Townhome Community taking control from its builder

Case 1:
The community’s infrastructure (road surfacing, grading, seeding, and trees) was less than half complete but all of the several hundred homes in the community had been sold. The builder blamed the delays on the developer, and the developer stalled and eventually defaulted on its bond. Working closely with members of the Board of Directors, LCMI facilitated communication with the county, prodded inspectors to have the work completed. After two years, the county finally completed the community’s infrastructure.

Case 2:
The community was built on a series of springs, so the back yards were swamps, unusable and unhealthy. LCMI advised the board that while it might not have been legally obligated to help residents resolve the causes of these problems, practically, it did not have a choice. In conjunction with a committee of the Board, strong letters were sent to the builder which influenced it to come back and install sump pump systems in the basements of affected houses, and then regrade the backyards so they would drain toward a previously nonfunctioning storm drain.

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Enhancement of property values and community desirability:

In a strong housing market, it doesn’t take much to sell any house. But what about in a weak market? Or a 10 year old community competing with a brand new one?

Laurence Community Management, Inc. worked with one of its communities to add value to homes before the current market boom. By focusing on landscaping, signage, and architectural compliance, and by making improvements overlooked by the developer such as speed humps and wheelchair curb cutouts, houses in the community were selling for prices similar to new houses in the next community. During the 2003-2004 current market boom, price increases in the community have soared in percentages that are giant leaps ahead of the national average and homes are sold within a couple of days.

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Budgeting challenges and insufficient reserves:

The community had not raised dues for over 10 years and volunteers performed many of the services normally paid for by an association. The previous management company had gone out of business and the new board was faced with too small a budget and insufficient income to hire a management company at current rates, and it also found that it had to address a large amount of deferred maintenance. Many of the people who had provided volunteer services had moved away.

LCMI offered its “Blue Plan” service plan and as a courtesy has provided some additional services to help the community close the gap until the budget and income resources would be reconfigured. This has allowed the community to begin a paving and storm drain restoration plan.

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Nonpaying residents and collections:

It seems like every community has some members who do not pay their dues. This is a giant strain on residents who are good citizens and the Board of Directors. Often, the first casualty is the community reserve fund which is necessary to pay for infrastructure repairs in later years. Sometimes a community has to reduce services in order to avoid a special assessment which would only hurt the same members who were paying anyway.

LCMI always recommends that the dues be billed on a quarterly basis. This allows owners to review account activity and ask questions if necessary. If the bill is not paid in the required time frame, a second bill advising that further action will be taken is sent. If the bill is returned by the post office, investigations as to the owner’s whereabouts are initiated.

LCMI works closely with the community’s lawyer to initiate an organized and comprehensive approach to collections. It makes sure to collect back dues, late fees, interest, and lawyers’ fees, but most importantly, dues are accelerated through the end of the year. Laurence works out payment plans with owners wishing to come current, and works with the Board of Directors and the lawyer to determine when it is appropriate to initiate a suit to protect the community’s interest.

Similarly, bankruptcy and foreclosure notifications require quick response to protect the interests of the community. All of this requires frequent communication between the law firm. LCMI is happy in most instances to work with the community’s current firm or to help the community find another firm that will be more effective.

LCMI has worked with collection agencies and recommends using them in some situations.

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Auditing and community accountability:

Laurence insists that the community’s books are audited annually. This ensures for the community that its funds are managed properly.

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