All For One, and One For All - Almost!

Personally, I support the across-the-board $7,200.00 ($300 x 24 months) special assessment of all 340 unit owners for the purpose of funding construction of those unimproved buildings that need renovating. It is time we got the neighborhood built up to code and looking good.

Some worry that their money will get lost because their building has already been renovated and so their $7,200.00 will not be spent on their own building but on another building. Be assured that everyone's money must and will be accounted for separately (at TAJ, each building is a separate condominium and money from one cannot be used to pay for another). In the books, your money will be applied to your own building, as per state law.

At least, that's what I think. There are pretty clear laws that govern this kind of thing.

Follow this link to read the 1994 Declaratory Statement made by the Florida Department of Business and Professional Regulation. It's a big document so you might have to refresh the page once or twice before it fully loads.

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A letter was mailed out to unit owners. The explanation is appreciated, but there are some questions left unanswered.  The letter does not indicate the final disposition of the collected funds. Apparently the money is to be used to make construction loans to buildings that need renovating. Presumably those buildings will repay those loans and unit owners in un-effected buildings will be made whole again. So, at some point can unit owners get their money back if it is not spent on their building, their condominium? If so, what will be the procedure and when will that be available? If not, what becomes of that money?

If I get the answers to those questions, I will let you know.

Finance Committee Meeting, Monday, 5 October 2015

Finance meetings are often committees, comprised of fewer than 4 BOD members (therefore it does not constitute a Quorum of the BOD). Typically, a meeting like this is open to the public for observing, but participation is generally limited to pre-assigned members of the BOD and the community. I am not sure of the arrangements for this particular meeting, as I have heard nothing about it other than to see the sign posted at the driveway entrance (pictured below).

BOD Meeting Aug 3rd -- 2012 Financial Audit is Available -- A Unit Owner's Request

Unit Owner Michael McNichol's Open Request of the BOD for the August 3rd BOD meeting:

Unit Owners' Fear of BOD Theft of Funds is Common Complaint

The following is a portion of an article in the Sun Sentinel in 2010.  It was recommended by a unit owner in a mass email to this blog's author and other undisclosed recipients.  Click here to go to the full article on the Sun Sentinel website.

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Cracking down on board theft

Florida law offers some help but owners are largely on their own

November 30, 2010|Daniel Vasquez on condos, Sun Sentinel Columnist

Last month's arrest of a Palm Beach County Century Village board president on larceny charges in connection with $33,000 in missing association funds highlights a top concern for those who live in Florida shared communities: Whom do you turn to when you think a board member is stealing?

Unless the robbery is at gunpoint, the answer is: You contact authorities and provide any evidence you have of theft. While Florida statutes and authorities offer some relief, for the most part condo owners are on their own when it comes to providing proof of stolen or missing money.

"Our office always gets calls from condo owners who believe that their board is misusing the association funds. It is one of the most common complaints that we get," said William Raphan, a South Florida supervisor with the Florida Office of the Condominium Ombudsman. "Since we do not have investigators, or enforcement power, we refer them to the appropriate agency."

In many cases, that means the local police.

Special Assessment Meeting, Well Done

I happened to stop in and listen to a portion of the Special Assessment (SA) meeting that was held on January 4th.  I was able to see the paperwork that the BOD had prepared for the owners, and to listen to the dialogue that they were having.  

Because I have attended many SA meetings I know how they often transpire.  It seems that unit owners are typically on edge and suspicious (and who can blame them) and that the BOD members are frequently under-prepared and defensive.

Pictured, left to right: John Lovell, Mark Morgenstern, Carol Hazan, and Paulette Watson.

I was very pleased to see that the BOD was very well prepared with paperwork that appeared professionally done (thanks to the management office).  They BOD members, themselves, were relaxed, respectful, and not overly defensive.  As a result, in spite of palpable tension, unit owners were also respectful.  A genuine dialogue took place between the two groups, and difficult decisions were made with both parties appropriately represented.  

My hats off to the BOD and the management staff for their hard work and dedication in this matter.  If this is a sample of how they conduct themselves in all matters, then we have a fine BOD (and management office), indeed.  I also congratulate the unit owners of building 34 for their respectful conduct in such a difficult situation. 

Letter From A Concerned Resident

The letter below was sent to the blog administrator after having been sent to the BOD. The author says that he has not received a response to his inquiry.

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With all due respect to the Board and finance committee who volunteered their time, why are we still having issues with the budget?

