The Communicator - Volume 1, Issue 2 - (Page 7)

president’s message By Ric Perez With the unending barrage of publicity for the financial crisis surrounding the housing and mortgage markets, we find ourselves in very uncomfortable waters indeed. ALTHOUGH NOT COMPLETELY new territory, it nonetheless is increasingly difficult for boards of directors, homeowners, and community managers alike to navigate through these troubled times. Across the country, the “F” word has been garnering a lot of attention. Of course, we’re talking about foreclosures here, folks. During more appreciable upward peaks in the marketplace, foreclosures were rare indeed and largely non-existent in many instances. That landscape has changed dramatically forcing communities to implement collection strategies to protect their life blood – namely assessments. As I’m sure you have heard through attendance at many of the educational programs during your tenure as a board member or career as a manager, the financial health of an association is contingent upon the successful collection of assessments. With foreclosures reaching dizzying heights, many associations find themselves in the unenviable position of escalated collection activities for mounting delinquencies – creating strategies for high foreclosures in a low equity world if you will. While Civil Code 1366 (a) provides the basic language for the levying of regular and special assessments, it does not intend to have associations thought of as lending institutions (banks), or worse, allow for exemptions to owners in their obligations to pay assessments. Because of human nature and sympathy for those who might, embarrassingly, find themselves experiencing financial hardships, boards must be diligent in the performance of their fiduciary duties and formulate reasonable collection policies that protect the interests of the corporation. There are many who mistakenly think that the individual owner should be the focal point, but in truth, the big picture should be the focus … it is the corporation whose assets you are trying to protect and preserve. This attitude must prevail and take precedent over any personal relationship with an individual owner. By adhering fairly and faithfully to a collection policy, the board is assured of the “safe harbor“ afforded by Directors and Officers (D&O) insurance coverage in the event that a lawsuit, small claims action or other legal action is taken against a board member or an entire group. Day to day operational activities can be severely hampered by budgetary constraints due to the lack of cash flow from assessment collections. This scenario only serves to cause more burdens for cash-strapped common interest developments, with long term implications. To name but a few, properties reverting back to the association, lack of proper short-term and long-term/deferred maintenance, and tax implications. There are several very reputable collection agencies (usually with an attorney involved on the staff) with the expertise to assist you through this difficult process. Additionally, we encourage you to take advantage of the many opportunities provided via the educational programs and seminars presented by the Bay Area and Central California Chapter of CAI. Please feel free to visit the CAI Web site for more information on programs and events in your area. Sincerely, Ric Perez, Branch Manager, CCAM Massingham & Associates Management, Inc. ricp@massingham.com The Communicator • 7

Table of Contents Feed for the Digital Edition of The Communicator - Volume 1, Issue 2

The Communicator - Volume 1, Issue 2 Contents President's Message The Hammer is Broken Top 10 Mistakes That Get Board Members Sued Dealing with Bankruptcy Ask the Experts – Are Your Contractors Licensed and Insured? 2008 Events & Education Calendar Welcome to CAI BayCen Directory Updates Index to Advertisers

The Communicator - Volume 1, Issue 2

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