Condominium infrastructure feels weight of market pressures

Condominiums are not only a functional but beautiful solution to the housing need within Houston and Texas’s city centers that serve everyone from the young professional to the retiree. They provide an equity building vehicle for their owners and are some of Houston’s most renowned and iconic architecture. They serve a vital part of the collective interest of our growing city. However, as illustrated by the collapse of Surfside’s Champlain Towers in Florida, condominiums of all ages face an existential threat: underfunded infrastructure.

Infrastructure is as much a financial problem as a structural one and solving this requires condominium managers to take on a larger role in future planning. Now with new federal mortgage lending guidelines set to go into effect Jan. 1, 2022 which impose stricter rules on condominiums with significant deferred maintenance, board members are left with an ultimatum: fix your infrastructure now or potentially lose financing options.

Continue to read about why this problem is so pervasive, Fannie Mae tightening guidelines, how condominiums function like governments, and how we should be looking ahead.

Preventing Disaster in Your High Rise Condominium

Champlain Towers South building collapse

Champlain Towers South building collapse

In the aftermath of the Champlain Towers South building collapse, high-rise condominiums across the nation want to learn how they can help prevent similar tragedies from happening. Many are quietly reflecting on the similarities their own buildings share and the challenges in addressing them. While much is still unknown about the exact cause of the recent collapse, many local condominium associations seek reassurance that their own buildings’ structural integrity remains uncompromised.


RISE Association Management Group (“RISE”), Houston’s leading high-rise condominium management company, specializes in implementing best practices for condominium associations to prevent disasters like this. “This disaster certainly did not happen overnight. The reality is all high-rise condominiums are in a constant state of degradation” said Jason Delgado, Managing Partner and Co-Founder of RISE. When it comes to high-rise properties, “gravity, water, sun, heat, and wind are all applying constant stress and even corrosion” Delgado added.

Structural degradation is caused by a myriad of factors, some of which are a result of human error, including careless contractors and the use of excessive loads. However, water presents the most pervasive threat as it can compromise structural integrity by causing ponding, rot, freezing, corrosion, soil saturation, and sinkholes.

There are three key elements to preventing a disaster as this and RISE specializes in assisting high-rise condominiums with developing, implementing, and executing on all three. They are Long Range Financial Planning for Infrastructure, Building Degradation Inspections, and Preventative Maintenance.

To outpace degradation, the condominium board must implement a high efficacy plan and be prepared to fund it. However, many condominium boards mistakenly believe that such a plan is prohibitively expensive. “Correcting major issues can certainly be expensive, however, our goal is to catch them early when they’re relatively inexpensive to fix. There are many elements to this plan and some do involve outside consultants and engineers, however, the majority are things your staff, management, and homeowners can do every single day to protect your building and its residents” said Delgado.

Many of our residents are wondering whether their building could have some of the same issues as the building in Surfside. In Houston where we have extreme winds, water, and temperatures it is absolutely critical that your condominium board of directors hire and consult with experts to maintain and manage these types of facilities. The presence of structural degradation mechanisms are easily identified by the right experts but easily missed by others.

said RISE’s Chief Building Engineer, Shaune Greenwood.

A key part of our system is to ensure that trained eyes are inspecting the facility regularly and that we’re implementing our best practices for preventive maintenance and structural degradation identification.

Greenwood added.

The cost of missed signs of degradation can be exponentially more expensive.

Maintaining a building and preventing disaster is something that takes place over the life of a building and requires constant and routine activity as well as a partnership with the residents, staff, contractors, and outside consultants. Even routine observations, when acted on early, can save hundreds of thousands of dollars in repair costs down the road.

Condominiums Crumble Under Market Pressures

Condominium boards across Texas are quietly reflecting on the parallels between their own Associations and those of the now collapsed Champlain Towers South Condominiums. What has surfaced of a frustrated Board, an abrupt change in association leadership, sparing with the membership, a funds shortfall, and infrastructure worsening by the day paints a picture that could easily be any number of local condominium associations.

As a professional who specializes in preventing disasters like Surfside, I regularly hear from boards who have made the decision to solve a decades-long financial problem that can no longer be ignored. The truth is there are surprising numbers of aging condominiums that face funding shortfalls that will eventually lead to infrastructure failures, and we work with them to fix it, but why is this so pervasive? The same reason our power grid is failing: there is no incentive to take care of infrastructure in condo associations.

