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A Professional and Independent Approach to Management.

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Did You Know?

— KW PROPERTY MANAGEMENT & CONSULTING ..........................P 3

Is it the Person or the Position? How to Avoid Costly Hiring Mistakes

— Kelly Ann Vickers, LCAM ...............................................................P 4

Hospitality — It isn’t Just for Hotels. Engaging in Courtesy

to Create a Sense of Community

— William Mathisen, LCAM. ..............................................................P 7

Company Bios ....................................................................................P 8

Plan Now or Panic Later – Why Community Association Leaders

Should Develop a Plan for their Condominium,

Co-Op or Homeowner’s Association.

— Andy Ashwal, Executive Director .................................................P 11

In thIs Issue:

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A Professional and Independent

Approach to Management.

In accordance with the passage of the Housing andEconomic Recovery Act of 2008, the FHAimplemented a new approval process forcondominium projects. The updated requirementscan be found on the website of the US Department ofHousing and Urban Development, but the areas ofspecific interest to anyone purchasing in acondominium community can be found in MortgageeLetter 2009-46 B, and they are:

Project Approval II. Eligible Projects: TheCondominium Project has been declared and exists infull compliance with applicable State law requirementsof the jurisdiction in which the condominium projectis located, and with all other applicable laws andregulations. This is of importance to buyers particularly inthe State of Florida which requires the funding of reserves forfuture capital expenditures.

Project Eligibility Requirements, P. 6. DelinquentHomeowners Association (HOA) Dues: No more than15 percent of the total units can be in arrears (morethan 30 days past due) of their condominiumassociation fee payments.

Project Eligibility Requirements, P. 11. Budget Review:Mortgagees must review the homeowners’ associationbudget for all projects. This review must determine

that the budget is adequate and:

• Includes allocations/line items to ensuresufficient funds are available to maintain andpreserve all amenities and features unique tothe condominium project;

• Provides for the funding of replacementreserves for capital expenditures and deferredmaintenance in an account representing at least10% of the budget; and

• Provides adequate funding for insurancecoverage and deductibles.

It is important to note that if the budget documentsprovided do not meet the standards defined by theFederal Housing Administration the mortgagee canrequest a reserve study to analyze the financial stabilityof the association, and they will not accept any reservestudy more than twelve months old.

If you are interested in learning more about the FHArequirements for a condominium approval processthen visit the HUD website at www.hud.gov orespanol.hud.gov to review all of the documentation inSpanish.

FHA Requirements for Condominium Approvals

the annual Community Association Institute Day and

trade show will be held at the new Jersey Convention &

exposition Center in edison, new Jersey on saturday,

october 27, 2012, with registration beginning at 7:45 AM.

For more information or to register for the event visit the

CAI website at http://www.cainj.org/

the holidays and year end are fast approaching, and most

associations are contemplating that year-end bonus or

holiday gift for the employees on the property. “every

year at this time we have to remind board members that

their best intentions can produce the worst consequences

when attempting to reward an employee financially for

their performance outside of their normal pay,” indicates

Robert white, CPA and Managing Partner for Kw

PRoPeRtY MAnAGeMent & ConsuLtInG, “as the

IRs Publication 15-B clearly indicates that the monetary

gift is considered a taxable fringe benefit.” In order to

avoid penalties Robert indicates that the board should

comply with the IRs requirements of treating the

additional moneys as a fringe benefit, and adding the

value to the employee’s pay for the appropriate

withholdings.

Annual Bonuses

Community Association InstituteDay and Trade Show—New Jersey

DID You Know?

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This Information is being reprinted from the HUD website:http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/letters/mortgagee

Is it the Person or the Position? How to Avoid Costly Hiring Mistakes—By Kelly Ann Vickers, LCAM, Business Development Manager

If asked to define the greatest challenge being faced byan association today, most individuals will recite a litanyof financial difficulties, building calamities, insuranceclaims, and a legal issue or two. Yet, when contemplatingthe multitude of mishaps that can have a significantimpact on the successful management of an association’soperations, the most overlooked, yet seemingly simpletask, is ensuring that the right people are in place.

