Is your condo management association enforcing the rules? If not, they could be jeopardizing your safety, physically and financially

Ever wonder who makes all the rules that your condo management association enforces? Better yet, do you sometimes wonder why there ARE so many rules? Seriously, are you feeling a little suffocated? Before you put that rebel hat on, consider this, rules are the safety net for owners and tenants both financially and physically and good condo management associations know their importance.

Rules for physical safety, is your condo association management covering you?

We’ve all seen the rules a million times; no glass containers in the pool area, no running in the common area walkways, no hanging items from the balcony, no leaving trash outside the door overnight. Seriously, why, and who comes up with this stuff?

Some of the rules you follow may be dictated by the CRRs for your community; others are developed by the condo management association and approved by the board to limit the risk of injury. People who develop these rules for the condo management association are risk managers and their job is to look at each situation and determine what the risk exist, score them based on industry standard criteria and determine if an action or rule is need to limit or eliminate your exposure. Taking the example of the glass in the pool area; one slip with a glass item in your hand in a slippery wet pool area and the results could be deadly; easy fix on this one-no glass in the pool area and post it on a sign in case you have visitors.

Physical safety is one thing, but rules helping with financial security

Condominium management associations also are required to minimize your fiscal liability by utilizing rules that alter behavior. Again, think about the glass in the pool area; what if the person who falls is killed and his survivors decide to sue for wrongful death; after all, there was no sign or rule that said not to take that glass into the pool area. Insurance may cover the first time, but after that, their risk manager is going to say, why isn’t there a sign or a rule?

The other part of good risk management, is reduced premium cost for insurance. If your condo management association has a safety program in place that includes rules which limit the liability of the community, insurance companies will reward you with lower premium cost.

How can I make sure my condo management association has risk management?

After an event is not the time to ask if your condo management association has a risk management program, ask now. Best idea, give RISE Management Association a call. RISE is unique, they have all the specialist under one roof, spreading cost over multiple properties and providing you with a solid condo management association. Call them today at 713.936.9200 or email them at [email protected]. When you gamble with safety, you bet with your life, follow the rules.

The more we live together, the more we need a good condo management association.

The more we live together, the happier we will be…okay, maybe not, that’s why you need a condo management association that works to strengthen the community instead of breaking it apart. You have owners who feel like kings, tenants who feel like they don’t have a say (and in most cases, they don’t) and a board who is sure attempting to make it all work is like herding cats. But good condo management companies love herding cats and they’re good at it!

Condo management associations strengthen through financial management

There are several things a good condo management association does to make the community strong. Most importantly, the condo management association starts by making sure the community is financially stable. Communities that are not consistently assessing owners for repairs that should have been planned for will do wonders for the demeanor of the owners and it adds to the overall strength of the community.

That same condo management association can also make financial reporting easily understood for both the board and the owners. Through reserve studies and other tools, everyone understands what their monthly fees pay and how they are distributed to keep unwanted assessments out of the picture.

Condo management associations also are the keepers of the rules

Sad but true, when living in such close quarters, rules are a part of life and a good condo management company knows not only the importance of the rules, but also how to apply them equally. My father would say, the condo management company has no dog in the fight, so they apply the rules and covenants equally across the board. The condo management association removes all indications of favoritism in the implementation and enforcement of the rules.

Interpretation of the rules is also better handled by a condo management associations. Companies like RISE management in Houston deal only with condominiums, so they have experience in reviewing your rules and implementing them; they can even make suggestions should one of them pose an issue.

Condo management association keep information available to all

Condo management associations provide the access to information that all owners and tenants needs. When you have engaged someone like RISE in Houston, there is always someone to reach out to. Owners and tenants have a sounding board or an information source. This added access helps to strengthen the community. Condo management associations keep meeting minutes, budgets, CCRs and accounts all within reach of the owners who may want them.

