Carol Ott in Building Operations for HABITAT

Over the years, the various condo boards at a small converted loft building commissioned several facade engineering studies. All of them discovered noticeable cracking and recommended remediation. Each board apparently believed that a long-standing brick building was safe — and they apparently were unwilling to pay for repairs that were not absolutely necessary — and so they never moved forward with the suggested fixes.

Big mistake.

After hiring a new management company, the board brought in another team of engineers to take a fresh look at the facade. During the walk-through, the structural engineer saw that the building’s bearing walls were leaning, and immediately notified the Department of Buildings. A few days later, residents of the condominium were given the worst possible news.

They had five days to evacuate the unsafe building. 

Compounding the enormous logistical challenges the condo faced was a cash problem. “The question was how to raise the capital to remediate a project projected to cost between $2 [million] and $3 million,” says Carl Cesarano of Cesarano & Khan, the condo’s accountant. The remediation cost was a moving target, he adds, and the big spread made raising capital all the more challenging. 

If this were a co-op, he says, the building could be leveraged as collateral and it could get a line of credit. In the condominium structure, however, unit-owners own their units, so leveraging the building isn’t possible. The kind of loan a condominium can get is called a common interest realty association, or CIRA, loan. There are only a few lenders who will make such loans, and the condo’s unsafe condition made the search that much more difficult.

“We went to different lenders, and when they heard that this was a potential building collapse, just about all of them said it didn’t meet their underwriting criteria,” Cesarano says. “One lender said to me, ‘We wouldn’t touch this with a 10-foot pole.’” Finally, though, a lender was found, but the loan came with conditions attached. “The lender said it was willing to give us a loan with all the shortcomings of the property,” Cesarano says, “but the owners must also have a chip in the game.” That chip was an immediate assessment of $1.6 million.

The high cost of doing things on the cheap was beginning to come into focus.

The assessment was only one part of the lender’s requirement; the second was the creation of a long-term assessment to fund the loan. Cesarano says the lender wanted the condo to create a line item in its budget specifically dedicated to paying back the loan.

This immediate assessment to unit-owners averaged around $65,000, depending on their ownership percentage. The lender’s $2 million loan, which was a revolving line of credit, was spread out over a six-year payback period, which meant that each unit-owner was assessed, on average, another $77,000 over the six years. Meanwhile, of course, the unit-owners had to continue to pay their common charges while the condo was undergoing repairs.

Because the cost of the project wouldn’t be certain until the remediation began, Cesarano took on a new role. “The condo board wanted somebody to watch the contractors and almost act as an owner’s rep for financial affairs,” he says. “Not only to track the financial outlay of the project but to augment how the ongoing assessments needed to be structured.” The loan was a revolving line of credit, so the condo didn’t have to draw it at once, only as needed. That made tracking the financials all the more important.

There’s a lesson here for all co-op and condo boards.

“From my perspective,” Cesarano says, “boards should embrace their engineers and have an accountant by their side. A lot of boards feel engineers come in and overstate what’s needed.” As a result, he adds, boards frequently fail to include the engineer’s findings in a building’s financial statement. “If they did, it would show that the building is underfunded.”

Failing to admit that reality, Cesarano adds, “is a double-edged sword.”

It’s a lesson this condo board learned the hard way.

By Janae Langreck, CAMICB Project & Volunteer Manager

Do you design impactful continuing education for community association managers? Whether you’re an educator, consultant, or organization with a strong track record, there’s an opportunity to broaden your influence. Join us as a CAMICB-Approved Continuing Education Provider and help raise the bar for industry excellence.

CAMICB is inviting qualified individuals and organizations to apply for provider status and offer approved continuing education programs for Certified Manager of Community Associations (CMCA) credential holders. As a provider, you play a vital role in shaping the professional growth of community managers—ensuring they stay current, compliant, and confident in their leadership roles.

Why Become a CAMICB-Approved CE Provider?

