Kevin Davis: 0:00

There's a lack of trust out there, and so it happened since covid, because since covid, we're looking at people who work at home, who look outside their window two o'clock in the afternoon and see things they don't like, and we see things that you don't like, you go to the board and say, Guess what, I don't like, and then I don't like to respond from the board. And when I like to respond for the board, trust starts to disappear. All of a sudden, I'm going wait a minute. Hold on. A minute. You want money for what? What do you mean? You need money for this. What do you mean? You need money for that?

Announcer: 0:32

six companies that care about board members, Association Insights & marketplace, Association Reserves, Community Financials, Kevin Davis Insurance Services, HOA Invest and The Inspectors of Election, you'll find links to their website and social media in the show notes

Robert Nordlund: 0:47

I'm Robert Nordlund from Association Reserves,

Kevin Davis: 0:50

and I'm Kevin Davis of Kevin Davis Insurance Services. And this is HOA insights. We promote common sense

Robert Nordlund: 0:56

for common areas. Well, welcome to episode 129 where we're again speaking with insurance expert and regular co host, Kevin Davis. This episode was driven by the tragic Champlain tower South collapse in 2021 and the knowledge that there's perhaps 1000s of other old associations all across the country trying to sustain their aging building so older buildings, just like older people, require more delicate handling, because the building, just like an older person, is more fragile and requires that special handling it just can't ignore it. So how do you ensure such an older building? How do you reserve to sustain such a building? Well, if your property is at or past a 30 year point. This episode is for you. And if your building is newer, remember that you'll soon join the club and your building will be 30 years old or older also. So you'll want to know what's ahead. Well, last week's episode, 128 featured a fun interview with Gavin Nelson of merchants, bank, giving us all some insights into what the community association world looks like through the eyes of someone who holds on to all our money. There are so many specialties like the banks that serve our industry that it's important to stop and consider all they do for associations. So if you missed that episode or any other prior episode. Take a moment after today's program to listen to our podcast at Hoa insights.org or watch on our YouTube channel, but better yet, subscribe from any of the major podcast platforms so you don't miss any future episodes. Well, those of you watching on YouTube can see the HOA insights mug that Kevin and I both have favorites, and you can browse through and see what we have for sale and free stuff at our Hoa insights.org website or the link in the show notes. Now I mentioned free stuff. We have some great board member zoom backgrounds, and we have some items for sale, like the mugs, but if you'd like a mug, then just go the store, the merch store, find the mug that you'd like and email me at podcast, at reserve study.com, and if you're the 10th person to mention episode, 129 mug giveaway with the mug choice your name and shipping information. We'll send that to you free of charge. Well, we enjoy hearing from you responding to the issues you're facing at your association. We want this to be a show for you. So if you have a hot topic, a crazy story, or a question you'd like us to address, you can always contact us at 805-203-3130, or email us at podcast@reservesafe.com but today's episode comes from an insurance professional, so let's hear from him right now.

Eric Davis: 3:50

Hi, my name is Eric Davis, and I have a question for the experts, as you know, from an insurance and reserve funding standpoint, older associations have their own sets of challenges, but what I want to know is what can actually be done for these associations before they start to become risks?

Robert Nordlund: 4:04

So Kevin, what comes to mind when we dive into this big topic?

Kevin Davis: 4:09

You know what it's it's a great question, because that's the number one problem, number one concern with the insurance industry right now, you have all these older buildings and the ones that becoming older, and for years, they haven't done the job they should have done. So our job is protect the association. Right? Is to make sure that if you have property damage or somebody sips and falls, the job protect them. But if they haven't maintained the property the way it should be maintained, maintained, then we're looking at the exposure increasing, and so the insurance professional is looking at their number of accounts they have and saying, Oh, how in the world can we make these associations price competitively at the same time when they're not doing their jobs to be price competitive. So everybody wants lower insurance. Insurance rates without doing the job necessary to have a low insurance rate. Okay, that's the problem.

