Most of the work is on them. They are their own neighbors. Love thy neighbor and now their garden plot. 

    Danielle Holley is a gardening enthusiast. She works at Hearn & Fleener in Littleton, CO as their Director of Client Services where she provides support to managers and association boards during their construction defect claims. She has been an active member of Community Associations Institute since 2009 and she especially enjoys the landscaping classes. She welcomes your feedback on this essay and your garden surplus. 

  • 08/01/2023 9:09 AM | Anonymous member (Administrator)

    By Devon Schad, The Schad Agency

    When it comes to safeguarding your condominium or townhome investment, having the appropriate insurance coverage is vital. The HO6 insurance policy is specifically designed to fill the gaps left by the master insurance policy held by the association. In this article, we will delve into what HO6 insurance entails, its significance, key inquiries to make to your insurance agent or company, and the utilization of loss assessment in case you are assigned a portion of a deductible.

    What is HO6 Insurance?

    Although the condominium & townhome associations typically carry a master insurance policy, it usually only covers the common areas and the structure of the building. HO6 insurance steps in to provide coverage for personal property, interior unit items not covered by the master policy, personal liability, loss of use, and other areas of coverage.

    Different Approaches to Master Policy Building Coverage

    Specific requirements for your association can be found by reading the Covenants, Conditions & Restrictions (CC&R’s) or sometimes referred to as your Declarations:


    The “bare-walls” only insures the basic structure of the individual building, up to the bare-walls of the unit. Unit owners are responsible for insuring their own exclusive building property, such as sinks, cabinets, appliances, flooring, and wallpaper, along with any improvements and betterments. 

    Single Entity or Original Construction

    The “original construction” covers most real property in a residential building, including fixtures in individual units. However, it doesn't include any structural improvements, betterments, or additions made by owners. 


    The "all-in" coverage includes all real property in a residential building, including fixtures in individual units and any improvements made by owners. It replaces a unit to its original condition after a loss. In this approach, the unit owner is only responsible for their personal property under the HO6 or unit owners form or losses below the associations all other perils deductible (AOP). 

    It is important to note associations may have different requirements of those above and may also follow what is outlined in the Colorado Common Interest Ownership Act. 

    Critical Coverages You Should Have


    The master policy may not extend to the interior of individual units, making it important to have HO6 insurance to cover gaps in coverage. This includes walls, floors, ceilings, fixtures, improvements or alterations.

    Personal Liability Coverage

    Provides personal liability coverage, protecting you in case someone is accidentally injured in your unit or away from it, or if you accidentally cause damage to someone else's property. This coverage excludes claims involving automobiles and business, which require separate coverage.

    Additional Living Expenses (ALE) Coverage

    In the event that your unit becomes uninhabitable due to a covered loss, HO6 insurance can cover additional living expenses such as temporary accommodation and meals until your unit is repaired or until you find a new permanent residence. If you rent your unit, this coverage can help cover the loss of rental income. Many policies only come with twelve months of coverage or a set limit which may not be enough to cover you for the time it will likely take to rebuild.


    Many association policies have a 5%-10% wind/hail deductible where unit owners are likely to be assessed a share of that deductible following a covered loss that affects common areas or multiple units. Loss assessment coverage, typically included in HO6 insurance policies, can help mitigate this financial burden. This percentage is based on the total building value and not the loss. 

    As an example, an association with 10 units and a $1,000,000 building coverage and a 10% wind/hail deductible will have a $100,000 deductible at the time of loss. To help cover this loss, most association will assess owners a share of this loss in equal portions, assessing $10,000 to each unit owner. Having the right loss Assessment may cover the entire $10,000 amount assessed.

    Be careful when purchasing loss assessment coverage as some carriers have added this language below: 

    Special Limit

    We will not pay more than $1,000 of your assessment

    per unit that results from a deductible in the

    policy of insurance purchased by a corporation or

    association of property owners.

    Having the language above will limit your payout, REGARDLESS OF HOW MUCH LOSS ASSESSMENT YOU PURCHASE.

    It is important to note that some loss assessment endorsements must be in force at the time of the loss to the association as well as at the time you are assessed. 

    Review your HO6 policy to determine the maximum coverage amount for loss assessments and make sure you are covered for at least the greater of the master policy all other perils deductible or the wind/hail percent deductible. 


    As an owner, it is crucial to protect your investment and personal belongings. HO6 insurance offers the necessary coverage to safeguard your unit and personal property, providing peace of mind against unexpected events. Remember to ask the right questions when selecting a policy and understand the benefits of loss assessment coverage to ensure you have tailored insurance protection as a condominium & townhome owner.

    Devon Schad currently sits on the Board of Director for CAI Rocky Mountain Chapter, is an Educated Business Partner, and owner of the Schad Agency. The Schad Agency is a family-owned business specializing in insuring association and has since its founding in 1976.

