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					                       Insight and Education for Community Associations
Community Associations Institute / Central Arizona Chapter /           Issue 3 / 2009

                                                            Protecting Your Organization from
                                                                        Itself – financial Issues

                                                                      reSerVeS: If You fail to Plan,
                                                                           You are Planning to fail

                                                                                 assessment Increase:
                                                                               One Size does Not fit all

                                                                                       How to Borrow and
                                                                                       What Impact does a
                                                                                       reserve Study Have
                                                                                            on the Process

                                                                                        2009 CaI Casino Night
                                                                                    Myths and Misconceptions
                                                                                  2009 CaI CaC event Calendar
                      To Better Serve You!

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                          Gila Bend                                           Florence
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              Az                                  sa a d
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                                                                             Issue 3 / 2009   1
                                                                                                      on the cover

                                                                                                                     If You fail to Plan,
                                                                            Issue 3 / 2009
                                                                                                                       You are Planning
                                                                                                                                  to fail
Community Associations Institute / Central Arizona Chapter /
  Features                                                                                   Departments
  12                                          10      “Priceless Legal advice”
                                                      April Luncheon Recap
                                                                                                  President’s Message
                                                                                                  From the Editor
                                                                                                                                            .......................... 4

                                              12      “going green”                               New Members
                                                                                                  Welcome to the
                                                                                                                                ....................................... 6
                                                      May Luncheon Recap
                                                                                                  Central Arizona Chapter!

  14       How to Borrow and What
                                                                                    14            CaI events .................................................8
                                                                                                  2009 Winter CAI Breakfast Club

           Impact does a reserve Study
           Have on the Process                                                                    arizona Legislative
                                                                                                  action Committee ............................22

           By Terry Burks
                                                                                                  2009 Arizona Legislative Session

  16      Myths and Misconceptions
      16  Myths that associations follow that could increase
          the association’s financial liability in the future.
                                                                                                  CaI News           ................................................24
                                                                                                  CAI News & Information
          By Lynn Krupnik, CCAL and
          Elaine Anghel, CMCA, AMS, PCAM, CAAM
                                                                                                  Congratulations Corner                           ................26
                                                                                                  Congratulations to…
   17     reSerVeS: If You fail to Plan,
                                                                                                  CAI – Central Arizona Chapter
          You are Planning to fail
                                                                                                  2009 Committee Chairs
          By Kerry-Lynn Goto, CMCA, LSM, PCAM, RS

  18      assessment Increases:
          One Size does Not fit all                         17                                    2009 CaI CaC
                                                                                                  event Calendar
                                                                                                  CAI – Central Arizona Chapter

          By Jessica J. Maceyko
                                                                                                  2009 Annual Sponsors

                                20       “Preserve and Protect”
                                         Property Maintenance
                                                                                             While efforts to insure accuracy are exercised, the publisher
                                         By Deena Kanoff                                     assumes no liability for the information contained in either
                                                                                             editorial or advertising content.

                                  21     MadOff’S PONZI SCHeMe -                                         Valhalla Holdings
                                                                                                         Custom Publishing
                                         a Lesson in Segregation of duties                     

                                         By Michael R. Gallacher, CPA and                    For advertising and editorial information,
                                         Marcos C. Goodman, CPA                              please call Valhalla Holdings at (480) 634-1708.

                                                                                                                                              Issue 3 / 2009                3
                 From the presiDent                                                                                     Community Associations Institute
                                                                                                                           Central Arizona Chapter

                                                                                                                         2009 BoarD oF Directors

                     President’s Message                                                                                       chapter president
                                                                                                                                 Brandi Reynolds
                                                                                                                            Law Offices of John Chaix
                                                                                                                       602-561-1094 •
                     Brandi Reynolds
                                                                                                                            chapter president-elect
                                                                                                                           Charles Maxwell, Esq., CCAL
                                                                                                                             Maxwell & Morgan, PC
                                                                                                                         480-833-1001 •
    I learned a lot during our May luncheon this year     members with the best possible lunch experience,                         vice president
    about Going Green. Some of you may remember           we needed to encourage our membership to                                  Gary McCunn
    I jokingly mentioned after the presentation that I    meet the registration deadline for our luncheons.            Four Peaks Landscape Management, Inc.
                                                                                                                 480-967-0376 •
    needed to get my dryer vent checked and cleaned.      Early registration gives us a better estimate of
    However, the more I thought about it, the more        the attendees and allows us to better serve our                        chapter secretary
    I wondered if my house was in good shape. As it       membership. We can often accommodate a few                  Kerry-Lynn Goto, CMCA, LSM, PCAM, RS
    turns out, the vent had detached itself in my attic   last minute registrants or walk in attendees, but                       Great Boards, LLC
                                                                                                                    602-569-0288 •
    and was blowing lint everywhere. The detachment       sometimes we have to ask people to wait to see if
    was a result of the vent being extremely clogged.     we have any no shows or turn them away due to a                      chapter treasurer
    So now my ability to dry my laundry is back on        shortage of space. We would like to limit both of                         Anne Dill
    track with a reduction in my energy impact on the     these scenarios by implementing a ten dollar late                Community Association Banc
    environment! Sometimes we all sit in a luncheon       registration convenience charge. By registering on             602-369-2388 •
    and wonder if the topic is truly relevant to us. I    time, you help us keep our costs contained and our                      chapter Directors
    believe there is always something to learn either     meal quality of a higher caliber.                               Elaine Anghel, CMCA, AMS, PCAM
    for our own benefit or possibly in order to help                                                                 Tri-City Property Management Services, Inc.
    another. I hope each of you come away from our        One of the best ways for an organization to prevent            480-844-2224 •
    luncheons with a nugget of valuable information.      stagnation, is to bring in new people or get people                      Charles Greco
                                                          who have been in the organization involved in              Florence Gardens Mobile Home Association
    The Board has a number of initiatives that we are     new ways. Their involvement can lead to new                520-705-2069 •
    continuing to investigate and pursue:                 ideas and a checks and balances on the existing               Shelly Holland, CMCA, LSM, PCAM
    • West Valley events: We hear our west valley         system. This does not mean that the “old” reliable           Val Vista Lakes Community Association
       members and we will continue to provide more       participants should be pushed aside, but rather that       480-926-9694 •
       networking opportunities on that side of town.     the blending of experience and knowledge with                      Lynn Krupnik, Esq., CCAL
    • Open, clear communication and accessible            new enthusiasm can lead to a better and stronger                    Ekmark & Ekmark, LLC.
       operation of the chapter: We want your             organization. This year as I look around at the              480-922-9292 •
       feedback; we also want you to maximize your        volunteers, committee participants, luncheon and
                                                                                                                           cai central arizona staff
       membership through participation and easy          event attendees, I see quite a few new faces mixed                      Kayte Comes
       access of information.                             with those I have known for almost eight years. I                     Executive Director
    • Expressing gratitude and appreciation for you,      believe this trend heralds the birth of a stronger             602-347-8726 •
       our members.                                       and hopefully better CAC-CAI. I want to extend
                                                                                                                                  Brittany Krupnik
    • Relevant and timely education.                      a warm welcome to all of our new members and                      Assistant Executive Director
    • Serving the legislative needs of our                thank you to all of our existing members for helping          602-347-8726 •
       membership.                                        CAI grow. As with any family, there is always room
    • Charitable outreach                                 at the table for more. Please invite someone to join                    chapter office
                                                                                                                          2221 W. Baseline Road, Suite 101
    • Quality networking programs                         us for a luncheon that you believe can give and
                                                                                                                              Tempe, AZ 85283-1039
                                                          receive value from participating in CAI.                    Tel: 602-347-8726 • Fax: 602-414-5553
    If you have an idea of how to improve our                                                                           
    chapter or meet any of these initiatives, please      Thank you again for your time, energy and financial           
    communicate with Kayte Comes or myself.               resources. We know you have options, and we
                                                                                                                   community resource committee
                                                          value your support and participation. Have a great
    Recently, our board was faced with a tough            summer and I hope to see you at our October Golf                     committee co-chairs
    choice. We realized that in order to provide our      Classic!                                                      Elaine Anghel, CMCA, AMS, PCAM
                                                                                                                           Tri-City Property Management
                                                                                                                            Jerry Parsons, CMCA, AMS
    From the Editor...                                                                                                      Total Property Management
    In past publications of this magazine, we have        as the inappropriate allocation of an association’s               Board of Directors Liaison
    focused on the security considerations involved       reserves, the failure to follow proper accounting                  Lynn Krupnik, Esq., CCAL
    in safeguarding communities from outside              procedures, or an improper assessment increase                      Ekmark & Ekmark, LLC
    dangers. However, external forces are not the only    implemented by the board may all place an                          committee members
    potential threats to the well-being of community      association in hot water. Fortunately, each                             Anne Dill
    associations. Many of the problems we see in          association can implement internal controls to                   Community Association Banc
    community associations arise from individuals,        avoid such situations.                                               Jessica Maceyko, Esq.
    actions or decisions made within the organization                                                                            Ekmark & Ekmark
    itself. In this magazine edition and the following    We hope that this issue provides you with
                                                                                                                                  Nicole McConville
    edition, we will address numerous steps that          guidance on how to protect your association from            Scottsdale Ranch Community Association
    each association can take to mitigate potential       itself by safeguarding the association’s financial
    problems stemming from inside the association.        security.                                                                Regis Salazar
                                                                                                                                Rossmar & Graham
    Financial matters are often ripe for dispute,         Yours truly,                                                          Brooke Songer
    especially in the current economy. Issues such        CAI Magazine Committee                                         ALPHA Community Management

                   An Association Law Firm
       That Thinks Inside and Outside the Box.