Robert Nordlund: 5:05

Well, I feel like the associations are all on a freight train, not a runaway freight train, but a freight train, and they're heading downhill and there's nothing we can do to stop they're all getting older. The entire portfolio of associations all across the country are getting a little bit older every day, so the number of associations joining the 30 and older club gets bigger every day. And that's a legitimate question. The board members are saying, well, they're they're very cash sensitive, cost sensitive, and they're seeing premiums go up and wondering, how come this is and that's a very interesting question that you ask, how can you lower their premiums when they're not doing their part?

Kevin Davis: 5:51

So exactly, it's okay, look at your car insurance. Look at your car. You write every year you have pay your car insurance, right? But all of a sudden we have sensors around the car. Okay? We maintain our car. We have oil change and we make sure it runs effectively on the road, so that we protect ourselves. So we want to make sure our car is safe as humanly possible when we get inside of it, so that it's not going to break down. So now get an accident. So we turn we can turn off all those sensors in our car, turn them all off, and live like it doesn't matter. In fact, we can buy a cheaper car and save money. Okay? We can ignore all safety requirements, but we don't, because we smart enough to know that that's valuable. For some reason, in the community associations, we think short term. We think about, okay, what is the best thing for right now? And the number one thing right now is we're not going to increase assessments. Okay,

Robert Nordlund: 6:45

I was wondering what you were gonna say, and I was thinking, low monthly assessments. Low monthly

Kevin Davis: 6:49

assessments is number one reason why we're living in this problem right now. As an insurance professional, as no any professional as anybody, we know that I'm gonna spend more money next year than I have this year, and I have to prepare for certain things that I have no control over, because things go up. Okay?

Robert Nordlund: 7:09

Groceries, gasoline, everything is getting more expensive.

Kevin Davis: 7:12

Yeah, just the eye, that mentality of saying, guess what? The I have a badge of honor because my assessments haven't remained low for all these years. Well, guess what? The association down the street, Uptown, across town, they have been going up every single year now. Which one of those? Which one of those is the correct answer?

Robert Nordlund: 7:33

Well, I guess it depends what you're trying to do. Yes, I like the way that you said badge of honor, because there are some people who boast that we haven't had to raise our assessments. We haven't had to raise our assessments in the last five years or six years, or three years, or whatever a different association will say, Well, we've raised our assessments because we are paying for our bills through operating we have enough money for snow removal, or we have a hurricane set aside, or we are ready for our roof project in two years, and we're going to be able to do it without a special assessment. Those are two different badges of honor. But I think what we hear so much is the badge of honor for the boards boasting that they haven't had to raise their assessments.

Kevin Davis: 8:20

We have one answer already for Mr. Insurance person, and that is, we have to shift in our thinking, you know, and that is, do we have that badge of honor saying, guess what? We are effective maintaining our association. It's our one job that we have. We have three jobs, you know, I always talk about three jobs with the maintain the association. You know. We have to collect assessments. We have to force the rules. One of our main responsibilities is maintaining Association. In order for us to do that, we have to make sure we are collecting enough money every single month, and that should be the badge of honor, but we have to convince the people out there, especially now, when you have a brand new Association, because a brand new association, or five year Association, the last thing think about is 30 years from now, or 20 years from now, where that roof or anything is going to need to be repaired. So they are thinking the beginning, that what we need to do is to maintain the association based on, you know, dissociation documents, the reserve study, our maintenance plan, whatever it is, if we follow them, then, 30 years from now, guess what happens? We're in pretty good shape. Yeah.

Robert Nordlund: 9:29

Well, we like to tell our clients, if you take care of the present, the future is going to take care

Kevin Davis: 9:33

of itself, yeah, just like we do in our own bodies, you know, I go to dentist, I get a eye check, I get a physical every year, you know, I could, I can choose not to do any of those things. And guess what happens for me? You know, years from now, I've been wondering why, you know, I can't see, I can't hear. You know, my teeth are fall. You know, all those things that we plan for as soon as we get to a certain age,

Robert Nordlund: 9:55

yeah, and we will find out that, oh, we have something. That's been growing inside of us for the last seven years, and now it requires surgery. And seven years ago, it was detectable, and it could have been a minor, A minor thing that you could have prevented, and I think, was it didn't Joe Biden just he was not not doing his colonoscopies. You got to be doing that preventive stuff to prevent the big ticket items. One thing that I hear about is, and it surprised me, the first time I heard about it was some board saying, well, the homeowners don't trust us with their money. And I was surprised about that. I didn't realize that there was that many homeowners concerned about theft or misappropriation or things like that. Is that something you see