  • 08/01/2023 9:08 AM | Anonymous member (Administrator)

    By Nicole Bailey, RBC Wealth Management

    The funds collected and managed by community associations are designated to be used for the benefit of the association. Association governing documents require some part of the annual assessments to be set aside for the future repair and replacement of community assets.  As these reserve funds accumulate, it’s important to ensure the funds are available when they are needed to pay for major repairs and asset replacements. The association’s reserve study provides a schedule of the reserve spending so that the association can build a plan to fund the reserve account sufficiently.  The association can also work with a qualified financial advisor to structure an investment strategy that helps protect the funds and generates interest income to supplement the contributions to the account from the homeowners’ assessments. 

    The homeowners in the community have entrusted elected members, management, and other professionals to properly manage and maintain the association. Everyone who serves the association (homeowners, board members, managers, community experts, etc) is expected to act in the best interest of the association. When selecting a financial advisor for an association, the board and community manager should seek out an advisor who acts in the best interests of the association. 

    Once a qualified investment professional has been engaged, the board and the advisor can develop an investment strategy that helps protect the funds, verifies they are available as needed, and generates a reasonable return given the first two objectives are met. The association’s investment policy provides the general parameters that inform the strategy to be implemented by the advisor.  

    As part of the investment objective, the investment policy outlines the types of risk the association should avoid or attempt to mitigate. These risks often include credit risk, liquidity risk, and inflation risk. It is important to have an awareness and understanding of the other types of risk the funds could be exposed to even if they are invested in what are commonly considered “safe” investments. 

    All investments come with different types of risk, so it is important for the board to consider which types of risk are acceptable and which types are not. Below is a summary of the different types of risks involved with investing: 

    • Interest Rate Risk: Changes in interest rates which result in changes to the market value of the investment. (ie: Interest rates rise and the market value of bonds falls)
    • Liquidity Risk: Investment cannot be converted to cash when the funds are needed without resulting in a loss of principal investment. (ie: Funds are in a CD that doesn’t mature for 6 more months)
    • Credit Risk: The investment’s issuing entity is unable to fulfill its obligations. (ie: Bank failure)
    • Inflation Risk: Prices of goods and services rise and the funds experience reduced purchasing power. (ie: Painting project costs $75,000 today and $80,000 2 years from now)
    • Reinvestment Risk: The funds currently invested will be reinvested at a lower return in the future. (ie: Interest rates are expected to be lower in 6 months and the funds are maturing in 6 months)

    In addition to the restrictions on risk, the association’s investment policy includes information about the investment strategy and the relationship between the board and the financial advisor.  The policy should outline the goal of the investment strategy – why are the funds being invested? Is it to ensure the full amount of the funds are FDIC insured (beyond $250,000)? Is the association seeking to increase the amount of interest being earned? When identifying the investment timeline, the policy should reference the reserve study. If the reserve study calls for limited spending for the next 5 years, the investment policy should not limit the investment timeline to 2 years. In alignment with the discussion of risk, objective, and timeline, the policy can identify the types of investment vehicles to be used or avoided in the account. Many policies restrict investments to certificates of deposits or investments guaranteed by the federal government, which is in alignment with the mitigation of credit risk. Some policies allow for a percentage of the funds to be placed into diversified stock positions which is in alignment with the mitigation of inflation risk. These restrictions and allowances should be carefully considered and approved by the board of directors.  The board’s expectations for the management and communication around the account should also be specifically outlined in the policy. 

    Under the fiduciary umbrella, the board of directors should partner with a qualified financial professional and adopt a comprehensive investment policy. By leaning on professionals and policies, the community may reap the benefits of long-term growth in the account in order to meet the future needs of the association.   

    Nicole Bailey, CFP ®, Vice President  - Financial Advisor

    RBC Wealth Management, a division of RBC Capital Markets, LLC, registered investment adviser and Member NYSE/FINRA/SIPC.

    Investment and insurance products offered through RBC Wealth Management are not insured by the FDIC or any other federal government agency, are not deposits or other obligations of, or guaranteed by, a bank or any bank affiliate, and are subject to investment risks, including possible loss of the principal amount invested.

    RBC Wealth Management does not provide tax or legal advice. All decisions regarding the tax or legal implications of your investments should be made in consultation with your independent tax or legal advisor. No information, including but not limited to written materials, provided by RBC WM should be construed as legal, accounting or tax advice.

  • 08/01/2023 9:05 AM | Anonymous member (Administrator)

    By Peter B. Miller, RS, and Rick McKittrick, MillerDodson Associates, Inc.

