CAI-NJ May 2019 (w)

Community Trends ® May 2019

IN THE KNOW

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• Case Study: Association on the Brink • InterimMonthly Financial Statements — Some Useful Tips • Play Nice in the Sandbox ....and more In This Issue

The Community Associations Institute New Jersey chapter would like to thank its 2019 Ultimate Partners below. For more information on our sponsorships, please contact Laura O’Connor at 609-588-0030 or laura@cainj.org.

T hank You Fo r You r Suppo r t !

THE CAI-NJ COMMUNITY TRENDS ® MAGAZINE CONTENTS

14

Case Study: Association on the Brink By Loren Rosenberg-Lightman, Esq. Hill Wallack LLP

20

Interim Monthly Financial Statements — Some Useful Tips By Samuel E. Schneider, CPA, Financial Controller RCP Management Company, AAMC, AMO

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26

Play Nice in the Sandbox By Robert N. Roop, P.E. Lockatong Engineering, Inc.

38

Management Trends: Keeping Communication Alive...

By Elaine Warga-Murray, CMCA, AMS, PCAM RMG Regency Management Group, Inc., AAMC

EXTRAS President's Corner

5 6 7 8

20

Looking Ahead

CAI-NJ Upcoming Events

Legislative Update

CA-PAC “Dollar a Door” Campaign

10 13 18 29

Chapter Trends

26

CA-PAC Top Golf Wrap up & Photos 2019 CAI-NJ Olympics Registration

Lecture Series Registration 31 Board Leadership Development Workshop Registration 33

Managers Best Practices Roundtable Discussion & Networking Registration Business Partners Best Practices Roundtable Discussion & Networking Registration

34

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35 36

Get to Know...Industry Leaders

New Jersey and Pennsylvania & Delaware Valley Chapters of CAI Joint Networking Event Registration 41 CA-PAC Day at the Races Registration 43 2019 CAI-NJ Conference & Expo Save the Date 45 2019 CAI-NJ Shoot the Cover Photo Contest 47 New Members 54 CAI Membership Application 55 2019 Ultimate Partner Listings 60

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CAI-NJ LEADERSHIP BOARD OFFICERS

BOARD OF DIRECTORS Benjamin Basch American Pool Enterprises Business Partner

Donna Belkot Taylor Management Company, AAMC, AMO Community Association Manager Jean Bestafka Renaissance Homeowners Association Homeowner Leader

PRESIDENT MOHAMMED SALYANI, CPA WilkinGuttenplan

Bruce Kunz, CMCA Windmill Club Association Homeowner Leader

Deana Luchs Canal Walk Homeowners Association Homeowner Leader Tony Nardone, MBA, PCAM Corner Property Management Community Association Manager

VICE PRESIDENT LOREN LIGHTMAN, ESQ. HILL WALLACK LLP

PRESIDENT ELECT JENNIFER NEVINS, CMCA DW SMITH ASSOCIATES, LLC

Christopher Nicosia, CMCA, AMS, PCAM Prime Management, Inc., AAMC Community Association Manager

Lisa Vitiello, CPA Towne & Country Management, Inc. Community Association Manager

TREASURER JEFFREY LOGAN GUARDIAN SERVICE INDUSTRIES, INC.

SECRETARY MARK WETTER, ESQ. RADOM & WETTER

GENERAL COUNSEL Jason Orlando, Esq. Orlando Murphy LLP

GENERAL COUNSEL EMERITUS Wendell A. Smith, Esq., CCAL Greenbaum, Rowe, Smith & Davis, LLP

IMMEDIATE PAST PRESIDENT Lisa Vitiello, CPA Towne & Country Management, Inc.

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PRESIDENT’S CORNER

CAI-NJ STAFF

Mohammed Salyani, CPA CAI-NJ 2019 PRESIDENT WilkinGuttenplan

LARRY P. THOMAS, PCAM CHAPTER EXECUTIVE DIRECTOR LARRY@CAINJ.ORG ANGELA KAVANAUGH DIRECTOR, CONFERENCE & PROGRAMS ANGELA@CAINJ.ORG LAURA O’CONNOR DIRECTOR, MEMBERSHIP & MARKETING LAURA@CAINJ.ORG JACLYN OSKIERKO DIRECTOR, EVENTS & EDITORIAL JACLYN@CAINJ.ORG BROOKE STOPPIELLO-NEVINS MANAGER, GRAPHIC DESIGN & MEMBER SERVICES BROOKE@CAINJ.ORG JENNIFER FARRELL ADMINISTRATIVE COORDINATOR JENNIFER@CAINJ.ORG

May There Be Relief for Associations

U sually May is supposed to bring flowers but in this case, we are hoping that it brings relief to associations that have long been suffering under the burden of “zombie” foreclosures and the like. In case you are wondering what I am talking about, in April both legislative houses passed two bills that would really bring a lot of relief to them. I am sure the legislative update will give all the details so all I am going to say this is huge. And if LAC is not going to toot their own horn, I will toot it for them. If it were not for the tireless work of this committee with our lobbying firm, MBI, this would not have been accomplished.

