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4 Mistakes Most New HOA Board Members Make (And how to avoid them)

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Everyone makes mistakes, especially when trying something new. New HOA Board Members are no different. The trick is to avoid common mistakes and learn from the unavoidable ones. Barrera and Company has been working closely with HOA Boards to prepare Reserve Studies for the past 30 years. We thought it might be helpful to put together a list of common mistakes that new Board Members make – and more importantly, how you can avoid them.Board Meeting

1) Thinking you can “wing it”

Too often, new board members take their seat at the table before learning what that actually entails. This is dangerous! If possible try to take a class or at the very least get your managing agent to give you an overview the roles and responsibilities within the HOA. Take the time to understand the management plan before you jump in. This will help you hit the ground running as an effective and efficient Board Member.

2) Simply doing too much

If you take the advice from point one, you know that your authority as a board member is derived from the HOA governing documents. And you have, of course, taken the time to understand them.

To put this simply: If it’s not in the governing documents, you can’t do it.

It’s easy to be enthusiastic and optimistic but never loose sight of reality. Some things, you simply can not change or regulate.

3) And doing it too soon

Along the lines of point two, another common mistake being to overzealous. Many times, people join the board for a specific reason. The minute they have the power, they try to enact change without fully understanding the implications of their actions. Any good decision takes time and the impact should be understood from all angles before action is taken.

4) Changing vendors hastily (Power trip alert!)

Try to avoid passing judgement on vendors before you’ve had the opportunity to meet with them. Maybe you didn’t like what they were doing before you came along but keep in mind that they take direction from the board. You might be able to turn the situation around without changing vendors. Again, you need to understand all sides.

By now you’re probably getting the idea. Most mistakes can be avoided with a little due diligence, patience and understanding. If you simply take the time to understand the Association, your role within it and the implications of your actions – you will be on your way to contributing to a healthy HOA.

Learn More: 6 Ways to Improve HOA Board Meetings

Water Conservation – Save the Planet, Save Money

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Water ConservationMany states, including our home state of California, are experiencing record low rainfall this season – an event that is sure to trigger tighter water restrictions for your Homeowners Association.

But the time of year or current conditions should not dictate your decision to pursue water efficiency. The bottom line is that saving water saves your HOA money – and all communities could do with a little extra room in this year’s budget.

With that in mind, we’ve put together 4 tips to help you save water and save green.

1. If you fail to plan, you plan to fail.

First things first – develop a water plan that’s made for your community. If mandatory water restrictions are in place, some communities often need to participate in a designated water budget program or water only on assigned days. Water budgets typically determine a specific number of gallons per square foot, inches per year or a percentage reduction of water use. While participating in such programs, communities can typically chose to water how and when they want as long as they are meeting the terms of the water budget. An irrigation professional can help you determine the best plan for your community.

2. Not being proactive can cost you.

Proper maintenance of irrigation systems are often overlooked and categorized as an unnecessary cost. The truth is proper maintenance is one of the best ways for your HOA to save water and money.

Multiple times per year, the system should be checked for broken heads and leaks. Make sure the heads are pointing in the right direction and that the spray is not blocked by other plants or tall grass. If the water pressure is too high heads may mist or fog, resulting in water that never hits its intended target. Installing devices that regulate the pressure will help you more efficiently and effectively water your property. Look into installing high efficiency nozzles – some of which are even rebated by your local water agency. Lastly, consider replacing heads with drip irrigation whenever possible.

3. Be smart about it.

Smart controllers take into account soil type, rain fall and plant requirements to deliver only the amount of water needed. The cost and features of such controllers vary but some can be completely controlled remotely via the Internet.

Some HOAs may deem smart controllers out of their budget but all should strongly consider installing rain sensors. This affordable yet effective device simply prevents the irrigation system from watering during the rain.

Again, some water utilities provide rebates that make upgrading a no brainer.

4. Don’t make a rookie mistake.

Not all landscape professionals are created equal. In fact, many are not irrigation experts at all. It’s important to make sure that your contractors keep in mind and are equipped to help you optimize your property for water efficiency. Work with them to determine the best water schedule, appropriate plant choices and available rebates.

