Ready or not, the holiday season is upon us. It’s time to stock the larder and celebrate glad tidings with family and friends. It’s also time for homeowner associations to wrap up the present year and prepare to launch the new one.
To help get your association off to a fresh start come Jan. 1, we asked several association professionals to join us in compiling the following year-end checklist:
– Help your homeowners hunker down for winter.
Kara Gould, vice president of Rowell, a property management firm in Rolling Meadows, suggests sending a letter that spells out policies and procedures for dealing with snow and freezing temperatures.
“We provide all our properties (with) information about who the snow contractor is, what the specifications of the contract are and some tips on what to do to protect themselves and their homes when the weather goes below zero,” she says. “If the contract says we don’t plow until after a 2-inch snowfall, people don’t have to wonder why the plows aren’t out after 1 inch.”
– Take stock.
Outgoing boards should determine what needs to be done to complete the agenda they set up when they came into office, says attorney Charles VanderVennet of Chickerneo & Fosco in Mt. Prospect.
“If you’ve just completed an election, it’s time for the new board to decide what projects are important for the new year and set its own course.”
– Update your rules and regulations.
Establishing the year’s end as the time to do it, similar to changing the batteries in your smoke detector when you change your clocks every April and October, will ensure the board keeps the documents current.
“Changing circumstances sometimes require board action to put rules and regulations in place or take out existing ones,” says VanderVennet. “Whether you use the new year or the annual meeting or some other time, you should have a benchmark for your review.”
– Review your contracts and service providers.
Make a list of new ones you’ll need this year and which ones expire. Start collecting bids now to lock in the best prices and dates.
For each of her properties, Gould creates a checklist that details goods and services needed, when they were bid out, when information was given to the board and when the decision must be made. As decisions are made, she makes easy-reference charts for the reception staffers.
“It’s nice for them to look at when they get phone calls from unit owners who want to know what buildings are being painted this year or who is doing the wood replacement,” she says.
– Make an appointment with your accountant.
Find out what types of money matters such as transfers or payments should be done, advises VanderVennet.
“Even though we’re not-for-profit organizations, there would be income tax due on income,” he says.
“There may be ways to offset expenses against that income to minimize any tax liability.”
Project excess income for the year and adopt a resolution to transfer it to the reserve fund, refund it to the homeowners or apply it to the following year’s assessments. Non-profit corporations must end their fiscal years with zero balances, explains Mara Fox of Rome Associates LLP, a Chicago accounting and consulting firm.
If you’re ever audited, the IRS will want to see the resolution “in order for excess funds not to be taxable,” she says.
– Evaluate your association’s investment policy and earnings strategies for reserve monies.
“I would never suggest associations invest in anything where they could lose their principal, but if they’ve got money they’re not using for 12 to 18 months, they see if they can invest in something with a little higher yield,” Fox says. “There’s no need to have that money in a low-yielding money market account.”
– Make a New Year’s resolution that board members will stay up to date on issues that affect homeowner associations.
Madeline Franklin, assistant to the president of Vanguard Management Corp. in Schaumburg, urges the associations she works for to join the Community Associations Institute (630-372-7510), the Association of Condominium, Townhouse and Homeowners Associations (312-987-1906) and to subscribe to Condo Lifestyles magazine (630-932-5551).
“They get first-hand information on the law as well as new programs and seminars that will benefit them,” she says. “There is a great deal of fellowship to be gained, too.”
– Be of good cheer.
“Homeowners, board members, contractors and management companies all have the same goal–to preserve and enhance our associations,” says Franklin. “This is a good time of year to step back and be thankful for our homes and for the people who take care of them.”
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Do you have an issue you’d like to see discussed in a future column? You can write to Pamela Dittmer McKuen at Community Living, Chicago Tribune, Your Place section, 435 N. Michigan Ave., 4th Floor, Chicago, Ill. 60611. Please include your phone number. Or e-mail Pmckuen@aol.com. Answers to queries will be provided only through the column.