Every market pressure promotes short-term interests, deferring large maintenance, keeping costs low to remain competitive with other condominiums. This kicking-the-can-down-the-road approach inevitably leads to a do-or-die scenario: pay exponentially more for overdue repairs or run the risk of a catastrophic failure.

Attempting to raise last-minute funds can be impossible if not unaffordable to the homeowners. Bank financing is no guarantee with stringent underwriting guidelines. The Surfside disaster was caused over the course of forty years and, without change, we will see similar disasters.
However, there is a remarkably simple solution and now is precisely the time to implement it. First, we must understand why condominiums are so vulnerable to market pressures: Association Board Elections.

Condominium Board Members are elected officials with serious jobs. Contrary to a for-profit enterprise, the Board’s prime directive is not shareholder value. They are accountable to their fellow owners to ensure the present and future of their condominium association.

However, often a board seeking to fund reserves through higher maintenance assessments is met with protests and threats rather than thanks. Why? Because higher maintenance assessments drive down the sales price of units and hinder the cash flow of investment properties.

The temptation to maximize return to its members rather than ensuring the financial future of the Association is ever-present. Decisions to defer or avoid necessary financial measures can easily be rationalized through this lens.

Many boards rationalize that selling units for higher prices while underfunding reserves is in the interest of all the members of the association even if not in the interest of the Association itself. Infrastructure maintenance such as roofs or foundations simply does not have the same impact on sales prices for condominiums as it does on single-family homes. Others simply believe they should not be required to pay to fund assets they may not be around to enjoy- a deeply flawed argument.

In fact, the long useful life of infrastructure provides years of cover before being forced to confront underfunding problems during which time a unit may sell several times like a game of hot potato.

Exacerbating matters is the election outcomes which often reflect local politics. Many elections become the battleground to air dysfunctional neighbor relations or misinformation which alienates some of the most qualified from participating.

With serious financial implications such as how to pay for infrastructure determined by-election winners, it is reasonable to want the best and brightest governing the association rather than the person most willing to collect proxy ballots from the absentee owner.

Finally, there is no requirement in Texas that a condominium association obtains or performs any kind of long-term infrastructure replacement plan (called a Reserve Study). These are designed to forecast costs to replace aging infrastructure and are entirely voluntary.

While an Association does have an annual financial audit this does little to forecast its financial future and is not required to be disclosed as part of a unit resale. A condominium association needs both Reserve Study and Long-Range Funding Plan that uses the data to answer questions on when funding will be needed and where it will come from.

Without this most associations are heading toward a financial cliff. Worse still, some may know it is there and are doing little to course correct it. This means it is entirely possible for new buyers to come into the community without any way of knowing of an impending fiscal cliff.
The solution, however, is remarkably simple: require balanced Long Range Plans to be disclosed as part of any real estate transaction. This alone will allow the market to determine the value of a sufficient reserve and sales prices will adjust. This creates an incentive for boards to begin adequately funding long-term reserves when buyers begin to avoid underfunded communities.
If Long Range Plans identify a need for future special assessments buyers can make informed decisions about purchasing into a community and this removes the incentive to delay needed fundraising by the HOA.

My final solution: Run for your board and be the agent of change. Give unpopular opinions. Choose short-term pain over long-term pain. Be a true leader in your community. Choose what is right over what is easy.

In-Office Assisted Learning for Students of Employees

staff helping students of employees learn

Rise Association Management Group Launches In-Office Assisted Learning for Students of Employees

As schools return virtually across Texas and the nation, employees are now beginning to grapple with the issue of how to balance work-from-home with their newly donned duties of Teacher’s Assistant. Recognizing the unprecedented burden this places on parents, RISE Association Management Group (RISE) has decided to take a unique approach: bring your kids to work, and we’ll teach them for you. That is, they have opted to provide assisted learning services for employees at no cost.

Combatting Continued Covid-19 Workplace Challenges

With the new virtual schooling measures, single parents are disproportionately affected and often face the unimaginable decisions of continuing to perform for their job, which is increasingly important as the economy sputters along, or devoting the necessary time and attention to ensure their child’s education remains on track.