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          We have excellent lawyers, paralegals, assistants and staff,
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    This work too is never boring. When associations and managers want
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                  Representing Community Associations throughout Arizona
                                                                                   Issue 3 / 2009   5
                                                                                             CAI MEMBERSHIP APPLICATION
                           new memBers                                                   P.O. Box 34793 • Alexandria, VA 22334-0793
                                                                           Ph: 1-888-224-4321 • Fx: 1-240-524-2424 • Online:

                                                                          MEMBERSHIP CONTACT: (where materials will be sent)

Welcome to the                                                            Name:

Central Arizona Chapter!                                                  Assoc./Company:
    The Central Arizona Chapter proudly presents and welcomes our         Fax:
    new members for April, May & June of 2009.
                                                                          Select your Chapter:             Central Arizona
    homeowner/BoarD memBers:                                              Recruiter Name/Co. Name:
                                     Bellair Townhouse Association
    Ms. Cynthia Dunham               The Leadership Centre                TOTAL MEMBERSHIP DUES*
                                                                          Community Association Leaders & Homeowners
    Ms. Anita Gerulis                Stony Mountain Villas HOA            q Individual Homeowner or Board Member                            $114
    Mr. Rick Gray                    Sun City Homeowners Association      q 2 Member Board                                                  $189
    Ms. Irene Hobbs                  Stony Mountain Villas HOA            q 3 Member Board                                                  $264
                                                                          q 4 Member Board                                                  $324
    Ms. Crystal Marino               Stony Mountain Villas HOA
                                                                          q 5 Member Board                                                  $374
    Mr. Walt Patterson               Sun City Homeowners Association      q 6 Member Board                                                  $424
                                                                          q 7 Member Board                                                  $474
    management companies:                                                 For 2-3 Board Member applications, please list the additional individuals who will receive materials.
                                                                          For applications exceeding three, please contact CAI Customer Care at 1-888-224-4321.
    Community Solutions, LLC         Mr. Chris Boettcher

    inDiviDuaL community                                                  Address:

    managers:                                                             City/State/Zip:
    Mr. Peter Budd                   Jomar Association Services, Inc.
    Mr. Stephen Burton               Jomar Association Services, Inc.
    Ms. Barbara Leabo                Amcor Property Professionals, Inc.   Name:
    Ms. Ursula A. Looper, CMCA                                            Address:
    Ms. Regis Salazar                Rossmar & Graham                     City/State/Zip:
    Ms. Phyllis Snyder               Royal Ranch HOA                      Phone:
    Ms. Bernadeen Wright,                                                 Fax:
        CMCA, AMS                    Jomar Association Services, Inc.     Email:

                                                                          Individual Managers                                                         $120
    Business partners:                                                    Management Companies                                                        $375
    Black Eagle Nurseries and Maintenance    Mr. Luis R. Serna            Business Partners                                                           $535
    ByteWize, Inc.                           Ms. Lori Hardtke             q Accountant                    q Attorney
                                                                          q Builder/Developer             q Insurance
    Coit Cleaning and Restoration Services   Mr. Frank Fuentes
                                                                          q Lender/Banker                 q Reserve Study
    Creative Consumer Research               Ms. Y-Vette Cave             q Supplier (landscaper, etc.)
    Criterium Engineers                      Mr. Charles S. Jones         Please Specify:
    Faith Restoration, Inc.                  Mr. Everett Higginbotham     q Technology Provider
                                                                          *Membership Dues above include $15 Advocacy Support Fee
    Farmers Insurance                        Mr. Lee Jones
    Gallacher, Bosen, & Goodman, PLLC        Mr. Michael R. Gallacher     PAYMENT METHOD
    Grace Plumbing Services, Inc. Mr.        Everett Higginbotham         q Check Enclosed                q VISA             q MasterCard                q AMEX

    Marbecc Custom Designs LLC- Mr.          Mike Haley                   Account #:
    Michael Ginsburg, CPA                    Mr. Michael Ginsburg
    Mercury Lock and Safe, LLC               Mr. Brian Calabro
    Pacifica Real Estate Services, Inc.      Mr. Mirko Marrone            IMPORTANT TAX INFORMATION: Under the provisions of section 1070(a) of the Revenue Act passed by Congress
                                                                          in 12/87, please note the following. Contributions or gifts to CAI are not tax-deductible as charitable contributions
    Real Estate Data Solutions               Mr. Salvatore Schamante      for federal income tax purposes. However, they may be deductible as ordinary and necessary business expenses
                                                                          subject to restrictions imposed as a result of association lobbying activities.
    Titan Restoration, LLC Mr.               Andy O’Crowley
                                                                          CAI estimates that the non-deductible portion of your dues is 17%. For specific guidelines concerning your particular
    Universal Protection Service             Ms. Angela Carey             tax situation, consult a tax professional. CAI’s Federal ID number is 23-7392984. $39 of annual membership dues is
                                                                          for your non-refundable subscription to Common Ground.

   Your D&O Coverage
Shouldn’t Be Trial and Error
Issues over architectural control, landscaping, signage, pets and parking areas often
       lead to Directors and Officers Liability claims for non-money damages.
 While these suits do not include a financial demand they can still cost a bundle to
defend in court. And with today’s Community Associations facing more challenges
     to the actions and authority of their Boards, non-money damage claims
                    now represent the majority of D&O claims.
  An experienced CAU professional can help you compare your present insurance
   coverage to that provided by CAU. For a prompt response, please contact
   Rob Chandley, CIRMS, Regional Marketing Director at 1-800-228-1930 x 7162
                    7418 East Helm Drive, Scottsdale, AZ 85260
                 Phone: 800-228-1930 x 7162 • Fax: 480-443-0836
             E-Mail: •

                                                                              Issue 3 / 2009   7
                                cai events

                                                                        Presenting Sponsor:
2009 CAI                                                                Bircher Exterminating Services

Casino Night                                                            High Roller Suite Sponsor:
                                                                        Universal Protection Services

                                                                        Table Sponsors:
                                                                        Alliance Association Financial Services
                                          A slew of CAI members,        Bennett & Porter Insurance
                                          including almost 200          Black Eagle Nurseries and Landscaping
                                          managers, homeowners          Carpenter Hazlewood Delgado & Wood
                                          and vendors, dressed in       Community Association Banc
                                          western attire and met at     Ekmark & Ekmark
                                          the Venue in downtown         Ironstone Bank
                                          Scottsdale on June 24,        Maxwell & Morgan
                                          2009 for an evening of fun    Pinnacle Restoration
                                          and games. The games          Valley View Landscaping
                                          turned out to be blackjack,
                                          roulette, craps and Texas     Bank Sponsors:
                                          hold’em It was a night of     BNC National Bank
                                          good food, good drinks        Sunwest Financial
                                          and good friendship!
                                                                        Food Sponsors:
    After three hours of eating, drinking, socializing and gambling,    Faith Restoration Services
    the participants cashed in their chips for raffle tickets and       Jomar Association Services
    gathered around
    the stage. Some of                                                  Bar Sponsors:
    those who didn’t end                                                ACE Restoration Services
    up with any chips                                                   BDL Financial
    after the gambling
    purchased raffle                                                    Dessert Sponsor:
    tickets. Everyone sat                                               Titan Restoration
    on the edge of their
    seats and studied                                                   Pre-Event Marketing Sponsor:
    the numbers on                                                      Sunwest Financial
    their raffle tickets as
    Board President,                                                    Casino Night Committee
    Brandi Reynolds announced the many winning numbers.                 Kim Kaseta, Sunwest Financial (co-chair)
    Winners left with gift certificates, golf accessories, computer     Jennifer Kennedy, Brown Community Management (co-chair)
    luggage. We thank the sponsors and Committee for the hard           Judi Celano, Valley View Landscaping
    work and support that made this event a financial and social        Heidi Hallquist, Carpenter Hazlewood Delgado & Wood
    success.                                                            Denise Ochoa, Kasdan Simonds Riley & Vaughan
                                                                        Lisa Stultz, Sunwest Financial
                                                                        Mitch Pinckard, Golden Valley Property Management
                                                                        (Programs Committee chair)

Issue 3 / 2009   9

     “Priceless Legal Advice”
     The Chapter’s April 14, 2009 luncheon topic was the popular,
     “Priceless Legal Advice,” where a panel of attorneys who specialize in
     the industry offered answers to questions posed from the audience.
     Question: Do homeowners associations need worker compensation                  dropping leaves in his backyard. What are the Association’s duties, if any?
     insurance? What are the consequences of failing to carry worker comp
     insurance?                                                                     Answer (Hazlewood): Generally, associations do not have any duty
                                                                                    written into CC&Rs with respect to trees growing over homeowners’ lot
     Answer (Blommel): Yes, if they have employees. A homeowners                    lines. That would be the only way the association would have a duty to
     association which employs even one part-time employee needs to have that       enforce – if there were mandatory language about that. The law regarding
     employee covered by worker compensation insurance. If the Association          encroachment of trees and other plants is found in the “common law”.
     has a management company employ its workers, then it must ensure that          The premise is that one’s property line extends upward into the sky and
     the management company has worker compensation insurance for those             down into the ground. A property owner has the right to protect his or
     workers.                                                                       her property. A landowner may cut off offending branches or roots at his
                                                                                    property line, without notice. Cannon v. Dunn, 145 Ariz. 115 (Ct. App. 1985).
     The uninsured Arizona worker has a choice. She can sue her employer in         However, the adjoining owner cannot go onto the other owner’s property
     tort for the injury or she can file a No Insurance claim with the Industrial   without permission to cut off branches. That would be a trespass.
     Commission of Arizona (ICA). If accepted by the ICA, the association must
     reimburse the Special Fund of the ICA for every dollar the ICA spends plus     Question: In order for someone to be able to attend a meeting on behalf of
     10% as a penalty. Failure to carry worker comp insurance is a felony and       an owner, what key items does the letter of representation have to include?
     the ICA can assess a $1,000 penalty against the association.                   Does it have to be notarized by the member?