Condo association management provides an avenue for engagement

Good condo association management understands the needs to engage. They work to provide various committees to bring people together for a common cause. It doesn’t have to be a social cause either, it could be to review an upcoming project and provide owner/tenant input. Don’t forget the tenants either; yes, they are not vested owners, but they do live there and they may have talents that can add to the wellbeing of the community. A good condo management association knows everyone in the complex and knows where those skills lay.

How strong is your condominium community?

Are you starting to wonder how your community measure us against the competition? If your community lacks the strength it should have, contact RISE Association Management today and find out how to strengthen your community through a solid condo management association. Learn more about RISE by visiting or request a quote by contacting RISE at (713) 936-9200 or [email protected]. A condo management association that increases your strength.

Association management rules, they’re serious business.

When you look up the word “Rule” in a business dictionary you can understand the importance of association management rules and maybe even more importantly the need for someone like RISE management on board to interpret and manage their enforcement. The definition is weighty and reads like this:

  • Authoritative statement of what to do or not to do in a specific situation, issued by an appropriate person or body. It clarifies, demarcates, or interprets a law or policy.
    2. Statement that establishes a principle or standard, and serves as a norm for guiding or mandating action or conduct. Rules may be divided into four general categories: (1) Folklore: Unpublished rules that are conveyed by behavior and are implicitly understood. (2) Guidelines: Commonly published and recommended practices that allow some discretion with their interpretation and use. (3) Mandates: Published commands that may not be ignored in any circumstance and whose violation is punished.       
    Click here to read more..

Now, think back to the last time you read the association management rules for your condominium home, been awhile? According the experts at RISE management, it is not that unusual that people have not read the rules, as most only refer to them for clarification after the fact.

Why are association management rules so important?

The association management rules or CC&Rs as they are also called; provide the guidance to keep your condominium association running smoothly. When association management rules are interpreted and acted upon by the association board versus an experienced company like RISE management, it can spell disaster, including ill feelings among groups of residents, unequal application of rules and even in some cases lawsuits.

What is covered in the association management rules?

Association management rules, according to RISE management can include directives on issues such as:

  • Permissions needed to rent out your unit, or even if rental is allowed.
  • Special stipulations for assessments and the collection of those assessments including penalties and remedies.
  • Building and remodeling restrictions or standards.
  • Governance of the association.
  • And more…

Every owner is responsible for obtaining a copy of the association management rules for their condominium and if they rent their unit out, informing their tenant of the rules at move in. These rules can be obtained by contacting your association board or management company according to RISE management.

RISE management understands association management rules.

RISE management not only understands the importance of the association management rules, but they also know the best way to make certain they are applied consistently to keep you and your board safe from legal actions.

RISE management reminds us, association management rules are serious and can be enforced with legal action so it only makes sense to use someone like RISE management with their wealth of experience. Give RISE management a call today and find out why their services are right for you. Call them today at 713.936.9200 or email them at [email protected].

RISE is setting the bar in Houston condo management.

When you look at Houston condo management, there is one company that stands out above the rest; RISE Association Management Group. Their home page says it all, they sharpen your focus instead of dulling your experience. How do they make this happen? They focus on condo management only, specifically, Houston condo management.

Most condo management groups represent not just condos, but also single family homeowner’s associations. These are two completely different animals and require two completely difference approaches. It’s like this, you wouldn’t have your General Practitioner do heart surgery; so why trust your condo management to someone who provides broad and limited knowledge to multiple market sectors.

What does RISE provide in Houston condo management?

RISE Association Management Group provides management by starting with a staff that has extensive knowledge in multiple subject areas working in teams for your success.

RISE provides a comprehensive program in Houston condo management that includes:

  • CFO Insight Reporting
  • Monthly Financial Reporting
  • Work Order Management Systems
  • Banking/Website Integration
  • Board/Owner Online Resources
  • Risk Management and Prevention
  • Effective Receivables/Collection Management
  • Compliance Enforcement

RISE can provide your Houston condo management maintenance.