Of the decision Managing Partner and Co-Founder of RISE Jason Delgado said, “No parent should have to choose between their child’s education or a successful career. We felt the right thing to do was lend a hand.”

“Our mission is to serve communities of all socio-economic levels and to provide a path to vibrance. We are also part of those communities and part of that path is through education – including the education of our children,” said John Elmore, Managing Partner and Co-Founder.

Prioritizing Team Members

Focusing on its team members has long been at the core of RISE’s success. “If we take care of our team, they’ll take care of our homeowners. Right now more than ever, it’s incumbent upon all of us to be a source of brightness and compassion in the world,” said Delgado.

“With our team members working from home, we have substantial empty office space that permits us to promote a socially distant learning environment while having a parent just down the hall,” Delgado added. “I certainly didn’t anticipate this is how we would be using that space, but here we are.”

Unique Challenges Faced by Houston Condominium Associations

Houston Condominium Associations have been dramatically affected during the pandemic, shifting from in town residences to office buildings almost overnight.

“Our buildings never stop running,” said Delgado. “When this began, our calls jumped up 200%. We have to be innovative in how we’re going to respond to the day-to-day changes and continue to deliver excellence for our homeowners,” he added. RISE has led the way in educating board members of HOAs on what to expect and how to effectively transition its operations during these unprecedented times. Houston condominiums have seen sky-rocketing utilities, and many struggle with paying the bills during a time when collecting assessments has become more difficult.

RISE has been uniquely situated to thrive during the pandemic. With cloud and remote-based technology in place prior to the pandemic, team members seamlessly transitioned from serving community associations and homeowners associations from their office in the Energy Corridor to serving them right from their living rooms. In addition, in September of 2020, RISE will launch a new Homeowner Board Member App to provide additional tools to ensure team members and the communities they serve are able to safely stay connected and productive.

Rise Association Management Group is a community association management company specializing in condominium associations and townhome associations in the greater Houston area including the Woodlands and Galveston. To learn more about RISE’s best practices managing through the COVID-19 Pandemic you view our webinar recording here.

For more information on how RISE helps condominium associations and other HOAs, please send us a message or call (713) 936-9200.

How HOAs and Condo Associations Can Prepare For Hurricane Season

Hurricane season begins in June and ends in November each year. As a member of a condominium association with a property near the coast, it is vital to prepare and establish expectations for protocol before the next storm hits. The best way to keep your property and your tenants safe is by understanding your specific responsibilities.

Thinking About High Rise Condo Living?

Downtown workers are flocking to high rise condo living, but Houston high rise association management companies caution you; not everyone is cut out for this lifestyle. If you are one of the lucky ones that is, it can be a fun and active lifestyle.

The pro, the cons from Houston high rise association management, RISE

RISE is one of the premiere Houston high rise association management companies. I reached out to them for the pro and cons of high rise condo living.

It starts with HOA dues according to RISE. HOA dues tend to be a little more, but, your amenities may replace many of your now homes expenses. All Houston high rise association management says consider savings like yard care, pool maintenance, trash service, gym memberships and the list goes on. Compare apples to apples.

Are you a hoarder? If you are, the lack of storage in high rise condo living will rule it out quickly for you. Houston high rise association management says limited space is why high-rise living is ideal for the young homeowner starting out or the older individual who is retiring and downsizing.

Can’t imagine living without your furry friend? Houston high rise association management encourages you to make certain pets are welcome. Mot high rise condo living comes with heavy restrictions on pets to just not allowing them at all.

When we talk about rules, Houston high rise association management company RISE says noise restriction are usually extensive. Do sleep days and work nights? Do you have a kicking stereo or home theatre system that you love to blast…you might want to reconsider; condo high rise living may not be your best option.

Parking is another area that needs to be considered according to Houston high rise association management company RISE. Most one-bedroom condos come with one parking space due to limited parking. They may have additional spaces you can lease, however if they don’t and you’re a two-vehicle family, high rise condo living might not be for you.

The bottom line from Houston high rise association management company, RISE

Do your homework; that’s what my friends from RISE say. Look at your lifestyle and what you are willing to change if you are making the move from a traditional single-family home or duplex. Don’t forget to ask about the financial condition of any condominium property you are considering; if you’re not sure what to look for, contact RISE (713) 936-9200 or [email protected]. RISE sets the standard when it comes to Houston high rise association management.