     Question: The Americans with Disabilities Act and the Family Medical           Answer (Hazlewood): The planned community and condominium statutes
     Leave Act were both amended in 2008. What’s next?                              (A.R.S. 33-1248 and 33-1804) say only that a member or “a person
                                                                                    designated by a member in writing as the member’s representative” may
     Answer (Blommel): The ADA Amendments Act of 2008 overruled two U.S.            attend and speak at open meetings of the association and board. It could
     Supreme Court decisions and expanded the interpretation of “disability” to     be any type of writing, even an email, if you can identify the owner. A
     give more protection to employees and job applicants. Congress amended         letter is not required. Signatures are not mentioned in the statute, but
     the FMLA to include military exigencies and care for wounded service           you obviously need something that indicates the owner really designated
     members as qualifying events to take job protected unpaid leave. The US        the person to attend. Therefore, a signature, or at least a “signed” email
     Department of Labor issued new regulations interpreting the FMLA. If you       makes sense, but technically is not required. Therefore, notarizing is not
     have 15 or more employees, you need to learn about the ADA Amendments          mentioned or required.
     Act and if you have 50 or more employees, you need to post your new
     notice, amend your employee handbook and train your HR staff and               Question: What can be done by an association to avoid having mechanics’
     supervisors on the new rules.                                                  liens recorded against the common area?

     There is a new I-9 form, too, for your new hires.                              Answer (Krupnik): To help avoid mechanics liens, an association needs to
                                                                                    make sure that it properly structures its contracts. The association should
     Retaliation cases are “hot” as are overtime cases.                             not pay any money to a contractor before work has been performed. If the
                                                                                    association pays the contractor and the contractor does not, in turn, pay
     President Obama and the Democrat majority in Congress are considering          the suppliers and the subcontractors, those suppliers or subcontractors
     the following:                                                                 could record materialmen’s liens or mechanics liens against the common
                                                                                    area. Any contract with a contractor should be structured such that the
     Employment Non Discrimination Act – adds sexual orientation to Title VII       association does not pay the contractor until the association has received
     protected classes.                                                             releases and/or waivers.

     Employee Free Choice Act – provides that unions can submit a petition          The association should also consider requiring the developer of the project
     with 50% of the workers to the National Labor Relations Board for              to provide the association with a title report before transferring common
     certification.                                                                 areas to the association. Unfortunately, some associations have ended up
                                                                                    with common areas that were still subject to the first mortgage that covered
     Mandatory paid sick leave – 7 days required for all employees of employers     the entire project from initial development or subject to mechanics liens or
     with 15 or more employees.                                                     materialmen’s liens. By obtaining the title report, the association and the
                                                                                    developer can determine whether any steps need to be taken before transfer
     Employee Misclassification Prevention Act– would tighten definition of         occurs.
     independent contractor. The IRS has developed a new and heavier burden
     for businesses and organizations to prove that a worker is an independent      Question: Is the association obligated to pursue collection of past due
     contractor.                                                                    accounts? What if it has no money to do it?

     Question: A homeowner has a tree over 30 feet tall that over-hangs the         Answer (Krupnik): Usually an association is not obligated to take specific
     neighbor’s property line by less than a foot. That neighbor has sought         collection actions. Sometimes, however, an association’s governing
     enforcement from the Association asking that the tree be trimmed back for      documents require the association to take certain actions at specific times.

If the requirements are not in violation of the law, the association needs to   By doing so, the judgments are likely to be picked up by appropriate credit
follow them or amend its governing documents.                                   reporting agencies.

If no requirements exist, the association can choose what collection            With respect to bankruptcy, while some attorneys over the years have
actions to take, so long as it is acting in the best interest of the            foolishly advised their clients to merely “write off” all amounts due
association. The association has up to three (3) years to file legal action     and owing if a bankruptcy is filed, amounts should only be written off
for foreclosing on an assessment lien and up to six (6) years to obtain a       in a bankruptcy where the property has been lost by a foreclosure and
personal judgment. Therefore, the association does not need to pursue           the debtors have received a discharge in bankruptcy. If the debtors
all delinquencies immediately. In these trying economic times, the              want to keep their property in bankruptcy, the association’s lien is not
association may need to prioritize what collections actions to take, and        extinguished for any amounts.
choose to not pursue an owner when a trustee’s sale is pending. These
are just some of the issues that the association should consider when           Question: “When there is a vacant unit with an enforcement issue that
deciding when and how to pursue delinquent owners for nonpayment of             needs to be addressed asap, i.e. some significant issue that is affecting
assessments.                                                                    property values of the surrounding homes (broken window creating
                                                                                security issues or hazardous waste accumulation, etc.), what is the best
Question: Should we post a list of delinquent owners at the clubhouse?          way for an association to handle such an issue, especially given the current
Answer (Lines): Arizona laws governing open board meetings and                  climate whereby the association will lose any monies used for self-help
association financial records suggest that delinquency lists should not         remedies?”
be publicized. Members have a right to attend board meetings, but not
without limitations. An association may exclude members from any                Answer (Maxwell): First, it is a misconception that an association will
portion of a meeting in which the board discusses “personal, health or          automatically lose all monies associated with self-help remedies. This is
financial information about an individual member of the association.”           especially inaccurate if a bank owns the property. If a bank already owns
Delinquency reports are regularly considered in board meetings.                 the property, the association is likely in a first lien position with respect to
These reports are financial records. However, the sensitive nature of a         all amounts incurred. If the property is in foreclosure, it is recommended
member’s personal, health or financial information should be reserved           that the association take no action to correct the violations until after the
for discussion without other members attending. Similarly, associations         bank forecloses and after notice is provided to the bank of the intention to
may legally withhold such records from other members requesting copies          correct the violations.
or to inspect the association’s financial records. Although these laws are
permissive, and not mandatory, association boards should ensure that            With respect to correcting violations, associations should generally only
their discussions and records concerning such personal information is           focus their attention on those portions of the property that are visible to
kept private.                                                                   the public. Associations should generally stay out of enclosed backyards.

Question: Can an association/management company charge a fee for                If an association is unconcerned with recovery of amounts associated with
properties that have been foreclosed upon, i.e. a “transfer fee” of some        self-help remedies due to the significance of a violation, such as missing
sort?                                                                           doors and/or windows, the association may impose safety measures, such
                                                                                as sealing off missing doors and windows with plywood and locking gates
Answer (Lines): Arizona laws require associations to disclose information       to backyards with pools. Sometimes the extent of the violation is so great
upon receiving written notice of a pending sale of a lot or condominium         that remedial costs are irrelevant.
unit. The disclosure differs depending on the size of the community. The
disclosure statement is usually handled by the association’s manager            Many times, I am asked if associations should organize clean up
and provides information concerning assessments and the association’s           committees within a development. While such an approach is admirable
CC&R’s, rules, etc. Associations may establish and charge a reasonable fee      in theory, associations need to be aware of potential liability. If persons
for the costs related to preparing and providing the statement.                 are injured during organized cleanup efforts, such as injuries caused by a
                                                                                flying rock dislodged by a person irresponsibly using a weed whacker, the
Typically, the statement is handled through a title company prior to            association could be subject to significant liability.
closing escrow. However, disclosure and applicable fees apply to any
written notice of a transfer or sale, whether handled through escrow            The foregoing is a recap of the April 2009 luncheon topic, “Priceless Legal
or not. Receiving notice of a pending trustee’s sale probably falls             Advice,” presented by:
within the disclosure laws. If an association receives notice, it may
                                                                                Denise Blommel, Esq. who is a member of CAI-CAC and a labor and
provide disclosure and charge the applicable fee. Additional statutes
                                                                                employment attorney in downtown Scottsdale.
allow nonprofit corporations to “impose dues, assessments, admission
and transfer fees on its members.” If your community is a nonprofit             James Hazelwood, Esq. who has represented condominium and planned
corporation, it may charge a reasonable transfer or admission fee to the        community associations in Arizona since 1989. He is a partner in the Tempe
new owner, including either the purchaser or foreclosing bank that took         law firm of Carpenter, Hazlewood, Delgado & Wood, PLC, a firm devoted
title through the trustee’s sale.                                               exclusively to community association representation. James is a member of
                                                                                CAI’s College of Community Association Lawyers (CCAL), the Arizona Trustee
Question: “How can an association collect money from a former owner             Association, and the Maricopa County and American Bar Associations.
who lost the property at a Trustee’s Sale? Is it best to simply write off
                                                                                Lynn Krupnik, Esq, who is an attorney with the law firm of Ekmark & Ekmark,
the debt once they lose the house? How does a bankruptcy affect this
                                                                                L.L.C., where she has been practicing in the area of community association
scenario?”                                                                      law for over twelve years. Ms. Krupnik was admitted to the CAI College of
                                                                                Community Association Lawyers, and speaks and writes often on topics that
Answer (Maxwell): Having been through the economic downturn in the              affect community associations.
real estate market three times during my twenty-five year legal career, I
have learned that the downturns are merely part of the economic cycle and       Mark E. Lines, a founding attorney of Shaw & Lines, LLC. Mr. Lines has
matters will turn around. In most instances, it is unwise for associations      represented planned communities, condominiums, office condos and timeshare
to merely “write off” amounts as a result of a trustee’s sale. If an            clients throughout Arizona. Mr. Lines, an accomplished lecturer, recently
                                                                                received the Leadership Centre’s 2009 Instructor of the Year Award.
association can afford to pursue a simple money judgment, the association
should do so as judgments can be renewed on an ongoing basis every five         Charles Maxwell, Esq., CCAL is a principal/shareholder with Maxwell &
years. When the economy picks up, people start to reestablish their credit.     Morgan, P.C. and President-Elect of CAI-CAC. Mr. Maxwell’s practice is limited
When the credit shows a prior judgment, the judgment must generally be          to community association law and litigation and he has practiced in said area
resolved before a lender will extend new credit. Most debtors then resolve      of the law since 1984. Mr. Maxwell frequently lectures on association matters.
their judgments. Judgments secured in Justice Court should not only be          Maxwell & Morgan, P.C. is Arizona’s only AV rated law firm devoted exclusively
transferred to the Superior Court, but the judgments should be recorded.        to community association law and litigation.