We all know that there is more than the financial and administrative side to Houston condo management. For maintenance of common areas and facilities, RISE has a team of specialist that know facility management. They know how to spec, hire, perform and supervise your repairs and maintenance. They real beauty in this part of the RISE Houston condo management difference is you share those facility specialist, so the cost is spread over multiple properties, reducing cost for all. This is Houston condo management done right.

Management; focus and accountability.

Most Houston condo management provided by the broad spectrum guys only provide the status quo. You don’t know where they are starting because they provide no defined baseline. The result, there is no long-term focus and limited accountability. RISE is different when it comes to Houston. They start by evaluating not just your financial condition, but also your physical condition. It doesn’t stop there either, they work with you to define goals, identify weaknesses. The most important thing RISE provides condo management is accountability, with RISE on your side you always know where you stand financially and physically. Monthly reporting keeps you in the loop and provides real time data upping the accountability factor for RISE.

Give RISE a call today and begin your journey to complete Houston condo management. The number is 713.936.9200 or email us at [email protected]. Let RISE sharpen your focus without dulling your experience.

When neighbors fight let the association management company handle it.

A condominium is a very close living situation and can be a wonderfully supportive environment or a war zone if neighbors fight neighbors. Without the right association management company it can make for quick escalation. Every property, neighborhood, apartment or condominium in Houston has one or more of the following in residents:

  • The Noise Maker: normally active on week nights when you have to work the next day.
  • The Slob: they leave their trash bag sitting on the shared landing overnight or sometimes longer until they take it to the community dumpster.
  • The Freak: they have eclectic taste to say the least and they have a very strange group of visitors. (Could be transplants to Houston from Austin)
  • The Pet Lover: little Fido barks all day while they are at work and leaves little gifts everywhere that they fail to pick up.

One of our managers use to compare living in a condo to having your extended family, (the ones we don’t talk about), living with you every day! The savior is your association management company, the association management provides the expertise that is not just a buffer, but a deterrent to these types of situations.

Association management company, in the trenches

An experienced association management company knows that neighbor to neighbor fighting can quickly escalate to an unmanageable situation that can spread and effect an entire community. Mediating these types of situations is most efficiently handled by the association management company. Parties are more likely to listen, as the association has no dog in the fight so to speak.

The association management company only has one charge and that is to provide a comfortable, safe and friendly atmosphere for all to live in.

How to deal with the nuisance neighbor

No one wants to turn their neighbor in for something they feel they did wrong, but no one wants to live in a community with unbearable neighbors, so do you turn them in to the association management company or use one of the following:

  • The diplomatic approach, just reach out to your neighbor and let them know your frustration-see if you can work out a solution.
  • Write a letter to the editor in the association management newsletter for your property. Encourage them to answer and sight policy/rule being broken.
  • Last resort, contact the association management company and let them address the issue. Let them know that you are happy to attend limited mediation if it will help.
  • NEVER retaliate-“Two wrongs don’t make a right”.

No association management company at your property here in Houston, check out RISE Association Management Group; explore what an association management company can do for you. Request a quote by contacting RISE at (713) 936-9200 or [email protected]. The association management company that increases your value and living experience daily.

Reserve Fund Study – Helping you to plan for the future

A reserve fund study is a tool that allows for long term planning by identifying the condition of capital expense items and setting funds aside for those expenses based on their life expectancy. The reserve fund study is made up of two parts: the physical analysis and the financial analysis and is best completed by an independent consultant or an advanced management company who has experience in this area, both are easily found in the Houston area. Normally capital expenses are identified as items where replacement and/or repair is a major long term expense and is not easily budgeted for in your standard operating budget.

Benefits of a reserve fund study

A reserve fund study provides important information to the maintenance department of what major expenses can be expected and even a possible time frame for when those expenses might occur. The reserve fund study also provides owners and perspective buyers a snapshot of the condition of common area critical components and the level of financial prep that has been done to avoid last minute assessments when they fail.