In order to understand the impact employees have onan association, visualize each individual team member asa foundational component, and the day-to-dayoperation of the association as the physical structureerected upon the foundation. If the foundation is weakin any area then the weight of dealing with financialchallenges, insurance claims, resident needs,maintenance requirements and legal issues will createsignificant stress. This continual stress will ultimatelycause the foundation to fail leaving anger, frustrationand additional operational issues in its collapse.

The single most researched and debated topic in the

business world for the past decade has been employeerecruitment and retention with an emphasis on thetangible and intangible impacts of hiring the wrongperson. The tangible impact, the cost of replacing a badrecruit, is often estimated to be one-third of up to fivetimes the employee’s annual salary1.

The intangible impacts are often far more difficult toquantify from a cost perspective as they are not asimmediately visible. The intangible elements ofteninclude lower morale among the remaining employees,greater frustration from the residents, incompleteprojects, unpaid association bills, and the transition ofthe board members from volunteers to unpaidemployees as they dedicate more of their personal timeto the association to take on responsibilities beingneglected by the wrong hire.

Considering all of the articles and examples availableregarding the impact of the wrong hire one has toponder “so why does it still happen”? According to

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1 Costs of Hiring the Wrong Person Go beyond the Financial – The Finance Professional’s Post.A

publication of the New York Society of Security Analysts (NYSSA).

Suzette Diaz, Human Resource Manager for KWPROPERTY MANAGEMENT & CONSULTING, “mostmistakes are made because thosewho are tasked with the hiringprocess not only confuse the jobdescription (duties) with the jobcriteria (skills), but they tend toseek out candidates who fill animmediate need without thinkingabout how the position may evolvebased on the changing demandsand needs of the community.”

“We have seen job descriptions thatare so detailed that they encompassfour pages of responsibilities,”Suzette indicates, “but then thecriteria is often vague andconflicting.” Before attempting tohire any employee first understandwhat the job responsibilities are,what the desired outcome is, andthen define the required skill set. Arecent survey by Robert Half, one of the world’s largeststaffing agencies, demonstrated that thirty-six percent ofthe executives surveyed felt that the primary factorcontributing to a bad hire is poor skills match with thesecond most common reason being unclearperformance objectives2.

“Another common hiring mistake is not considering theculture the individual is being hired into,” indicatesGrant Horwitz. “In my role of Chief Operating Officerfor KW PROPERTY MANAGEMENT & CONSULTING,I spend a great deal of time educating our hiringmanagers why the cultural fit is just as important as theskill set when placing managers and staff at a property,”states Grant. “We meet candidates who have all of therequired skills and more, but that doesn’t mean they willbe a fit for an association who has a very involved boardwhen they have spent the past three years employed byan association whose board members all live out of stateeight months out of the year.”

Andy Ashwal, Executive Director for KW PROPERTYMANAGEMENT & CONSULTING’S New York office,understands culture all too well. “I serve on the board ofdirectors in the building where I live, and we arecurrently interviewing for the position of ResidentManager,” Andy states, “This position is vital to theoperation of our building, but we are taking our time inselecting and interviewing candidates. We understand

the importance of filling this position now, but we don’twant to have to interview for the job again in six months

because we made a decision based on a sense ofurgency.”

To ensure that the right candidate for Resident Manageris selected for the building, Andy and other members ofthe Board of Directors, are practicing interviewingtechniques that are often recommended to avoidcultural clashes including cross interviewing with otherboard members, and interviewing in venues away fromthe standard conference room to gauge how thecandidates interact in an uncontrolled environment.“Some days,” Andy indicates, “there will be a lot ofbackground noise, disruption and distraction when thisperson is the Resident Manager, and we are trying todevelop a sense of how this person would handle theenvironment before they are ever exposed to it.”

In addition to defining the immediate and futureresponsibilities of the position, the skills, character andcompetency that will be conducive to the position andtaking into consideration the culture of the associationthe hiring manager will also need to ensure that thecandidate participates in a pre-employment screeningprocess. “At KW PROPERTY MANAGEMENT & CONSULTINGwe utilize a rigorous screening process to attempt toeliminate any surprises,” states Suzette Diaz. “In ourindustry it is imperative that we take every measurepossible to protect the associations we represent from

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2 Costs of Hiring the Wrong Person Go beyond the Financial – The Finance Professional’s Post.A

publication of the New York Society of Security Analysts (NYSSA).