“At the time of writing this the bills were at the Governor’s desk...”

At the time of writing this the bills were at the Governor’s desk so I am really hoping that by the time you read this, he will have already signed them. As I said earlier this will really bring relief to the associations suffering under this burden. Having audited

Contact CAI-NJ

ADDRESS CAI-NJ

500 HARDING ROAD, FREEHOLD, NJ 07728 PHONE 609-588-0030 FAX 609-588-0040 WEB WWW.CAINJ.ORG EMAIL INFO@CAINJ.ORG

many an association that is carrying huge allowances for bad debts because the foreclosures are not moving forward, and the priority lien is only for six months that too for condominiums only, I can assure you this will definitely help. Once again, a big round of applause for the LAC. As usual we have some great articles this month. To start the case study by Loren Lightman, Esq., my fellow board member, brings to light that one can never really understand the complexities of being a board member until elected to that seat. It is too easy to sit on the sidelines and criticize. Robert Roop’s article about playing nice in the sand box has a similar under- lying concept but for totally different reasons and a different outcome. Definitely an interesting read and a situation that is faced by many an association, maybe not to the same degree. If every board member read and followed Samuel Schneider’s article on some useful tips to understand the interim financial statements, it would make life easier for every manager and auditor, like myself. By the way Sam, like several others in the industry, is a past employee of WilkinGuttenplan. They make us so proud. Lastly, be sure to check out the calendar of events, there’s a lot taking place this month. Be sure to attend some of them. Enjoy those flowers everyone! n

CAI-NJ On Social Media

www.facebook.com/ CAINJCHAPTER

@CAINJCHAPTER

Community Associations Institute - New Jersey Chapter

@cainewjersey

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LOOKING AHEAD LARRY THOMAS, PCAM | CAI-NJ CHAPTER EXECUTIVE DIRECTOR

T his month’s theme can easily be the premise for every month. “In the Know” cannot be overstated or over- played. I will give you my take on the theme and some suggestions and observations over my 35 plus years in the community management business. The most dangerous community boards are the ones that “know everything”. They feel that their community is the best and all other communities look to them as a model. They feel that they do not need to be further educated and never reach out for answers or advice. I know a lot of our community board members and when we have an educa- tional seminar (such as the recent legislative updates) I pan the room to see who’s attending. I see the regular faces that I see at a lot of our educational presentations and I also notice that a lot of the “know everything” boards elect not to attend. These boards also do not insist that their man- agement staff attend and can, at the very least, report back to the board. This is poor governance to say the least. In addition to our education programs for our board members and homeowner leaders, several of our business partners offer either in-person or on-line seminars usually on specific topics. These are also a great way to increase your knowledge base and keep current on relevant issues con- cerning our common interest communities. I find it alarming that board members do not at the very least attend the legislative updates. There is so much happening in Trenton that affects our everyday decisions and operations in our communities. I get dozens of calls asking me about the changes in the bathing codes, the pending foreclosure reform bills, mandated mediation and believe it or not, I still get calls on “What is this Radburn thing all about”. I usually ask who their professional team is and more times than not, they have an attorney, accountant or management compa- ny (or manager) who is not a member or involved in CAI. Here’s a quick story that I usually tell to support the impor-

tance of building the correct team of professionals. I was in a small community visiting a friend when I saw a copy of the monthly community newsletter sitting on the kitchen table. I started reading it and came across the notes from a recent open board meeting. There was a paragraph that stated the manager contacted the association attorney to see if their pool would qualify to be “exempt” under the new bathing code regulations. Their attorney charged them $1,800 to investigate the new code requirements and pro- vide his opinion to the board. I have three issues with this. 1. If the attorney was a true “association attorney” he would have already known about the “exemption” pro- visions and would not have charged the community for his time to investigate and report back to the board. 2. The manager and pool company should have been current on this topic and gave advice to the board con- cerning the legislation. I checked, and the management company is a CAI-NJ member, but the manager is not a member and is not active with CAI. I’ve never heard of the pool company so I’m assuming they had no idea about a community association being classified as an “exempt” facility. And 3. If the board had taken their roles seriously and attended one of our legislative updates (and we held 2 informa- tive sessions just on the new bathing code changes), they would have been better equipped to handle this matter. So, to wrap this up and I will give my usual pitch for CAI — hire professionals that specialize in homeowner and condominium associations. Look for professionals who are ACTIVE members of the CAI-NJ chapter. Believe me, your role as a board member will be more rewarding and you and your community will be much better off if you stay “In the Know”. n