A growing number of states, (30) at this time, require some form of reserve planning or disclosures. While Texas is not one of the states requiring this type of planning by law, it is still highly recommended. Houston condo buyers are savvy buyers who will require this type of planning. In fact, for a condo complex to be considered Fannie Mae or FHA insured loans they must demonstrate that they have a minimum of 10% of the total budget dedicated to reserve contributions plus they may ask the property to provide a reserve fund study that is no more than 24 months old.

Reserve contributions are normally one of the largest budget line items and often account for 15-40% of the total budget. Again, the importance of a reserve fund study to you is the help it provides in making sure your condominium project is acting in a fiscally responsible manner that will result in little to no surprises for you as an owner.

Funding methods for a reserve fund study

There are two basic funding methods for reserve funds and they are “Cash Flow” or “Straight Line”, with cash flow being the most popular due to its flexibility which allows it to operate with all four of the following funding objectives. The four funding objectives being: full funding, threshold funding, baseline funding and statutory funding. Of these four, baseline funding is most likely to have higher probability of special assessments or deferred maintenance.

Types of reserve fund studies

There are actually three types of reserve fund studies and each association needs to determine which better meets their budget preparation and disclosure needs:

  • Full Reserve Study-This is the most complex and involves listing all components and measuring reserve components for Useful Life, Remaining Useful Life and Current Replacement Cost. This will be done by a vigorous onsite inspection of all components. Fortunately, this type of reserve study normally only needs to be done once and a less time consuming method can be used for subsequent years.
  • Update with Site Visit Reserve Study-Performed every two to five years, this reserve study assumes that all components have been identified by a full reserve study and thus is much quicker.
  • Update No Site Visit Reserve Study-This type of study is normally done by just visiting with maintenance personnel, vendors and owners to determine if any conditions may have changed.

What should you do to insure a Reserve Fund Study is in place?

To read in more detail about reserve fund studies click here. Then, call your management company or condo association board today and make sure that they have a current Reserve Fund Study in place and are keeping it current year to year. Make certain the budget for your condo association includes a reserve fund line item that is at minimum equal to 10% of the annual budget. Don’t get caught with high unexpected assessments, when you can act today and protect your property.

Condo insurance preparedness; because no one likes an “Oops”

Condo insurance is that bet you make with your insurance company that the “oops” will happen. Even if the “oops” doesn’t happen, you need to be prepared. Condo insurance is a little different then insuring a single family home, so let’s see what you need to look at. Don’t understand insurance, contact one of the many fine insurance agents int he Houston area to review what you may need in condo insurance.

What condo insurance does the condominium association carry?

The good thing about condo insurance is that it is normally less expensive due to the cost being spread across multiple owners. Most condo insurance policies carried by the condo association itself cover studs out and common areas, plus liability for the common areas. That essentially means that anything inside your unit is NOT covered. So, if you get a water leak and it damages your carpet or flooring, your condo insurance is responsible for the loss. If you don’t have a copy of the master insurance policy, ask for one from your condo association and review exactly what they are covering. In rare cases, there is an All-In policy that covers the entire property inside and out (remember, even All-In policies do not cover your personal belongings. Also look at the deductible on the master policy and encourage your condo association to keep that deductible in reserves for the condo insurance; again, planning is always your best bet.

What you need to cover

If the condo insurance policy handled by the condo association is a ‘studs out’ policy, then you will need to have a policy that cover:

  • Damages within your unit (studs in)
  • Your personal belongings in case of loss
  • Liability to cover a guest who may be injured inside your unit-(If you are doing short term rentals with your unit as is common in Houston, this one is important).

It may sound like a lot of condo insurance considering you are paying on the master policy through your HOA dues, but consider the consequences of being under-insured. A typical water leak that damages flooring and cabinetry can easily run in excess of $5000 per incident and those incidents never seem to come at a good time financially. Don’t forget flood insurance if you happen to be in a flood plain; this can be purchased through your state and normally will be mandatory at closing.

Confused yet?

The best recommendation is to have a professional insurance agent review the master policy for the condo so they can confirm what coverage may be lacking and recommend additional coverage if needed. By doing this, you will be certain that one of those little “oops” won’t wreak havoc on your finances. If you’re looking for an agent or would like more information about what is actually covered with a condo insurance policy you might consider Allstate.