Continued on page 6.

the harmful impact of hiring someone who has a historyof theft, substance abuse or filing workerscompensation claims,” Suzette says. All too often peoplewho hire people tend to overlook the fundamentalthings that need to occur during the process –including conducting prescreening processes thatcould prevent issues from ever occurring.To ensure that your association is hiring the “right”person and not just the “next” person we suggest thatthe following strategies be implemented:

• Clearly identify the need – throw out that jobdescription from two years ago, and avoidcategorizing what the last employee did. Create ajob description that encompasses the needs andexpectation of the position, and then create anoverview of the experience, skills, competencyand character that are needed for the position.

• Interview for the culture and not just theposition: some of the most common pitfalls inthe interview process are leaning towards acandidate who is similar in thoughts, actions orattitudes of the individual conducting the

interview or even of the last employee, and goingwith your gut instinct based on the initialimpression of the candidate. If you are drawn tosomeone in the first ten minutes you will spendthe next fifty minutes of the interview internallyjustifying why this person is right for theposition, and you may miss the clues thatindicate why the person isn’t right for theculture.

• Be consistent in the interviewing process: Askeach candidate the same set of questions, and jotdown their responses to be compared later. Besure that the interview is structured, askquestions related to the position and the culture,and avoid predictable questions that requirelittle thought on the part of the respondent.

• Have a pre-screening process in place and use it.

• Hire an individual only when the right personhas been identified; never hire out ofdesperation.

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Continued from page 5.

Is it the Person or the Position? How to Avoid Costly Hiring Mistakes

For more information on how KW PROPERTY MANAGEMENT & CONSULTING

can assist your association, please contact the Business Development Manager in your area

(page 9), or visit our website at www.kwpropertymanagement.com

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Hospitality – It isn’t Just for Hotels Engaging in Courtesy to Create a Sense of Community

—By William E. Mathisen, LCAM, Business Development Manager

Imagine working a ten hour day after learning yourluggage didn’t take the red eye from LAX with you, buttwo hundred forty other travelers with an affinity forelectronic gadgets emitting bright lights and syntheticsounds did, spending two hours competing to move tenmiles in traffic after finding a huge dent in the side ofyour car courtesy of the guy parked next to you at theairport, and the only thing you are looking forward towhen you get home is a three mile jog to release yourfrustration into the concrete. Walking through the front doors of your condominiumlobby feeling dejected and exhausted, sans your favoriteblue suit, you hear the concierge call your name,“Good evening, Mr. Williams, I thought you might begoing for a run tonight so I have a bottle of cold waterand a towel for you when you get back.”

Suddenly, your day — and your blue suit —seems a littleless important because someone took the time toremember YOU. “This is the essence of hospitality,”indicates KW PROPERTY MANAGEMENT &CONSULTING’S Executive Director Sandy Bennett,“the unsolicited regard and generosity towardsanother.”The concept of hospitality, although archaic in itsorigins, has been making a rather nouveau resurgencein the past few years and in arenas outside of thetraditional lodging industry. “When the housing marketturned four years ago we witnessed a large number ofassociations choose to reduce services to their residentsand communities in order to decrease costs,” laments

Robert White, Managing Partner and Co-Founder ofKW PROPERTY MANAGEMENT & CONSULTING.“Internally we began to have discussions regarding howthese reductions would impact the morale of acommunity, and, as a result, we began to implement ahospitality strategy that is included in our serviceofferings.”The focus of the hospitality program cultivated by KWPROPERTY MANAGEMENT & CONSULTING is suchthat it can be utilized by an association of anydemographic and design. “Most people equatehospitality with luxury,” states Sandy Bennett, “but thetruth is you can have hospitality without luxury, but notluxury without hospitality.”The concept employed by KW PROPERTYMANAGEMENT & CONSULTING is simple: provide

