When you buy into an Association, the first thing to understand is you are now living in what is commonly referred to as a planned community. A big part of understanding this concept is realizing there needs to be governance of said community, as well as business orchestration of the community as a registered non-profit organization in the eyes of the State of Minnesota. How does that happen?  Through your elected Board of Directors. The purpose of this article is to give you a brief overview of the function of the Board and their responsibilities to your community.

Who are they? Board members are typically individuals elected by the homeowners from within your Association at the Annual Meeting. Depending on your Governing Documents, the board may consist of somewhere between three and nine people.  Five member Boards seem to be the norm. They are typically elected to serve a two or three year term. Following the Annual Meeting, most Boards will have a brief meeting to elect the Officer positions. President, Vice President, Treasurer, Secretary and Member at Large. Homeowners/members elect who will be on the Board. The Board members then elect their positions.  The most important thing to note is that there is no one Board member that is more powerful than another. The Officer titles help define roles and responsibilities; however, they are all elected in the same way and therefore carry the same weight as any Board member.

What do they do?  In short, the Board is the governing and decision making body on behalf of your Association. To name a few of their responsibilities: They manage and engage in contracts and contractors - such as lawn/snow providers, insurance carriers, management companies, repair services, etc. The Board also handles and resolves homeowner issues. A primary function of the Board is to create and enforce rules and policies that govern the Association. This includes following the Governing Documents and state statutes. Finally and perhaps most importantly, the Board is responsible for the fiscal management of the Association. Examples of these responsibilities include: setting and collecting dues, creating Operating Budgets, managing the Reserve Fund and capital projects, and paying bills.

How do they do it? Associations are organized as a nonprofit corporation and are governed by the Minnesota Nonprofit Corporation Act. This gives the Board a legal framework for how to operate. Most Boards will meet (Board Meetings) on a regular schedule to discuss and make decisions; and often times they will hire a professional Management Company, such as us at Sharper Management, to facilitate, take over and/or provide guidance to the items listed above. However, ultimately these responsibilities fall on the Board of Directors as the elected representative of the community.

Why should you care?  Having listed everything above, you should be enlightened to care because the breadth and depth of the responsibilities of the Board of Directors are great. Decisions made and policies created by the Board can have both immediate and long-term impacts on the Association, and therefore your home and daily life in your home.  It is important to remember these homeowners have generously volunteered their time and talents to serve and do what they feel is best for the Association and community.

If you are selling your townhome or condo that is legally platted within a registered Association, you are required by Minnesota state law to provide a Resale Disclosure Package to the potential buyer.

This package consists of a number of items including:
*    Copies of the Governing Documents (Articles of Incorporation, Declarations, Bylaws, Rules, recorded Amendments, and more.)
*    Financial Statements
*    Resale Disclosure Certificate

Perhaps the most important component is the Resale Disclosure Certificate. This document must be dated not more than 90 days prior to the date of the purchase agreement. To name a few things, it includes information such as the Association's Reserve Fund and Operating Fund balances; if there are any outstanding assessments (dues) or special assessments against the home; if the Association knows of any pending or imminent special assessments; if there are any lawsuits against the Association; and a statement of insurance coverages.

By state statute, "the Association, within ten days after a request by a unit owner, or the unit owner's authorized representative, shall furnish the certificate required...."   Additionally, there is usually a fee associated with producing these legal documents.  "The Association may charge a reasonable fee for furnishing the certificate and any Association documents related thereto."  See the full statute at https://www.revisor.mn.gov/statutes/?id=515B.4-107

In short, this Disclosure allows the potential buyer to have complete transparency into what they are buying.

Most Associations utilize their Management Company to facilitate this requirement on behalf of selling homeowners.  Sharper Management facilitates all Resale Disclosure requests for our clients. If you are planning to sell your unit, or if you have any questions about Resale Disclosure requirements, please contact us.

There's no doubt that understanding insurance coverage in an Association can be confusing. One important distinction in your personal homeowner policy (commonly called an HO6 policy) is Loss Assessment coverage. Depending on the carrier, this coverage may be different from your real property coverage.  Real property coverage should cover your personal contents, coverage of building construction items like flooring and walls that may not be insured by the master association policy (which can vary greatly by Association) and, at a bare minimum, coverage of all of those covered components up to the Association's master policy deductible.

Loss Assessment Coverage can be different. Loss Assessment coverage will cover you should the Association assess a deductible or damages back to you.  For example, if your sink caused a backup and it flooded the floor below you, the Association may assess the master policy's deductible back to you if it was a covered loss under the Association's policy.  Another scenario is if there is a hailstorm that damages the roof of your building. The master insurance policy may cover it; however, the Association can make up the deductible by assessing it back to you and/or the other units affected. Finally, Loss Assessment coverage provides protection should there be a loss that exceeds the Association's coverage amounts - or for items that may not be included in the overall coverage scope. One again, the Association could assess the overage or uncovered items back to you as a homeowner.

You should talk to your personal insurance agent to ensure you have Loss Assessment coverage as part of your policy. At a minimum, it should be equal to the Association's master policy deductible. You should also check your Association's Governing Documents, as many Associations require homeowners to carry Loss Assessment coverage.

Living in an association, with shared walls, makes it particularly important to properly care for your home during the cold winter months. If you plan to be away this winter, remember the following important items:
*    Always leave your heat ON. Set thermostat no lower than 55 degrees
*    Winterize your pipes (sinks, toilets, etc) by turning supply valves off and then draining any trapped water
*    Communicate with Management and your neighbors. Emergency contacts or instructions on how to get into your unit in case of an emergency is helpful
 
 General Seasonal Tips:
*    Check and change your furnace filter regularly (rec. monthly).
*    Have your furnace inspected and tuned-up for better efficiency.
*    Install a programmable thermostat to better manage temperature and mitigate heat costs.
*    If you have a built in humidifier unit, make sure the lines are clear and filter is clean. They can be a common source of leaks.
*    Manage your humidify levels. High humidity inside of the unit meeting the cold/dry exterior walls can be hard on windows and even lead to ice dam formation.
*    Check weather seal/strip on all doors and windows.
*    If you have original (wood) windows, consider covering them with plastic.
*    Consider adding insulation to bring up your R-value.
*    Remember to winterize outside faucets! Turn off supply valve and open spigot to allow remaining water to drain out.
 
If you'd like Sharper Maintenance to help you with any of these items - or if you'd like Sharper to check on your home while you are away, please contact us. We have technicians available!
 

Did you know that Sharper has a maintenance team available to service any of your home repair/remodel needs?   Our team of highly skilled General Contractors and  licensed techs are ready to tackle any project including plumbing, light electrical, drywall, heating/cooling equipment, painting or any type of general "handyman" job.
 
Contact Matt Froehlich with questions or to schedule. (952) 224-4777 or [email protected]

Did you know your Association has a website through Sharper Management? As a homeowner, you can access account information, pay your dues, submit maintenance requests, view the Governing Documents, stay on top of community news and more. It is a helpful tool for you and your community association!     www.sharpermanagement.com