The 5 Biggest Issues for Community Associations in 2012

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Along with a new year comes a set of new challenges, and being prepared for them is the first step towards reaching your goals as a community association in 2012.
Here is a list of the top five issues we predict community associations will face this year – with tips on how to overcome them:
1. Owners slacking on payments
No surprise here. Delayed payments from homeowners may be the biggest issue community association boards face every year.  When a community member pays less than is required, others must pick up the slack or risk the association becoming financially unable to perform daily tasks. There can be no soft approach to this, and all owners must pay their dues on time – all the time.
As an association, you may have had to assume an aggressive stance in collecting payments. Enforce stricter collection policies, and have no second thoughts about letting a legal counselor take over if the owner flat-out refuses to pay.
2. Renewing your Federal Housing Administration Certification
In 2010, many community associations went through the process of receiving a Federal Housing Administration (FHA) certification, which made potential buyers eligible for receiving an FHA loan. Since this certification needs to be renewed every two years, most condos will have to go through the process again in 2012.
With increasing amounts of purchasers able to qualify for FHA loans, not renewing certification would probably decrease your marketability. For more information on why receiving an FHA certification is a good thing, and how to actually do it, consult this article.
3. Postponed maintenance and long-term projects
Community associations often defer necessary maintenance and upgrades as a way of preventing an increase in association fees. Unfortunately, this phenomenon is not surprising – many HOAs struggle with collecting payments as is.  Increasing them even more could cause additional problems.
Delaying essential upgrades and maintenance operations, however, is only going to make matters worse. The longer your projects have to wait, the more expenses you will incur down the road. It also prevents your property from increasing in value.
Plan your resources and start working on the tasks you have been postponing. If the need arises, do not be afraid to increase the association fee – it will be an unpopular decision, but just like taxes, it is for the greater good.
4. Dealing with bankrupt owners
Property forecloses are at an all-time high, which can cause a great deal of financial turbulence for an HOA. When an owner goes into foreclosure, he probably already has debt from unpaid association fees. The sad truth is when lenders take over the property, they are not keen on paying off these amounts owed.
The best way to prepare your association for these types of problems is to have a budget plan that covers situations when the income stream is fluctuating. As a rule of thumb, be prepared for the worst – and play out scenarios when assessments will not be paid as expected.
5. Community association manager licensing
If your association has been utilizing the services of Community Association Manager (CAM), you need to be sure your CAM is properly licensed. The license often sets benchmarks in terms of CAM professionalism and association management skills. Some states require a special license and many are in the process of adding such licensing requirements.
Although the process of licensing might be complicated for the manager and for the HOA as whole, the community will be able to sleep tight, knowing that the association is in the hands of an experienced professional.
This article is provided by The Management Trust.