    Now that we have marked the second anniversary of the Champlain Towers South partial collapse, it is time to examine where we have come regarding the Reserve Study field. This tragedy opened our eyes and made clear several issues, not the least of which was a reform of the way we do Reserve Studies. As we all know, the Community Associations Institute (CAI), was very active in its response to this disaster, starting with a physical presence on the ground in the days immediately following the collapse, followed by its Condominium Safety Public Policy Report within months of the event. CAI also appointed several task forces to study specific topics such as Reserves and Reserve Funding, Building Maintenance and Structural Integrity, and Insurance. The input from these task forces culminated with extensive changes to CAI’s Reserve Study Standards. These changes to the Reserve Study Standards are important to understand, not just for Reserve Specialists, but for Community Managers and Community Association Volunteer Leaders as well.

    Input from the hundreds of CAI task force participants showed that the Reserve Study Standards of the late-1990’s needed to be updated to reflect the current practices and the rapidly changing technologies in the 21st Century. The updated Standards challenge the older practices such as requiring only a 20-year minimum period for the Reserve Study. This has now been updated to require the Reserve Study to cover a 30-year minimum. Previous Reserve Study practices excluded many components that had a Normal Useful Life (RUL) greater than 30 years. The new Standards require that proportional funding be provided so that a component with a 40-year Normal Useful Life would have 75% funding at the end of 30 years, for example. Previously ignored or overlooked “in the wall” common elements such as plumbing pipes, and electrical and mechanical equipment must now be included as Reserve inventory items. Additionally, Reserve Studies previously required that replacement be “in-like-kind”, meaning that you replaced each component with an identical component. The updated Standards recognize that components can be replaced with newer, more energy-efficient technology, or with components that have a lower life-cycle cost.

    The updated Reserve Study Standards also acknowledge that maintenance practices are integral in planning for the future physical and financial needs of a building, and therefore need to be considered in preparing the Reserve Study. The new practices recognize that a good maintenance plan can extend the Useful Life of components. Conversely, the lack of a maintenance plan can and should result in a reduction in the Normal Useful Life of the various components. Such a reduction in Remaining Useful Life, of course, increases the amount of Reserve Funding necessary for these components.

    Most importantly, the new Standards recognize that the structural integrity of buildings can no longer be ignored. While the actual structural components of a building are still not included in the Reserve Study inventory, funding for periodic professional structural evaluations of certain building types should be provided in the Reserve Study. The Taskforce on Reserves and Building Safety recommends that buildings be evaluated structurally every 10 years up to year 20. Buildings older than 20 years should be evaluated every 5 years. The exact “scope” of these evaluations is not defined within the new Standards. However, it has been suggested that the scope of these evaluations be defined by the appropriate ASTM Standard.

    It is hoped that the Reserve Study Standards will continue to be a model for State and local governments that are considering legislating Reserve Studies. And it is not just State and local jurisdictions that are tightening these requirements. CAI has seen outside forces such as Fannie and Freddie, other lending institutions, as well as the Insurance industry pushing for tighter Standards.

    The new Reserve Study Standards can be found on the CAI website at  under Reserve Study Standards. It should be noted that the updated Reserve Study Standards do not change the requirements and qualifications for applying for the Reserve Specialist Designation.

    Peter B. Miller, RS, is the President of MillerDodson Associates, Inc. He is a past member of CAI’s Board of Trustees and served as a Co-Chair of the Taskforce on Reserve and Building Safety.

    Rick McKittrick has worked as an Analyst with MillerDodson for more than 15 years.

  • 08/01/2023 9:00 AM | Anonymous member (Administrator)

    By James Phifer, ACCU, Inc

    It is not uncommon for our esteemed colleagues in the industry to shy away from discussing financial management, especially when it comes to the delicate balance between providing professional advice that may not be appreciated and keeping the coveted contract.


    However, before we proceed with our discourse, let us set aside the communities that are already flush with funds, diligently following their reserve studies, and dutifully maintaining their properties. They are already living the dream and we need not bother them with our humble musings.


    The number of underfunded communities that are unwilling to raise their assessments is growing, and they are facing mounting pressure from the rising costs of construction, materials, labor, and insurance.


    As previously expressed by attorney David Graf: "Bad management is obvious; mediocre management is visible; yet excellent management is unseen." It's no easy task to showcase the smooth sailing of a well-managed community. Said another way, it’s easy to show your worth in solving problems but it’s much harder to highlight your excellence in keeping problems from arising in the first place! No judgments here -- many of us are tasked with managing a community teetering on the edge of financial hardship or already immersed in it, all while trying to meet expectations on a shoestring budget.


    Managers, what are some essential resources at your disposal when dealing with an underfunded community? 

    Let's explore a few ideas:

    Behold the power of the monthly management report! As the expert in the field, it's your responsibility to provide appropriate financial guidance. It falls upon the shoulders of the esteemed professional (that's you!) to navigate the treacherous waters and steer the ship in the right direction. This means making professional recommendations for responsible funding of the client, irrespective of how you believe the message might be received. There is an obvious stress that Board members will have in reaching out to their neighbors and asking for more money.