"Fully funded reserves" DOES NOT mean collecting all the funds in one year: it means determining the remaining useful life of the assets, how much is already in the bank, and how much is still left to collect. In 2009, the total amount to fully fund reserves was $25.33 per unit per month for the outstanding balance of $1.5 million, of which $103,000 was scheduled to be collected in 2009 to fully fund them that year. Based on the budget we received a few weeks back in the mail, the finance committee is using the same spreadsheets that were created several years ago and have in them the calculations for funding the association reserves.

I am unable to figure out how someone came up with $325 per unit per month, or $1.32 million, for 2011 ....we're not supposed to collect all of the funds in one year. And if an asset is already fully funded we don't have to fund it any further. State law I believe also requires the Board to re-evaluate the reserves every couple of years to correct the amounts and useful life - has this been done?

Your accountants - who may already be subject to disciplinary actions  for not transferring 2010 and prior common area and building reserve funds each month to a separate reserve account as required by law and which you were previously notified about  - should have corrected or advised you on this.

Please see the attached sheets from the proposed 2009 budget - specifically the Common Area Reserves worksheet that had the calculations from 2009.

I am not that smart, but I am smart enough to know that something is wrong when it took me less than 5 minute to review the old files, and your current spreadsheets you sent to us the other month, to see the mistakes. Our budget could have remained the same as last year and fully funded the reserves at about $23 per month per unit, or about $16 per month more than the  first budget notice and $302 per month less than the budget you just sent us.

Who will be addressing this at the meeting on Thursday night? Who will answer the questions about insurance deductibles and were they passed back to all the units in the Association or did just the units in the buildings affected pay the deductible on their insurance claims, such as Building 2 and 31 (by law each building is responsible for their own expenses, including insurance premiums and deductibles)? When will the reserve funds that the Associaton colllected  be transferred to the Reserve Accounts per Florida Statutes since Moody never transferred them (board votes don't override the law)?

Thank you.

718.111 (14) - note: we don't have investment funds, and Moody never transferred our reserve funds to our reserve accounts!COMMINGLING.—All funds collected by an association shall be maintained separately in the association’s name. For investment purposes only, reserve funds may be commingled with operating funds of the association. Commingled operating and reserve funds shall be accounted for separately, and a commingled account shall not, at any time, be less than the amount identified as reserve funds. This subsection does not prohibit a multicondominium association from commingling the operating funds of separate condominiums or the reserve funds of separate condominiums. Furthermore, for investment purposes only, a multicondominium association may commingle the operating funds of separate condominiums with the reserve funds of separate condominiums. A manager or business entity required to be licensed or registered under s. 468.432, or an agent, employee, officer, or director of an association, shall not commingle any association funds with his or her funds or with the funds of any other condominium association or the funds of a community association as defined in s. 468.431.

718.111(3)(f) - note: description of how to compute association reserve funds
Annual budget.—

2.In addition to annual operating expenses, the budget shall include reserve accounts for capital expenditures and deferred maintenance. These accounts shall include, but are not limited to, roof replacement, building painting, and pavement resurfacing, regardless of the amount of deferred maintenance expense or replacement cost, and for any other item for which the deferred maintenance expense or replacement cost exceeds $10,000. The amount to be reserved shall be computed by means of a formula which is based upon estimated remaining useful life and estimated replacement cost or deferred maintenance expense of each reserve item. The association may adjust replacement reserve assessments annually to take into account any changes in estimates or extension of the useful life of a reserve item caused by deferred maintenance. This subsection does not apply to an adopted budget in which the members of an association have determined, by a majority vote at a duly called meeting of the association, to provide no reserves or less reserves than required by this subsection. However, prior to turnover of control of an association by a developer to unit owners other than a developer pursuant to s. 718.301, the developer may vote to waive the reserves or reduce the funding of reserves for the first 2 fiscal years of the association’s operation, beginning with the fiscal year in which the initial declaration is recorded, after which time reserves may be waived or reduced only upon the vote of a majority of all nondeveloper voting interests voting in person or by limited proxy at a duly called meeting of the association. If a meeting of the unit owners has been called to determine whether to waive or reduce the funding of reserves, and no such result is achieved or a quorum is not attained, the reserves as included in the budget shall go into effect. After the turnover, the developer may vote its voting interest to waive or reduce the funding of reserves.

Flyer From Property Manager

Office Closure Feb 15th - 22nd

I stopped by the office to follow-up on the wild rumor that the property management staff had quit. Taped to the front door was the message that due to an internal financial audit the office is to be closed for a week.

I have no further information about this situation other than to say that I do not recall this having happened before. I mean, is this a standard operating procedure, or this an extraordinary measure that signals the existence of a significant problem?