Kevin Davis: 10:49

that was the second if I had to pick a second point, that would be a great second point to tell Mr. Insurance person, because there's a lack of trust out there. And so it happened since covid, because since covid, we're looking at people who live, who work at home, who look outside their window two o'clock in the afternoon and see things they don't like. And we see things that you don't like. You go to the board and say, Guess what, I don't like, and then I don't like to respond from the board. And when I like to respond for the board, trust starts to disappear. And when a trust start disappearing, when they start communicating with me, all of a sudden, I'm going wait a minute. Hold on. A minute. You want money for what? What do you mean? You need money for this. What do you mean? Eat money for that. And guess what? I just saw out there, a brand new car for you. So, you know, yeah, or I see the new car for the Manage, manager who works there. I mean, we live in a world right now where there's a lack of trust in institutions, period. The next door neighbor could be the president Association, but once he goes in that board meeting, and he closes that door, all of a sudden, and you're not invited, all of a sudden. Guess what happened? This trust happens? Yeah. And that is such a critical piece there.

Robert Nordlund: 12:02

Kevin is the the kernel of that thought back from that old Seinfeld episode. Where was it? Jerry's father was Jerry's? Remember at boca delga del Vista? Yeah. And Jerry gave him a new Cadillac because he was being a good son, and it was just bad timing. And they thought, Gee, that has been around for a long time, but I was frankly surprised about that when the first time I heard about it, because we're in the business of saying you need to have this much money set aside. And it makes perfect sense to me, the roof is going to cost 500,000 you need to have at least 500,000 in reserves. And the board said, well, the homeowners don't trust us with more than 200,000

Kevin Davis: 12:42

because guess what? We know Association. Down the road, they only pay $200,000 for their roof. Okay, you know? Okay. Again, it's not a matter of stealing money. It's better getting kickbacks. It's a matter of you getting something that you're not entitled to. For example, not only you get a roof in there, but he'll come in inside your unit there and paint it for free. Okay, he's gonna give you special privileges because you were a board member. I saw him in your unit. You know, it's just a distrust you have so, you know, it's not so much as you embezzle the money or you did something, is that it's perceived that you did something you weren't illegally entitled to. You know, just takes Can you imagine you have a roof for coming out of your unit all of a sudden with equipment now you can come in and just do a checklist of this where I'm at right now, but suspicion is there that he did something special for your unit. That's why you're paying a half million dollars for the roof instead of the $400,000 I saw our earlier bid on or you should have gotten an earlier bid on it. You're getting kickbacks. So the lack of trust in institutions lead to the point where, guess what, you're cheating, you're misleading. You're not doing things you should be doing. You're breaching your fiduciary duty, you know. All those words come out, you know, and all of a sudden it puts that extra pressure on you, because again, funny with Boca del Vista, that happened 30 years ago on Seinfeld. Okay, but can you imagine now you have lots of poker del VISTAs out there, and a lot of Jerry Seinfeld dads out there, who's saying, I don't trust you. And you know, as your son bought a car, I don't believe a son bought your car. You got a car,

Robert Nordlund: 14:18

Cadillac.

Kevin Davis: 14:20

And that's, that's, that's one of those issues out there. You know, as an insurance professional, our job is saying, Okay, we need to make sure you maintain your association so I can give you an adequate rate, but if you're not maintaining the association, I can't give you an adequate rate. And if you're telling me that you kept your assessments low or you don't trust your board when it is a special assessment. What you're going to do, instead of saying, we understand and we agree we need it, you're going to go to a judge and say, Judge, they lack the authority to pass a special assessment. They do the mandatory number of votes, and we don't think it's, you know, constitutional for them pass special assessments in violation. Question of your state loss, and now all of a sudden, guess what happens? You know, you spend more money fighting that, then guess what, putting the money aside for your roofs or for whatever has to be done.