exceptional service to all residents,without hesitancy, to ensure thattheir experience is a positive one.“Our mantra is ‘The answer is yes,now what is the question,’” saidPaul Kaplan, Managing Partnerand Co-Founder of the company.“We believe that each residentdeserves to have their concernaddressed in a professional,pleasant and positive manner. Weall face a barrage of complaints,crises and moments throughoutthe day where we feeloverwhelmed and under-appreciated, and we all lookforward to returning to our

homes. We want the residents of the communities thatwe manage to feel that their home is a welcoming place,a safe and comfortable haven if you will, and we believethat you can increase the level of service to yourresidents without increasing costs.”How do you provide hospitality services to yourresidents with a limited budget, modest staff, and ascintilla of experience? We suggest that you start byobserving the interactions between the residents andthe association staff, and record the followingobservations:

• When are the highest numbers of residentsseeking assistance from the staff? Is there aspecific time or day that seems to be busier?

Continued on page 8

• What are the reoccurring issues that are beingreported? Can these issues be corrected? Arethey issues or misconceptions regardingexpectations?

• How is the communication between theresidents and the staff? Is it free flowing andpositive, or is it evident there is tension andstress?

Once you have recorded your observations it isincumbent upon you, as the Board of Directors foryour association along with your managementcompany, to have an open dialogue on ways toimprove the home owners experience, create a planbased on that dialogue, and effectively roll anassociation specific hospitality program out to yourcommunity. The best implementations of hospitalityprograms are with management companies that areadept at supporting the various requirements of an

association, and have the experience of incorporatinghospitality into each interaction. Practical Next Steps:

• Observe your association (see above).

• Create a hospitality critical to quality (CTQ)list.

• Review your managers recommendedhospitality specific training that aligns to yourCTQs.

• Develop your associations specific hospitalityprogram including an implementation plan.

• Implement your hospitality program andmeasure the results.

• Continue to refine your hospitality program toaddress new CTQs.

Regan Marock received his Bachelor's of ScienceBusiness Administration in Finance from theUniversity of Florida. He is a licensed CAM as well as alicensed Realtor. Regan was actively involved in allaspects of Real Estate such as the acquisition andmanagement of residential assets while attendingUniversity of Florida. In August 2006, Regan joined the KW PROPERTYMANAGEMENT & CONSULTING team. Since Reganjoined the team, he has been intimately involved withthe acquiring of new management contracts and theresidential portfolio growth from 10,000 units toapproximately 40,000 units. Currently, Mr. Marockoversees the operations of the Business Development

department as well as the companies BusinessDevelopment team. Regan has been instrumental indeveloping the companies Business Developmentgrowth platform allowing for a smoother transitioninto new markets. Mr. Marock additionally has substantial involvementwith the maintenance of the relationships with the 3rdparty vendors within the company's network. OnJanuary 1st 2011, he was made an equity partner at theage of twenty six.

Contact Information:Office: (305) 476-9188Email: rmarock@kwpropertymanagement.com

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Continued from page 7.

Hospitality — It Isn’t Just for Hotels

REGAN MAROCKExecutive Director of Business Development

C O M P A N Y B I O

Kelly Ann Vickers is the Business DevelopmentManager for KW PROPERTY MANAGEMENT &CONSULTING’s West Central Florida region whereshe oversees all business development, vendorrelationship management and education coordinationfor the members of a Board of Directors incondominium and homeowners associations fromHillsborough county to Pasco county in the north, andinto Sarasota and Manatee counties.Kelly Ann has been with KW PROPERTYMANAGEMENT & CONSULTING since February of2009, and prior to joining the team she had gainedrecognition at Coldwell Banker the Condo Store forher ability to consistently produce the largest numberof contract closings in a turbulent marketplace byunderstanding the needs of both the Developer andthe buyer, and effectively negotiating agreements thatwould benefit both parties.