The Top 10 Questions from Condo Buyers in Houston

Condo buyer inspecting unit

Condo buyers in today’s’ market are a mix of first time home buyers with small families, single millennials, and empty nesters. This diversity is resulting in condo buyers’ questions being a mix of old and new. For Houston property managers, Hurricane Harvey is also affecting questions during showings. Here’s a list of 10 questions you’re likely to encounter and a possible response.

Top 10 Questions to Condo Property Managers

  1. Did this property flood? Was it affected by Harvey?

    This is an easy question, it’s fairly black and white. Yes, we had flooding or no we didn’t. If you had flooding, be prepared to answer what level and how it was handled by the condo association. Be upfront about a unit that was damaged and provide proof of mold remediation and warranties.

  2. What type of insurance does your property carry?

    Condo buyer’s may want to see proof of coverage and limits. Understand your landlord insurance policy, what it covers and what it doesn’t.

  3. Are there mandatory types of insurance required by the association board?

    The answer can be found in the CC&Rs. Educate buyers on what insurance they are required to purchase. Let them know it is recommended they talk with a licensed insurance agent for optional coverage.

  4. Are we allowed to AirBNB our condo?

    This question is becoming more popular, as AirBNB, HomeAway and other sites are still relatively new. Not all condo properties allow short term rentals such as AirBNB. Most condo buyers won’t know what short term rental means, so educate them in the lease agreement.

  5. Do you have discount condos available?

    The term “discount condos” is defined by context. Discount condos can mean condos that flooded, selling at a discount in lieu of repair. In the rental market, this could be referring to Section 8 units or condos rented at a lower rate due to seasonal shifts. Answer accordingly.

  6. Does this unit have hurricane proof windows?

    In a showing, highlight the thick walls and protections against excess flooding and wind. Not sure, check with your maintenance man or management company to find out the age and certification of windows.

  7. What is the management team like?

    This is a common condo buyers’ question, buyers want a responsive management company who will protect their investment.

  8. Who makes the rules and what are they?

    The same reason people love a management company is the same reason they hate them; management companies propose the rules and enforce them in many cases. This is the preferred method vs. a condo association board handling the issue, but that’s a whole other article.

  9. Is there storage space available?

    Not only do millennials like their toys, but so do the empty nesters. Highlight the bike racks, storage lockers, garage options and other amenities around storage.

  10. Does this community have a reserve fund and reserve fund study?

    Today’s buyers are educated, they want to know if their investment is being protected and they don’t want to get hit with assessment after assessment.

Kind of like a marriage, condo buyers’ questions are a mix of something old and something new depending on their perspective. Need information on what you should do, start with your management association, don’t have one, now may be the time to consider a change. Contact RISE (713) 936-9200 or [email protected]. RISE sets the standard when it comes to Houston high rise association management.

Should Your Condo Community Accept FHA Loans?

A very common and important consideration for a condo community, is should FHA loans be accepted? The Federal Housing Authority was designed to help individuals and families of all incomes afford housing. Compatible with single-family homes, townhomes and condominiums, the non-conventional loan requires a smaller down payment and more favorable interest rates. It’s a noble mission, but one that often conflicts with a condo homeowners association and its balance sheet.

FHA Condo Loan Application

Just the facts on FHA

  • 21% of real estate loans are FHA loans
  • 35% of millennials are opting for FHA loans
  • 82% of FHA loans were for first time buyers
  • Statistically, FHA buyers are not more likely to default on a loan
  • FHA loans do not attract a lower level of buyer; in fact, FHA insured loans can reach as high as $800K
  • Increase in pool of buyers for FHA condos increases values for those condos
  • FHA loans are assumable and eligible for reverse mortgages-great advantage
  • FHA criteria means you will have a more stable base of owner/occupant vs investor/tenant

Source: FHA Review

Embedded in these facts, are a variety of misconceptions that are now outdated. New condo buyers due to the great recession, student debt and a host of other factors are more likely to seek FHA approval. In 2018, good credit buyers with steady income are seeking FHA loans. Despite the benefits of accepting FHA, many condominiums are not approved or in compliance.