Becoming an approved provider isn’t just about gaining recognition—it’s about joining a respected network of educators dedicated to elevating standards in community association management. You’ll gain access to a motivated audience of professionals seeking to maintain their CMCA credential while contributing meaningful content that directly supports their success.

Your courses can cover a wide range of relevant, high-demand topics, including:

• Accounting and Business Practices
• Budgets, Reserves, Investments, and Assessments
• Community Governance and Leadership
• Ethics and Legal Issues
• Property Maintenance and Contracting
• Risk Management and Insurance
• Effective Meeting Management

Flexibility and Innovation in Course Delivery

In today’s digital world, continuing education is more accessible than ever. CAMICB recognizes the importance of flexible learning formats—virtual courses, webinars, and other electronic platforms are welcome. However, providers must demonstrate that their delivery system reliably tracks student participation to ensure engagement and compliance.

Organizations offering in-house training programs can also seek approval, with up to 8 CE credits available through pre-approved internal content. These programs must meet the same high standards and will also be reviewed by the CAMICB Continuing Education Review Committee.

Simple Application Process — No Fees Required

The path to becoming a CAMICB-approved CE provider is straightforward and cost-free:

1. Create an account on the CAMICB continuing education website.
2. Submit your application through the portal.
3. Track and manage all your submitted and approved programs from your account dashboard.

There are no fees to apply or to maintain your provider status, making this an accessible opportunity for experts who want to give back to the profession and grow their visibility within the industry.

Ready to Get Started?

If you care deeply about advancing professional education and take pride in high standards for community association management, we want to hear from you. Bring your knowledge to the table—and help shape the next generation of managers. Visit the CAMICB Continuing Education Website to learn more  — > https://bit.ly/4jjWn4i 

Here you will find:

• Application requirements 
• Application portal
• A new CE Course Provider Checklist that offers tips for beginning the process, preparing your application, course submission requirements, approvals and other important notes.

As always – we’re here to help! If you have additional questions, you can also email continuingeducation@camicb.org.

by Justin Hale for Crucial Skills — A Blog by Crucial Learning

Dear Crucial Skills,

When my coworker follows up on my projects, I usually answer fine. But sometimes I get the sense that he’s checking up on me and checking my work, and I lose patience and lash out at him. How can I deal with this situation?

Signed,
Snappy

Dear Snappy,

I suppose I could butter you up and say this isn’t your fault and blame your jerk of a coworker.? But I’m going to go a different route. I’m going to guess there are two possible reasons for your coworker’s behaviors.

1. He doesn’t fully trust you because you aren’t consistently reliable.
2. He’s so stressed because of pressure being put on him, and he’s transferring that stress to you.

REFLECT ON YOUR BEHAVIOR

Organizations are littered with people who think they are high performers and yet perplexed why they don’t get promoted as quickly as they believe they should. Such employees commonly feel they are being slighted and wronged. And yet most of them have a career-limiting habit that they don’t see or aren’t willing to see.

In all the research we’ve done, common career-limiting habits relate to being productive, organized, and personably accountable. It comes down to this: are you consistent at doing what you say you’ll do, when you say you’ll do it? If trust is what makes or breaks a team, then getting stuff done is the currency of trust. I’d challenge you to dig deep and ask yourself:

• What’s my role in this?
• Do I see a pattern of people in my life checking up on me?
• Am I constantly making excuses for why I can’t finish commitments?

Let me be clear, I’m not saying this IS your issue. But I’m not sure that it isn’t either. I don’t say this to try to demean you, but to wake you up to a new view of yourself. We all need this in our lives. I once received feedback that my tendency toward persuasion was abrasive for many of my colleagues. Tough news to hear, but it was vital tough love.

In your case, being reliable is something that’s in your control. When someone delegates a task, capture it somewhere other than your head. Writing it down or putting it immediately on a to-do list sends the message to the other person that you care, that the task is just as important to you as it is to them. Also, don’t agree to deadlines you know you won’t hit. You’ll simply be setting yourself up to fail.