Robert Nordlund: 15:11

Kevin, we I have two thoughts on that. One is, wasn't the aftermath of that snafu with Jerry's father that they had a board turnover, a recall, and they elected Kramer. Yes, that's it, yes and that, and that's no i The Kramer was a wonderful character, but that represents the silliness of what then happens. It goes from okay to what goes from better to worse, something like that. It, you know, it goes the wrong direction,

Kevin Davis: 15:40

but that's a perfect example of how these things can deteriorate. We left the episode, but we do get associations where all of a sudden that special assessment is done, we have a recall, we have a recall election, then all of a sudden we're the new board of directors, and first thing we do is stop the special assessment. Well, guess what the current board is saying. No, we are the official board of directors. So now you have a lawsuit out there for a judge to determine which one is illegally, legally, in charge, board of directors. Yeah, and guess what happens now the insurance is paying for it, because insurance doesn't know who's the real president and who's not the real president. So you have to defend the current president, the new president who thinks he's new president. So you have this battle going on all because of one thing, and that is, we don't believe that you have the authority to pass special assessment, so we recalled you, and now we have a new board, and that old board is saying you didn't have the authority to disband us, to kick us out, or whatever you want to do. And so now this battle goes on for a number of years, and all you had to do is say, Guess what? We need a special assessment, because, based on our reserve study, this is what we need to do. But again, you have people who are short term thinkers, and for years, said we the badge of honor thing, so we cannot move forward. That badge of honor and the lack of trust there stops associations from doing their job of moving the ball forward, to saying, guess what, if our goals have lower insurance premiums, we have to make sure we maintain the association. As simple as that.

Robert Nordlund: 17:17

In the second half of this episode, I want to talk about things that they can do to to move forward effectively on this. But I just want to share another story with you. Last week, we were contacted by a reporter who was doing a story on a big special assessment at a property. And they pitched the story as, How can this be? How does this happen? The evil board, the poor homeowners are now faced with a special assessment that they can't afford. And that was how the story was pitched to us. And I asked the reporter for more information, how many units? Where is it? Are there any reserve stays? And the reporter provided us with two prior reserve studies, and it was very clear it was a 45 year old Association. The last reserve study had recommended some special assessments. You know, seven years ago, they had an update. Two years ago, because they were on every five year cycle, not recommended, but at least they had it. And two years ago, the last reserve study recommended another special assessment. And from my point of view, it's a very normal progression. It's old building. They had been wearing the badge of honor of minimizing assessments and not raising assessments enough, and the consequence is special assessments. And I wanted to pull that reporter aside and say, hey, it's not the board of directors that has the problem here. They're not the evil board of directors. It's just that buildings get old, and I can imagine they're in the hot seat now, because they know in this place it was a facade issue, so balconies and exterior type things, and that becomes dangerous. They know that that needs to get done, and the homeowners are saying, You're crazy. We don't want a special assessment. And those, those are two opposing forces. When you have the homeowners that think that the board is just taking Yeah, and the board feels the responsibility that, hey, we have this building, and they know, like you've said, their job is to maintain the association. They need to collect the funds to be able to maintain the association and then enforce the rules, keep law and order going on there, but they're in a jam.

Kevin Davis: 19:22

It's worth I just think this board lives there. So they go to the pool, they go to the gym, they may work out, and every day, all they do is get beaten up because of that. They can add the old board who said, Guess what? We maintained it. You the one that didn't do your job properly. You the one didn't maintain it when we were the board. Guess what we did? We had a special assessment. We did X, Y and Z. But what happens is, over the past five or six years, things change, the expenses change. You know, inflation. We've been inflation since covid. Anything that happened over the past five years have changed, but our mentality hasn't changed. We live in community, associations. We still believe the world. World runs the same way it ran, you know, eight years ago, seven years ago, but in the past five years, they've changed, and we haven't shifted our attitudes to this new change. So we're still talking about things we talked about 10 years ago, 20 years ago, 30 years ago, and they no longer apply.

Robert Nordlund: 20:17

He got me really sobered up here. Yeah, this is it's a real deal, that badge of honor that's real. And expenses we live in a different world. All the buildings are eight years older than they were eight years ago. They're a whole lot more expensive because of eight years of inflation, some of that, some very high inflation years we learned words like supply chain. We had covid that caused us to have lower trust in the people above us, and that creates kind of a toxic situation where we have even more frustration the boards that are seeing the higher insurance premiums, higher reserve funding recommendations, and the homeowners are getting mad at them. How come you can't, you know, run the place. Well, cut the fat somewhere. Jesus, waste. You can't cut the fat. People have been cutting the fat for 35 years.

