The October Issue Includes: -          Vote for Clayton & McCulloh - Reader's Choice Awards -          You Got Served! Now What?! -          Looking for a New Management Company? -          Financial Statements & CPA -          Clayton & McCulloh’s Collections Department -          Executive Producer Highlight - Asphalt Restoration Technology Systems -          What is our Florida Statute Service? -           Collection Limited Contingency Service -          How to Handle Water in Light Fixtures -          Pet Corner -          Is Your Favorite Association Vendor One of Our Super Partners? -          Quote of the Month -          Celebrate!

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Please Vote for Clayton & McCulloh - Reader’s Choice Awards

Wow! Are we ever honored! For the fifth year in a row, we’ve been nominated for Florida Community Association Journal’s Readers’ Choice Awards!  Your vote has kept us in the top two categories every year since 2014. We would be so honored if you would take a few moments out of your busy schedule to vote for us.  If you feel that we are deserving of your vote, simply click on the button and follow the instructions on the page. Voting is over December 31st. If you REALLY like us (and we hope that you do), you can vote more than once for the little firm that Embraces Community.

You Got Served! Now What?! By Senior Collections Attorney, Alan Schwartzseid

So you’ve been served with a lawsuit or petition for arbitration. The question is what to do with the documents? Do you get nervous and concerned, and simply respond? No – a response without understanding the law could hurt your defense more than helping. Moreover, except in small claims court, a corporate entity defendant (including LLC’s and the like, and our community association clients) can only represent itself through counsel in Florida. A response filed by a representative - even a director or officer - may be stricken or simply disregarded by the Court or arbitrator, as though it was never filed. So, do you instead remain unconcerned and simply take no action? No - this is perhaps even worse. If no response is filed, a default can be entered by the Clerk of Court, Judge, or Arbitrator. Such a default operates as an admission of your opponent’s claims. This means that even if your opponent’s claims are completely untrue and completely frivolous, a judgment could be entered against you based on such a default. Accordingly, we almost always recommend that a response be filed. There is generally one “right answer” to protect your interests to the extent possible and necessary: send the documents to your attorney to review and discuss with you, immediately after you receive them. For the corporate entities discussed above, we also recommend that your attorney serve as your registered agent, so that any lawsuit or petition for arbitration is served directly to the person who should be receiving it, without delay.  See also our article, "What is a Registered Agent? Who needs one?" Your attorney can confirm whether your opponent’s claims are customarily covered by one or more of your insurance policies. If the claim is “covered,” you will generally pay the amount of your insurance deductible, and the insurance carrier will address the cost of defending the case by

assigning an attorney to do so. Note that some types of insurance policies do not cover any damages, attorney’s fees, or costs awarded to the other party, meaning that you would still be responsible for those charges regardless of who pays the cost of your defense. Many people seem unaware that you can request that the insurance carrier appoint your law firm of preference to address your defense. If the carrier denies the claim ( i.e. , declines to pay for your defense), your attorney can review the policy to see if that denial is legally incorrect. Note that even if the claim is covered, you can still choose to proceed without submitting a claim. However, insurance carriers occasionally contribute toward a quick settlement, rather than paying an attorney to represent you through completion of the case. This can make settlement more likely, rather than spending the next year or more of your life in a legal battle. In short, a lawsuit is not always cause to “freak out.” However, being served with a lawsuit should elicit an immediate reaction, including communication with counsel. This should allow you some peace of mind, based on in-depth analysis and an informed decision of how to proceed.

Looking for a New Management Company? Here’s Another Point to Consider in that Search

In 2009, the Florida Legislature passed regulations requiring community association management to be licensed by the Department of Business and Professional Regulation (DBPR). Florida Statute, Section 468.432, imposes new guidelines on any company that holds itself out to the public as being able to engage in the business of community association management. Any management company responsible for the management of more than ten residential units or lots or a budget of at least $100,000 must now be licensed by the DBPR. In addition to a local business license, these licenses must be renewed every two years. Along with completing a license application, management companies must also pay licensing fees for its initial license and every license renewal thereafter. These licensing fees can range from $25.00 to $100.00. Surprisingly, there have been some companies during the past few years that were unaware of this law. Additionally, each management company seeking licensure with the DBPR must also designate at least one CAM who will respond to inquiries and investigations by the DBPR. Furthermore, each licensed management company is required to notify the DBPR within 30 days after any change of information contained in the application upon which its license is based. This includes, but is not limited to, changes in the officers, the designated CAM, management company name, and address of the management company. Of critical importance under this statue is that the license of a management company is canceled automatically if the license of at least one individual active CAM employed by the management company is not in force. Therefore, it is imperative that every CAM employed by the management company is current with their own individual licensing requirements. If your Association is considering hiring a management company, it is suggested that you not only review the individual CAM’s licensing information, but during your review ensure that the company is licensed by the DPBR. If you would like assistance in hiring a new management, please call our Public Relations Department for information on our complimentary Management Referral Service.