Don’t forget to check out what your lender requires

If you are just now purchasing your condo be sure to find out what if any requirements your lender may have regarding condo insurance. Again, a copy of the master policy and a reputable insurance agent should be able to help you out on the rest so there are no budgetary surprises.

So get on the phone and make the call, first to your condo association for a copy of the master policy and then to your favorite Houston condo insurance agent.

Condo Reserve Fund …how much is enough?

Let’s start by reviewing exactly what a condo reserve fund is. The condo reserve fund covers capital expenditures that will occur due to repair or replacement of critical items as they wear out. Your management company or condominium association should have a condo reserve fund study on hand and that study needs to be updated yearly to define what those systems are and the anticipated date of failure with replacement cost. Remember, the elements, heat and humidity, in the Houston area take their toll on these critical systems.

Are there condo reserve fund standards for financing?

Rule of thumb says there should be at least 10% of your annual operating budget in your condo reserve fund at any time. In fact, for FHA insured loans, Fannie Mae or Freddie Mac loans, it is actually a requirement that an amount equal to 10% of your annual operating budget be set aside in your condo reserve fund. Additionally, Freddie Mac and Fannie Mae require that no more than 15% of the homeowners be delinquent on their assessments. Click here for more info.

What is the benefit to you?

A condo reserve fund that is equal to 10% of the annual operating budget on deposit helps to ensure that you as a condo owner will not be hit with last minute assessments to address critical failures. So, it should be limited surprises when it comes to maintenance assessments and repairs. This also helps you when it comes to personal budgeting. When you decide to sell your unit, it will also act as a selling point allowing for more financing options and better comfort for the buyer that this is a fiscally responsible property.

Things that can have an effect on your condo reserve fund

There are many things that can affect your condo reserve fund. Inflation is one of them. You may think that the interest you are earning on the deposited reserve fund money will offset this, but consider this: it takes a 13% increase in reserve contribution to offset a 1% increase in inflation.

The age of your complex also has a direct effect on the amount you need in your condo reserve fund. The newer the units, the less needed in reserves, as things are at their beginning of life. However, as a complex ages, you could need as much as 30% more to accommodate the aging items that are covered by your reserve fund.

Your objective in funding also is a factor; if you plan to be 100% funded obviously your monthly amount will be more. If you are using baseline funding, be ready for additional assessments.

What’s the golden number?

For most condominium projects across the country and in the Houston area, the golden number for condo reserve fund assessment is anywhere between $50 and $100 per month. While this might sound like a substantial number, consider this, an assessment of $1500 hitting at the wrong time can be devastating.

Get with your management company and/or condo board today and find out first if they have done a condo reserve fund study and second, if they are meeting the minimum requirements of 10% of the yearly operating budget being assessed for the condo reserve fund. Don’t get caught off guard!

Managing Delinquent Condo Association Fees

Managing Condo association fees

“Hope is important because it can make the present moment less difficult to bear”. The problem with hope when talking condominiums and condo association fee collection is that we all really want to think the best of our neighbors; we have hope they are good and honest people. We want to believe that old Joe down the hall just let his condo association fees slip his mind and once he is reminded he’ll apologize and cut a check right there on the spot. But alas, hope can be fleeting or misplaced.

Condo association fees are the hope that feeds our present and future

Let’s face it, condominiums while our home are also a business. They must have money from condo association fees to provide for daily operating expense, common maintenance, reserve funding, capital funding and insurance. They probably even have some staff cost, a maintenance man or a management company. It all adds up and then it gets divided and passed on to you in the form of a monthly condo association fee. Then when something comes up unexpected there may be an additional association assessment that needs to be collected.

Most condo associations will admit they are a business and must be run like one, but they have trouble acting when a neighbor is involved. Let’s face it, this is Houston, Texas, people are friendly here and they don’t want to have to be the bad guy, they hope the person just forgot their condo association fees. Well, sad to say, hope is NOT a strategy for collection.