Read More: Water Efficient Landscape… The Easy Way!

Interested in getting a Reserve Study for your community? Click here to get a proposal!

Top 10 Home Renovation Projects

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Many homeowners are looking for ways to improve the value of their properties. In this article, you’ll learn about the top 10 home improvement or renovation projects that offer a solid return on investment, listed from least to most costly. So, whether you’re just wanting to “spruce the place up a bit” or are looking for a way to get the most out of your old home to help pay for your new one, there’s something here for nearly every budget and dream.Garage Door

1. New front door – Replacing your old, tired front door with something more stylish is a rather inexpensive way to add some new value to your home, as well as to your curb appeal. Experts say that an upgrade to a steel door is a great investment, but warn against choosing a door strictly for its energy rating. Turns out homes lose more heat through gaps around the door than through the door itself.

2. New garage door – To echo the first item on this list, garage doors need some love too.

3. New siding – Give your entire home a facelift with a new cladding of vinyl siding. While this project is more expensive and complex than the first two, it is still relatively quick and budget-friendly while adding value and improving the look of your home.

4. New deck – A deck is a lovely and functional transition from inside to the outdoors. A new deck can be built over an existing but outdated patio or can replace an old, sagging wooden porch on the back of your home. The return on your investment is either years of enjoyable leisure, or about 75% of the costs, depending on whether you stay or go.

5. Minor kitchen updates – You don’t have to go all out. Consider replacing just the countertops, adding a backsplash, purchasing a sleek new appliance, or swapping the faucet for an elegant, water-saving model. Something as simple as new light fixtures or cabinetry hardware can add value, style, and atmosphere to an otherwise less-inspiring cooking cave. The budget and extent of the makeover is up to you.

6. Window replacement – Give your home an aesthetic and energy-efficiency makeover with new windows. While the budget for this project is larger, it’s well worth it and can pay for itself in climate efficiency over time.
7. Attic remodel – If you’re considering a real undertaking, turn that old, dusty attic into the master suite, library, or nursery of your dreams.

8. Basement remodel – Similar to the attic project, only in the basement, you’ll want to focus on family space. Adding family or “public” space in the basement can take you from cramped and cranky to peaceful and harmonious.

9. Major kitchen overhaul – And sometimes you do have to go all out. Kitchen remodels are pricey and require you do McGuyver kitchen space somewhere else in your home, but remodeling the heart of the home comes with many benefits, including a more beautiful and functional space and a solid ROI to go with it.

10. Second floor additions – You can nearly double the value of your home by doubling its size and functionality. Adding an entire floor, or even just a master suite, over your existing home can bring in a 65% or more increase in the sales price of your home. It also saves valuable landscaping and outdoor living space—a plus for smaller lots and cramped neighborhoods.

If 2014 is the year of the fresh home design for you, you’ll be off to a great start with any of the items on this list. Whether you gather your supplies for a DIY weekend or call your favorite local contractor, you’re in for a treat. Good luck!


 Read More: DIY Home Renovation Blunders to Avoid

Interested in getting a Reserve Study for your community? Click here to get a proposal!

How Effective HOAs Make New Year’s Resolutions

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Fresh StartWell, it’s that time of the year again – time to reflect on 2013 and resolve to make improvements for 2014.

But, just as you’ve set personal goals for the new year, now is the time to look ahead as a HOA (homeowners association) to form New Year’s resolutions that will set your community up for success this year.

Setting Community Goals (AKA Resolutions)

Effective HOAs constantly seek feedback and input from their homeowners. The beginning of the year is a great time to get on the same page. This year, before you get together with your board, reach out to your homeowners to determine the needs and goals specific to your community – you might be surprised at what you find. This often gives the board a fresh perspective while making owners feel included and active.

Now, take this feedback to your next board meeting for review and choose the areas most in need of improvement, define your goals and prioritize them based on need, budget, time and resources.