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2019

EVENTS & EDUCATION CALENDAR

May

August

7

6-7

F.A.S.T Habitat For Humanity Day Monmouth County, TBD High Rise Summit: Joint Manager & Business Partner Panel Discussion The Liberty House, Jersey City Lecture Series - Managing White-Tailed Deer Destruction in New Jersey CAI-NJ, Freehold Joint Manager &Business Partner Roundtable TBD Board Leadership Development Workshop CAI-NJ, Freehold Dennis R. Casale Memorial Golf Outing Forsgate Country Club, Monroe Twp. M-100: The Essentials of Community Association Management Mercer County Community College, West Windsor Joint CAI-NJ & PennDelVal Networking Event TBD Lecture Series: What Are The Key Ingredients For Your Recipe For Success CAI-NJ, Freehold Joint Manager & Business Partner Roundtable Forsgate Country Club, Monroe Twp.

Board Leadership Development Workshop CAI-NJ, Freehold

8

Annual Beach Party Martell’s Tiki Bar, Point Pleasant

8

20

Lecture Series: Securing Your Community CAI-NJ, Freehold

21

September

5-6

PCAM Case Study Cranbury

25 June 5-6

11

Managers Leadership Workshop Rossmoor Community Association, Monroe Twp.

11

17 12

Legal Forum Stonebridge Community Association, Monroe Twp. Homeowner Leader Roundtable Buona Sera, Red Bank

19 18

24 25

Lecture Series CAI-NJ, Freehold

Joint Manager & Business Partner Roundtable TBD

25

27- 29

October

17 16

2019 Pre-Conference Networking Reception The Event Center @iPA, Freehold, NJ 2019 CAI-NJ Annual Conference & Expo The Event Center @iPA, Freehold, NJ M-310: Management Company Administration Freehold, NJ

July

17 10 26

CAI-NJ Olympics Thompson Park, Monroe Twp.

17- 18

Senior Summit Renaissance at Manchester, Manchester CA-PAC Day at the Races Monmouth Park Racetrack, Oceanport

November

5

Lecture Series - Pending National & State Legislation & the Physical & Financial Effects on our Community Associations CAI-NJ, Freehold

All Events Are Subjuect To Change

LEGISLATIVE UPDATE

GEORGE GREATREX, ESQ. PARTNER, SHIVERS, GOSNAY & GREATREX, LLC LEGISLATIVE ACTION COMMITTEE CHAIR

O ne of the legislative and regulatory issues your Legislative Action Committee (LAC) has been addressing involves recent changes to regula- tions covering public recreational bathing in New Jersey. As you may know, the New Jersey Department of Health issued revised regulations in January of 2018 applicable to all public bathing facilities in the state. While swimming pools in common interest communities (CICs) are generally considered a “private” amenity, it is important to know that the State of New Jersey continues to define a community pool serving more than two resi- dential units as a public recreational bathing facility that must comply with the provisions set forth in the NJ State Sanitary Code Chapter IX (N.J.A.C. 8:26). The purpose of the code is to set safety and sanitary expectations for the swimming pools operating throughout the state in the interest of public health. The amended regulations adopted last year caused some confusion and concern among those who live and work in CICs in New Jersey which have swimming pools as an association amenity. Much of the confusion stems from the fact that “private pools” owned and operated by CICs are considered “specially exempt”, permitting them to avoid some of the requirements of the state’s regulations if certain criteria are met (such as proper signage at the pool). There have been various informational publications printed over the past year addressing those concerns, including articles in the April 2018 and December 2018 issues of Community Trends ® written by Beth Barnett and Ben Basch from American Pool Enterprises. Legislation was introduced last year which addressed some, but not all, of the confusion and concerns gener- ated by the 2018 amended pool regulations. Barbara Drummond, President of Prime Management Inc. who serves

on your LAC, reports below on that bill which was enacted into law this past January. Please read on… On January 31, 2019, Governor Murphy signed into law Assembly Bill 4191 which made some technical amendments to the New Jersey State Sanitary Code that covers Public Recreational Bathing Facilities. It outlines exceptions to the Department of Health regulations governing public recreation- al bathing facilities that went into effect on January 16, 2018. One of the new law’s changes modifies the previous health inspection requirement to now allow pool operators the choice of whether they want to use the official 21-point checklist in

“Legislation was introduced last year which addressed some, but not all, of the confusion and concerns generated by the 2018 amended pool regulations.”

lieu of a regular inspection by the local health department prior to opening the pool for the year or season. It also clarifies the requirements for pools in existence prior to January 1, 2018 concerning the need to upgrade pool circulation system equipment. The clarification states that only pools undergoing other alterations/upgrades are also required to upgrade the circulation system equipment. It further states that those pools in which existing equipment is being replaced with like kind and quality do not count as an alteration that would require upgrading the circulation system. Additionally, lifeguards are now permitted to perform administrative tasks such as checking pool passes and performing routine water testing, provided that the lifeguard CONT I NU E S ON PAGE 56

