Summary
of Finance Committee Meeting of 4 April 2006
Present:
Finance Committee: Phyllis
Benaman, John Frisch, Sanya Ham, Don Horan, Jim Pierce
Board of Directors (BoD): Mal
Malo
Subsequent Member Fee (Resale Transfer Fee):
Pat McCord, local Realtor and Falls Run resident, was invited to explain
the process of reselling a Falls Run residence from the perspective of making
sure the Falls Run Community Association (FRCA) collects the Subsequent Member
Fee, 1/3 of 1% of the selling price, associated with most sales.
This fee is described in the Covenants, Conditions, and Restrictions (C,
C, & Rs) for Falls Run, Section 8.6 of the original version and Section 7.4
of the version of 13 February 2006. Pat
gave a very clear and thorough description of the process, as follows.
Almost all sales involve a selling real estate agent who will list the
property in the Real Estate Multiple Listing Service (MRIS).
A knowledgeable agent will also notify CondoCerts at the beginning of the
sales process. CondoCerts is a
central data center for communities with homeowners associations, such as Falls
Run. Since Falls Run is registered
with CondoCerts, Koger Management will then be notified by CondoCerts that a
resale is in progress in Falls Run. Koger
Management will then inspect the property to make sure that it is in compliance
with the C, C, & Rs, prepare required documentation for the resale, and
notify CondoCerts that all is OK. CondoCerts
will then send the resale HOA documents to either the owner/seller or Realtor,
whoever ordered the documents. Prior to settlement, Koger Management will be
contacted by the settlement attorney or the settlement company to verify that
everything is in compliance. Koger
Management will inform the settlement company/settlement attorney about the
Subsequent Member Fee and any other fees to be collected at settlement.
The Subsequent Member Fee and other fees are then collected at settlement
and sent to Koger Management by the settlement company for deposit into the FRCA
account. The great majority of home
sales will use either a local real estate agent or a local settlement company,
which virtually ensures that FRCA will collect the fee.
Owners selling houses without using a real estate agent will be
responsible for ordering the HOA resale package which will then alert Koger
Management and start the resale process to insure that all fees, including the
Subsequent Member Fee, are collected at settlement.
Most local settlement companies/attorneys are aware of the fee for Falls
Run resales. Therefore, it is highly
unlikely that the Subsequent Member Fee would not be collected.
As a verification that FRCA has collected the Subsequent Member Fee where
it is due, Pat provided a list of all home sales in Falls Run during 2005 from
the Real Estate Multiple Listing Service (which is public record).
This list will be sent to Koger Management for comparison with the
Subsequent Member Fees collected for 2005 sales.
Pat will provide this list of all sales of Falls Run homes on a quarterly
basis in the future. As a final
mechanism to ensure that a sale does not escape payment of the Subsequent Member
Fee, a change in the name of the person to be billed for the monthly assessment
will reveal that a sale may have occurred and provide an opportunity to
investigate further.
Also discussed was the contractual provision that the
Subsequent Member Fee had to be shared equally with Silver Retirement
Communities II, LLC if Del Webb did not completely exercise its option to buy a
certain parcel of land, as described in Section 8.6 of the original C, C, &
Rs. Pat expressed her belief that it
would be prudent to obtain a document from Del Webb verifying that they had
completely exercised their option and that the contractual requirement to share
the Subsequent Members Fee with Silver was null and void.
Monitor FRCA
(Koger) Account:
A spreadsheet comparing a small number of available invoices with the
record of checks written was discussed. Since
invoices corresponding to the great majority of checks were not available, Koger
Management will be asked to routinely provide a copy of every 2006 invoice to
the Finance Committee for a more accurate comparison between invoices and
checks.
The Balance Sheet provided each month by Koger
Management in the package of monthly financial reports was discussed.
Several changes were suggested for the purpose of clarifying and
improving the information presented in the Balance Sheet.
Since we would like to make all desired changes to the Balance Sheet at
once, it was decided to delay a request to modify the Balance Sheet until the
committee can give it more thought.