    Next comes the delicate art of dealing with underfunded communities requesting bids. Please, I implore you, do not abuse your contractors. Many contractors are willing to give you a Rough Order of Magnitude (ROM) estimate. You know, the classic question of, "Will this cost us $1,000.00 or $100,000.00?" It's a fair question, and qualified contractors should be able to provide a ROM without significant investment of their time. If you do need a more precise estimate than a ROM, please ensure that you are sincere in considering using that vendor for the ultimate project. Bids do not cost the association anything -- but they certainly cost the vendor an investment of their time and if they repeatedly invest that time and do not get awarded the work, they will stop responding to your requests for bids.

    Let's talk budgets, my fellow managers! Construct a budget that not only covers expenses but also reasonable reserves and present it to the Board during budget season. Even if your Board takes charge of their own budgeting process, I implore you all to build a budget that leaves no expense or reserve unaccounted for. And don't forget to save a copy of the budget you supplied to the Board in the designated folder for your company. If the community decides against raising assessments, you will have the data you supplied as evidence, proving that any shortfall was not the result of "mismanagement from the management company." This will surely save you from future headaches, whether it be in your current role or with a potential future management company.

    Last, but not least, confide in your supervisor! Share the financial status of the community with your superior, enabling them to engage in a candid conversation with the Board. This will provide the Board with additional guidance and support during these trying financial times. Make no mistake-- if raising assessments to cover all anticipated expenses was easy, we wouldn’t be having this conversation. Board members are understandably cautious in raising assessments without a clear need to do so. So, make sure that the need is made clear to them so that they can be transparent with their owners.

    Now, dear struggling Boards grappling with the financial affairs of your community, this one's for you! As inflation skyrockets and every budget line item sees a staggering increase from 10% to 1,000%, while equipment nears its end-of-life expectancy, and the underfunded reserve dilemma looms large, what options do you have for exemplary financial management?

    Gather 'round, Boards! It's time for a meeting to discuss expectations, and boy, do we have some gems for you. If the community is stuck in a financial tight spot and can't afford to replace the (insert asset here) within the next (insert timeframe here), despite the dire need for repairs, make sure to communicate that information to the community. Transparency is the name of the game in association operations, and not just when the news is good. 

    But fear not, my friends, for clear communication is the knight in shining armor that will rescue us from a barrage of angry phone calls from upset owners. It's a win-win situation when it comes to handling the association’s reputation and owners’ expectations with finesse.

    Ok team, let’s talk bank loans! They're like magical unicorns prancing through a field of financial possibilities. Now, hold on a sec while I put on my old man hat and reminisce. "Back in my day, a Board member had to sign a personal guaranty for an association to obtain a loan." But lo and behold, times have changed! Communities can now secure a loan through an assignment of assessments (aka UCC filing), and fret not, my friends, it doesn’t count against your personal credit report. A loan can inject some much-needed strength into our common elements, improving the overall quality of living and boosting resale value. 

    Pro Tip! - Just be aware that if you first levy a special assessment to raise the funds and owners default or defer payment, you may not be able to go back and get a loan because your delinquency rate may be too high for the lender.

    And here's a nifty idea: chat with your management company about contractors who are willing to finance your project or explore external funding resources with long-term amortization payments. You'd be surprised to find funding companies out there flaunting repayment terms stretching up to 40 years! Now, that might just be the perfect fit for certain clients and their assets with a longer life span.

    So, there you have it, folks! A delightful mix of humor and professionalism to guide us through the trials and tribulations of managing a community on a tight budget. Let's tackle these challenges head-on, and don’t forget to treat your community manager and their team with kindness.  

    Author: James Phifer, President ACCU

    ACCU, Inc. has been providing community management services to homeowner associations since 1979.  For more information, please visit us at 

  • 08/01/2023 8:55 AM | Anonymous member (Administrator)

    By Paul Riggle, AGS Construction

    *2023 Titanium Sponsor*

    If you were having repair work done in your home, would you ever invite a contractor in who you have not verified their credentials or gotten references from?  There is no difference if you live in a HOA community or serve on an HOA Board.  The final work product you get from a third-party contractor will impact everyone in the community and a bad decision could be detrimental and even more costly in the long-run.  One way to maximize the likelihood for the success of your project is to follow some best practices in selecting a contractor.  By using techniques listed below, everyone will be on the same page through the evaluation, bidding, and construction process.