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2019 CAI-NJ COMMITTEES

AWARDS COMMITTEE Gabby Grimes — Chair Eileen Szelewicki, CMCA — Vice Chair Neil Betoff

F.A.S.T. COMMITTEE Gabe Vitale — Chair Ashley Gray, CMCA — Vice Chair Matthew Antico

J. David Ramsey, Esq., CCAL Caroline Record, Esq., CCAL Board Liaisons: Jean Bestafka Loren Lightman, Esq. Staff Liaisons: Larry Thomas, PCAM Laura O’Connor MANAGER COMMITTEE Erin O’Reilly, CMCA, AMS, PCAM — Chair Kristina Munson, CMCA, AMS, PCAM — Vice Chair Denise Becker, CMCA, AMS, PCAM Jeff Cirkus, CMCA, AMS, PCAM Dawn Mackanic, CMCA Kerri Stimpson, AMS Elaine Warga-Murray, CMCA, AMS, PCAM Michelle Williams, CMCA, AMS Board Liaisons: Tony Nardone, MBA, PCAM Chris Nicosia, CMCA, AMS, PCAM Staff Liaison: Angela Kavanaugh MEMBERSHIP COMMITTEE Nikolaos Haralambopoulos, CPA — Chair Briana Walsh — Vice Chair Michael Barch Lysa Bergenfeld, Esq. Jennifer Cardak Nichole Gist Jennifer Lynch, CIC Tara Melick, CPA Steven Mlenak, Esq.

Jennifer Carr Rich Cassilli Drew Cowley Michelle Gadaleta Lila Khiry Steve Lang

Jessica Baker Angela Celeste Jamie Cullen, CMCA Eric Eggert

Shelby Evans Maggie Faselt Brian Griffin

Christine Maldonado Vanessa Nixon, Esq. Drew Podolski, Esq. Kari Prout Mary Visco Sandi Wiktor Board Liaisons: Jennifer Nevins, CMCA Lisa Vitiello, CPA Staff Liaison: Jaclyn Oskierko BUSINESS PARTNER COMMITTEE Amy Shorter — Chair Jessica Vail — Vice Chair Theresa Beckett John Buglione Robert Flanagan, Esq. Ryan Fleming Frank Gencarelli Joseph Kreps Toni Licciardi Michael Luzzi Kim Manicon Patricia Ventura Gregory Vinogradsky, Esq. Lisa Wagner Board Liaisons: Jeffrey Logan Jennifer Nevins, CMCA Staff Liaison: Angela Kavanaugh CONFERENCE & EXPO COMMITTEE Jay Burak — Chair Jessica Kizmann, CPA — Vice Chair Kristie Bendick, CMCA Saher Gouda David Kalen Dawn Kearney

Jessica Hatton Shaun Hynes Vincent Kazmierski Lila Khiry Steven Kuhnert Jessica Long

Kristin Marzarella Tara Melick, CPA Nicole Miller, Esq. Rachel Richardson, CMCA Lauren Vadenais David Vargas

Kristy Winchock Board Liaisons: Benjamin Basch

T he CAI Amicus Program is looking for your help. For years, CAI has participated in New Jersey court cases involv- ing significant community associ- ation issues. We do this through our “Amicus” or “Friend of the Court” Program. With the court’s permission, CAI files briefs in court cases advocating the interests of our members. CAI has successfully appeared in a number of important New Jersey cases, including Twin Rivers. It is important for our mem- bers to let CAI know when they are involved in, or become aware of, a lawsuit which may have an impact of general concern to the industry. We can only participate and have our views expressed when we know about these cases when they first arise. So, this is an import- ant request on behalf of both the National and Chapter Legislative Action Committees to please advise the Chapter office of any litigation involving community association issues of potential importance to the entire industry. For any such notices, please contact Larry Thomas, PCAM at (609) 588-0030 or at larry@cainj.org. n Help CAI’s Amicus Effort

Jeffrey Logan Staff Liaison: Jaclyn Oskierko GOLF OUTING COMMITTEE Paul Migliore — Chair Eric Eggert — Vice Chair Chris Belkot Scott Brandle Martin Cabalar, Esq. Patti Clemente Marty Ehrlich Keith Giliberti, PE, RS Fred Hodge, Jr. Hank Johns Lisa Komitor Georgette Kyriacou Cathy Mango Mike Polulak, Esq. Ross Rutman David Shahrabani Jasmin Shelton Lenny Stern Christopher Tensen, CMCA, AMS Ryan Weiner

Kathleen Radler Steve Roderick Ken Shah

Peter Throndson Board Liaisons: Loren Lightman, Esq. Mark Wetter, Esq.