Looking for a strategy?

It may be time that your association board sat down and set up a list of targets for collection of condo association fees. The development path includes investigating how your governing rules state delinquent accounts will be handled. Finally, you have to agree to apply this list to every association assessment and every person equally.

From the list you should create an administrative resolution to set up the policy on collection of delinquent association assessments. Once this policy is enacted by the condo association it should be promulgated to all co-owners and if possible incorporated into the CRR’s. It should simply lay out the process for collection of condo association fees. Things it should include are:

  • Date association assessments are due
  • Grace period if applicable, late charges apply
  • Intent to Lien notice over 30 days
  • Lien recorded after 45 days
  • Acceleration of assessments to end of fiscal year after 3 months
  • Lien foreclosure after 4 months
  • After lien foreclosure, all payment/settlements require board approval

Remember, the process for collection of association assessments has to be in writing and it has to be enforced equally to be effective and hold up in court.

Management companies for third party billing

Another consideration, have a management company do the billing and collections of association assessments. You will still need a written guideline for them to follow in the CRRs, but they provide a buffer that eliminates any bad feelings that may arise out of the collection process.

Contact your condo association today and find out what your policies are for collection of delinquent condo association fees. Find out if they are being followed in a consistent manner; if not, get with your board and suggest changes be made to insure a positive cash flow with all participating. For more information on this subject check here.

Short Term Rentals – A No in Most Condos

Short Term Rentals in Condos

There are very few condominium projects that allow short term rentals like Airbnb. Most of the ones that do lie in the high tourist area sites, like Houston, Texas and have onsite management companies that assist with the functions involved in short term rentals for a percentage or additional fee.

What if I get permission?

As with any rental, you would most likely need to get approval from the condo association to engage in a short term condo rental. Be sure when you do this, you look closely at the terms; most condo rules prohibit short term rental by defining them as anything shorter than 6 to 12 months. This certainly will not accommodate the owner who is looking at nightly, weekend or weekly rentals which are popular with Airbnb in high tourist areas like Houston.

Don’t forget to check local state and city restrictions against short term rentals as well.  Texas’ state should guide you to rules for Texas and the City of Houston can provide local information for that area.

What if I do it without permission?

Many short term rental advertisements you see out there are being done without the knowledge of the other owners of the condominium or the condo association. In fact, some management companies are hiring firms to search for ads offering short term rental that have not been approved and are illegal. Once identified the condo owner is normally served with a cease and desist letter and the attorneys’ fees for the letter; a fine and any other additional attorney fees the condo association may incur. Failure to pay can result in a lien against the unit.

In fact, New York governor Andrew Cuomo signed a bill into law late 2016 that will make it a lot more difficult for Airbnb to operate in the state. New York does not allow rentals of less than 30 days in a multi-unit building if the tenant is not present; something that many Airbnb listings advertise. This new law makes even listing an advertisement for this situation illegal itself, a tool that some think the state will use to go after Airbnb directly.

Why do condominiums dislike short term rentals?

Although many short term renters are just families looking for a little larger place to call home for the weekend, many short term rentals are polar opposites. Let’s face it, in short term rentals owners and tenants alike rarely know who will be staying in the unit much less how they will behave.  Though Airbnb has a unique on-boarding and review based system, can they really discern how people will behave? Will they steal? Will they damage the unit or common areas? Will they intimidate permanent owners?

There is actually documented proof of short term rentals for loud bachelor parties and drug deals. Think about what the increased risk will do to not only your insurance premiums, but also the master policy for the property. What happens to the insurance if one of them slips in the pool area and is seriously injured?

The reality is, when you buy a condo, you buy into a family with common interest and rules that govern the relationships; those rules must apply to all, so if the association rules say no to short term rentals, just don’t do it. Cities like Houston have numerous hotels and business suites available.

If you are unsure what position your condo association has on short term rentals, check your bylaws and rules today. If you still are not clear contact your management company or condo association board member to clarify. To enjoy some dialog on this subject just click here.