    • Document Your Selection Process:  In order to help you organize your thoughts around selecting a contractor, consider developing a written plan that documents the process you are going to use.  This is a great way to help your community understand the process and avoid headaches down the road when certain members of your community ask questions.
    • Qualified Contractor Estimates:  Having at least three qualified estimates will help you get the best value for the best price, but equally important will help you determine how you feel about a contractor and how they will get along working in your community.  You can start by getting recommendations from people you trust.  The last thing you want is your community to be unhappy and you fielding complaint after complaint.
    • Estimate Evaluation:  Whether you have experience in the estimation process or not, the most important thing in comparing estimates from different contractors is to make sure that what was estimated is what you specifically asked for and that you are able to compare them on an “apples to apples” basis.  That means there are no items missing and nothing extra included…Think things like the same quantities, the same repair scope, the same quality, etc.  One way to assist you in this process, especially for large jobs, is to use an engineer as a resource.  The engineer can help with identifying qualified contractors, creating the scope of repair, providing a bidding template, evaluating the estimates, and helping you understand them.  Using such a resource can help identify gaps in estimates that appear too low that could possibly cause the need for expensive change orders down the road or estimates that are too high and are either gold plated or just too expensive for the work required.  Engineers can even provide oversight of the contractor to make sure the contractor performs the repairs according to design.  
    • Communication = Success:  The single biggest factor to ensure success of your project is communication.  Utilizing your given communication infrastructure is great, but on a large project, your communication strategy needs to be augmented.   Does the contractor have established practices for communication?  Do they use multiple methods to share information as people receive and ingest information in different ways.  Types of communications you should look for include physical postings, cell phone numbers of on-site staff, 24-hour emergency numbers, online portal, document warehouse, strategies for neighboring communities, etc.
    • Get History & References:  Ask the contractor how long they have been in business and how has their business changed from a scope, management, or ownership perspective.  Also ask them about their safety records.  Any reputable contractor should be able to provide that and give you references, but you should not stop there.  Ask for specific references for a scope of work that is similar to what you are planning.  You should also consider visiting the job sites for these references and talking to community managers, HOA board members and homeowners who were present during the construction.
    • Local & Licensed Contractors:  If you have ever tried getting support from national companies, you know how challenging it can be.  Hiring a local contractor will provide much easier access to people who can help if problems arise.  Local contractors have a vested interest in making things right as their reputation is key to their future success.  Additionally, they are more likely to be familiar with specific building codes in your area.  You’ll also want to ask for their local physical address and phone number.  Another key is to make sure the contractor has the proper licensing to not only work in your area, but to perform the work being asked.  Not all licenses are the same, so ask for the details.
    • Insurance & Bonding:  Make sure to inquire to the contractor’s insurance…This includes General Liability Insurance, Workers Comp, Auto, Umbrella, Excess Liability and any local special insurance requirements such as property damage, pollution or recycling.  The coverage should exceed the total value of your project.  Also, make sure you request that the community, the Board, property managers and any other interested party are listed as additional insured on a Certificate of Insurance.  Even if you do not want to consider a bond, asking the contractor what their bonding capability can give you some keen information in making your contractor selection.
    • Product Advice:  Every contractor will have products and systems they are most comfortable with.  These likely have worked best for them and their workforce on past projects.  You should listen to a contractor’s product recommendation but inquire about alternatives and why they prefer the recommended solution.  If a contractor only offers one product solution, they may be getting special discounts that they may not necessarily pass on to you.
    • Payment Options:  You should discuss your budget and payment options with a contractor.  There is no industry standard to payment options and many contractors have multiple possibilities that if you don’t ask about, may not be offered.  Things to consider include special financing, early payment discounts, down payment or commencement payments, retainage, etc.  Regardless of what payment option is arranged, do not pay cash.  Pay by check, credit card or ACH and do so on time.  Part of a good team is for all parties to do their part.
    • Documentation:  Ask the contractor what their documentation strategy is.  This should include third party documents from engineers, city permits, daily logs, etc.  All this information should be readily available to you, ideally at any time, but at minimum at your specific request.

    The choice you make is an important one and will ultimately determine the success of the project and how much you will have to do throughout this undertaking.  It is important to not be pressured into making a quick decision.  When you have chosen a contractor, get everything in writing and make sure you read all the fine print on any estimate or contract.  The contract should include a detailed description of the work, a payment schedule, an estimated start and completion date, guarantees and warranties and signatures from both parties.  The small details can make or break a project when any issues or differences of opinion arise.

    At the end of the day, it’s your choice and a decision you must live with.  Take your time and do it right!

    Paul Riggle is the Vice President of Sales and Marketing for AGS Construction and works with HOAs, multifamily, residential and commercial properties for their communitywide restoration and reconstruction projects. Paul works hard to strengthen relationships between the Sales Team, Project Managers, Community/Property Managers, management companies, Board of Directors, residents, and vendors. The ultimate goal is to deliver a successful project to the customer on time, within budget and safely while exceeding expectations. "AGS wants to be your preferred contractor!" 
  • 08/01/2023 8:53 AM | Anonymous member (Administrator)

    By Bryan Farley, Association Reserves - CO

    Q) What is the difference between loss assessment coverage and special assessment coverage?

    A) Loss assessments are the result of sudden and accidental damage that is covered by an insurance company.

    A Special Assessment is an extra fee charged to the owners of an association to pay for projects that are not the result of sudden and accidental damage or a covered loss. For example, if a property has not budgeted for the eventual replacement of the roof, owners may need to be charged a special assessment to pay for the replacement of the roofing system. 