Staff Liaisons: Laura O’Connor Brooke Stoppiello-Nevins NETWORKING EVENTS COMMITTEE Pam Illiano — Chair Gary Gleitman — Vice Chair

Dean Catanzarite Diane Cody, PCAM Rhett Cowley Jose Elvir Seth Frumkin Freedom Hildreth Carol Nickerson, CMCA Julie Nole Debbie Pasquariello, CIC, CIRMS

Joe Bonafede Stacey Cadoff Jeanine Clark Ellen Comiski Jeffrey Cuevas

Tom Witkowski Board Liaisons: Chris Nicosia, CMCA, AMS, PCAM Mark Wetter, Esq. Staff Liaison: Jaclyn Oskierko HOMEOWNER LEADER COMMITTEE Cheryl Palent — Chair Roslyn Brodsky — Vice Chair Lois Gerber Richard Pucciarelli Board Liaisons: Jean Bestafka Bruce Kunz, CMCA Deana Luchs Staff Liaison: Angela Kavanaugh LEGISLATIVE ACTION COMMITTEE (LAC) George Greatrex, Esq. — Chair A. Christopher Florio, Esq. — Vice Chair Gabriel Lavigne Charles Lavine Anthony Manino Ralph Owen

John Echelmeier Tanya Jimenez Terry Kessler, Esq. Konrad Kurach Valerie Luckenbach Denise Mack

Daniel Reilly Chris Rosati Kristine Schmocker Dan Turi Melissa Volet, Esq. Board Liaisons: Benjamin Basch Donna Belkot Staff Liaison: Jaclyn Oskierko

Jessica Marvel Karl Meth, Esq. Kevin Oliver Cheryl Rhine, CIC, CIRMS

Harriet Schwarzber, CMCA, AMS Jackie Thermidor, CMCA, AMS

Gabe Vitale, Jr. Board Liaisons: Donna Belkot Mohammed Salyani, CPA Staff Liaison: Angela Kavanaugh EDITORIAL COMMITTEE Mary Barrett, Esq. — Chair Robert Arnone, CMCA, AMS — Vice Chair Daniella Chaviano Hilary Harding Jonathan Katz, Esq. Richard Linderman, Esq. Michael Mezzo, CPA, MBA Steven Morris, RS

Joseph Chorba, CPA — Treasurer Michael Pesce, PCAM — Secretary Lisa Rayca, CMCA, AMS — CAI-PADELVAL, So. Jersey Liaison Elizabeth Comando, CMCA, PCAM Barbara Drummond, CMCA, PCAM

Kelly Peters Robert Roop Kari Valentine, CMCA, AMS Ray Venturino Board Liaisons: Deana Luchs Lisa Vitiello, CPA Staff Liaison: Jaclyn Oskierko

Matthew Earle, Esq. Vincent Hager, CIRMS Sue Howe, AMS, PCAM Steve Kroll Christine Li, Esq., CCAL James Magid, CMCA, PCAM, LSM Thomas Martin, Esq. Glen Masullo, CMCA, PCAM

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Jack McGrath Paul Raetsch

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CA-PAC WORKS HARD PROTECTING THE INTERESTS OF COMMUNITY ASSOCIATIONS

SUPPORT CA-PAC “A Dollar a Door”! The Community Association – Political Action Committee (CA-PAC) is a volunteer committee consisting of homeowners, professionals and managers who serve New Jersey’s community associations. CA-PAC was created to give our members a stronger voice in Trenton by supporting candidates who support key issues important to CAI-NJ members. Please do your part and support our 2018 “Dollar a Door” campaign. Donate $1 per door or at least $250.00 per year for com- munities and $25.00 for individuals. 2018 A Dollar a Door Community Associations • Cedar Village at East Brunswick • Manors at Lawrenceville • The Plaza Grande at Old Bridge • The Ponds • Union Gap Village Association • Wildflower Village COA

TO DONATE TO CA-PAC, SEND CONTRIBUTIONS TO: CA-PAC, 500 Harding Road, Freehold, NJ 07728 | or visit: www.cainj.org/capac

YES, I’D LIKE TO SUPPORT CA-PAC WITH A PLEDGE!