Financial Statements & CPA By William Jackson, CPA

If you decide to have a CPA prepare your financial statements, you need to carefully consider the type of financial statement you will receive and the scope of work that is involved for each different type. Outlined below is a brief description of the financial statements most commonly issued by CPAs. The information provided below is for informational purposes only, please refer to Florida statutes to determine your association’s reporting requirements. Basic Financial Statements – Cash Receipts & Disbursements These statements are prepared within an acceptable financial reporting framework and are prepared using information provided by an in-house CFO or management company. These statements are primarily intended for in-house use only, although they can be shared with outside interested parties. Because these reports are created using the records provided by the entity being reported on, a CPA will not verify the accuracy or completeness of the information. Compilation A compiled financial statement, while similar to the cash receipts and disbursements report in many ways, requires the CPA who prepares the report to disclose any impairment to independence. This disclosure would notify any outside lender or other interested party if there was a relationship between the CPA and the association that may cloud the judgement of the CPA. In this type of report, the CPA is required to read the association’s financial statements in light of the financial reporting framework being used and consider whether the financial statements appear appropriate in form and are free from obvious material misstatements. The CPA is not required to verify the accuracy or completeness of the information provided by the association and does not gather evidence for the purposes of expressing an audit opinion or a review conclusion. A compiled report will state that the CPA did not audit or review the financial statements and accordingly does not express an opinion, a conclusion or provide any assurance on them. Although no assurance is provided, outside parties will often appreciate that the association has a relationship with a CPA. Reviewed Financial Statements A review is one in which the CPA performs analytical procedures, inquiries and other procedures to obtain limited assurance on the financial statements and is intended to provide the association with a level of comfort on their assurance. A review is the base level of CPA assurance services. Similar to the Compilation, the CPA is required to determine his/her independence. If the CPA is not independent, the CPA may not perform the review. In a review engagement, the CPA is required to understand the industry in which the association operates, including all accounting principles and practices generally used. He/she is also required to obtain knowledge about you that are sufficient to identify areas in the financial statements where it is more likely that material misstatements may arise. A review is substantially more narrow in scope than an audit. A review doesn’t contemplate obtaining an understanding of an association’s internal control, assess fraud risk, test accounting record through inspection, observation or outside conformation or the examination of source documents as well as other procedures that are ordinarily performed in an audit. In a review engagement, the CPA will issue a formal report that includes a conclusion as to whether, based on the review, he/she is aware of any material modifications that should be made to the financial statements in order for them to be in accordance with the applicable financial reporting framework. Audit An audit is the highest level of assurance service provided by a CPA and is intended to provide an association comfort on the accuracy of the financial statements. The CPA performs procedures in order to obtain reasonable assurance (a high but not absolute level of assurance) about whether the financial statements are free from material misstatement. In an audit, a CPA is required to have an understanding of an association’s internal control and assess fraud risk. The CPA is also required to corroborate the amounts and disclosures included in the financial statements by obtaining audit evidence using inquiry, physical inspection, third-party confirmations, examination, analytical and other procedures. As with the review, a CPA may not conduct an audit engagement if independence has been impaired. The CPA will issue a formal report that expresses an opinion on whether the financial statements are presented fairly in all material aspects in accordance with applicable financial reporting framework. In addition, the CPA is required to report any significant or material weaknesses in the system of internal controls that are identified during the audit. Forensic Audit A forensic audit and financial statement audit have separate objectives that do not overlap. A forensic audit should be requested if the association suspects asset theft fraud. A CPA performing a financial statement audit is charged with performing audit procedures to discover financial statement fraud but not asset theft fraud. A forensic auditor examines a company’s system of internal controls to identify weaknesses designed to safeguard assets and to determine whether anyone in the company has exploited control weaknesses to misappropriate assets for personal gain. A forensic auditor will not express an opinion on your association’s financial statements. Financial Statement Fraud - Financial statement fraud is the intentional misrepresentation of a company's financial position through the misstatement or omission of certain transactions or disclosures in the financial statements. Financial statement fraud is designed to deceive financial statement users, such as owners, investors, creditors or others who rely on the financial statements to make financial decisions. This type of fraud is usually perpetrated by company executives whose compensation is tied to the financial performance of the company or whose position is dependent on the company meeting certain financial goals. A financial statement audit is designed to detect financial statement fraud. Asset-Theft Fraud - Asset-theft fraud is using one's position in a company, usually as an employee, to deliberately misuse or steal company resources or assets for personal gain. A financial statement audit will usually not discover asset-theft fraud because the objective of the financial statement audit is to determine whether the financial statements fairly present the company's financial position. For example, if an employee sets up a dummy vendor to siphon off company cash into his own account, the company's books will reflect this cash payment. Even though the transaction is fraudulent, the company's financial statements will accurately reflect this transaction. An auditor conducting a financial statement audit cannot examine every transaction in the company's business records and is not charged with discovering asset-theft fraud. If the financial statements fairly state the company's financial position, the auditor would be justified in issuing an unqualified opinion, even though undetected asset-theft fraud is present.