    Q) What is the difference between a sudden loss, capital improvements, and maintenance?

    A) A sudden loss is something that happens unexpectedly, a capital improvement is an upgrade or large planned project, maintenance is something that is done regularly so that the asset can achieve its expected life. 

    An example of sudden loss is a hailstorm that causes damage to the association roof. 

    A capital improvement would be if the association wants to install a playground within the property when no playground previously existed. 

    Maintenance is the general upkeep of the assets that help the asset achieve its expected useful life. For example, items such as asphalt sealing, roof patching, siding painting, wood staining, boiler repairs, etc., will help these items achieve their expected useful life. Typically, ignoring maintenance projects will shorten the life of the asset or may even cause the eventual replacement value to increase due to lack of maintenance. 

    Q) Will an HO6 insurance policy cover a special assessment that is due to deferred maintenance?

    A) No, it will not. 

    For example, an asphalt composition shingle roof was installed in 2000 is expected to last approximately 20-25 years. The roof is now, in 2023, approaching the end of its expected useful life. An owner is expected to maintain the roof, and the failure to do so is not a sudden and accidental occurrence that would result in a successful insurance claim. 

    Loss assessments are the result of sudden and accidental damage that is covered by an insurance company, special assessment is for special projects that are not the result of sudden and accidental damage or a covered loss. 

    Q) What is deferred maintenance?

    A) Deferred maintenance occurs when s common area component needs to be repaired or replaced, but the association chooses to not the make repairs, and instead pushes the project back. For example, if the roof needs to be replaced this year, but the HOA does not have enough money to pay for this project, the board may decide to defer the project another year. 

    Q) What are the consequences of deferring our projects further?

    A) Consider the roof will soon need to be replaced (with a remaining life of 0 years) per the recommendation of a qualified inspector. If the board chooses to defer the project, then there are a couple of outcomes:

    - The roof will fail catastrophically with damage to the interior of a unit, which would now require a large restoration project to mitigate this issue. This will also negatively impact the HOA since the failure was caused due to board negligence. This could possibly result in lawsuits or other costly issues.

    - The roof project will be deferred, but the cost will be higher in the future due to inflation and other unknowns (supply chain issues, labor issues, etc). The HOA will now need to charge the owners more money in this scenario to make up the difference in cost. This can result in a special assessment or large loan requirement. 

    Overall, deferring a project will always cost the owners more money. It is best to complete a project when it comes due. 

    Q) If we complete this project now, won’t our dues go up and that may negatively impact our resale value? 

    The data shows that well-funded reserves increase the resale value of a home. A well-funded association can increase the resale value of its homes by ~12% relative to a poorly funded association.


    When a property is experiencing component failure due to deferred maintenance, a prospective buyer will see that they are buying a property in an HOA that cannot maintain its current financial obligations, and therefore may be less incentivized to pay top dollar for a property that is underfunded (roofs leaking, paint peeling, potholes in the parking lot) and cannot pay for basic maintenance needs. 

    Ultimately, the board has three options to pay for the upkeep of the common area assets: 

    1) Regular budgeted contributions into the reserve account

    2) Special Assessments and Loans

    3) Doing nothing

    The most affordable option is to pay equally distributed contributions into the reserve account since every owner over the life of the property should have paid into this fund. Every owner will pay their fair share of their usage of the common area assets. 

    A special assessment and loan are sometimes necessary if the HOA does not have adequate reserves, however, these are more costly than regular budgeted contributions. 

    Doing nothing is the costliest because deferring maintenance could lead to structural damage, and potentially cause life safety issues for the property. 

    Each board has a choice to make, and the choices are not easy, but there is clearly a right choice and a wrong choice. The wrong choice could lead to costly emergency projects, or at the absolute worst, building failure.  

    The right choice to make is to spread out the inevitable costs of the ongoing deterioration of the common area components to all owners of the HOA. This way, every owner, regardless of when they happen to live at the property, will be paying a fair share of the reserve contribution obligations.

    Bryan Farley is the President of Association Reserves, CO and has completed over 3,000 Reserve Studies and earned the Community Associations Institute (CAI) designation of Reserve Specialist (RS #260). His 12+ years of experience includes all types of condominium and homeowners’ associations throughout the United States, ranging from international high-rises to historical monuments. 

  • 06/01/2023 11:00 AM | Anonymous member (Administrator)

    By Kiki N. Dillie, Altitude Community Law

    No one feels good about collections. Board Members don’t relish sending their neighbors to collections. Professionals, be they managers or account techs or attorneys, don’t enjoy it either. However, the reality is that collections is a necessary reality for nearly every Association at some point.