COMMUNITY ASSOCIATION DOLLAR PER DOOR __________________ X ____________________ $_________ Number of Doors A Dollar or More Total Pledge PROFESSIONAL PLEDGE __________________ X ____________________ $_________ Number of Doors A Dollar or More Total Pledge FLAT RATE PLEDGES Business Partner ............................................... $250-$500 $_________ Management Company ..............................................$500 $_________ Other ....................................................................................... $_________

Community/Company: ________________________________________________________________________________________________

Individual Name:_____________________________________________________________________________________________________

MailingAddress:______________________________________________________________________________________________________

City, State, ZIP:______________________________________________________________________________________________________

Phone:_________________________________________________________Fax: ________________________________________________

Email:________________________________ Occupation:______________________ Employer:_____________________________________

Employer Address:___________________________________________________________________________________________________

City, State, ZIP:______________________________________________________________________________________________________

Please make your CORPORATE or PERSONAL CHECK payable and mail to: CA-PAC, 500 Harding Road, Freehold, NJ 07728

Management Company Name: _________________________________________ (Community Association’s Only) DO NOT INCLUDE MY NAME OR COMPANY ON THE LIST OF CA-PAC CONTRIBUTORS

The New Jersey Election Law Enforcement Commission requires us to collect and report the name, mailing address, occupation and name of the employer of contributors whose contribution exceeds $300 in a calendar year. Contributions to CA-PAC are not deductible for federal income tax purposes. Contributions are not limited to suggested amounts. CA-PAC will not favor nor disadvantage anyone based upon the amounts or failure to make PAC Contributions. Voluntary political contributions are subject to limitations of ELEC regulations. CA-PAC contributions are not considered payment of CAI dues.

CA-PAC WORKS HARD PROTECTING THE INTERESTS OF COMMUNITY ASSOCIATIONS

Municipal Bonding Requirements – (A1425, S3233) - Last year, the legislature passed a law removing developers’ requirements to post performance and maintenance guarantees on construction not ultimately dedicated to the municipality. While intended only to apply to shopping centers, CA-PAC is concerned that our communities could be swept into the exemptions, and will be working to correct the oversight. Delinquencies and Expedited Foreclosures – (A2085, S1243) – We continue to attempt to work with the banks to maintain vacant units and assume responsibili- ty for maintenance fees while pushing for rent receiverships as an option. Municipal Services / Fire Hydrant Maintenance - (A1745) – CA-PAC is advocating for expansion of the municipal services provided to your community. Our top priority for now is passage of legislation that would ensure that your local municipal utility authority keep your neighborhood safe by properly maintaining fire hydrants, and we hope to make the cost of such maintenance fair by banning the practice of charging our associations more than their host municipalities. Electric Charging Stations - (A1030) - There is National and State legislation concerning the installation of electric charging stations for existing and future common interest communities. CA–PAC will be there to make sure you have say over when, where, and if to include these stations in your communities. DCA Inspections - (S1150) - This bill would reduce inspections from every 5 years to every 2 years. Solar Panel Installations – (A2469) - Recent legislation proposes controls for regulation and installation of solar panels in your community. Insurance Deductibles – (A2439) - Recent legislation proposes to prevent an association’s ability to transfer the responsibility for a damage claim’s deductible to homeowners in condominium associations. Snow Contractor Indemnification – (S665) - This legislation would require snow contractors to be indemnified for any damage or injuries as a result of their snow removal/ice control operations.

TO DONATE TO CA-PAC, SEND CONTRIBUTIONS TO: CA-PAC, 500 Harding Road, Freehold, NJ 07728 | or visit: www.cainj.org/capac

CAI-NJ 2019 PARTNERS

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2019

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CHAPTER TRENDS

mem property management Upgrades Telecommunications Services mem property management recently announced a significant upgrade to its telecommunications services to serve their resi- dents and vendors better than ever before. The improvements will help residents and vendors get the answers they need quickly and effortlessly, whether inquiring about payments, late fees, accounting matters or any service-related issues. mem’s adoption of ShoreTel Workgroup Queue Handling activates a feature to play an announcement to callers about how much time is left in the queue and an opportunity to learn more about mem property management while they wait. This allows residents and vendors to manage their time more effec- tively and is the latest improvement in a state-of-the-art automat- ed workflow system that routes calls quickly and efficiently to the right person, every time. The new system also allows mem to monitor calls for quality assurance, work to further reduce wait times and evaluate call handling performance metrics across the entire organization.

Robert J. Flanagan Named Co-Chair of Greenbaum, Rowe, Smith & Davis Community Association Practice Group Mr. Flanagan, a partner in the Litigation Department, has been counseling association clients for nearly ten years on matters related to governance, day-to-day operations, cap- ital improvements, financing, collections and litigation. Mr. Flanagan explains: “I view being a community association lawyer as being a problem solver. I work closely with my clients to achieve the most effective and cost-efficient reso- lution to any problem.” Mr. Flanagan joins Christine F. Li in co-chairing the group. Ms. Li comments: “I am so pleased that Bobby will be serving with me as co-chair. His strong experience in community association law and enthusiasm will continue to benefit our existing association clients while growing this area of practice for our firm. n

Send in Your News for Chapter Trends to jaclyn@cainj.org Today!