Kevin Davis: 21:07

Was that wasted abuse? Right? Wasted abuse, right? Give it the wasted abuse without a problem. Yeah. And again, one more thing is that, again, at two o'clock in the afternoon, we're home, and we we see the landscaper out there, and he's taking his time. Guess what? Cut the landscaper? I could do. I get somebody cheaper. It is if we because we are home, we're seeing things we didn't see before, and we don't like it, and we think it is waste that, you know, the landscape takes so long to cut the grass.

Robert Nordlund: 21:36

I saw them sitting down out there, exactly.

Kevin Davis: 21:39

Yeah. Taking the lunch break. Taking a lunch break?

Robert Nordlund: 21:42

Gee, the amount, the money we're paying them, they should be working hard when

Kevin Davis: 21:46

they're here. You guess what? Just stop. Let's go back to the positive stuff, because they don't want to hear

Robert Nordlund: 21:50

this. Yeah, we could. This is not getting good, okay? Kevin, well, there's a good time to take a break. Let's take a quick break to hear from one of our generous sponsors, after which we'll be back with more common sense for common areas, and we'll be talking about solutions. What can you be doing for this?

Paige Daniels: 22:05

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Robert Nordlund: 22:36

And we're back. Well, we're going down a little bit of a dark path before the break, and Kevin and I want to spend a little bit of time here on what can you do? We all we know we live in aging associations. If your association is not old now, it soon will be. So Kevin, what? What is one of the first things an association can start to

Kevin Davis: 22:56

do? Easy goes go to the trust area. We need to build trust back in these associations, and the best way to do is communication and transparency. You can't get better than

Robert Nordlund: 23:06

that. Okay, Transparency means a bunch of things, making the board meetings, inviting so more people come, sharing financials, so everyone sees a situation, communicating multiple ways. So it's not just the you said it earlier this when the board meets in secret, behind closed doors. Well, yeah, maybe it's not behind closed doors, just that no one comes to the board meetings. Maybe that means a website. Maybe that means an email blast once a month, multiple ways. We know we've heard it so many times. That's why there's so much advertising on television and on radio and on podcasts and everything else, because it takes multiple Okay, so let

Kevin Davis: 23:47

me add another word in attitude. You have to have a better attitude when you communicate. You know, nobody talks about they say, communicate, transparency, communication. But what attitude do you have when you communicate? Is it a pleasant up, or are you giving this information? Do you is it pleasant? Is it kind? So let's talk about communication in a kind way. Let's just do it that way.

Robert Nordlund: 24:10

Kevin, that's near and dear to my heart. I am the boss of my company, and there's oftentimes I give directives. My leadership team has said, Robert, you're a little harsh. Can you soften it up a bit? And they gave me some chat GPT versions of what I should have said that was a little more empathetic. And I'm hearing that, and you're right, I can be more empathetic in communication with the employees at Association reserves, and I bet the average board could probably be a little more empathetic in the way they communicate with the homeowners in order to maintain a wonderful place here at Happy Valley villas, you know, soften it up, give it some directives, or in pursuing our mission to be the whatever it is at Happy Valley villas. Okay? So communication in a chosen

Kevin Davis: 25:03

way, in a kind way. Let's do it that way. Communicate in kind way, because everybody can't be empathetic. Everybody can't be I can't feel your pain, and we all could be kind. We can all just speak. Thank you and please and just be kind in a way you communicate. You know, we have this, and this is the reason why, I hope it's you understand.