                                                                                                                                              Issue 3 / 2009       11

                                                      “Going Green”
                                                           The theme of our Chapter’s May 12, 2009 luncheon was
                                                             “Going Green,” and the speakers, who have many
                                                              years experience in their respective fields, provided some
                                                            useful tips for reducing energy consumption and waste.

                                                                                        they are turned off, they continue to draw power. Be sure to not only turn off
     Xeriscape                                                                          equipment in the evenings, but also flip the switch on the power strip to stop
                                                                                        “phantom” electrical use.
     What is xeriscape? First, it is called “xeriscape,” not “zeroscape” and, it
     is simply water conservation through creative landscaping. The use of              There are several new technologies for heating water, cooling buildings,
     xeriscape is beneficial both to the environment and to your wallet. The            lighting occupied spaces and turning lights off in unoccupied spaces. There
     seven principles that apply to xeriscape are:                                      are also utility rebates and tax credits available for installing energy-saving
     1. Make a plan that includes water and energy efficiency.
     2. Create practical turf areas that limit the use of grass.
     3. Select and group plants appropriately, using only native or desert-             Dryer Vents
        adapted plants and trees.
     4. Utilize rock mulch and recycled wood mulch to protect the plants from           While trying to keep up with mounds of laundry, homeowners often find
        the sun and water evaporation.                                                  that when they are ready to remove clothes from the dryer, the clothes aren’t
     5. Utilize soil amendments for flowers, vegetables and turf areas.                 dry yet, so they restart the drying cycle, using more gas or electricity and put
     6. Utilize efficient irrigation like drip and micro-spray systems.                 their dryer another cycle closer to the landfill. This also has a poor effect on
     7. Develop and implement an appropriate and efficient maintenance                  the environment.
                                                                                        In all likelihood, these dryers are suffocating in lint that is so clogged in
                                                                                        the dryer vent and lint tray cavity that it can’t expel the dampness from
     Energy Efficiency in Community Buildings                                           the laundry to the outside. As a result, the dryer has to run much longer
                                                                                        thus wasting more energy. In doing so, this also adds over 3,000 pounds
     By using energy wisely, everyone can tap the cheapest, most abundant and           of harmful carbon dioxide to the atmosphere. It is easy to see how annual
     most reliable source of renewable energy.                                          dryer vent cleanings can help save both the dryer and the environment.

     Common sources of energy waste in community buildings include:                     Cleaning the dryer vent is a small way to go green and put money back in
                                                                                        your pocket. Did you know that the clothes dryer is often the second or third
     Loss of conditioned air through leaks in the building envelope, such as: the       highest consumer of electricity in a household?
     areas around recessed can lights, doors with gaps between the door and the
     threshold, windows with sun-damaged caulking, electrical outlets and light         Another problem is that many homeowners are putting their home and
     switch plates. Leaks should be sealed using the right kind of caulks, spray        family at risk by starting the dryer and then leaving the house or going to
     foams, door sweeps and other sealants. Some doors just need to be adjusted         bed. According to the U.S. Fire Administration, clogged dryer vents cause
     after long-time use.                                                               15,000 fires, 15 deaths, 310 injuries, and over $84 million in property
                                                                                        damage each year. Have you looked at the back of your dryer lately?
     Incandescent lights or using more lighting than needed can waste energy            Chances are you will find a large label that says something to the effect of,
     twice. Most of the energy used to produce light with an incandescent light         “Warning, Fire Hazard: Use only a heavy metal vent. Do not use plastic or
     bulb generates heat, not light. The community ends up paying for the lights        foil. Failure to follow these instructions can result in death or fire.”
     twice: first to power the lights, and then again to cool the space that has
     been heated by the lights. Some easy options to reduce lighting costs are to       For peace of mind, have your dryer vent inspected, thoroughly cleaned, and
     replace incandescent lights with LED lights.                                       repaired if necessary. Not only will you make your home safer and your
                                                                                        clothes dryer faster, you will also be helping the environment by using less
     Also, consider turning on only half of the lights during the day. This can cut     electricity and keeping your dryer out of the landfill.
     your lighting bill in half without any noticeable difference in lighting levels.
     Additionally, if any outdoor safety lighting is set to turn on and off with a      The foregoing is a recap of the May 2009 luncheon topic, “Going Green,”
     timer, ensure that the time the lights come on and go off corresponds to the       presented by:
     actual daylight hours. Another consideration is to replace the timers with
     light sensors that operate the lights based on the level of daylight.              Gary McCunn, Certified Irrigation Auditor, Certified Arborist, and Licensed
                                                                                        Landscape Contractor.
     There are many electronic sources in buildings that emit heat, such as             Melissa Debnar, Certified Home Energy Rate and Certified Indoor Environmentalist
     computers, printers or fax machines. This equipment, while critical for            of Advanced Energy Efficiency & Environmental Quality (AE3Q) of Arizona.
     managing the community, can also generate a lot of heat that needs to be
     cooled. All of these electronics will not only continue to generate heat when      Chris Willey of Dryer Vent Wizard franchise, serving Arizona.

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                                                                                                          Issue 3 / 2009   13
and Lisa Stacy, Administrative Assistant
     How to Borrow and What Impact does
             a reserve Study Have on the Process
     By Terry Burks

     In a perfect world, each association has a reserve study outlining                  fixed rate permanent loan at the time construction has been
     the useful life of each of the association’s assets with a correspond-              completed.
     ing reserve funding schedule. If the reserve study is kept up to date,
     as assets age and their time of replacement arrives, reserve monies        3. Are there penalties for prepaying the loan?
     are spent to replace the aged asset and all is well. But as we all know        a. Generally there is a pre-payment penalty based on the term
     conditions change and board views on funding reserves vary. Conse-                 of the loan: (As an example) 5% if paid off in the first year,
     quently, you may find your association in a position requiring a loan              4% if paid off in the second year etc.
     to complete a major renovation project. This may be your association’s         b. If the association makes a large principal reduction most
     first loan request, and you find yourself in need of help initiating the           banks will re-amortize the loan, reducing the monthly pay-
     information gathering and review process, which can get confusing.                 ment. No penalty would be assessed however there may be a
     Hopefully the information below will give you some guidance through                fee assessed for the re-amortization.
     the various loan stages as well as the bankers thought process.            4. What are the requirements for the association to qualify for a
     The first thing you should consider is that not all banks have the             a. Delinquency review – Does the association follow up on
     lending expertise to underwrite or manage a loan request from a                     delinquencies and does it have a collection policy in place?
     community association. This skill set is only found in a few banks so          b. Non-Owner Occupied units – Each bank may have a speci-
     the first question you should ask is just that, “Do you make loans to               fied percentage they will not exceed.
     community associations?” If yes, what documentation will be needed             c. Current reserve study – What is the need for future funding
     to begin the application process? I have outlined a list of informa-                and what percent is currently funded. This is as important as
     tion you may need. Please keep in mind that the list will vary at each              the effect on the new loan payment to the cash flow analysis.
     individual bank.                                                               d. What will be the effect on the monthly assessment as the loan
     1. Complete a simple loan request application as to the amount you                  repayment and any reserve adjustments are made? Percent-
         will need and the purpose for the loan.                                         age of increase? What effect will this have on the marketabil-
     2. An outline of the work to be done. Attach all bids if available.                 ity of the homes going forward?
     3. Payback term – How many years / months will the loan be active?         5. Does the board have the authority to enter into a loan agreement
     4. Is your community a townhome, condominium or single family                 or is there a vote needed from the entire association? Regard-
         community?                                                                less of whether the board has the borrowing authority or not, if
     5. How many homes are in the association?                                     the loan amount substantially effects the regular assessment to
     6. What are the current dues and the frequency?                               all homeowners, it would be prudent to secure an affirming vote
     7. Delinquencies / broken out 30-60-90 and > 90 days. Number and              before taking on that responsibility.
         amounts. A high delinquency rate will seriously affect your ability
         to secure a loan.                                                      What most associations fail to realize is the effect the loan repay-
     8. When the homes were built, approximately?                               ment will have on their regular assessments as well as any shortfalls
     9. Sales and turnover in the community. How many homes have                in the funding of reserves. The bank will take into account not only
         been purchased in the past two years?                                  what the loan repayment will have on the regular assessment amount
     10. Master and sub-association structure.                                  but also if the reserve study and its corresponding reserve dollars
     11. Reserve Study/ What precent is funded? Each bank has bench-            (Percent Funded) are seeing a dramatic shortfall, that too must be
         marks that it requires to see which may vary.                          increased to insure the property does not become delinquent in the
     12. Audited financial reports for the past 2-3 years as well as the cur-   maintenance of the buildings or neighborhood, compromising the
         rent years income and expense summary.                                 association’s ability to keep a well maintained community that will
                                                                                attract new homeowners and insures the repayment of the loan.
     I have outlined a number of question and answers that may serve as a
     guide to your board:                                                       Your relationship manager from your bank of choice can be an excel-
                                                                                lent guide in this process, addressing the Board of Directors ques-
     1. What is the possible number of years the bank will provide a loan,      tions. Please call upon the experts to lead you through this process to
        both the construction portion and permanent loan after construc-        insure the outcome you desire prevails. Each bank is different and
        tion?                                                                   so are their terms and conditions for borrowing. Pick a bank with
         a. Construction: 12 to 24 months – Determined by the type of           the terms that work for your association. A strong bank with liquid-
             project and the bank guidelines.                                   ity that has the expertise on hand to manage a loan to an association
         b. Permanent loan: 5,7,10 years or possibly longer based on the        as well as a relationship manager that can assist with answering
             amount and purpose of the loan.                                    questions from the board will go a long way in simplifying the loan
                                                                                process and cut out a number of headaches as you move through this
     2. Will the interest rate be fixed throughout the term of the loan?        process.
        a. The commitment or letter of interest that will be provided to
             all loan clients details the rates and terms. The interest rate    Terry Burks has 35 years of banking experience and for the past five years has
                                                                                banked for hundreds of community management companies and thousands of
             may vary during the construction phase of the project with a
                                                                                community associations.