Next, you’ll want to distinguish between long, and short term goals. Breakup the long term goals into smaller milestones and recruit homeowners to help you reach them. If you were initially successful when seeking community feedback, this task becomes exponentially easier.

Last but not least, publicly share your community goals and your progress throughout the year. Use your community website and /or newsletter to keep everyone in the loop and up to date. The new year is a great time to reconnect but try to keep up the momentum. A good HOA’s job is never done.

We hope these tips will get your community off to a great start in 2014.

Here’s to a happy and healthy year!


Read More: 5 Homeowner Resolutions for 2014

Interested in getting a Reserve Study for your community? Click here to get a proposal!

 

 

 

 

3 of the Biggest DIY Blunders to Avoid

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DIY Home

Do You Need Permits?

Every homeowner wants to feel the pride that comes with completing do-it-yourself projects. But oftentimes when we’re on a mission, we unwittingly bite off more than we can chew. There are many DIY projects that can be tackled easily and successfully by most any homeowner without causing more harm than good, but here we’ll take a peek at a few common blunders that may require you to think twice before picking up that tool box and getting started.
Many homeowners jump right into a project before consulting city codes or condominium association rules. Oftentimes DIYers err on the side of just trying to finish a project quickly without anyone being the wiser, as permits are time-consuming. But permits are there to ensure that the time and money you invest into a project is put to good use. For example, San Diego electrical and plumbing permits are an integral part of planning any changes that might affect the integrity of these portions of the home. Oftentimes you need proof of a permit for an insurance carrier to cover it, or there may be specific height and material limits that you’ll need to adhere to in order to get the best price for your home should you choose to sell.


Buying Cheap Materials

It can be an intriguing idea to consider buying materials that are a few levels lower on quality than you originally budgeted. But trust that buying cheaper materials outright can actually cost you more in the long run. Cheap tile can break, cheap carpet can tear, cheap paint can peel, and cheap appliances can wear down or malfunction quickly. This doesn’t mean you have to buy the Cadillac of dishwashers in order to keep yourself out of the quality red zone; it simply means that sometimes a few extra dollars here can save you having to buy those materials all over again in short order. Think of it this way: you aren’t paying for labor, so you have a little extra room to get better materials.

Inaccurate Measuring

We’ve all heard the old adage, “measure twice; cut once.” It’s important not just for good measure, but because one wrong cut can cause a domino effect across an entire project. Fences, drywall, flooring, and other items in the home must be meticulously measured out, as beginning on the wrong foot can cause you to waste materials and run into issues once you hit the end of the project. Always err on the side of caution and measure everything diligently multiple times. A few minutes on the front end can save you from having to scrap yards and yards of material on the back end.
Taking heed of the potential to make these mistakes is the first step in preventing issues that can be caused by do-it-yourself projects. A little bit of planning can go a long way towards making sure your home project goes off without a hitch.

Read More: Top 10 Home Renovation Projects

Interested in getting a Reserve Study for your community? Click here to get a proposal!

5 tips for an effective HOA

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A well rounded and effective Homeowners Association (HOA) is imperative to your community’s pocket book and piece of mind. At Barrera & Company we’ve seen the good, the bad and the ugly. In today’s post we’ll go over a few tips for cultivating and managing an effective HOA.

related: 6 Ways to Improve HOA Board Meetings

1. Try to chose homeowners that have business experience and a working knowledge of finance.

The biggest mistake we see HOAs make is to underestimate future expenses – eventually resulting in an HOA fee hike. Often times this can be mitigated by simply choosing individuals that have a track record of overseeing long term projects or business ventures.

2) Whenever possible, it is also extremely helpful to include homeowners that have experience with design and construction – contractors, engineers, architects, landscapers, etc. These types of people are invaluable when it comes to evaluating bids and keeping your community up to par aesthetically.

3) This is an obvious one – attorneys make great HOA board members.

4) It’s not always possible to assemble the “dream team” – and that’s ok. But what’s even more important is that you chose people who are most likely to be long term residents. There’s nothing worse than being forced to raise dues because of the decisions of people who are long gone.