    Sometimes a homeowner is in a bad financial situation through no fault of their own, such as a medical issue. Sometimes a homeowner is unable to pay an emergency special assessment. Sometimes a homeowner just doesn’t want to pay because they are unhappy with the Association’s lack of maintenance. Regardless of the reason behind the non-payment, the end result is the Association now has a homeowner with a delinquent balance. Inevitably, the Association where you are a Board Member or an Association you manage or an Association you represent will have someone that is unable or unwilling to pay their balance.

    This situation can be uncomfortable for everyone involved. The Board has responsibilities to the Association and is obligated to ensure all homeowners are complying with the governing documents of the Association, which includes paying assessments timely. But, the Board is also aware that they are sending their neighbor to collections, which can be awkward when meeting that homeowner at the mailbox or park. Conversely, the Association has its own responsibilities to uphold and relies on all homeowners paying their assessments timely. If some homeowners do not, the Association may not be financially able to provide the services and amenities it is contractually obligated to provide. If enough homeowners fail to pay their assessments timely, it could result in the need for a special assessment, essentially making the paying homeowners pay their fair share plus a portion of their neighbors’ shares.

    The Board has a duty to uphold the governing documents of the Association, including the Association’s Collection Policy. Therefore, when a homeowner falls delinquent, regardless of the circumstances, the Board should follow the Association’s Collection Policy and send the notices as listed under the policy. However, if a homeowner reaches out to the Board before the balance has been sent to an attorney for collections, it is generally recommended that the Board and homeowner have an open dialogue to try to reach a resolution. Both the Board and homeowner should be reasonable and try to resolve the situation. For example, a waiver of late fees and/or interest may be a reasonable solution. Alternatively, an extended payment plan option may be reasonable.

    However, it is important for both the Board and homeowner to understand the limitations of the discussion as well. Generally, a waiver of assessments is not recommended or permitted by the Association’s governing documents. 

    Additionally, the Board should be careful to avoid possible selective enforcement claims. All homeowners in similar situations should be treated similarly. Having standard practices in place can help avoid selective enforcement. For example, a Board could have a blanket practice that any homeowner that initiates settlement discussions with them will be offered a waiver of late fees and interest if the remaining balance is paid in full. What Boards should avoid is unilaterally waiving a balance for a homeowner or deciding to not follow the Collection Policy for a particular homeowner just because they happen to know about a medical condition or financial misfortune impacting that homeowner. It is entirely possible that other homeowners are experiencing the same misfortune, but the Board does not know about it, resulting in potential selective enforcement claims.

    Collections is often uncomfortable for all parties involved and most people want to reach an acceptable resolution to help the homeowner get out of debt to the Association. It is important for Board Members to be aware of the potential problems with waivers or settlement negotiations, such as waiving assessments or selective enforcement. However, with the proper knowledge, collections can be done with compassion, while also being sure the Association is properly funded.

    “Kiki Dillie is a Shareholder and Debt Recovery department head at Altitude Community Law, P.C., located in Lakewood, Colorado. Altitude Community Law specializes in representation of community associations all over Colorado and has offices in Lakewood, Loveland, Colorado Springs, Frisco and Durango.

  • 06/01/2023 10:59 AM | Anonymous member (Administrator)

    By Jennifer Kinkead, Goodwin & Company

    90% of the Community Management Business is the relationships we build with our vendors, our peers, and, most importantly, our Boards of Directors. The relationship between the Community Manager and the Board of Directors can be defined as the most important relationship to nourish. The role and responsibility of a Board member is so important when it comes to managing an HOA correctly and accurately. We can all agree that being a Board member can be a thankless job at times, as they are homeowners who are graciously volunteering their time to serve the community they love. 

    The best way to understand the role of Board member is to understand their responsibilities to the Association they are serving on. The most important role of the Board of Directors is the fiduciary responsibility they have to the Association. It is crucial that all Board members commit to enforcing the Governing Documents of the Association, that is their job. This can be difficult for some Board members as some rules can be a point of contention to their fellow neighbors. Board members dedicate their time to guaranteeing the Association is being managed according to the law and Governing Documents of the Association. Current Board members play a huge role in developing current and future leaders in the Association who will represent the Community once they are gone. 

    I think it’s safe to assume that serving a community cannot be done without some assistance; and this is where the management company comes in. Boards entrust the manager, the same way the homeowners entrust the Board members. Together, the Board and management company accomplish the duties of the Association. It’s important that managers nourish the relationship with the Board, as that can also be the defining factor in them continuing to work with the management company they represent. 

    Board members are also trusted to represent the homeowner and speak on their behalf. It’s important to make sure there are active Board members at all times, and any vacant seats get filled according to the Governing Documents. 

    How is that done? Board recruitment! 

    Board recruitment is an on-going process as Board seat terms do expire and finding volunteers also cannot be easy, but it is meaningful to the Association. Below are just a few ways to recruit Board members:

    1. Homeowner Involvement-Engaging with your fellow residents and gathering their ideas is a great way to recruit Board members. This will allow current members to decide where a new member can best serve the community based on their individual skills or trades.  

