Richard White: Gated security is a strong selling point

Q. Do you have any statistics that show whether mandatory private country club membership in a gated community is a positive or negative for the community, especially as regards to resale? C.P. — Naples

A. My answer is supported mostly on my experience as no statewide studies have been made comparing crime statistics with gated and non-gated communities. Real estate sales training says that sales are made to prospective buyers looking for specific amenities and lifestyles. The old saying is that location, location, location is the key to a good investment in a home. Location is somewhat an all-encompassing word. Without getting into too many details, to some location can mean security. In a recent article by Mike Grogan of The Reporter, he interviewed Lt. Nick Pallitto of the Lake County Sheriff’s office: “If the neighborhood has a security gate, it is safer. Like water, a burglar takes the path of least resistance. A gate is definitely a deterrent to crime.” There are three disadvantages of a gated community: initial cost and upkeep, control and entry of visitors, and the delay of entry by owners (a few extra seconds). There is one additional disadvantage in that residents take the gate as an all-encompassing security system and it is not. Any person who wants to do harm can penetrate the barrier. This means that all residents must take some security actions for their homes. The short answer is that I feel that a gated community sells faster and the homes sell for more. Yes, a gate is a selling point.

Q. I am in the process of updating my condominium unit insurance. I have not increased the insured amount in 20 years. How do I decide the value to insure my unit? I know the square footage. I can find out the cost to build per square foot and I am aware of the price the unit is selling for at present market values but I do not know how to estimate the amount the association is responsible for and the amount of the building that is my responsibility. Is there any formula I can use? E.J. — Stuart

A. Your first source of information will be your insurance agent. Rather than just putting an amount to insure your unit, ask him/her about replacement cost coverage. In addition, ask about an automatic inflation increase each year. As for the association, the board can obtain an insurance appraisal for the building and common areas. This will provide a basis for the association’s insurance requirements. While an appraisal is not necessarily a requirement for a unit, it is an option. Keep in mind that the appraisal for insurance should establish an insured value and not a market or sales value.

Q. Although we carry the standard liability insurance for our condominium, our board is seeking bids for a special insurance to cover board members against legal action. This insurance is very expense. Is it necessary? D.D. — Dunedin

A. Since board members volunteer to serve on your board, they should have the members’ support to protect them against lawsuits. The insurance you refer to is called Directors and Officers Liability (D&O) coverage. I do not recommend that any director serve unless they are covered by D&O insurance. It is simply a cost of doing business and a wise decision.

Q. Recently we changed management companies for our co-op. Our treasurer had been in property management before retiring and has now taken a position with our new management company in which she would be overseeing the person we have as a property manager. We heard she was going to resign from the board but they checked with the attorney and he said she did not need to. Do you see any problems or conflicts with such an arrangement, especially in the position of treasurer? B.B. — St. Petersburg

A. It is very unusual for a management company to engage a person from the association as a supervisor acting for the association. While I can find some conflict of interest, it is not necessarily a violation of the statutes. Where I find it a problem is that I hope she is properly licensed. Since I do not know her exact duties, my answer is based on the limited information supplied, but it sounds like she is performing management duties for compensation. That would mean that she must be licensed as a (CAM) Community Association Manager. Other than the need to be licensed, I would not see a problem for her to remain as a director and officer.

Q. Recently in your column, you suggested holding meetings by directors without quorum was a way to conduct business. In these meetings, must written records be maintained? If so, must these be given to the full board, right away or at next meeting? This business of sunshine laws has come up again and l am certain you have previously said sunshine laws do not apply to condominiums. P.S. — Ocala

A. The answer is simple for both condominiums and homeowner associations. The Florida sunshine laws only apply to government agencies. Condominium and HOAs have their own laws that say anytime a quorum of directors meet to discuss business, it is a meeting and must be noticed and held in the open. Sometimes directors, less than quorum may meet to conduct business. In that situation, I call it day-to-day business activities. It could be a discussion between a president and the treasurer to discuss the budget and expenditures or maybe the vice-president and the secretary to discuss a news letter. Most daily business discussed in these meeting do not need minutes or reports but in some situations, the officers should report events that could affect the association to the board. Say a members slips and falls on the steps leading to the clubhouse and must go to the hospital. The president and one of the directors come to the aid of the fallen member. In that case, a report should be addressed to the other directors about the event.

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Richard White is a licensed community association manager in Florida. Questions should be mailed to him at 6039 Cypress Gardens Blvd. # 201, Winter Haven, Fl. 33884-4415; e-mail To be considered, questions and comments should include the author’s name and city. Questions should be about association operations, not legal matters.

© 2006 All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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