5) Peace is important for an HOA to function effectively. Sure there will be disagreements but keep in mind that you’re all on the same team. If it does get out of hand, it’s best to seek mediation before there is irreparable damage.

While these tips my seem like common sense, you’d be surprised how many HOAs do not keep these guiding tenets in mind. Follow these simple, yet important guidelines and your HOA is on the road to success.

Read More:  The role of an HOA board


Interested in getting a Reserve Study for your community? Click here to get a proposal!

Should HOAs Invest Reserve Funds?

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Investing Reserve FundsCommunity Associations, at various times, collect money to fund reserves and/or for working capital. Is it wise for Associations to invest these dollars while they are accumulating for future repairs and replacement of the Communities’ assets?

The answer is yes – but through well-informed decision making.

The first important thing to remember is that Reserve Studies assume some level of interest is being earned on reserve account balances.

However, these assumptions are relatively conservative with respect to the interest earned. Typically it will range from one to three percent.

But it’s important to note – the interest-earned component is an integral part of the funding plans for reserves. Therefore the Association should always have in place a policy or strategy for keeping the reserve balance in some low-risk, interest bearing account.

Put simply – Your HOA should seriously consider developing and approving an investment policy to help maximize the interest income while minimizing risk. For example, your policy should list types of acceptable investments as approved by the HOA Board of Directors. They might include Certificates of Deposit (CDs), Money Market Accounts, FDIC insured banks or other investment companies that are pre-approved by the Board.

The idea here is to make sure your money is always working for you but don’t lose sight of the inherent risk involved with investments. Always consult the appropriate professionals when setting up your policy.

Read More:  The role of an HOA board


Interested in getting a Reserve Study for your community? Click here to get a proposal!

5 Homeowner Resolutions for 2014

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As you gear up for the New Year, take some time to think about your most valuable material asset: your home. Alongside personal goal setting, jot down a few steps toward improving your property and your enjoyment of it, too. Here are four things every homeowner should resolve to do in the New Year:

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1. Increase home value. You do not have to spend a lot to see an improvement in the value of your home. Simple upgrades to kitchen cupboard and drawer hardware or landscaping can up the value of your home and its aesthetic appeal. If you have some money available for renovations, start with your kitchen or bathroom, as upgrading these rooms tends to add the greatest value to homes.

2. Decrease energy costs. There are so many simple ways to cut back on the energy you consume at home, but it takes some reminding. Start with basic things like making sure lights are turned off when they are not in use and consider more advanced long-term savings like high-efficiency light bulbs or appliances. Did you know that electronics like televisions, laptops, and even cell phone chargers continue using electricity when plugged in—even if they are not in use? Over the course of a year, this can mean hundreds in wasted energy costs. Reevaluate the way you use energy in your home and you will see savings in the long term.

3. Improve protection. How many valuable items do you have that are easily accessible around the house? When you consider jewelry, documents, and cash, those numbers really add up. Come up with a better way to safeguard your valuables from intruders. Research wall safes or even portable ones that are sturdy enough to withstand abuse from a thief. If you do not have a home security system in place, look into affordable options that will also lower your homeowner’s insurance costs.

4. Do less maintenance. Enjoy your home more this year by having less to do when you are in it. Get rid of possessions that are crowding you and develop easy cleaning systems. If something in your home is a particular pain (like cleaning that antique oriental rug or constantly pulling dog hair off your black couch), look into replacing it with a more reasonable option. Your free time at home should be about relaxing, not constantly cleaning or repairing it.

5. Invite more visitors. If you are waiting for your home to look perfect before hosting a party or inviting another family over for a play date, you could be waiting a really long time. Make the most of what you have and invite friends and loved ones into your personal space for socialization. Chances are they will be more interested in the company than whether the home is perfectly decorated or dusted anyway.
Make the most of the coming year when it comes to your home. The changes will improve your enjoyment of it and may even increase your resale value too.

What will you resolve in 2014?

Read More: How Effective HOAs Make New Years Resolutions

Reserve Studies and Funding : Survey of 400 community managers

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A couple of months ago, the Foundation for Community Association Research conducted a survey of almost 400 community managers.