Building Reserves Funding

It is time, once again, for each building (each building is an individual condominium) to cast their collective vote regarding the funding of their building's reserve fund. By law, if the building does not vote, the owners will owe the amount that has been estimated by the BOD to fully fund the reserve fund for their building. In the years that I have observed the outcomes of the voting process, it is extremely rare that unit owners want to pay the fully funded amount. The forms below were mailed to unit owners to complete and return by the published date, January 28th at 7:30pm.

Annual Budget Meeting: Attendance Low, Monthly Fees High

Of the several hundred unit owners that make up the TAJ community and will collectively share the cost of the $1,040,949.00 budget in 2010, four of us showed up for the Annual Bedget meeting on Monday, January 11th.

The BOD members out-numbered the unit owners 2 to 1. Our thanks goes out to the BOD and especially the Finance committee for their work in the creation of the annual budget. It is not an easy task and we appreciate that they donate their time to do this for all of us.

Yearly Budget Meeting; Something Missing?

It is time, once again, for the yearly budget to be approved for the following year. This includes determining the yearly maintenance fee that is assessed to all unit owners (and then divided into equal monthly payments). As part of the process, the BOD is required to determine what the buildings' reserve amounts should be. Each building is then allowed the opportunity to vote to reject the proposed reserves for their building. All this is part of the law in Florida, as shown in an earlier post.

The BOD sent out the flyers shown above. However, in past years the BOD also sent out proxy ballots so that unit owners could submit their votes to reject the proposal without having actually to attend the budget meeting. It seems that the proxy ballots did not get sent out this time. Does that mean that in order to reject the proposed monthly payment of $410 in favor of the lessor payment of $260 each building has to have a majority of their owners show up at the meeting?


Florida Statutes Chapter 718.112(1)(f)2:
2. In addition to annual operating expenses, the budget shall include reserve accounts for capital expenditures and deferred maintenance. These accounts shall include, but are not limited to, roof replacement, building painting, and pavement resurfacing, regardless of the amount of deferred maintenance expense or replacement cost, and for any other item for which the deferred maintenance expense or replacement cost exceeds $10,000. The amount to be reserved shall be computed by means of a formula which is based upon estimated remaining useful life and estimated replacement cost or deferred maintenance expense of each reserve item. The association may adjust replacement reserve assessments annually to take into account any changes in estimates or extension of the useful life of a reserve item caused by deferred maintenance. This subsection does not apply to an adopted budget in which the members of an association have determined, by a majority vote at a duly called meeting of the association, to provide no reserves or less reserves than required by this subsection. However, prior to turnover of control of an association by a developer to unit owners other than a developer pursuant to s. 718.301, the developer may vote to waive the reserves or reduce the funding of reserves for the first 2 fiscal years of the association's operation, beginning with the fiscal year in which the initial declaration is recorded, after which time reserves may be waived or reduced only upon the vote of a majority of all nondeveloper voting interests voting in person or by limited proxy at a duly called meeting of the association. If a meeting of the unit owners has been called to determine whether to waive or reduce the funding of reserves, and no such result is achieved or a quorum is not attained, the reserves as included in the budget shall go into effect. After the turnover, the developer may vote its voting interest to waive or reduce the funding of reserves.

~12 Jan 2010~ At the BOD meeting to ratify the annual budget, held on 1/11/2010, the BOD indicated that the proxy ballots were soon to be mailed out to owners and that there was to be a subsequent meeting to determine each buildings' vote on reserve funding.

BOD Meeting July 6th, 2009

The Board of Directors met last night. They spent a good amount of time explaining to the owners of building 27 the complicated details of their finances. Apparently a building refurbishment loan with a premature repayment deadline had been renegotiated. The Board explained that the terms of the new loan were more favorable for building 27. They also explained that a loan default would have serious consequences for the entire Association because the once building-specific bank loans were "cross-colateralized" with other loans when the previous BOD purchased two units within the community.

There was much back-and-forth between unit owners and BOD members about the finances (when, how, and why decisions were made). In the end, a BOD member summarized the situation by stating the simple truth that we (the Association) owe the bank money and we simply must pay.

Apparently building 27 is not the only condominium facing financial problems. Keeping the financial records straight has always been a challenge here at TAJ. Every new BOD in recent history has expressed strong intentions to correct any problems in that area, and every BOD discovers, eventually, that our way of doing business is so complex that even well paid professionals have difficulty handling the work. By the way, it seems that the new accouting firm (Moody) is on top of our finances. Unfortunately, there are a lot of mistakes to correct from past years of poor accounting.

An Explanation Of The Credit Crisis That Is Worth Watching

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.