BUDGETS 10/2014
It’s that time of year again – the time when association boards meet to consider issues that impact the annual budget for the community association and its members. What should you expect?

First, here is some background…

The Association Board is required by Washington State Law and the Governing Documents of the Association to “...preserve, protect, and maintain...” the common elements of the association. Obviously, doing so requires an appropriate level of funding in order to fulfill this mandate.

That said, there is a limit to the amount of funds available to meet the needs in addressing common area maintenance and improvements. The Association board must therefore set priorities within which to determine funding levels for each item - and the order in which each can be addressed. In many cases, this also means that some of the “needs” cannot be addressed in a given year due to the limit of the funds that are available.

As it is with each of us and our own family budgets, there is not an endless supply of funds to meet every need, want, and desire. The reality of such limitations are true even for local and national governments. In short, no matter whether it is a personal household, an association, a local municipality or even the national government, various needs must be prioritized, available funding identified, and a budget developed to address the most pressing issues within the context of each year.

While not necessarily an easy process, budgeting is a fact of life for all of us.

Hopefully this year as we enter into the budget season for associations, the highest needs of the community will be evident and an appropriate budget developed to meet the legal requirements to “preserve, protect, and maintain” the common elements of the community.

Best regards,
Toyan & Sacha Copeland                                                                                     Back to Top

This November marks two significant events – the mid-term elections and the celebration of the Thanksgiving holiday.

With the important elections behind us, we must admit to a sense of relief that the negativity reflected in the proliferation of campaign mailers and advertisements is also over for now.

We much prefer to shift our focus to the Thanksgiving holiday and the many people and opportunities for which we are so grateful. In fact, as we choose to reflect on all that makes us grateful, the list of people, experiences, and opportunities seems to grow endlessly.

In our role as professional association managers by which we seek to support and build communities, we are reminded that as we express gratitude to each other – and for each other – we can foster a deeper sense of community with everyone we encounter.

In advance of the actual Thanksgiving holiday later this month, we simply want to take this opportunity to express our gratitude to each of you – and for each of you - our friends, acquaintances, colleagues, and clients.
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Are We Covered? A Brief Guide to your Association’s Insurance Policy
- by Amy Rieger, ARM, CIRMS

When putting together your association’s insurance program, it’s important to understand what coverage the association needs and how it will protect you. The following is a brief overview of these important coverages.
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Provides first party coverage for the association’s property when damaged by a covered cause of loss. Most association policies written in the State of Washington are on an “All In” basis. It’s important to confirm this is the case with your insurance agent. All In - Includes coverage for common ele­ments, limited common elements, property included in units and private storage areas and additions, betterments and improvements made at the expense of the unit owner.
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Liability coverage insures against third party claims arising from al­leged bodily injury or property dam­age to members of the public. The insurance company has the duty to defend the association against any claim which alleges injury or seeks damages regardless of whether the as­sociation is negligent.
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Directors and officers liability pro­vides protection against claims alleging loss arising from mismanage­ment or wrongful acts.
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A wrongful act means any breach of duty, neglect, error, misstatement, misleading statement, omission or other act done or wrongfully attempted by the association. Insured persons under the association policy should include the association; di­rectors and officers, past and present (elected or appointed); employees; committee chairs and members; and other association members acting at board direction.
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Employee dishonesty coverage in­demnifies the association for loss of money, securities, or any other prop­erty due to acts of fraud, dishonesty, forgery, theft, larceny, embezzle­ment, wrongful abstraction, or willful misapplication or misappropriation, or any criminal act. Coverage is provided only for the as­sociation's employees, unless it is specifically broadened. Directors and officers of the association and employees of the property manage­ment firm who handle association funds should also be covered.
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If the association has no owned auto­mobiles, non-owned and hired auto­mobile coverage should still be secured. Often these coverages can be included on the master package policy.

An association’s insurance program can be confusing and overwhelming to many so use this as a tool for further exploration when reviewing with your trusted insurance professional.

Thank you Amy for your insights!

Please do not hesitate to contact us if you have questions or need assistance with your community management needs.

All the best,
Toyan Copeland & Sacha Copeland
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LEAKS - WATER 8/2013
A first-floor homeowner reported water dripping from her kitchen ceiling. The second-floor neighbor did a quick check and found he, too, had evidence of water leaking into his kitchen ceiling. On the third floor, that neighbor said all appeared OK in her kitchen – no sign of water on her floor and the ceiling looked just as it always had.
What could it be?

A more thorough investigation, including a peek behind the third-floor refrigerator, revealed a disconnected water line to the ice-maker. It was secretly pouring water behind the refrigerator where it could run into the wall system and down to units below. The result was over $20,000 in damages.

Leaking water is the major cause of property damage in condominiums. It ruins more property than fire.

The only solution is prevention.