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                                                                                                                               Issue 3 / 2009                              15
     Myths                                              By Lynn Krupnik, CCAL &
                                                        Elaine Anghel, CMCA, AMS, PCAM, CAAM

     Myths that associations follow that could increase
     the association’s financial liability in the future.

     Myth: If I am getting property tax statements and/or property          Fact: There is a difference between being a non-profit corpo-
     valuation notices for the association, the association must own        ration and a tax-exempt organization. Just because an orga-
     its common area.                                                       nization is a non-profit corporation does not mean that it is
                                                                            tax-exempt. Rather, most associations are not tax-exempt, and
     Fact: Just because you are receiving property tax statements or        are required to pay some taxes (at least on the outside income
     valuation notices does not mean the association owns the com-          it receives, such as interest). An association needs to work with
     mon area. The assessor’s office and treasurer’s office will send       its accountant to determine the best tax form to be filed by the
     their notices to any address you give to them. Therefore, the          association on an annual basis.
     fact that you are getting the notices only means that the assessor
     and/or treasurer has your address for delivering these notices.        Myth: Because we haven’t heard anything from the Arizona
     It has no connection to ownership.                                     Corporation Commission, our corporation must be in good
     If the association wants to make sure that it owns the com-
     mon area, it should check the valuation notice or the assessor’s       Fact: Every association should go on-line to the Arizona Cor-
     website to see who is shown as the owner of the parcel. The            poration Commission’s (“ACC”) website to make sure that its
     assessor’s site will list the deed recording number that is the        corporation is in good standing. There are many associations
     basis for the assessor’s determination of ownership. Although          that have been administratively dissolved and not been aware
     the information is not always entirely accurate, it will give the      of this fact for a number of years. One reason that this often
     association a good place to start to determine if it owns its com-     happens is that if an annual report was not filed, the names and
     mon area. Also, keep in mind that just because the property is         addresses of the principal place of business or statutory agent for
     valued at $500 does not mean the association owns the common           the organization may be a former board member or management
     area. For those communities that have been around for awhile,          company. Although the ACC may send out a Notice of Adminis-
     the assessor’s office originally valued many of those common           trative Dissolution, that Notice may go to a prior board member
     areas at $500 per acre, whether they were owned by the associa-        or management company and never make it to the association.
     tion or not. However, if the association has not filed paperwork       Therefore, an association should check on-line to make sure that
     to qualify for common area valuation (i.e. a value of $500), the       it is good standing with the ACC. The ACC’s website is http://
     assessor may revalue those common areas in the future. If the Once there, go to “Corporate Records”.
     association is not paying attention, it may receive a large tax        From there, you can click on “Information on Active Corpora-
     bill that it was not anticipating (due to this increased property      tions.”
     value). That is not the time for the association to find out that it
     does not own its common area. If there is a problem, it is better      Lynn Krupnik is an attorney with the law firm of Ekmark & Ekmark, L.L.C.,
     for the association to fix the problem before the assessor reval-      where she has been practicing in the area of community association law for over
                                                                            twelve years. Ms. Krupnik was admitted to the CAI College of Community As-
     ues it common area.                                                    sociation Lawyers, and speaks and writes often on topics that affect community
     Myth: Because our association is a non-profit corporation, we
                                                                            Elaine Anghel is the Vice President of Management Services of Tri-City Property
     don’t have to pay taxes.                                               Management Services, Inc. and has been in the homeowner association industry
                                                                            for sixteen years.

                                                               If You Fail to Plan,
                                                               You are Planning to Fail
                                                               By Kerry-Lynn Goto, CMCA, LSM, PCAM, RS

Eventually, a community’s major assets, such as streets, building roofs,
and recreational amenities will “retire,” requiring major repairs or replacement.
However, unlike individuals who don’t properly plan for retirement,
associations can’t rely on Social Security.

Community associations function as businesses. Although the          The most prudent course of action for an association’s board is
business is generally non-profit in nature, a board of directors     to avoid the foregoing scenarios by preparing for component re-
has a fiduciary obligation to the association, and is elected by     tirement through a long-range reserve funding plan. A well-exe-
the membership to protect, preserve, maintain and enhance its        cuted reserve funding plan distributes major repair and replace-
community’s common elements. This fiduciary obligation re-           ment costs over a period of several years, helping to ensure that
quires community association boards to adequately prepare for        funds will be on-hand when needed, thereby avoiding the need
anticipated future expenses. So, what happens when association       for loans, special assessments or deferred maintenance.
boards don’t plan ahead? Essentially, an association that has
not properly funded for replacement reserves faces three sce-        Association boards can employ various strategies to meet their
narios: borrowing from a bank; special assessment; or, deferred      reserve funding goals. These include baseline funding, thresh-
maintenance.                                                         old funding, and full funding:

While obtaining a bank loan to pay for necessary replacement or      • Baseline funding establishes a reserve funding goal of keep-
repairs may be an option, the financing charges associated with        ing an association’s reserve cash balance above zero. Vari-
borrowing add to the cost of the primary expenditure. Even if          ous plans are tested against the anticipated reserves expense
a bank loan is available, some association governing documents         schedule until a desired funding plan is achieved;
prohibit borrowing, while others require approval of a large
percentage of homeowners in order to proceed. In many cases,         • Threshold funding maintains an association’s reserve fund
regular assessments must be increased to meet the loan pay-            balance above a specified dollar amount, or percentage
ment obligation; and the bank will require a lien against future       funded. This method could be more or less conservative than
association assessments to secure repayment.                           full funding, depending upon the threshold amount; and,

The second option is the dreaded special assessment. Spe-            • Full funding is designed to attain and maintain reserves at or
cial assessments are frequently unfair, as they place financial        near 100% of funding. This method is sometimes referred to
responsibility for worn-out components on the current hom-             as “component” funding, as reserve funds are separately allo-
eowner, regardless of how long they have owned property within         cated for each component to achieve 100% funding for future
the community. They can also create an economic hardship               expenditure.
on homeowners who may already be struggling to meet their
regular assessment payments, as special assessments usually          Planning for an association’s asset retirement makes good busi-
have a very short time-frame for payment. Additionally, as with      ness sense, as it helps to ensure that sufficient funds will be
the borrowing scenario discussed above, obtaining membership         available to meet future replacement costs. If you are unsure,
approval for a special assessment can be difficult.                  or know that your association’s reserve funds are inadequate, a
                                                                     professional reserve study provider can assist with long-range
The third alternative is to defer the necessary maintenance or       reserve planning and funding strategies.
replacement until the association has sufficient funds to meet
its obligations. However, deferred maintenance can have a            Kerry-Lynn Goto, CMCA, LSM, PCAM, RS, is 30+ year veteran of the community
snowball effect, leading to a deterioration of common area ap-       association industry. She is a community association consultant and the owner
pearance and functionality, a decline in property values, and a      of Great Boards, LLC; a consulting firm that provides professional reserve stud-
                                                                     ies for common interest developments.
potential breach of fiduciary duty claim against the association’s
board of directors causing increased insurance premiums.

                                                                                                                                   Issue 3 / 2009       17
     Assessment Increases:
     One Size Does Not Fit All
     By Jessica J. Maceyko

     Lately, it seems that there is a general sense of heightened          assessment. Most declarations provide that the maximum
     awareness in this country when it comes to money. Many                annual assessment is the highest amount the board can levy in a
     community associations are also feeling the pinch. The result?        given year without the approval of a specified percentage of the
     Numerous associations are finding it necessary to raise annual        members. Confusion often arises with respect to the limit of the
     assessments to meet increasing expenses in light of decreasing        maximum annual assessment versus the actual amount the as-
     revenue. Not surprisingly, a problem can arise when a cash-           sociation levies, since these are often two different numbers. In
     strapped association increases the assessments levied against         other words, even though a board may be authorized under the
     its cash-strapped members. With so many members concerned             declaration to assess a certain amount (the maximum annual
     about their personal finances and unable to pay higher assess-        assessment), the board may actually be levying a lesser amount
     ment amounts, the odds of a challenge being brought against an        (the actual annual assessment).
     association for an improper assessment are elevated.
                                                                           This discrepancy most often arises when there is an automatic
     Fortunately, there are steps an association can take to protect       increase in the maximum annual assessment. While some dec-
     itself from such a challenge. Below are some tips to use when         larations require the board to take active steps to raise the maxi-
     navigating the potentially muddy waters of assessment                 mum annual assessment each year, other declarations provide
     increases.                                                            that the maximum annual assessment is automatically increased
                                                                           each year by a certain amount or percentage, without the board
                                                                           having to take any steps to effectuate this increase. Therefore, if
     One Size Does Not Fit All                                             the maximum annual assessment has been increasing automati-
                                                                           cally for several years, but the actual annual assessment charged
     The most important thing to remember when it comes to in-             to the members has remained relatively stable, a situation could
     creasing assessments is that each set of governing documents          arise where the association can raise the annual assessment
     is different. With the exception of the few statutory provisions      substantially in a given year. This concept may be difficult for
     discussed below, assessment increases are governed entirely by        members to understand, and it may appear to them to be unfair,
     each association’s governing documents. It is easy to fall into the   thus increasing the likelihood of a challenge.
     trap of assuming that all governing documents are basically the
     same when it comes to the requirements for raising assessments.       To prevent such issues, the board and manager should care-
     However, this is not the case. There are substantial differ-          fully review the governing documents and make sure they have
     ences in assessment provisions. Furthermore, the assessment           an understanding of the maximum annual assessment versus
     provisions, which are typically in the declaration, are often very    the actual annual assessment and are aware of whether the
     complicated. A few of the more common issues with assessment          documents provide for an automatic increase in the maximum
     provisions are discussed below.                                       annual assessment.