FHA Approved Condos in Houston

For a city the size of Houston, how many FHA approved condos do you think there are? It’s shocking, but with 2.3 million residents, there are only 21 FHA approved condos in Houston! Interesting enough, 184 condo properties were at one time approved, but many have now let their FHA approval lapse. Let’s find out why.

Getting Approved as an FHA Condominium

Nationwide, only 7% of condominium properties are FHA approved. The biggest reason for a property owner not seeking FHA approval is compliance. A variety of rules must be met and it differs for new vs. old properties, whether a condo owners association is active and by location. In summary, getting approval can be cumbersome and many new developments skip the process.

Working with a property management company can help fast track approval. Accepting VA loans is another way to receive faster approval for FHA compliance. A condo management firm can be an important liaison, providing documentation and data to the government as needed.

Check here for a general outline of FHA guidelines for condo properties. Three of the most common reasons for non-FHA compliance include “a right of first refusal”, owner occupancy percentages and ongoing litigation.

  1. A right of first refusal is a common clause in COA agreements and is allowed for FHA loans. However, many communities poorly define the right of first refusal and allow for a board to reject buyers for any reason. This is not allowed per FHA guidelines.
  2. The second reason for denial is owner-occupancy percentages. A property must maintain an owner occupancy rate of 51%.
  3. A final reason is there cannot be ongoing litigation between the HOA/COA and the developer or a contractor.

Approvals must be renewed every 2 years and the submission cost has dropped to $850 per submission. Not too bad considering it was north of $3000 in the past. Talk to a property management company and see how FHA condo approval can work for you.

Attract More Millennial Condo BuyersConsider the Benefits

When you consider the benefits of accepting FHA loans and the trend towards millennial acceptance, it becomes worth pursuing. Marketing an FHA approved condominium can open the floodgates towards qualified buyers, increasing market value of units and the entire property.


In Houston, reach out to RISE and experience a new level of condominium management. We can answer your questions and take your through the FHA approval process. Give RISE a call at (713) 936-9200 or [email protected].

Managing a Garden Condo Residence – Nature Without the Mess.

Luxury Garden CommunityDespite the heat, humidity and weather, there is a large percentage of Houstonians that enjoy being outdoors and one with nature. What better way than from where they live, in a luxury garden community. After all, nature can be messy and enjoying it is one thing, caring for it, another. Garden communities have a high appeal to baby boomers or those 55+. Condominiums with serene grounds dotted with ponds and gardens provide that peaceful setting that feels removed from the urban landscape of Houston, with none of the upkeep.

Luxury Garden Communities in the Houston Market

One of the new players in the luxury garden community market is builder Sitterle Homes. Sitterle launched with a luxury garden home concept in Riverstone. These $310-400K homes offer luxury lock and leave lifestyles that Baby Boomers are craving. Read more about their concept here.

But it’s not all about new communities designed around park-like fountains, running trails and green spaces. For an older community with undeveloped land, there’s a chance to re-brand and appeal to this market and effectively compete with high rises advertising close proximity to restaurants and nightlife.

Can Your Property Become a Garden Community?

While you’ll always have the new kids on the block like Sitterle Homes. There’s an advantage for older properties to participate in this new movement towards luxury grounds, expert landscaping and outdoor amenities.

For one, it could make your property command luxury prices for less cost. If updating your units and exterior building is out of the question, consider the cost for an updated outdoors. You could improve the value of the entire property by up-scaling the setting.

Depending on your current landscaping and ambiance the changes may be minimal. If you have a lot of concrete and a few token trees, well, you have a way to go. Here are some examples of how a condo complex can reconnect with nature:

  1. Water features: Lakes, ponds, or streams could already exist on the property, but have limited access. Man made water features are expensive, but can be designed and installed. Fountains and play areas
  2. Master planned landscaping: Start with the perimeter to separate your community from surrounding areas. Create a hidden garden community that adds privacy with trees, fencing, secure gates and limited access to features inside.
  3. Parks and Recreation: While a golf course is an expensive and large feature to add to a garden community, other options do exist. Frisbee golf courses, bike trails, walking and jogging trails are much cheaper to build and highlight the natural landscapes of your community. Connecting to nearby trail systems is an added bonus!
  4. Native plants: Not only does going native attract wildlife, it’s cheaper and easier to maintain. Identify plants with signage to educate residents.

