CAI-NJ November 2020

FINANCIAL IMPACTS... from page 17.

being informed. As we speak, there is new legislation being considered that may result in significant changes to the transition process. Working with your professionals to stay on top of these issues will help you to navigate what can be an arduous and compli- cated process. Arriving at the ultimate

goal, a settlement agreement that is fair to both the developer as well as the association, does not have to be out of reach. Following these guide- lines will help to ensure a successful transition process and will start an association down a path of financial success. n

Once the decision is made to pursue transition, boards can create a new “transition fund” that can be utilized to account for all transition related activ- ity. This will help to provide a clearer picture of the association’s finances and will prevent any transition related activity from tainting the operating or reserve funds. With a more accurate picture of the financial health of each fund, boards will be better informed and prepared when it comes time to prepare the annual budget. 3) Evaluate the Benefit: As the old saying goes, you will want to make sure “the juice is worth the squeeze”. You do not need to be an accountant to know that spending $100,000 to receive a $50,000 tran- sition settlement is not an ideal situation. As mentioned earlier, transitions are unique to each individual situation. It is very important to work with your pro- fessionals and put together a plan for your transition process. The plan should include an estimated time frame, a reasonable estimate of the value of the potential settlement to be received, and an estimate of anticipated professional costs to be incurred along the way. Once all of this information is gathered, the board can then determine whether or not pursuing a settlement would make financial sense. Relying on stories of what similar associations settled for does not constitute a reliable plan. You must always consider the facts and cir- cumstances that are specific to your site. At the end of the day, the key to a successful transition revolves around

tech touch value LEVERAGING TECHNOLOGY TO STREAMLINE COMMUNICATION, OPERATIONS AND REPORTING. CULTIVATING RELATIONSHIPS TO ENSURE HIGHLY SATISFIED ASSOCIATION RESIDENTS AND STAKEHOLDERS. PRESERVING AND ENHANCING VALUE THROUGH BEST-IN-CLASS SERVICES.

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To learn more, visit IntegraMgtCorp.com or call Edward San George, MPA, PCAM at 973.770.1500 .

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