     Maximum Annual Assessments                                            The Consumer Price Index
     Typically, a declaration will set forth a maximum annual assess-      Many governing documents have provisions linking the allow-
     ment amount, or a method for calculating the maximum annual           able increase in the maximum or actual annual assessment to

the Consumer Price Index (CPI). These documents will typically        provision. The Act provides that an association cannot raise its
set forth a formula to be used in calculating the CPI increase.       actual annual assessment by more than twenty percent (20%)
However, these formulas are not all the same. Some formu-             over the prior year’s actual annual assessment without the ap-
las will only allow the association to raise assessments by the       proval of a majority of all of the association members. There-
amount of the CPI increase over the prior fiscal year. Other for-     fore, even if the declaration provides for an automatic maximum
mulas will allow the association to increase assessments by the       annual assessment increase or a CPI calculation that would yield
amount of the CPI increase for the entire time the association        a higher assessment increase, a planned community association
has been in existence. If a declaration sets forth such a formula     is limited by this cap.
and if the association was formed many years ago, the allowable
increase may be substantial. Again, such a large increase in a        Condominium associations are not restricted by the twenty
given year may raise a red flag with the members.                     percent (20%) cap that is present in the Planned Community
                                                                      Act. However, the Condominium Act provides that unless the
In addition, there are numerous versions of the CPI published         condominium declaration specifically gives the board the power
by the U.S. Bureau of Labor Statistics. A declaration drafted         to adopt and amend budgets, the board must send the budget
many years ago may reference a different version of the CPI           out for ratification by the members as set forth in the Act. Since
than a declaration drafted recently. Accordingly, the board and       assessment amounts are tied into budgets, condominium asso-
manager should carefully review the declaration to ensure that        ciations need to be aware of whether the board has the power to
they are using the proper CPI and the proper formula. They            establish the budget, or whether ratification is required.
should also be prepared to explain to the members how the CPI
formula works and show evidence that the calculations were            In summary, increasing assessments is a hot-button issue in
done properly.                                                        light of the current economy. Therefore, it is more important
                                                                      than ever for each board, manager and association to be aware
                                                                      of the governing document and statutory provisions addressing
The Planned Community and                                             assessments.
Condominium Acts                                                      Jessica J. Maceyko is an attorney with the law firm of Ekmark & Ekmark, LLC,
                                                                      where she practices community association law exclusively.
The Planned Community Act sets forth a cap on assessment
increases that trumps any association governing document

                           more QuAliFied…
                                    less expensive                                                                                  SM


                                        Charles e. Maxwell* Brian w. Morgan
                                  Jeffrey B. CorBen elise V. saadi daron J. garey
                                       w. williaM nikolaus Chad M. gallaCher
                                      Melissa s. laVonier nanCy MCdade (of counsel)
             Advising BoArds
             Advising developers                                     Representing Hundreds of Homeowner Associations
             interpreting governing documents                                Throughout Arizona Since 1984              SM

             developer turnover
             interpreting FederAl/stAte lAws                                 telephone                               emAil

             resolving AssociAtion disputes                         (480) 833-1001            
             enForcing covenAnts                                                FAx                                 weBsite
             Assessment collection
                                                                    (480) 969-8267          
             drAFting governing documents
             drAFting Amendments                              *
                                                                Admitted into CAI’s Prestigious College of Community Association Lawyers.
             simple to complex litigAtion           Arizona’s only AV rated law firm devoted exclusively to community association law and litigation.

                                                                                                                                         Issue 3 / 2009   19
                                       “Preserve and Protect”
                                              Property Maintenance
                                       By Deena Kanoff

                                       In these economically challenged times, how does a board of directors
                                       maximize its community’s hard-earned reserve dollars?
     They target obvious problems relating to maintenance issues and fix them.         you can do is implement all common area repairs that enhance property
     When it comes to increasing and maximizing property values, that’s a              values. At the same time, work should be prioritized to insure the most
     lesson any community can apply.                                                   important issues are addressed, starting with life/safety and health.

     Here are a few places to start:                                                   A well maintained property is key!

                                                                                       There should be short-term and long-term goals set up during the
     VISIBILITY                                                                        planning phase of the project that identify the remaining useful life of
                                                                                       common area components and components that are beyond repair and
     A question to ask yourself – How desirable is your community to live in?          should be replaced. This is the most cost effective way to maintain the
                                                                                       community, reduce resident complaints, and maintain property values.
     When it comes to new or potential owners, often they’re influenced by             Your property is your most valuable investment.
     something as tangible as good old fashioned curb appeal, or what they see
     when they first look around.                                                      This well-forecasted, disciplined planning program offers greater
                                                                                       economic return, and in turn, money in the bank.
     So, the first key to strong property values is also the most obvious: Keep
     your focal points well maintained!                                                Global planning can provide a framework of strategies and endpoints
                                                                                       joining one board to the next, even when board members leave, and new
                                                                                       ones are seated.
                                                                                       It provides the stability that helps a community thrive.
     “You get what you pay for.”
                                                                                       Board members need to see the big picture and how properly maintained
     The most direct correlation for a community may be between its property           properties are clearly the most economical choices in preserving their
     values and its assessment level. It’s not that people have to be convinced        maintenance dollars!
     that a higher assessment rate always equals higher values. But rather, they
     usually have to be convinced that a lesser rate doesn’t equal higher values.
     There’s a mindset among owners that if an assessment fee is too high, it’s
     going to (adversely) affect the value of the units, and turn away potential       “Hear Ye, Hear Ye!”
                                                                                       Assuming your board sees the big picture and your association is doing
     In fact, whatever superficial appeal your community tries to gain from            well, the important question is, “Do your residents all know what is going
     keeping its assessments too low is quickly squandered away by the damage          on in the association?” Do they know the improvement and maintenance
     of an underfunded budget and a reactive maintenance program that                  dollars are being spent wisely now in order to secure the future
     simply cannot address the repair maintenance needs throughout the                 maintenance integrity of the property?
                                                                                       How about prospective buyers? By nature, people don’t usually seek out
     Simply stated: If you do not have enough money in your reserves to                good news; you have to deliver it to them!
     take care of maintenance issues within the community, all you do is
     begin to attract similar buyers in the marketplace that are interested in         A newsletter that features the maintenance planning and upcoming
     perpetuating the same low, depleted reserve budget. Maintenance issues            projects helps in sending a positive message.
     become worse, and available funding becomes non-existent which equals
     a very bad combination in maintaining the property value.                         A friendly and inviting newsletter would increase the chances of a
                                                                                       potential new buyer wanting to purchase into that particular community.
     The association needs an annual “cost of living raise,” in order to maintain
     the integrity of the components within the community. When you have an            A newsletter is a great tool to review the accomplishments of the previous
     assessment rate that‘s realistic, the other financial objectives will fall into   year, and it also helps to forecast what’s to come. This type of “community
     place, including funding both the operating budget and the reserve budget         tracking” aids the association in keeping the maintenance schedules up to
     necessary to maintain the building structures and repair issues within the        date and is a way to address future needs within the community.
     community and common areas. It is easier to move forward with repairs
     when you have readily available funding.                                          This is very important in today’s marketplace. With so many properties
                                                                                       on the market, you have to create a way to stand out from the rest and
                                                                                       provide information of what’s going on in your community. Whether it’s
     PLANNING                                                                          capital improvement programs or full maintenance renovations that are
                                                                                       taking place, “keeping the community involved” adds to the “emotional
     Tomorrow is a new day, but so is the “day after.”                                 value” of the community and promotes a positive community experience.

     In today’s economy, can you plan for property values to go up…or down?            Deena Kanoff is Director of Business Development of Jon Wayne Construction.
                                                                                       She was affiliated with an architectural firm after graduating from the University
                                                                                       of Southern California prior to joining JWC in 1995. Deena is a member of the
     Even with a crystal ball, you cannot determine what will be. But what             following associations: AACM, CAI, and CACM.