It’s all about creating that garden atmosphere and that is a delicate balance. Residents want to feel like they are living in nature, but they don’t want nature on their patio. It takes a very exceptional management company to upkeep garden properties, but the return is a very stable market. High end maintenance teams are a must to maintain the natural look without looking overgrown.

COA’s and Luxury Garden Communities

Condo owner associations in luxury garden communities are typically more stringent on exterior appearance rules to maintain a consistent look. Violators are notified swiftly and fines can be substantial. In a setting that is designed to look park-like, it can be difficult to maintain a rustic yet polished appearance. Again, nature is messy.

Management teams must continually monitor not just the landscaping and plant life, but also the wildlife that these areas attract. While it’s wonderful to see a tiny rabbit hopping down a garden path, it is quite another to have a skunk spray your patio wall when you have guest. There must be rules in place that rein nature in and that includes human nature, like feeding animals.

Becoming a Luxury Garden Community

Making the move to a luxury garden community can be easy with the right partner by your side. The management company you need must have exceptional maintenance and long range planning abilities. The onsite management must be strong and ready to enforce rules in place to protect the residents and the environment.

If you’re thinking about re-branding your community to a luxury garden community but you still have questions? Give RISE a call at (713) 936-9200 or [email protected]. RISE is that unique property management company that has all the right people to help you re-brand and move forward with nature and a little control.

Spring Cleaning Condo Properties, A Community Affair.

It’s that time of year again, we’re all coming out of winter hibernation and slowly venturing out. For condo managers and staff, it means spring cleaning condo properties. Admit it, you’re seeing neighbors you thought had moved, it’s like a whole new community! Along with spring comes an annual rite of passage, “Spring Cleaning”. Spring cleaning started years ago, when homes in the winter were heated with coal furnaces/fireplaces and illuminated with oil lamps which left soot and residue on everything. When spring came, the house was opened-up and emptied out to be thoroughly cleaned. (Origins of “Spring Cleaning”) I don’t know about you, but I’ve slacked up a bit. But spring cleaning shouldn’t be limited to just your home, spring cleaning condo properties helps you complete a few items on your annual check list.

Tip 1: Spring Cleaning Condo Properties

Paperwork makes the world go around and your association is probably drowning in it. Spring is a great time to archive association management records in that cabinet. By now, all important paperwork should be with the CPA for tax preparation. Add a discard tag to your boxes if you don’t already have that system in place. Discard tags tell you when a box can be shredded or if it is a permanent file. I can already hear you saying, “our records are electronic”; guess what, you still need to backup files and store them on a separate HD or flash drive for security.

Tip 2: Management by Walking Around

Once you’ve cleared out the paperwork, try a little MBWA (Management by Walking Around). When RISE does spring cleaning for our clients, this is one activity that can’t be forgotten. Managers learn more about the needs of the property by walking around and interacting with staff and home owners. Speaking of staff, take your maintenance, landscaping and office employees with you. Use the time to gather input and identify needs of the community.

Tip 3: Preventative Maintenance

Spring cleaning is also important for preventative maintenance. There are a few items that require upkeep before the hot Houston summer is upon us – air conditioners and pools. RISE knows when those brutal Texas summers are on the way, it is essential to use spring as a time to tune up. HVAC in each unit should receive a tuneup and maintenance check and filters should be replaced. Outside, confirm the A/C condenser is clear of leaves and debris so they can operate efficiently.

Spring is also an important time to set a date for the pool to open. Beforehand, a pool must be cleaned and inspected, both inside and out. Repairs should be made if needed and filtration, PH and chlorine systems tested and ready for non-stop summer operation.

Tip 4: Get Everyone Involved!

Spring cleaning condo properties is best done as a community wide event! Don’t make it feel like a hassle for residents. Instead, get everyone involved, have a community wide kick-off party and give DIY tips for styling your balcony or patio. Come up with a contest, such as, “Most Improved Balcony!”. Get a few local sponsors and pass out gift cards and food. Have the onsite manager talk about why Spring Cleaning a Condo is important and efforts residents and the association is taking for upkeep. When everything is done, celebrate your accomplishment with the opening of the pool or a community party.

Want ideas on spring cleaning condo properties, talk to my Houston friends at RISE, get info from people who live it every day, explore the RISE difference at or contact RISE at (713) 936-9200 or [email protected].