Robert Nordlund: 25:24

We together, co own homes at Happy Valley villas, and together, we want to have this be a nice place now and in five years and in 10 years. So this

Kevin Davis: 25:36

is being kind. You know, you're not sharing your pain. It's just being kind communicate in a kindly

Robert Nordlund: 25:44

way. I like that. Okay, that'll that'll be in the show notes. That'll make the show notes. Okay. Another thing is, well, and I hear Julie's voice in my head, because she emphasizes communication so much. Different ways, different different people are going to be sensitive to different things. Okay, let's talk about the message and understanding of the different people, the different interests. We're going to have some board members who are, I'm stereotyping, the old timers, or maybe homeowners who are the old timers who bought 30 years ago, and they remember buying their condo for $52,000 and now it's worth $520,000 and there's the new couple who bought it for$520,000 and talk about a different couple of people. And then there's everywhere, everyone in between. So we have the people who remember the old way. They remember when the dues were $78 a month. And we have the new people who paid a lot of money for this place, and they expect to be there for 1020, years, and they are working and they're ready to pay for keeping it nice. So how do we work with that? Is that a matter of, how do we have the board members appreciate the different homeowners or the different board members and come, come together. And

Kevin Davis: 27:02

that's a that's a key part too, because we're looking now that every Association has it's I we call the culture, okay, the cultural norms. Okay? Again, if you've been in association for 30 if you have a 30 year old building, that means you may only have a handful of board directors. You know, because some of these Board of Directors last for 10 years, 15 years today, this don't rotate. And so now you get new owners, those new young millennials that they want to move in, and what they want to do is say, Guess what? We want to make sure that our association is maintained. Because I want my half a million dollar associate, my whole half million dollar unit, to be worth a million dollars in 10 years. Now, people were living there for 20 years, or anytime at the time, they don't care about that anymore, that I care about the value. I've been in my house for 20 years now. I don't care about the value. I don't think about the value of it. It's not important to me. But the person across the street who just bought that house cares about the value. They want to make sure that value continues going up. So he comes over and wants to understand, you know, how the trash work. You know? Well, you know, I kick my trash cans in and everything. So he's, he's more aware of the value of the neighborhood than I am, because I've been here for some long so as board members, again, they have to understand the people who live in an association. You know, if you have people who've been there for a long time, you know, Ed, who may have went through special assessments before. It's easy to talk to them about special assessments, but they never had one before. It's hard to talk to them about it, where the new people, you can say, Guess what? To increase our values. You need to, you know, you need to understand the special assessment as board. We're talking about communication. You know, you have the active adult communities out there. Okay, these guys, they do the best job of maintaining and guess what, most of them are short term thinkers, but they enjoy their life the quality of life they have there. You know, when special assessment happens, they end up paying it right away. But then you have, you know, the associations where people may live paycheck to paycheck or may be on, you know, Social Security. How do you communicate to them in terms of, we need a special assessment and they can't afford it? Well, again, it goes back to, you have to understand that you can't ask for a quarter million dollars for people who don't have a quarter million dollars. There's some associations, and we have to say this thing. Some associations had to say, You know what? We have to disband. We have to disband.

Robert Nordlund: 29:26

Yeah, that's, I think of that as the emergency exit. What's that emergency exit? Yeah, deconversion.

Kevin Davis: 29:31

If you happen to live in a community association that's 40 years old, and somebody says, Guess what, your balconies are gone. Okay, you have so much damage do, and you want to fix income. You know, you're you have to deal with some realities. You know, this is a challenging podcast for us, Robert, because we're giving, you know, we likely stay positive and up, but this is one of those things we're saying from that insurance person said, Guess what? I'm concerned about the future. These condominium associations. Now we're saying, guess what? If you communicate properly, if you invest properly, if you pay properly, you don't have a problem. It's 6070, years from now, you can live. But if you haven't done that, you have to think about what do you do? We have to communicate better. But if you can't afford, if you live in a Fixed Income or Social Security, anything where you can't, you don't have the money that's to your 40 years old. You may have to have it's kind of pull out that, you know, break here, here, you know, break glass for in case of emergencies.