When asked whether or not the associations had a formal reserve fund, 93% of respondents stated that their association did, but the most interesting find of the survey has to do with the level of funding within these funds.

When asked the question “How does the association determine how much to keep in the reserve fund?” almost 20% responded with “What the association can afford to set aside,” but that they “do NOT believe is adequate”.

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While almost 75% of survey respondents indicated basing their reserve fund levels on the recommendations of professional Reserve Specialists, over 25% indicated that the amount in the Reserve Fund is dictated by whatever the association can afford to set aside.

For Homeowners Associations and Community Managers, this scenario can quickly become dangerous if a costly or emergency repair arises. More importantly, is that ultimately the reality and cost of underfunded reserves is passed on to the homeowners themselves. If an HOA can not properly maintain roads, pools, or roofs the value of residents’ properties may be harmed. When HOA’s resort to special assessments, the cost to owners can run in the tens of thousands of dollars – no small expense for the average homeowner.

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For owners and buyers, here are some quick tips to help you evaluate the financial health of an HOA:

  • If you are a buyer, demand that the seller provide you with copies of the most current financials for your review.
  • If you are an owner, make sure that you are given annual financial reports, especially the delinquency report and those pertaining to the adequacy of the reserve account.
  • If you are a buyer, do a physical review of the property and observe how the common areas are maintained. For example, assess the condition of exterior paint, amenities, roads, roofs, drives, fencing, etc.
  • If you are an owner, be involved with the board and its decisions, especially when you see deferred maintenance of common areas or are subject to special assessments.(Joseph Aiu, California Department of Real Estate, 2012)

For more information on the effects of Underfunded HOA’s,  read this Consumer Warning from the CA D.R.E.

All images taken from CIARF.org’s Snap Survey : Reserve Studies and Funding.

Click here to download the report.

To find out more about our procedures for conducting reserve studies, or to be in touch with a reserve study specialist click here or give us a call at (800) 543-8670.

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How Eco-Friendly Plumbing Can Save Your Wallet

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Plumbing

Plumbing

Investing in eco-friendly plumbing services is one of the best choices you can make for your home. Also called green plumbing, this investment is environmentally sound and economical. Many people typically think about what is cheaper in the short-term without considering the implications bad plumbing can have in the long run. Eco-friendly plumbing is incredibly energy efficient, creating a smaller footprint on the earth—but also on your wallet.

Comprehensive Lifestyle Solutions
Eco-friendly plumbing services extend from plumbing installment to using ecologically sound plumbing products. This method works by using systems like solar water heaters, gray water collection, and rainwater catchments that use less resources and energy to maintain. Plus, reliable, eco-friendly products can be used to clean your plumbing systems and fix problems like clogs rather than toxic chemicals.

Free Resources
This might be obvious, but oftentimes in this modern digital age we forget that resources such as sunlight and rainwater are free. Green plumbing thus takes the resourceful approach of harnessing the free energy provided by nature. Solar powered water heaters can be used to heat the water in your home, and most of them even come with backup systems for the cloudy days. Rainwater can be harnessed and used intentionally for exterior purposes, such as watering your garden. Grey water systems recycle the used water from the dishwasher, laundry and shower. By using ecologically friendly and nontoxic products, this can save exceptional amounts of water for further use.

Save Water
There are still more ways eco-friendly plumbing services can benefit the home of today. Water is the most precious resource on the planet, and copious amounts are wasted every day because of inefficient utilization. Toilets, for instance, account for 30 percent of all interior water waste, along with faucets and shower heads. Dual flush toilets are one way to better manage the amount of water you flush away. A home that installs water-efficient fixtures can potentially save about 30,000 gallons of water every year. From a do-it-yourself standpoint, check your systems and pipes regularly to catch any leaks as they happen, as persistent leaks can add up to hundreds of dollars without you ever knowing there is a problem.

Read More:  Water Efficient Landscape Maintenance


Interested in getting a Reserve Study for your community? Click here to get a proposal!