Executive Producer Highlight Asphalt Restoration Technology Systems, Inc.

This month, we are highlighting one of our Executive Producers, Asphalt Restoration Technology Systems, Inc. Asphalt Restoration specializes in asphalt rejuvenation, repairs, sealcoating and striping.

W e asked Jennifer Agravat, Director of Customer Relations, about how her company can assist your association: Q: How can our associations benefit from your service? A: Asphalt Restoration is here to help associations get the most out of their asphalt dollars. Through education, in depth evaluations, and clear, understandable pricing, our goal is to keep associations in the know. Q: What is the one thing that people probably won’t know about your service? A: We are a woman owned and family run asphalt company. Q: From your experience, what advice would you give to an association? A: Talk with your contractors about the associations overall goals, and be open to expert advice. We have a lot of experience and sometimes the same old solution might not be the best choice for your association. Q: How can an association save money by using your service? A: Our goal is preserving the existing asphalt cap if possible. We work on extending the life of the existing pavement so communities can concentrate their funds elsewhere for as long as possible. In the event paving is the only option, we look to ensure that communities receive exactly what they have requested, either through paving ourselves or by consulting. Q: What sets your company apart from your competition? A: Our evaluations. Our evaluations are in depth and in terms that make it easy for all to understand. All of our evaluations are free and informative to the association and are not contingent on them using us to receive the information provided. We believe that an educated consumer is best for all.

What is our Florida Statute Service?

Amber Bell of Bermuda Walk Property Owners' Association had this to say about our Florida Statute Service: “Thank you. This is an amazing service, much appreciated and much used.” The Florida Statute Service provides the perfect place to organize all the Florida Statutes you need for your Community Association in a beautiful green leather-like, gold leaf embossed three ring binder. The service binder features all the pages in plastic sheet protectors and indexed with numerous "how to" articles included as a bonus. Our binder is large enough to accommodate adding any of your Association's Governing Documents. There are four books:

Homeowners Association (Chapter 720) Condominium Association (Chapter 718) Mobile Home Park (Chapter 723) Cooperatives (Chapter 719 There are "how to" articles included in the book on the following topics: Amending Governing Documents Collections Covenant Enforcement Fiduciary Duty of Board Members How to be a Director Annual Meeting Marketable Record Title Act

Complimentary annual updates to the books will be provided electronically in September and January of each year. The cost of each book is $70.00 (tax included). Order yours today through our website using the button below.

Order Now

Collections Limited Contingency Service All Associations now qualify for the new contingency program!

We developed it specifically for associations like yours who are facing this dilemma every day. How do you justify spending more money on legal fees than you are owed in the first place? The problem is the question is valid, but also puts the Association at risk for not fulfilling your fiduciary obligations by not collecting or attempting to collect delinquent assessments – quite a quandary. No matter what the decision is under our old collection program, you had to make a choice with no easy answer. Now, the answer is super easy. The fees are contingent, that means if we can’t collect them from a third party (an owner or bank or from the proceeds of a sale) you don’t pay them, and we just don’t get paid for our time. That very rarely happens, but it is a risk that the firm has decided to take for our clients. You get to keep all of your interest, late fees, assessments – we do not take a percentage of your money. We are confident in ourselves and willing to risk not getting paid for our work. You do have to pay for the costs on the file; postage, copies, recording fees, filing fees, service fees, etc. If we have to pay someone for something out of our pocket, you have to pay that amount and the costs are billed monthly. As long as you do not interfere with our ability to get paid (i.e., tell us to close the file or to not proceed with collections) then you do not pay any legal fees for collection or the lien foreclosure process.

To qualify for contingency, the accounts must be less than twelve months delinquent (six months for Condominiums) with no open mortgage foreclosure or bankruptcy. We do the initial review and if a property doesn’t qualify, you will be sent an e-mail to let you know. You will then have the option of opening the matter under the flat rate program, or just taking it back and not authorizing us to take any action on it. If a property doesn’t qualify, you are not charged for time to investigate the property and owner. Questions? Please ask! We love to discuss this exciting new way to serve your community.