MASTER YOUR STORIES AND BRING IT UP

I think you should bring up your concern with this colleague. Better to address the pattern than continue to suffer through it. But you need to start by checking your emotions. From your question, it sounds like you’re frustrated. The source of your frustration is likely coming from a story you’re telling yourself that this coworker is micromanaging you.  Since the problem of coming up with ugly stories takes place inside your own mind, that’s also where the solution lies. Those who are best at holding Crucial Conversations tell themselves a more balanced story. Instead of asking, “What’s the matter with that person?” they ask, “Why would a reasonable, rational, and decent person do that?”

By asking this humanizing question, you should gain a few other possible explanations for the checkups and you’ll be more effective talking about the issue.

Once you’ve checked your story and calmed your emotions, just be candid. Say something like, “Hey Juan, I’ve noticed with the last few assignments I’ve taken on for you that you check in on me almost every day, even though we agreed on a due date. I had every intention to finish by the date we agreed. But honestly, when you check in on me it makes me wonder if you think I will finish on time. Can you help me see your side of things?”

USE CHECKUPS AND CHECKBACKS

Sometimes the other person is so stressed that their worry drives them to become a nag. They may trust you, but the stakes are so high for them that they want to guarantee nothing goes wrong. While it’s understandable that someone might get to this point (we’ve all acted ineffectively because of stress), it’s also detrimental to others. So, to those who are giving the assignments, you gotta know the difference between a checkup and a checkback and use them correctly.

Do a checkup when you’re giving the assignment and are nervous or have questions. You’ve looked at the risk, the track record, and the person’s experience, and you’re feeling anxious or uneasy. This is the time to use a checkup. Say something like, “Since this is such an important project, I’m wondering if we could meet next Wednesday at 10am to review how it’s going.” In this case, you are in charge of the follow-up.

Use a checkback when the task is routine and has been assigned to someone who is experienced and reliable. Now that person is in charge. He or she offers suggestions, “How about we follow up at our next scheduled meeting?” or “The deadline is two weeks from today. Could we meet next Thursday fifteen minutes before our team meeting to touch base?”

To get results AND maintain healthy relationships, both checkups and checkbacks can be helpful.

Justin

By Chris Davis

STATEHOUSE — Your homeowner’s association might not be able to keep people from having RVs or food trucks in the neighborhood, if a bill discussed Tuesday (HB1389) on the Indiana Senate floor becomes law. Some lawmakers feel that is a threat to property values.

“Sometimes HOAs become a little too aggressive,” said Sen. Mike Bohacek, of LaPorte County, who supports the bill.

He cited a bill from 2022 that would keep HOAs from prohibiting the installation of solar panels as precedent.

“Sometimes when there’s new technology they want to force that technology. And, sometimes we have to step in and make sure that they don’t,” he said.

Sen. Michael Young, of Indianapolis, spoke passionately on the bill, which he believes takes protections away from Hoosiers who have worked hard to pay for homes and who don’t want to see bulky vehicles clogging driveways.

“What happens if I bought this house and I bought it because we weren’t gonna have a 48 ft. RV sitting in the neighborhood during the winter or a food truck?” he asked. “Now I’ve got a ..food truck that looks horrible setting [sic] in the driveway right next to my property and now the provision that I can use to keep that food truck out is now gone!”

It wasn’t clear if the Senate took any action on the bill Tuesday.

By Kelly G. Richardson, Esq. CCAL, HOA Homefront Column

Question: Can major landscape renovation use reserve funds when too little funds are available as a line item? M.K., San Diego

Question: Should HOA boards expense directly out of reserves without establishing a maintenance budget annually? D.L., San Marcos

Dear M.K. and D.L.: The reserve fund is established so that the HOA can build up money to offset the ongoing deterioration of common area components included in the HOA’s reserve study. If the reserve study included landscaping elements, then reserve funds could be withdrawn for that purpose, but normally HOAs do not include those items in their reserve studies. Civil Code Section 5510(b) does not allow HOAs to use reserve savings funds for items not included in the reserve study. However, HOAs are allowed to borrow from the fund to meet short-term expenses if they follow the requirements of Civil Code Section 5515. The board must announce the proposed borrowing in an open meeting agenda and in that announcement must also explain why the borrowing is needed, give options for repayment, and indicate if a special assessment is being considered. That borrowing must be repaid within one year unless the board in a written finding determines a temporary delay in repayment is necessary.