While the Association, with its professional manager, routinely assures the maintenance of such common elements as roofs, gutters, irrigation systems and outdoor faucets, the various water-related devices within the units need the vigilance and cooperation of every resident to keep them from wreaking havoc.

Washing Machine Hoses – According to Community Association Underwriters of America, the leading cause of water damage in most residences is failure of the flexible hoses that connect the washing machine to the hot and cold water feed pipes. Frequently, the hoses that come with new machines are of a low quality. They may last only four to five years. Owners should be certain they have high-quality hoses that have been properly connected. Equip the feeder pipes with easy-to-close (or automatic) shut-off valves. Turn these off when away from the unit for any period of time.

Hot Water Tank – These big containers hold a lot of water. A water heater usually fails gradually – but not always. Some signs to watch for: water accumulating under the tank, a hissing or whistling sound, or chronic hot water shortages. Corrective action (usually a new tank) is required immediately. And then there are those really unfortunate times when the bottom of the tank simply wears out and lets all of that water pour onto the floor – and wherever else it can get to. In addition, the cold water supply to the tank will keep running. That valve needs to be shut off immediately. And the tank must be replaced. Tanks generally last between five and ten years. Know when it is time to replace. Know where the shut-off valve is.

Ice Maker Lines – These small water lines can cause big problems. Routinely check behind your refrigerator to be certain the water is going where it should – and nowhere else. There should be a shut-off valve on this line. Know where it is and how to use it.

Showers and Tubs – Caulking serves a great purpose – whether it is at the edge of a tub, around tile or at a drain. Basically, it keeps the water from entering places it should not go. Failed caulking or grout allows water into walls or under floors. It can cause mold or property damage. It should be checked frequently.

Water Supply Lines – The water lines bringing water into the kitchen or bathroom sink, toilet or other fixture can leak. They might separate at a joint or otherwise fail. Check regularly for signs of water under these places.

There is an automatic shut-off valve available for just about every residential appliance that uses water. It will sense moisture and shut off the water. There are also water alarms that will alert the resident to a leak or failure…assuming the resident is there to hear the alarm. Either or both of these may prevent a disaster.

Being aware and taking precautions to avoid water leaks will be a great benefit to each resident – and the neighbors will be forever grateful.

All the best,
Toyan Copeland & Sacha Copeland
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This month we provide the following article, written by attorney Dan Zimberoff, a Partner with Barker Martin, P.S., a Pacific Northwest law firm focusing on community association law. Dan is a former US Navy commanding officer, combat veteran, and graduate of Top Gun. When outside the office, Dan enjoys coaching youth hockey, running, and spending time with his family outdoors in the Pacific Northwest.

Keeping a Watchful Eye...

- by Dan Zimberoff, Esq.

The George Zimmerman – Trayvon Martin murder trial, where a neighborhood watch captain shot and killed a Florida teen, is a stark reminder of the care a community association should take if it decides to implement a neighborhood watch program. As an attorney who provides legal counsel to many community associations, when asked to provide advice on the issue of neighborhood watch, my initial reply is “Don’t do it.”

To best eliminate tragedy and minimize legal liability, a community association should utilize the services of a trained, insured and bonded security company. However, I understand the economic realities homeowner associations face and realize professional security is impractical for many communities. If an association decides to take on this responsibility in-house, it should take the following steps:

1. Contact the local police department and ask its community support officer to meet with the association. In addition to offering general tips on establishing neighborhood watch programs, the police representative may give community-specific information and insights. The officer may speak to the community as a whole, providing anti-crime tips to assist individual homeowners.

2. Establish written guidelines for the program. Work with the association's attorney in coming up with these procedures. Among other items, the guidelines should emphasize minimizing conflict and confrontation.

3. Ensure program participants are not armed with weapons. A cell phone and camera ordinarily are the only equipment needed to conduct patrols.

4. Criminal background checks should be conducted on all program participants. Local police departments or state agencies offer inexpensive background options.

5. Contact the association's insurance company to verify insurance coverage for the program. Many community association insurers have risk management departments that offer helpful information on establishing neighborhood watch programs.

6. The association's board of directors or professional manager should review the program at set intervals to ensure it is being conducted in compliance with the written guidelines.

A community association and its members must understand the purpose of neighborhood watch programs. Volunteer homeowners are not intended to stop crime--that job is for the police. Watch programs are most successful in deterring crime by providing a watchful eye and vigilantly documenting suspicious behavior, not by interceding in crimes or suspicious behavior that is in the process of occurring. If a crime is being observed, the watch members should dial 9-1-1 and avoid confrontation.

Some associations may attempt to insulate themselves from liability by allowing a neighborhood watch program within its community, but not taking an active role. Though this tact may work for some communities, it may not completely protect a community association from being sued if a homeowner acts wrongfully.

As shown from the Zimmerman trial, we are reminded of the dangers and tragedy that can result from a misguided, untrained community association neighborhood watch program. Don’t let that happen to your association. Outsource; and if not, be cautious and smart!
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