MADOFF’S                                                                                             A Lesson
                                                                                                     in Segregation
PONzI                                                                                                of Duties
SCHEME -                                                                                             By Michael R. Gallacher, CPA and
                                                                                                     Marcos C. Goodman, CPA

Bernie Madoff apparently “made off” (pun intended)
with billions of dollars. That is until he was finally caught.
His criminal activity was revealed to the world last December after he          associations need to consider. In best case scenarios, duties must be seg-
had confided in his two sons that the asset management arm of his firm          regated among responsible and trustworthy individuals. Of course, there
was an elaborate Ponzi scheme, which he had actually begun back in the          is always the possibility of collusion, but that is a topic for another article.
early 1990’s. The most shocking revelations following his arrest may be
that he never invested any of his clients’ money at all, and that he insisted   Each process of the association should be evaluated to determine if
that he was solely responsible for the scheme.                                  adequate control procedures are in place to prevent misuse or theft of
                                                                                association assets. Internal controls are processes to prevent errors,
If these assertions turn out to be correct, the concept of “segregation of      theft and/or fraud. Some associations may be subject to unnecessary risk
duties” under the subject of internal controls takes on added meaning           because they fail to institute processes or control procedures in a way that
and importance. For Bernie Madoff, all “investment duties” were con-            might protect them and their association’s assets.
centrated in him alone. For community associations, and in particular
for those who serve on their boards, segregating duties is not only good        For community associations, basic control procedures can be developed
business, but also a compelling safeguard to protect assets and reputa-         around the following areas:
                                                                                1.   Collections
Segregating the responsibilities for dealing with the “cash” asset of an as-    2.   Disbursements
sociation is one function that deserves our attention. Cash represents all      3.   Payroll
the assets, from petty cash to balances in checking accounts and savings        4.   Budgeting
accounts, as well as investment accounts. Pertinent questions regarding
these practices include:                                                        Depending on the size of the community, there can also be a number of
                                                                                subcontrols that relate to these areas. With sub-controls in place, the
1. Are the responsibilities for collection and deposit preparation ad-          board will need to increase its oversight roll. This increased roll may
   equately separated from those of recording cash receipts?                    require additional training. The fiduciary position of each board member
2. Are the responsibilities for cash receipt functions adequately sepa-         can be safeguarded by tight internal controls, which lightens the load for
   rated from those of cash disbursements?                                      association members.
3. Are responsibilities for check preparation and check signing ad-
   equately segregated from those entering cash disbursement                    Michael R. Gallacher and Marcos C. Goodman are with the accounting firm Gal-
   information?                                                                 lacher, Bosen, & Goodman, PLLC in Mesa, Arizona.

These are only a sample of internal control guideline questions that

                                                                                                                                              Issue 3 / 2009       21
             a r i z o n a L e g i s L at i v e
                action committee

2009 Arizona Legislative Session
By Ryan Anderson

     The First Regular Session of the 49th Legislature opened for             under this legislation, an association could not regulate its
     business on Monday, January 12th, 2009, with several new                 own swimming pool, and could not exercise authority over its
     legislative faces and a renewed optimism.                                playgrounds.

     The results of November’s general election welcomed 22 new               This bill also fails to consider a number of safety concerns
     members, which created an opportunity for significant changes            associated with narrow streets which are routinely constructed in
     in both House and Senate Leadership. Arizona Governor Janet              planned communities. Often, a developer will design communities
     Napolitano prepared to vacate the Office of the Governor for her         with narrow roads in exchange for agreements to enforce CC&R
     new role as head of the Department of Homeland Security in the           parking restrictions on community streets. If this legislation were
     Obama Administration. Napolitano’s exit in late January cleared          to pass, boats, RVs, large SUVs, etc., would now be able to park
     the way for Secretary of State Jan Brewer to assume her new role as      on these neighborhood streets. When precious seconds count,
     Governor, which marked Republican control of the Legislative and         imagine the jeopardy this would create for emergency vehicles such
     Executive Branches for the first time since 2002.                        as fire trucks and ambulances.

     Unfortunately, any optimism that accompanied the new legislative         Another bill the LAC is actively working to defeat is HB2514
     body quickly dissipated as members learned of the reality of the         (amateur radio; accommodation), a Republican sponsored bill
     state’s multi-billion dollar budget deficit. This was going to be a      that recently passed out of the House of Representatives. The
     long and tedious session.                                                legislation will require all planned communities in this state
                                                                              to allow the installation and use of HAM radio towers and will
     To date, 1111 bills have been introduced in the current session, but     prevent homeowner associations from enforcing size or placement
     the reality is that one issue has dominated all legislative dialogue:    restrictions on large towers within planned communities.
     the budget. After a 2009 fiscal year fix of $1.68 billion early in the
     session, Governor Brewer made it abundantly clear she wanted             Yes, you very well could have a 50 ft + HAM radio tower next to
     to bridge the 2010 deficit gap primarily with temporary sales            your home by this time next year.
     and property tax increases. Brewer’s budget proposal includes a
     package for the November ballot that would raise the state’s sales        Advocates claim the legislation should be enacted in the name of
     tax rate from 5.6% to 6.6%, possibly generating an estimated $1          public safety and homeland security in case of a state of emergency.
     billion in additional annual revenue.                                    The reality is that a small group of hobbyists would like to impose
                                                                              their will upon the majority of their neighbors, compliments of the
     Meanwhile, lawmakers struggled to put together their own budget          Arizona State Legislature.
     package in the hopes of pulling the state out of debt by not raising
     taxes, and instead cut state spending by an additional $350+             HB2514 and HB2034 are symptomatic of a common problem
     million more than the Governor’s plan.                                   surrounding most HOA legislation introduced at the Capitol: the
                                                                              Legislature’s continued attempt to interfere with the rights of
     Amidst the huge budget crater consuming discussions, committee           willing parties to contract. New laws continue to be enacted and
     agendas trickled along. And while we will likely witness the lowest      imposed upon the majority of homeowners because of the desires
     percentage of bills signed into law in Arizona history, the CAI          of a small and vocal minority.
     Legislative Action Committee (LAC) is currently monitoring or
     actively lobbying on behalf of or against 13 homeowner association        A real political debate should take place in the forum where it
     related bills.                                                           matters most – between the owners of a particular community
                                                                              debating what they want to do about parking, HAM radio towers
     When compared to more recent sessions, 13 bills is a reduction in        or any other issue affecting their community. Planned community
     the amount of harmful or anti-HOA bills being considered before          associations inherit use restrictions from developers who draft
     the Legislature. However, the CAI LAC continues to fight as hard         the CC&Rs. Unfortunately, the CC&Rs often contain unworkable
     as ever to defeat a number of bills currently moving through the         thresholds for amending community documents. Often, the
     process.                                                                 owners would like to change the provisions to reflect the changing
                                                                              expectations of communities. Each community’s needs are
     One such bill, HB2034 (planned communities; authority over               different and unique. If CC&Rs were easier to amend, homeowners
     roadways), would cripple the ability of homeowner associations           who desire to change onerous provisions (whether it be parking,
     to enforce parking and street restrictions in communities with           HAM radio towers, or acceptable house colors), could attempt to do
     roadways dedicated to cities and counties. While the bill purports       so at the local level, and the Legislature should not feel obligated to
     to address parking of vehicles on publicly dedicated streets only,       interfere with private contracts between willing parties.
     the words “vehicle”, “car”, “RV” and “park” never appear in the bill.
                                                                              Until this larger concept or true “Power to the People” legislation
     As currently drafted, HB2034 would render planned community              is actualized, it is likely that we will continue to fight anecdotal,
     restrictions on any “area” – such as the lots or common area in          short-sighted, one-size fits all homeowner association legislation at
     an association – null and void if the “area” is under the “legal         the State Capitol.
     authority of a governmental entity.” Ironically, every lot and every
     parcel of common area in Arizona is under the legal authority            Ryan Anderson is a Senior Associate with DeMenna & Associates, a Phoenix-
     of the federal government or the State of Arizona. For example,          based political consulting firm. He routinely lobbies on behalf of homeowner
                                                                              and community association rights before the Arizona State Capitol.

AAFS_CommunityResource_0109.pdf   1/10/2009   4:34:00 PM

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                                                                                                                     Issue 3 / 2009   23
                                      cai news

CAI News &


     2009 Board Election
     This year’s CAI Nominating Committee is composed of the
     immediate past President Kathe Barnes, serving as committee
     chair, President-Elect Charlie Maxwell, Alan Lezak (homeowner),
     Cat Coltrell (US Bank) and Larry Aldrich (Burns Pest Elimination).
     The purpose of the Nominating Committee is to identify
     candidates and conduct interviews for the three open Board seats.
     These candidates will fill the seats of outgoing Board members
     Chuck Greco, Anne Dill and Kerry-Lynn Goto. Each position is for
     a 3-year term.

     In late June and early July, an e-mail blast was sent to the
     membership soliciting board candidates for the three open
     positions. The Nominating Committee will select a slate of
     candidates that is deemed to help promote the value of the CAI
     by providing knowledge and skills related to the duties of group
     leadership, consensus building, and decision making. The
     Nominating Committee must submit a slate of nominees not less
     than the number of open positions.                                       •	   Substantial	discounts	to	CAI	members

     Any applicant who is not selected by the Nominating Committee
                                                                              •	   “A”	rated	insurance	company	partners
     has the right to petition the Chapter and be placed on a written         •	   Unique	insurance	program	groups	for	property	
     ballot along with the nominees. The ballot is sent to the                     managers.	One	policy,	one	renewal	date	for	
     membership not less than 30 days prior to the election date. The              multiple	properties.
     deadline to file a petition is September 28, 2009. If there are
     no petitions filed, the slate of candidates, as presented by the         •	   Comprehensive	coverage	specific	to	your	needs
     Nominating Committee, and the notice of the Annual Meeting will          •	   FREE	professional	loss	prevention	assessment
     then be sent to each member.
                                                                              •	   Licensed	agent	&	service	representation	team	
     The Annual Meeting and Board Election will be held at the                     designated	to	your	account.
     November 10, 2009 luncheon. If there is no contest for any of the
     positions to be filled, the Secretary casts a unanimous ballot for the   •	   Involved	member	of
     slate of nominees nominated by the Nominating Committee, and
     such nominees are declared elected Directors of the Chapter.             M a n a gement Comp a n ie s • P rop er t y M a n a ger s
                                                                                        Condo s • Ap a r t ment s • HOA’s
     Should you have any questions about the Board Election, please
     call the CAI office at (602) 347-8726.