Robert Nordlund: 30:33

Again, in my world, it's really interesting. Intersection between your world and my world. Your world is the world of decisions, looking after the board members, watching what decisions they make, and the decisions are getting more complicated. As a building ages, there's more things going on. There's more activity. It's probably harder to be a board member, but in my world, I can see those expenses coming, and it's no surprise to me, a roof will fail roughly in the 20 year range. You can see it coming. You can see it coming. It coming for 20 years. It blows my mind how an association ignores the reality of a roof that's failing in plain sight, or paints that deteriorating in plain sight, and they say we have an emergency special assessment. I'm like, there was no emergency. It just deteriorated a little bit each day on schedule, and that is part of the communication of helping everyone know that this is the plan. It's gonna cost $500,000 or a million dollars, or $50,000 or whatever it is at your association for a new roof, and you need to be setting aside the money. And have we said it here today? Owning real estate is expensive. We have to appreciate that when you were talking, when we were talking about demographics on the board, one thing I started to think was, what about the board? Who has been the board for 15 years, and they think, as one mind, I think that's also dangerous, because they're missing the insights from the young couples or the point of view of the young people, or the point of view of the people with kids, or the point of view so many different things, because they may not be running the association Well, in the best interest of everyone at the association, like they're supposed to,

Kevin Davis: 32:16

yeah, and that's again, if you look at the election, that's why every four years, or six years, every two years, you have these elections out there to bring in new, fresh ideas. You know, it's just in the country elections are there to bring in new people, to bring in new thought, new ideas. Yeah, if you have a same group that's been there for 1015, years, they're still thinking in terms of, guess what? My badge of honor, low assessments. If you transition these board boards like you should do? You get a new board in there, a board that is hungry, that want to maintain it, and looking at their association saying, five years from now, I want to sell, and I want to sell for more money than the association down the street. So you have to, I must say, you have to transition. But you have to understand that if you've been doing the same job for 15 years without much growth, then the association hasn't changed much in the last 15 years. You have to have change in order to say, Guess what? You know what? I have to reserve study. It's been updated, but I don't think we ever funded it. You get a new board. And the first thing on to say, wait a minute, here's a reserve study. Are we? Is a fully funded

Robert Nordlund: 33:21

Yeah, we're in a heap of trouble here, folks.

Kevin Davis: 33:24

That's why those transitions are really important. And again, this is our conversation today is kind of unique, because we giving the people out there who listen to us saying it's time to look at your association and say, who do we want to be? Do we want to have that badge of honor saying we're prepared for the future, or we have that badge of honor and saying, guess what? You know, we're cheap. You know, do you would have a Walmart Association? Or do you want to have a, you know, Nordstroms, or pick something that of value? Okay,

Robert Nordlund: 33:55

well, I've heard someone say that there's two types of people in this world, the types of people who are holding on to baggage and they're holding on to the past, and people who are holding on to luggage because they're planning for the future, and just like you were talking about, you need to have healthy change in the board. I was wondering if that's just like the old association that has an old roof, old paint, and they just been limping it along. And you and I know that a healthy Association gets fresh paint at the right time. It gets asphalt care at the right time. It gets new carpet at the right time. It gets a new roof at the right time. And I think the board likewise needs to have new voices at the right time on an ongoing basis to regenerate the board, just like you regenerate the physical property. That's interesting. We maybe have another episode in that. Well, I want to bring this episode to a close. Something I had on my notes was a great resource. It's a free download from the CAI Research Foundation. It's a report called aging infrastructure. They released that in. 2020, and has some great information on it. I'll have a link in the show notes to that report. But Kevin, gee, you're right. There's a little bit of a different episode. But any closing thoughts to wrap it up,

Kevin Davis: 35:14

the words trust. We have to establish trust between us, the board of directors and people who live there, because once you have that trust, you can solve the problem of your aging Association. It's not that challenging to say today, right now, we're going to start solving this problem because we know we can, and first thing we're gonna do is tackle the assessments and then move this ball forward. If we communicate in a kindly way, then guess what? We'll be in a lot better shape than all the other community associations out there that because we're all aging, everything's aging, and everything as we age, we don't stay the same. And I wish I could say 10 years ago, I look the same. 40 years ago, it's gone.

Robert Nordlund: 35:57

Today. I've seen some old pictures of you and we were on athletic teams. Yes, exactly yes. Okay, well, we hope you learned some great HOA insights from our discussion today that helps you bring common sense to your common areas. Thank you for joining us. We look forward to bringing more episodes to you week after week after week we'll be here. It'll be our pleasure to have you join us, and have you joining us on a regular basis, so please spread the word

Announcer: 36:28

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