Chapter Trends Editorial Guidelines

• All submissions must come from and be about: - A member of CAI-NJ (Manager, Management Company, Board Member, Business Partner or Business Partner Employee) in good standing. • Companies/Communities are permitted four (4) announcements per calendar year. • Submissions are limited to 150 words. - Members are responsible to condense the information appropriately, as CAI-NJ will not do so. Any submissions over 150 words will not be published.

• Submissions may include (1) image. • Submissions should not be advertorial in nature. Please note, CAI-NJ reserves the right to edit any submissions. The chapter reserves the right to omit information as necessary. CAI-NJ has the exclusive right to refuse to publish any submissions for any reason. For questions regarding the Chapter Trends section of Community Trends ® , please contact jaclyn@cainj.org or 609-588-0030.

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CASE STUDY: ASSOCIATION ON THE BRINK By Loren Rosenberg Lightman, Esq. Hill Wallack LLP

© iStockphoto.com

S everal years ago, I served as an impartial mediator in a case in which a homeowner sued their commu- nity association, the association’s board of trustees, and the association’s property manager. The homeowner’s claims were similar to those we often hear throughout the community association industry, including that the associ- ation did not hold its annual meeting as required in the governing documents, did not hold fair and transparent elections of its governing board, did not hold open board meetings, did not make required financial disclosures to its members and did not provide timely minutes of the meet- ings that were held (this was prior to the recent Radburn legislation). The homeowner’s claims also included a lack of repair and maintenance of the association’s common elements, which the homeowner argued had fallen into a state of disrepair.

The homeowner’s complaint did not seek financial com- pensation, but rather, a Court Order requiring the associ- ation to address the violations. As a result of negotiations between insurance defense counsel and the homeowner, the Court voluntarily dismissed the homeowner’s complaint and referred the claims to alternative dispute resolution (“ADR”) where I commenced my role as the third-party neutral mediator. My first action as mediator, after receiving consent from both the homeowner and the association’s board, was to schedule an annual meeting and election, which I under- stood had not occurred during the previous calendar year. Part of the reason for this was that the association’s communi- ty manager was based out-of-state and there was a dispute between the manager and the association as to exactly what this manager’s contractual responsibilities were. As a CONT I NU E S ON PAGE 16

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“...just because the board was eventually

CASE STUDY... from page 14.

The outcome of the meeting was that the challenging homeowner was elected to the board, which immedi- ately changed the entire dynamic of the situation and the relationship of the parties to one another. It also helped alleviate the tension within the mem- bership of those members who had supported the homeowner challenge, since these owners now felt that they were adequately represented in deci- sions impacting the entire association. With the election completed, the next order of business was to reach an agreement with the entire board to begin the process of hiring professionals to help guide the association going forward. We began the process with the attorney position, which would take over for me as my tenure as mediator started to wind down. This was some- what of a protracted process, as the

able to come to an agreement on

result of not having direct managerial involvement in the daily running of the association’s operations, many items that the association were tasked with by law and its governing documents were not being completed in a timely matter or, in some instances, being completed at all. After scheduling the annual meeting and election, I drafted the election documents, arranged for their mail- ing, secured the location for the meeting with the help of the board, and conducted the meeting. It was apparent that the association mem- bers appreciated having a meeting and the opportunity to present their questions on issues relevant to the election and association operations.

retaining association professionals did not mean that there was not discord along the way.”

board and I met with each candidate personally and carefully analyzed each proposal. At the end of the day, the board came together and, after much debate and consideration, made its decision as a unified group. The board utilized the same process for hiring an accountant and, eventually, a new man- agement company. However, just because the board was eventually able to come to an agreement on retaining association professionals did not mean that there was not discord along the way. Part of my duties of mediator evolved from helping the parties resolve their differ- ences to acting as a sounding board for the board members to vent their frustrations and present their “side” as the process moved along. Every board member recognized the final goal of getting the board to the point where there was no longer a need for a mediator, but how we got to that point was a matter of some discourse and disagreement as each individual got used to their role on the board. The newly elected homeowner on the board quickly came to realize that serving on the board was not an easy task, as it involved a tremendous

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Interim Monthly Financial Statements — Some Useful Tips By Samuel E. Schneider, CPA, Financial Controller, RCP Management Company, AAMC, AMO