                                                                                        Ca l l 480 -212 -1150 or v isit ou r
                                                                                         website at w w w.bapi

Issue 3 / 2009   25
                  c o n g r at u L at i o n s c o r n e r

Congrats to…
     Special congratulations to our CAI – Central Arizona members of the month:
     April: Nicole McConville with Scottsdale Ranch Community Association &
            Jerry Parsons, CMCA, AMS with Total Property Management
     May: Mike Amico with Western Risk Insurance & Jennifer Kennedy with
          Brown Community Management
     June: Ken Miceli with Advanced Painting & Contracting & Mitch Pinckard,
           CMCA with Golden Valley Property Management
     Congratulations to those who have recently received a new CAI Designation:
     Mr. Mitchell Pinckard, CMCA, Golden Valley Property Management
     Mrs. Pat Kanicsar, CMCA, PMG Services
     Ms. Maggie Story, CMCA, PMG Services
     Ms. Rita Hoy, CMCA, PMG Services
     Ms. Cindy Cassin, CMCA, AMS, PCAM, Capital Consultants Management
     Mr. Jeff Reynolds, CMCA, AMS, Rossmar & Graham Management Company
     Mrs. Josephine “Jo” Seashols, CMCA, AMS, Tillett Property Management
     Mr. Todd Davidson, CMCA, AMS, PCAM, Capital Consultants Management
     Ms. Delores Ferguson, CMCA, AMS, PCAM, Capital Consultants
     Management Corporation
     Mr. Mark L. Wade, CMCA, AMS, PCAM, Sun Lakes HOA I
     Ms. Cindy Cassin, CMCA, AMS, PCAM, Capital Consultants Management

     CAI – Central Arizona Chapter
     2009 Committee Chairs
     Directory                               memBership
     Kerry-Lynn Goto CMCA, LSM,              Ken Miceli                           Scottsdale Fine Landscaping is seeking to
     PCAM, RS (Chair)                        (Chair)
     Great Boards, LLC                       Advanced Painting & Contracting      make acquisitions in Arizona.
     602-569-0288                            480-968-3375    
     eDucation                               programs                             We are currently looking to purchase
     Gayle E. Laureta, CMCA, PCAM            Mitch Pinckard, CAAM (Chair)
     (Co-chair)                              Golden Valley Property Management    commercial/HOA landscape maintenance
     Planned Development Services
                                                                                  companies ranging in gross sales from
                                             puBLic reLations                     $250,000 - $2 million. We are cash buyers
     Angela Potts, Esq. (Co-chair)           Brandi Reynolds
     Ekmark & Ekmark, LLC                    (Co-chair)                           for your book of business and sound team.
     480-922-9292                            Law Offices of John Chaix                    602-561-1094
     LegisLative action
                                                                         Please e-mail all
     Scott Carpenter, Esq., CCAL             Augustus Shaw, Esq.
     Carpenter, Hazlewood, PLC               (Co-chair)                                               inquiries to
                                             Shaw & Lines, LLC
     Elaine Anghel PCAM, AMS, CMCA
                                             Lynda Erickson, PCAM                                     DON’T LET A
     Tri-City Property Management            (Chair)
     Services                                Jomar Association Services                               DOWN ECONOMY
     480-844-2224 x 125                      480-892-5222                                        GET YOU DOWN!!
     Jerry Parsons, AMS, CMCA
     Total Property Management
                                              CE N TR AL AR IZO N A CHAP TE R
                                                                                                      SFL is a Division of MIG
     602-952-5581                                                                                     (Martoccia Investment Group)

                                                           Augustus H. Shaw IV
                                                              Mark E. Lines
                                                             Quinten T. Cupps
                                                            Michael C. Lamb

                                                           4523 E. Broadway Rd.
                                                          Phoenix, Arizona 85040

                                                               Contact Us
                                                             p 480-456-1500
                                                             f 480-456-1515

New Name, Same Comprehensive                                                    Anne Dill
                                                                                Vice President/
Banking Solutions for                                                           Regional Account Executive

Homeowner Associations                                                          602.369.2388
                                                                                Toll Free 866.800.4656
                                                                                ext. 7499
Community Association Banc is now a division of                       
Mutual of Omaha Bank and stronger than ever.
• Online cash management systems
• Lockbox and digital imaging services
                                                                                Manny San Miguel
• Online ACH and credit card payment systems                                    Regional Account Executive
• HOA loans for property maintenance and development
                                                                                Toll Free 866.800.4656
CondoCerts simplifies the process of obtaining                                  ext. 7405
and distributing homeowner association data and                       
documentation with our online document delivery system.               
• Real-time account access 24/7
• Automated resale disclosure packages
• Dedicated customer service teams
                                                                    Community Association Banc

                                                                     National Corporate Member of Community
                                                                   Associations Institute. Community Association
                                                                    Banc is a division of Mutual of Omaha Bank.
                                                                                    Member FDIC

                                                                                                      Issue 3 / 2009   27
               caLenDar oF events

2009 CAI CAC Event Calendar

     8th                   CAI – Central Arizona Educational Lunch
                           Vendor Performance
     9th                   CAI- Annual Golf Classic –
                           AZ Grand Resort
     27th                  New Member Breakfast Club Meeting
     10th                  CAI – Central Arizona Educational Lunch
     No scheduled events

     CAI – Central Arizona Chapter
     2009 Annual Sponsors
     DiamonD sponsors
     BNC National Bank
     Carpenter Hazlewood Delgado & Wood
     Community Association Banc
     Maxwell & Morgan, PC
     Sunwest Financial

     goLD sponsors
     Advanced Painting & Contracting
     Community Association Underwriters of America
     Law Offices of John Chaix
     Shaw & Lines, LLC

     siLver sponsors
     AV Builder
     Bennett & Porter Insurance
     Clean Cut Lawns
     Dicks Coglianese Lipson & Shuquem
     Ekmark & Ekmark, LLC
     Ironstone Bank
     Rossmar & Graham Management Company
     The Groundskeeper
     The Mahoney Group
     Union Bank
     US Bank

     Bronze sponsors
     Bircher Exterminating Services, Inc.
     CertaPro Painters
     Integrity First Property Management
     Jon Wayne Construction & Consulting
     Kasdan Simonds Riley & Vaughan
     Kommercial Painting Services
     Planned Development Services
     Securitas Security Services
     Sprayfoam Southwest
     Titan Restoration                                               Our readers are
     Tot Lot Services
     Trident Security                                                       your
     Tri-City Property Management

     corporate sponsors
     AMCOR Property Professionals, Inc.                              We deliver to over 30,000 homes
     Associated Property Management
     Association Reserves                                            in premier communities around
     Caretaker, Inc.                                                 the East Valley.
     CLC Enterprises
     Gallacher Bosen & Goodman                                                                                              To advertise visit
     Golden Valley Property Management                               • Scottsdale Ranch            • The Islands
     HomeTeam Pest Defense                                                                                     
                                                                     • The Ahwatukee Foothills     • Augusta Ranch
     Jomar Association Services                                                                                                        or call
     Rider Levett Bucknall                                           • Ocotillo                    • Sun Lakes
               A complete list of 2009 Sponsors can be found         • Val Vista Lakes
                       by visiting                                                                   Valhalla Holdings

               Sunwest Financial Community Association Services
Sunwest Financial is a leader in working with Community Associations. For nearly three decades, our experienced
Relationship Managers and dedicated Customer Service Department have created custom packages of products and
services to meet your industry’s needs. We can offer you:

Rapid Remit Lockbox Processing                           HOA Wealth Management Service
Streamline dues payment processing.                      Removes the worry and hassle related to managing your
                                                         associations’ funds because we do the work for you.

Customized Community Association Loans                   Elite Money Market
Use the funds for renovation and rehabilitation          Earn great rates on your funds.
projects, or to replenish reserves.

Remote Deposit Capture                                   CD Placement
Save time by processing checks at your location.         Obtain the security of FDIC coverage for amounts over

Merchant Card Processing                                 Sunwest Bank Online
Add value by accepting credit cards.                     Securely manage your accounts anytime via the Internet.

Contact our Community Association Services Division toll free at (866) 479-2265 to speak to any of our experienced
Relationship Managers for more information.

                Kimberly Kaseta                                          Lisa Stultz
                VP & Relationship Manager                VP              VP & Relationship Manager
                480.290.5210 |   480             480.287.4406 |

                                                                                                       Issue 3 / 2009
                                                                                                           MKT-CAS-100-2      29
             Scottsdale Fine Landscaping
         Full Service Landscape Management

 Specializing In HOA’s, Condos, Commercial Plazas
                and Office Complexes
Our mission is to provide exemplary service to our customers,
 to sustain lasting business relationships with our customers,
and to work with qualified employees who share our passion
      and commitment in what we do for our customers.

                                                                  Scottsdale Fine Landscaping is a full service Landscape
                                                                  Management Company established in 1988.
Caring for Communities for 22 Years                               Our central location in the Scottsdale Airpark provides easy
                                                                  access to our customers.

                                                                  We have developed and structured our landscape management
                                                                  programs in such a way as to provide our customers with the
                                                                  best possible proactive and reactive service. Through dedicated
                                                                  service and attention to detail, we have sustained many
                                                                  customers since our inception.

                                                                   MEMBER O F

          SouthweSt DiviSion                                                    eaSt coaSt DiviSion
      (Servicing Phoenix & Scottsdale Arizona)                                  (Servicing Central New Jersey)

           Scottsdale Fine Landscaping                                     Martoccia Landscape Services, Inc.
          PMB 452 - 11445 E. via Linda, #2                                           P.O. Box 4173
              Scottsdale, Az 85259                                                 Warren, NJ 07059

                    Tel: 480-614-3238                                                 Tel: 908-756-1967
                   FAX: 480-614-1190                                                 FAX: 908-755-6585

     Licensed (ROC 217999-K21) - Bonded - Insured
                                                                 Licensed (ROC 13VH01475500) - Bonded - Insured

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