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Monthly Insights
Jim Yost, owner of Elite Management and Ocean Property Management, writes regular condominium association informational newsletters. These informational pieces are linked below.
For additional advisory services on any of the information in the articles you can contact Jim Yost at 609-675-6835.
Insight Article Links
Director's & Officers Insurance
Director’s & Officer’s insurance (“D&O”) is a specialized policy designed to protect the board members and officers of a condominium association from personal liability if they are sued for alleged wrongful acts while carrying out their duties. Condo directors and officers (“D&O”) insurance protects the personal assets of board members from lawsuits alleging wrongful acts while managing the association.
Capital Improvements & Special Assessments
A capital improvement for a condominium, community or homeowner’s association is generally defined as a permanent structural enhancement, change, addition, or major renovation to the association’s common elements that increases the property's value, increases its utility, and/or appreciably prolongs its useful life. Unlike routine repairs which restore an item to its original condition, capital improvements are substantial, long-term investments that modernize the property. As such, they are capitalized, added to the asset's cost basis, and depreciated over time.
Coming Soon
Check back soon for the next condominium association article. Articles are posted monthly and on occasion bi-monthly.
Have you read our past articles? Check out our other website pages with articles saved by year published.
Completing the Condominium Project Questionnaire – Form 1076 Part 1
Completing the Form 1076 Condominium Project Questionnaire, otherwise known as the condo questionnaire, has become more challenging, confusing to some, and even onerous for volunteer board members. New requirements on mortgage approvals for condominium units are being imposed based on building inspections and capital reserve studies as a result of changes in the Fannie Mae and Freddie Mac secondary loan markets.
Completing the Condominium Project Questionnaire Form 1076 Part 2
The Form 1076 questionnaire wants to find out when the building was last inspected; if the board is aware of any defects, damage or violations of code requirements, and if so, is there a plan and budget to get things fixed. The Form also wants confirmation that the association board has a maintenance plan, including schedules and that the board includes maintenance in the annual operating budget.
Adequacy
In the context of condominiums and homeowner associations (HOAs), "adequacy" primarily refers to the financial health and sufficiency of the reserve funds. Specifically, it means the association has enough money in its reserve accounts to cover the anticipated costs of major repairs and replacements of common elements (such as roofs, building exteriors, or elevators) over a long-term period without needing to impose a special assessment on unit owners or significantly raise regular fees.