    1. Community Events- Attending events being held throughout the community is another advantageous way to recruit Board members. Any successful community event allows the owner to observe all the great things that come from serving the community. Social events also allow the community to gather and enjoy their neighbors. You want Board members who are personable but also Board members who are not afraid to uphold the Governing Documents of the Association. 

    1. Clearly Define the Role and Responsibilities of the Open Position(s)-The role of each Board position is usually defined in the Governing Documents of the Association but it’s important to give them a heads up on what they are getting themselves into. New potential members should be advised of how many hours per month they will be needed, how many Board meetings they need to attend to achieve quorum, or any extra approval processes they will be needed for. 

    1. Advertise/Broadcast -If your Governing Documents are not opposed, it’s a great idea to put the word out there ahead of time. Posting notices on the open Board Positions or sending Broadcast emails allow owners the time to decide if they can join the Board.  

    As any relationship requires attention to grow; the same applies with your Board relationships. Once you are assigned to a new community, or a new Board has just been elected to your current community, don’t be afraid to nourish the relationship you have with them. The goal is gaining their trust to ensure you are serving the Community as one voice.

    About the Author: My name is Jennifer Kinkead, senior community/ special district manager for Goodwin & Company. I so thrilled to be a part of an industry that is so rewarding, and I’m so proud to help bring Goodwin & Company to Denver Colorado!  

  • 06/01/2023 10:57 AM | Anonymous member (Administrator)

    By Nicole Hernandez

    Putting it in today’s terms, one of my biggest “cringe” moments being an HOA insurance specialist is when a Board of Directors decides they do not wish to procure Directors and Officers Liability Insurance (D&O).  In my mind, (and I’m sure many of you share this same opinion), this coverage is absolutely necessary to protect the Board from allegations of wrongdoing and the defense against such claims. Often, I find that the reason a Board may choose to decline procuring D&O coverage is because they do not understand why this coverage is necessary and what exactly it covers.  

    I recall the time I experienced a discrimination complaint in my prior life as a Community Manager.  A resident was dissatisfied with the general landscape maintenance of the common areas and filed a complaint with DORA against the Board of Directors, the landscape company, Management, and the Association itself.  Fortunately, we did have a D&O policy in place and coverage for the response and defense was provided by the insurer.

    The first step in the complaint was gathering all the documentation related to the matter to bring forth with our response. In this case, we wanted to provide records of all landscape work orders, all planned and executed landscape projects and architectural control records related to landscape modifications.  Additionally, any meeting minutes that mentioned the same and phone records were requested. I imagine with today’s technology, the compilation of these records would be much more streamlined, but back then it was a process to collect all this various documentation. Additionally, as management contracts often work, the additional time required to gather the records, copies and claim management were outside of the standard routine services as defined in the management agreement, so this all resulted in additional expenses for the HOA.

    The greatest expense for the community was the attorney fees and court costs required to respond to the complaint. The attorney had to review the records through the lens of the complaint and draft a response to the State regarding the allegations. As is common with such claims, additional information needed to be provided before the State eventually closed the complaint with no finding of any violation by the defending parties.

    Due to the nature and desired resolution of the original complaint and the Board’s sincere desire to rectify the issue and resolve any lingering feelings of being wronged, several meetings were held with the complaining party, Board and landscapers trying to come to a satisfactory resolution of the landscape in question.  The additional meetings required a mediator, which was also provided and funded by the HOA itself.

    In the end, the response and defense of the claim took over nine months and an estimated expense of $50,000 in attorney fees, court costs, and settlement expenses, all of which would have been funded by the association if it had not carried D&O coverage.  I am not aware of any communities that regularly budget a $50,000 contingency, attorney fee expense, or other relevant line item, so it is likely that a loan or special assessment would have been necessary to fund this unexpected expense.

    It seems like such a silly example. We had to engage attorneys, a mediator, and the court system to resolve an aesthetic issue with common area landscaping (I hear the chuckles coming from my Community Management friends now….do I dare mention native grasses?!), but these are common situations when we live in proximity and are unable to find common ground on matters that may be seen from different perspectives.

    I use my personal example of landscaping to illustrate the types of D&O claims we experience in HOAs.  Allegations of discrimination, unequal covenant enforcement, improper meeting notice or elections, ACC processes, or decisions are all examples of an issue that may arise at any point in our communities.  Without Directors & Officers Liability coverage, the community would be left to self-fund the additional expense related to the response and defense of the claim. Remember, this is not just attorney fees and court costs; the additional time and energy costs should be considered too.


    With over twenty-two years of combined Community Association Management & Insurance experience, Nicole understands the structure of Community Association Management and the challenges Managers and Boards face daily. Nicole is passionate about helping Boards and Managers assess their risk and designing proper insurance programs that cater to their communities.

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