The purpose of the reserve fund is to protect the HOA’s long-term financial interests, so diverting that money to another purpose outside the reserve study is a bad idea. Doing so is essentially stealing from the HOA’s future, like living on credit cards.

Best, Kelly

Dear Kelly: Our board believes the reserve fund is just a bank account and the required reserve study is just advisory. Therefore no increases for inflation have been made for many years and we are classified “underfunded.” Is there any state agency that we can appeal to? Thank you for your column, P.J., Palm Desert.

Dear P.J.: No state agency forces HOAs to obtain reserve studies and accumulate funds in reserves. Technically, reserve studies ARE advisory – but they statutorily created reports, which are supposed to guide HOAs toward protecting themselves from the fact of deterioration of assets. The problem of HOAs not sufficiently attending to their reserve funds is so great that in 2012 the California Department of Real Estate issued a “Consumer Warning” about the risks of living in underfunded HOAs. There is no official definition of “underfunded,” although many reserve study providers and experts believe that a balance which is less than 70% of the currently required accumulation is “underfunded.”

Underfunded HOAs may find property values affected – the disclosures required by Civil Code 5570 are intended to highlight to prospective buyers the HOA’s level of financial health regarding reserves. Furthermore, Fannie Mae and Freddie Mac (the two government-sponsored entities backing most residential mortgages in the U.S.) require that at least 10% of the HOA’s budget be devoted to funding its reserve account. It’s important to remember that placing money in reserves is not really an expense but is saving for future expense – expenses that are certain to occur. An increasing number of underfunded HOAs are learning that their members cannot qualify for FNMA or Freddie Mac loans… more about that in part 3 of this series.

Studying and calculating reserves is legally required. Following the reserve study recommendations is sound HOA financial management.

Sincerely, Kelly

HABITAT Magazine

A likely revision to the state’s solar tax credit could be a windfall for New York City co-op and condo boards struggling to pay for retrofits that will cut their buildings’ carbon emissions and bring them in compliance with Local Law 97.

Under the current law, City Limits reports, homeowners can reduce their income tax payments by 25% of the cost of their solar panel system, up to a maximum of $5,000. The proposed legislation would double that cap to $10,000 — and give low-to-moderate-income residents the option to collect the credit as a tax refund. It would also make it easier for co-ops and condos to access the benefit by essentially removing a limit on the amount of solar power these properties can use the tax credit towards.

The bill was included in both the Senate and the Assembly’s “one-house” budget proposals. If it makes it into the final budget, which is due on April 1, it automatically passes both houses and just needs Gov. Kathy Hochul’s signature to become law.

“It’s a no brainer,” says Sen. Peter Harckham, who is sponsoring the bill in the Senate. “I don’t see who would be opposed to something like this. We’re cleaning our air, we’re adding clean energy to the grid, and we’re allowing the homeowners to save money on their electric bills.”

Under the current law, homeowners who don’t have taxable income — or retirees whose tax liability is less than the credit would be worth — can’t use much of the benefit. By giving people the option to collect the tax credit as a refund, the new bill addresses the equity issue and allows more homeowners to use the incentive, advocates argue.

Making it easier for more properties to switch to clean energy is urgent, supporters say, especially since only 29% of New York’s power comes from renewable sources right now. The state’s goal of drawing 70% of its energy from renewable sources by 2030 is beginning to look unattainable.

“New York State is behind on its renewable energy goals,” says Kate Selden, a senior policy manager at Solar One, a nonprofit that helps New Yorkers install solar panels. “And so anything we can do to accelerate solar will play a major role in helping expand renewable energy.”