Kelly Ann, who holds a Bachelor of Arts in Psychologyfrom Saint Leo University, spent over twelve years inthe business consulting industry where she assistedcompanies in identifying areas of the business thatcould be streamlined to reduce redundancy andunnecessary expenditures. This experience, inaddition to the knowledge she gained while serving asthe Director of Marketing for Sunice, Inc., a real estatedevelopment firm who envisioned and constructed thefive hundred four unit residential community ofWellington Edge, has enabled Kelly Ann to assist boardmembers in making the best management decision fortheir association.

Contact Information:Direct Line: (813) 448-3982iPhone: (727) 412-5195Email: kvickers@kwpropertymanagement.com

Andy Ashwal, who joined KW PROPERTYMANAGEMENT & CONSULTING in 2012, is theExecutive Director for the firm’s New York office wherehe has applied the knowledge and experience garneredin the residential and commercial real estatedevelopment market to facilitate and manage the firm’sexpansion into the New York City metropolitan area.Before joining KW PROPERTY MANAGEMENT &CONSULTING, Andy served as the Director ofOperations at LCI, a boutique constructionmanagement and owner’s representative firm focusedon municipal and residential construction. Andy’sexperience also includes his tenure as a SeniorDeveloper for the international real estatedevelopment company Africa Israel’s US office. Whilewith AFI, Andy was responsible for overseeing theredevelopment of the former New York Timesheadquarters including the construction of a seventy-four lane bowling alley, a museum caliber exhibitionspace and AFI’s corporate offices. Additionally hemanaged the completion of 20 Pine Street, a four

hundred eight unit luxury residential condominium.During this process he was responsible for all aspects ofthe development process including due diligence, pre-construction, construction, lease negotiation, turnover,property management and disposition. Prior to joining AFI, Andy was an assistant constructionmanager at Atrimus Construction where he completedthe excavation, foundation and base superstructure for5th on the Park. Andy is a graduate of GeneralElectric’s prestigious Information ManagementLeadership Program, holds a Bachelor of Sciencedegree from the University of Maryland, and a Master’sin Construction Executive Management from NewYork University. He also serves as a board member ofthe Jewish National Fund’s New York City Board andCo-Chair of Council of Young Jewish Presidents.

Contact Information:Direct Line: (212) 596-7210iPhone: (917) 453-1518Email: aashwal@kwpropertymanagement.com

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ANDY ASHWALExecutive Director

KELLY ANN VICKERS Business Development Manager

C O M P A N Y B I O

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RHONDA VAILBusiness Development Manager

WILLIAM “BILL” MATHISENBusiness Development Manager

Bill Mathisen, who joined KW PROPERTYMANAGEMENT & CONSULTING in July of 2011, isthe Business Development Manager for the SoutheastFlorida Region. Bill, a life-long resident of Miami,graduated from Auburn University with a Bachelor ofSciences degree in Secondary Education with anemphasis on Speech Communication and a minor inPolitical Science. After his graduation in 1977, Billjoined Eastern Airlines and continued to grow with theorganization until 1989. A Licensed Real Estate Agent, Bill joined ThePrudential Florida Realty company in south CoralGables where he specialized in high-end residentialproperties throughout Coral Gables and CoconutGrove. In 1993, Bill moved to Kendar Realty, andcontinued specializing in residential real estate alongwith office building property management and leasingin South Coral Gables. In 2004, Bill became a Licensed

Real Estate Broker forming his own company -WEMCO Realty Services, and found his niche to bewithin the upper eastside Miami neighborhoods alongBiscayne Bay. Since joining KW PROPERTY MANAGEMENT &CONSULTING, Bill has used his expertise andexperience developed within the residential real estatemarket to continue to expand KW PROPERTYMANAGEMENT & CONSULTING’s visibility andreputation as a professional property managementfirm throughout Dade, Broward and Palm Beachcounties.

Contact Information::Direct Line: (786) 363-2458iPhone: (786) 218-5236Email: wmathisen@kwpropertymanagement.com

Rhonda Vail, who joined KW PROPERTYMANAGEMENT & CONSULTING, in March of 2012,is the Business Development Manager for the CentralFlorida region. Rhonda, originally from Jacksonville,Florida, has over twenty years’ experience in theproperty management industry, and has had numerouskey roles in the real estate management industryincluding Quality Control Specialist and RegionalMarketing Director.