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W hen you receive your community’s interim monthly financial statements do you ask yourself, “What in this financial package can help me better understand the association’s current financial situation?” After reading this, you will have a better idea of some items to look for and a better idea what they mean. Cash Flow As the old saying goes “Cash is King”, and we all know how important cash is in running the day to day operations of an association. So when looking at your operating cash balance on the association’s balance sheet, how do you know if the balance is healthy or not? One important item to compare it to is the balance in accounts payable. The accounts payable balance, listed in the liabilities section of the balance sheet, represents the amounts owed to the association’s vendors. Comparing operating cash and accounts payable balances will give an idea of whether

the association is paying its vendors timely, as well as paying itself in order to properly contribute to its capital reserves, and any other funds, such as the deferred main- tenance fund. If the operating cash balance is greater than the accounts payable balance, the association is most likely able to pay its vendors, as well as its non-operating fund contributions, in a timely fashion. Interfund Balances Often times, interfund balances exist on an association’s financials. An interfund exists when one fund owes money to another fund, e.g., when the operating account owes the capital reserves fund. Two ways interfund balances can arise are when one fund’s cash account temporarily pays for another fund’s expense, or when negative cash flow prevents the budgeted contributions to be paid to another fund. It is important to settle these interfund bal- ances whenever possible. Failing to address interfund bal- CONT I NU E S ON PAGE 22

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ances can cause your cash balance to become misleading. For example, while the balance in operating cash as compared to accounts payable may appear positive, significant inter- fund balances due from operating to other funds can cause operating cash flow to actually be negative. Aside from cash flow purposes, the IRS requires capital reserve funds be FINANCIAL STATEMENTS... from page 20.

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“There are other factors that can have a negative impact on an association’s cash balance.”

separated from other funds, and not comingled with operating cash. There are other factors that can have a negative impact on an association’s cash balance. Two common fac- tors include extensive unanticipated/ unbudgeted operating expenses and higher delinquencies in a particular month. Being aware of these factors will better allow boards and property managers to plan accordingly so that general operating services continue uninterrupted and that reserves are

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consistently funded so that the neces- sary funds are available when future major repairs and replacements are needed. Significant Budget Variances In addition to the balance sheet, paying close attention to budget vari- ances can also help board members and property managers become bet- ter informed about whether the impact of negative cash flow may arise. In many instances, the association’s income statement, included in the monthly financial package, will pro- vide budget vs actual comparisons to show where the association stands with certain line items. For example, large differences in difficult-to-bud- get-for operating expenses such as snow clearing costs and general repairs and maintenance vs budget can often have a major impact on the association’s operating cash flow. Carefully monitoring the association’s income statement for these significant variances on a monthly basis can help boards decide on the need to pass special assessments or make other changes in spending in order to recoup these unforeseen losses. Monitoring substantial negative budget variances on the association’s income statement is also beneficial in determining if reclassifications to other funds are in order. For example, often associations will budget for con- tributions to a deferred maintenance fund for cyclical type expenses that occur less frequently than annually. Perhaps the association is having a maintenance project done which takes place every 3-5 years and

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FINANCIAL STATEMENTS... from page 23.

on a particular line item in the associ- ation’s operating budget. Reviewing the monthly income statement for sig- nificant variances can pinpoint on a more timely basis instances such as this where an expense reclassification may be needed so that the expense is included in the appropriate fund.

When examples of these reclassi- fications occur, be sure to transfer the funds from the proper fund cash account promptly in order to avoid interfund balances. The interim monthly financial state- ments are a great tool to help support the management of the community from a fiscal standpoint if utilized properly. Understanding what items to look for and being able to decipher what they represent can be extremely advantageous in assisting boards and property managers to more effectively serve their community associations. n Your requests are welcome...

is originally included as an annual operating expense. This expense appears to be one belonging to the deferred maintenance fund, however is currently causing a negative impact

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ATTENTION ALL CAI-NJ SEMINAR ATTENDEES:

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Please remember to keep your seminar completion certificates in a safe place. These certificates are distributed at the end of each CAI-NJ seminar. This is proof that you attended and completed the seminar. You may need to reference the certificate in the future and CAI-NJ does not keep track of each member’s attendance record. Community managers will definitely need the certificates to obtain credit for continuing education towards their designations.

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Play Nice in the Sandbox By Robert N. Roop, P.E., Lockatong Engineering, Inc.

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“P lay nice” is not just for preschoolers. It is an instruction that adults are well advised to follow too. The consequences of failing to do so are emotional and financial pain, disruption of lifestyle and confrontation with neighbors and friends. The following case study reveals the origin of disputes, escalation, conse- quences and resolution. Imagine a shore property, moderate size ownership, beautiful building, all modern amenities, luxury finishes and appliances. What could be better — seasonal relaxation and recreation, a getaway from the stress of work and

career? At least for half of the owners that was the purpose of condo living. Other owners had an additional moti- vation. They were investors. Enjoy the beach, sure, but equally important was securing a return on their investment through high season rental income. Explore the objectives of each group. One wanted care- free vacation living, appreciation of the value of their invest- ment over time and retention of the quality and appearance of the building. The investors had shorter term objectives. While they certainly appreciated the benefits of a vacation home, they wanted that rental income. CONT I NU E S ON PAGE 28

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