Designed exclusively for various condominium and homeowner associations, our professional transition study examines physical and fiscal assets prior to the full control transfer and ownership of the association
The last 20 years of real estate development has proven that many of the problem issues faced by property owner associations could have been prevented during the construction phase. We would not propose that developers are out to take advantage of the new homeowner/association; simply put, mistakes do happen even with the best of developers. And the mistakes should be addressed while the developer is still present with a financial interest in the site. Then, it is an outstanding developer that addresses the issues before the burden is carried by the homeowner/association.
What is included in a Transition Study?
There are three major components of the process;
1. Physical analysis of every built component
2. Fiscal analysis of all funds due the new association
3. Polling of all unit owners to examine prevailing conditions within undivided interests
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Physical Analysis
Inspection for problematic conditions is conducted, as well as appropriate application of components. While early signs of component failure may be seen, the typical issues that arise as a result of the transition study are improper or poor choices in products, or the improper installation of products. An example of this could be shrubs placed too close to buildings, building settlement, roofing products shifting or moving, etc.
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Fiscal Analysis
There are a myriad of fiscal audits that should be conducted. During the development stage, developers have historically estimated operating expenses and reserve contributions unrealisticly low. In some states, developers are required to contribute reserve funds after a certain period of time. The construction of realistic operating and capital budgets is completed, as is the audit of historical withdrawals from association funds that may have inadvertently been applied to development costs. A punch list of product warranties is developed for the association to receive, as well as building plans and blueprints.
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Polling Unit Owners
Within interior spaces of divided interests, underlying problems may be prevailing. Unit owners receive question forms as to specific interior conditions, and how common areas, or undivided interests, impact their own property value and enjoyment of use.
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What the Transition Study is not.....
The main function is not a witch hunt. Our experiences have shown most developers are honest, proficient professionals. Throughout the million and one details in the development process, errors can occur, from poor sub-contractor performance to product availability and specification changes. Although any responsible developer would gladly forego the problems, they should not be borne by the association of homeowners.
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What is the major flaw of the Transition Study process?
The most glaring fault of the process is that one is rarely conducted. There are several factors that create the fault;
1. The new homeowner is usually preoccupied with moving into the new home and addressing issues within the divided interest areas. The common, undivided interest areas are mistakenly thought to be taken care of by someone else.
2. Most association trustees/directors are not aware of potential major flaws in the development. Their time as volunteers is absorbed by setting up and learning to operate a new business entity as an association. Most are not aware that this type of analysis is even available.
3. The window of time is limited when a new board has controlling votes to commission a Transition Study, and, while the developer is still present with a financial interest in the site.
Who will benefit from the completed Transition Study?
1. The individual homeowner will benefit from increased value. Less issues and problems result in greater property image, reputation, and curb appeal.
2. Trustees/directors of the association will have an immediate grasp of the issues presented, a higher compliance of their due diligence, and less problems in the future that will require their attention and direction of funds.
3. The developer will have a formal exit plan resulting in a higher level of customer satisfaction, less legal issues, and reinforced market reputation.
4. Managing agents and site managers will have defined issues and a shorter learning curve at the new site.
5. Brokers and sales agents will have improved confidence in the site, and greater client satisfaction resulting in future repeat business.
6. The association will have less burden of capital expenses both at its inception and in future years, realistic operating expense and reserve funding budgets, and a greater chance of achieving viability and sufficiency.
EVERYONE Benefits from Our Transition Study!
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We would be glad to supply you with a comprehensive range of references, information, and pricing specifically detailed for your property .
If you are looking for a professional property management company, please contact us for your FREE, customized proposal.
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