Rhonda, who relocated to the Orlando area recently,opened Jungle Management, a company dedicated toproviding property audits, property inspections andtraining services to the apartment industry, where she

successfully designed and implemented a brandingand marketing campaign for a local developer thatincreased the traffic and leasing ratios of thecommunity.

Rhonda is a member of the Orlando Women inBusiness (OWIB) professional organization, theOrlando Breakfast Rotary Club, and the Mid-Floridachapter of the Community Association Institute (CAI).

Contact Information:Direct Line: (407) 705-3236iPhone: (407) 284-9681rvail@kwpropertymanagement.com

C O M P A N Y B I O

Plan Now or Panic Later – Why Community Association Leaders Should Developa Plan for their Condominium, Co-Op or Homeowner’s Association.—By Andy Ashwal, Executive Director

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Today you woke up and decided you needed to get awayfrom it all for a while so before you have time tocontemplate the potential impact you send an email toyour office conveying your need to “escape,” throwclothes and toiletries into a bag, hop in your car, driveto the airport and ask to be put on the first flight withan open seat.

With no particular destination, no place to sleep whenyou arrive wherever it is you are going, and potentiallyno opportunity to return because you have, with a singleemail, cut off your financial flow, you are sitting at theairport confident in your belief that you have just madea great decision, right?

The probability of anyone waking up one morning andsetting out on the course of action described above isvirtually unlikely, however; all too often, associationsembark on a very similar “trip” by failing to have a planthat maps out the future needs of the community.

In order to create a viable business plan for theirassociation, the Board of Directors must understand thecore components that need to be considered: finances,asset and equipment management, regulations that mayimpact the functioning of the association, contingencyplanning for unexpected and unpreventableoccurrences and the presence of an individual who canexecute and manage the plan on their behalf.

It is imperative that it be recognized that all of theconsiderations listed above have a direct impact on eachother, and cannot be separated from the othercomponents. For instance, the association is currentlyexperiencing a deficit in operational funds today, andputs off a planned maintenance program to the chillerto defer the immediate costs. The association may finditself in a situation where the chiller needs to bereplaced five years earlier than previously planned as aresult of the neglect or operational efficiency decreasescausing stress on the system resulting in specific parts tofail. This unexpected occurrence becomes a pressingissue that requires the Board of Directors to implementa special assessment to cover the replacement costs. The

association is left with a cycle of special assessments ordeficits in operational funds.

Obviously the outcome of every decision we make,albeit personal or professional, impacts us and thepeople around us twice — immediately and in thefuture. In order to minimize the immediate and futureimpact of the decisions made on behalf of theassociation, the current Board of Directors should takethe time to devise a business plan that encompassesboth. “When we begin working with an association,”states Regan Marock, Executive Director of BusinessDevelopment for KW PROPERTY MANAGEMENT &CONSULTING, “we start mapping out a plan thatcovers the first thirty days of our relationship, andproject out to what needs to occur over a five yearperiod.”

With this information in hand, garnered from thefinancial statements and reserve study1, the Board ofDirectors, assisted by the management company, cancreate a plan of action to fund the business plan. Anassociation with a plan knows that four years down theroad the common area carpets are going to need to bereplaced, the walls painted and the motor on thecooling tower fan will have reached its useful life. Thatsame association has also planned for the expense byeither (1) increasing the association fees, (2) fully fundthe reserves in anticipation of the identified expenses(requires a membership vote)2, or (3) planning toinstitute a special one-time assessment to fund the costsof the expense.

“It is imperative,” indicates Regan Marock, “that theBoard of Directors has a strong team around them whocan help them create the business plan. It requiresprojecting the financial needs of the community,understanding the useful life and expected life of thephysical components, and creating an operationalroutine that will allow for flexibility if there is a code orregulatory requirement, even a natural disaster, thatmay expedite the projected time frame.”

1Eight states have mandated reserve requirements for condominium associations includingFlorida, California, Delaware, Hawaii, Nevada, Ohio, Virginia and Washington

2 Florida Statute 718.112(2)(f)

A Professional and Independent Approach to Management

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Corporate Headquarters

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