How to Handle Water in Light Fixtures By Andrea McCarthy, Marketing Representative of SERVPro

Often, Florida homeowners do not notice a leak until there is already ceiling damage. The first sign of a leak will manifest through the ceiling. You may even see water in the light fixture. If you see this, it’s important that you follow these steps and do not let the water out. 1. Act Quickly As soon as you see the water in your light, you need to take action. Water serves as a conductor and carries the current wherever the water touches. This means that if a person touches the light socket or attempts to drain it, he or she likely to suffer from an electric shock. It is important that you go straight to the circuit breaker to turn it off. 2. Turn off the Electricity Even touching the switch itself can shock you. Do not turn off the light near the fixture. Go to dry electrical source and check the power to make sure that you turned everything off. This will help keep you or anyone else in your family from suffering an accidental shock. 3. Turn off the Water Next, turn off the water. This step only works if you know where the source of the water is coming from. If it comes from a pipe, then you can turn off the water supply through the main shutoff valve. 4. Call a Plumber and Electrician If you have a problem with the pipes, then you need to call for a plumber. The plumber can fix any issues you’re having with the water lines in your home. Next, you need to call an electrician. The electrician will handle the electrical work. Never handle electrical work yourself. When it comes to water in the light fixtures, you need to act quickly. Often, you’ve already experienced ceiling damage once it’s gotten to this point. Unfortunately, with most ceiling leaks, you will not know that you have a leak until you see the damage. Taking care of the plumbing and electrical work first is important, and then you can call a water damage repair service to take care of water damage.

Pet Corner The Pittie Party of Central Florida

The Pittie Party of Central Florida was formed to achieve several goals: Unite local Pitbull rescues/organizations, owners, and activists. Promote a positive image of the true Pitbull breed. Work together to educate society on the true nature of the majority of Pitbulls and promote the alteration of unfair regulations of the breed. Support owners of Pitbulls from discrimination. Work together to raise awareness and funding for Pitbulls, especially those who are in need of forever- homes. The Pittie Party of Central Florida uses money raised for rescuing and rehabilitating Pitbulls from euthanasia, animal abuse and neglect, and discrimination. You can find them on Facebook at https://www.facebook.com/TPPCF , and contact them at thepittiepartyofcf@gmail.com .

Foster Or Adopter Needed !

All expenses will be covered by our rescue for fostering! Cheddar is still without a foster or adopter. Please consider taking a chance with the biggest snuggle bug. He is such a good boy. Cheddar needs a place without dogs.

Please email thepittiepartyofcf@gmail.com for more details. They are looking for a homeowner without dogs.

Is Your Favorite Association Vendor One of Our Super Partners?

Do you see your favorite vendor’s logo at the bottom of this newsletter? You don’t? Well, then you should help them out. If you don’t, send us their company, contact name and number and we will reach out to them to become one of our Business Partners. Our Business Partners receive year-long exposure to other Associations and management companies and receive special perks at our seminars. Using one of our year-long vendor sponsorships opens new doors for new business for your favorite vendor. So, receive some brownie points with your Association’s vendor(s) and provide their contact information to us. After all, new business referrals are treasured by vendors and they may show their appreciation back!

Quote of the Month

Celebrate!

October October 4 th - Mary King - Sentry Management October 5 th - Frayda Morris - Central Association Management October 6 th - Cheryl Drake - Leland Management October 10 th - Nandine Randolph - Intracoastal Bookkeeping and Management October 13 th - Ayesha Hendrix - Leland Management October 25 th - Claude Beach, Jr. - Southwest Property Management of Central Florida October 31 st - Debra Parker - Association Management Group of Central Florida November November 5 th - Connie Davis - Windtree Gardens Condominium Association November 26 th - Doreen Acevedo - Space Coast Property Management of Brevard

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Orlando Office: Maitland The Clayton & McCulloh Building 1065 Maitland Center Commons Blvd. Maitland, FL 32751 Phone: (407) 875-2655 Fax: (407) 875-3363

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You are receiving this e-mail as you fall into one of the following categories: *You are currently a client or client's manager;  * You have requested to be on our mailing list; *as a former member of BCAM and NECAM you are provided a subscription to the C&M mailing list If you elect to be removed from this e-mail service, we will no longer be able to send you seminar invitations, information on changes in the law concerning Community Associations, newsletters, or any other information regarding the Community Association industry. You will not receive solicitation for business unless you have requested that information. We sincerely hope we can continue to assist you with the challenges that face Community Associations today through this service.  When replying with a question or statement please include your full name  a nd the legal name of your Association or Management Company (no acronyms, please, unless your legal name on the Article of Incorporation lists an acronym.)