CAI Survey: Association Boards and Managers Are Optimistic

Community Associations Institute's Press Release 

Sept. 11, 2014—The national economy and housing market are improving—however slowly—and that means things are looking up for most associations, which is welcome relief to many communities that weathered some difficult years.

While some associations continue to feel the pinch, almost 90% of community managers and board members say their association’s overall financial health is "excellent" or "good," with 10% saying "fair" and only about 2% indicating "poor" financial health.

 The results are based on responses from almost 1,000 community managers and association board members who completed CAI's 2014 State of Associations Survey.*

 Looking ahead, almost 55% of managers and board members see their association’s financial condition being “much” or "slightly" better in the next five years, while about 42% expect little change. Less than 4% anticipate a turn for the worse in the next five years.

"Like the country as a whole, many associations experienced especially difficult challenges during the downturn," says CAI Chief Executive Officer Thomas Skiba, CAE. "This survey affirms that most associations are better off today, and it’s reassuring to know that most managers and board members express optimism about the next few years. Nobody can predict the future with certainty, but that’s a very positive economic indicator for associations and the professionals who support them."

Assessments and Delinquencies

Almost 40% of associations did not increase assessments during the most recent budgetary cycle. Of those that did raise assessments, 33% of respondents say assessments increased 1 to 3%, while 17% report a 4 to 6% hike, 7% a 7 to 10% increase and 4% an increase of 10% or more. About 13% of associations levied a special assessment during the previous 12 months.

Most managers and board members are confident their homeowners believe they are getting a good value for their assessment dollars, with 26% "overwhelmingly" satisfied, 60% "for the most part" satisfied and 10% "somewhat" satisfied. Almost 5% acknowledge their members are "not really" satisfied with the value they are getting for their assessments.

Understanding that rates of assessment delinquency often reflect the health of a local economy and housing market, respondents were asked the percentage of owners who are behind on their payments to the association. About 81% of respondents say their delinquency rate is 6% or less, with three quarters of those in the 0 to 3% range. About 15% peg the delinquency rate at 7 to 15%, with 4% saying it’s more than 15%.

Asked if their associations pursue delinquencies differently than before the mortgage foreclosure crisis and economic downturn, 44% say they are now "much" or "somewhat" more aggressive, with a near-even split between the two. Almost 55% say their collection policies and approaches have remained largely consistent, while less than 2% say their associations have become less aggressive.

Reserve Funding

Encouragingly, almost 70% of association managers and board members believe their associations are setting aside sufficient funds for future repairs and replacements. The remaining 30% do not believe their communities have sufficient reserves.

"Although 70% is a good number, most community association experts would be concerned that almost three in 10 associations have under-funded reserves," Skiba says. "We strongly encourage associations to budget with a sharp eye toward the future. It’s not easy making choices between immediate and long-term needs, but those bills will become due eventually."

The survey shows that almost 75% of associations base their reserve funding on a formal study or updates conducted by a professional reserve specialist; 25% do not use a reserve specialist.

Leadership Performance

Most community managers and association board members believe their residents are satisfied with the performance of the association leadership team. Almost half of respondents believe 80% or more of their residents are satisfied, while about a third estimate their approval rate at 60 to 80%. About 20% peg their approval rating at less than 60% of residents. According to a March-April 2014 national survey of community association residents conducted for the Foundation for Community Association Research, 90% of association residents rate their overall experience as positive (64%) or neutral (26%).

 

Leading Challenges

Community associations face a number of challenges, but resident apathy is rated the "most serious" issue for almost a third of the associations represented in the survey—higher than any other issue.

 "While community leaders rightfully seek more volunteers and greater owner participation, I don’t think apathy is necessarily an indication of poor management or owner discontent," Skiba says. "A lack of interest can mean that residents are largely satisfied with how the association is being managed and don’t feel the need to get involved."

The following are the percentages of managers and board members who rated issues as "very" or "somewhat" serious:

·        31% Resident apathy

·        20% Renters and rental-related issues

·        18% Rules enforcement

·        15% Insufficient money to do what is needed

·        13% Deteriorating common elements

·        13% Community appearance and curb appeal

·        12% Assessment delinquencies

·        12% Issues related to aging residents

·        5% Resident discontent

See survey PDF. 

 

Fire Safety Tips for Your Abode

Every homeowner wants to protect his or her residence and family members from the dangers of an unexpected blaze. Considering the number of deaths that occur each year due tohousehold fires, equipping your house against a fire is probably the best way to get rid of the fear.

If you want to make your home fireproof, here are some tips that can help you out:

In the Kitchen

No matter what the time of year it may be, you cook and bake in your kitchen on a daily basis, and being hasty in this environment can lead to a residential fire. When cooking, you should never:

- Leave the stove on while you are absent from the kitchen. If you sleepy or in need of rest, turn off the burner and take a nap so that you can resume cooking again once you are well rested and alert.

- Overcook your food, as it can also lead to fires. When you are cooking on the stove, set a timer to alert you regarding the right time when you have to take the food off the stove. When you are using your oven, microwave or even other cooking appliance that does not have a timer, set one inyour cell phone, tablet or alarm clock so that you will knowwhen to go and check on your food.

- Keep cloth rags need a stove. All kinds of fabrics, wood, paper, and plastic are flammable. Keeping these items neara flame or a hot and active stove can result in their catching fire, which may spread out across your residence.

While Lighting Candles

Candles can bring a romantic ambiance and a soft glow to your home, but they can also be deadly, especially when a burningcandle is left unattended, and causes other objects to burn in its proximity. As a rule:

- Always blow out the candles in your home before you go to sleep at night or every time you leave your home.

- Place your candles in an area where all other objects are at a foot’s distance from it.

- Never keep your candles on the surface without using a candleholder and ensure that the holder is firmly placed on a stable, straight, and smooth surface.

- Do not use candles in a home where oxygen tanks are available.

- Prefer to use flashlights in cases of power outages in place of candles.

When Heating Your Home

During the winter months, most homes utilize heating systems tokeep their interiors warm and cozy. However, using portableheaters can be a fire hazard if care is not taken. Use the following tips to secure your home:

- Do not place any item that may burn or melt within three feet of your heater.Do not operate these heaters for an extended period, such as leaving them activated all day or all night.

- Keep your children and pets away from the heater.

- Follow the instruction given on the heater to the letter to ensure that it is operated with safety.

Aside from all of these tips, install fire alarms in your home and maintain them twice a year for additional safety. You can also devise an escape route to exit your home in an emergency and purchase a fire extinguisher to take care of small fires on your own.

For more information consult with your security advisor(s) or your local fire department.