COMMUNITY ASSOCIATION CLIPPING CAC

www.communi tyassociat ionc l ipping .com

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“A HELPFUL SOURCE OF INFORMATION AND

SERVICES CREATED EXCLUSIVELY FOR DEVELOPERS

AND DIRECTORS OF COMMUNITY ASSOCIATIONS”

Issue 3

Jan. / Feb. 2011

PALM BEACH AND BROWARD COUNTIES EDITION

CCCOMMUNITYOMMUNITYOMMUNITY AAASSOCIATIONSSOCIATIONSSOCIATION CCCLIPPINGLIPPINGLIPPING

Also On This Edi t ion:A lso On This Edi t ion:A lso On This Edi t ion:

Water Damage:Water Damage:Water Damage: ‖BAD THINGS HAPPEN ‖BAD THINGS HAPPEN ‖BAD THINGS HAPPEN

FROM WATER THAT WILL RUIN YOUR DAY‖ FROM WATER THAT WILL RUIN YOUR DAY‖ FROM WATER THAT WILL RUIN YOUR DAY‖

Background Screening: Background Screening: Background Screening: ―WHAT YOU ―WHAT YOU ―WHAT YOU

DON’T KNOW CAN HURT YOU‖DON’T KNOW CAN HURT YOU‖DON’T KNOW CAN HURT YOU‖

. . .W. . .W. . .WELCOMEELCOMEELCOME 2011!2011!2011!

2011 R2011 R EALEAL EE STATESTATE FF ORECASTORECAST

GG OODOOD BB YEYE 20102010 . . .. . .


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“A HELPFUL SOURCE OF INFORMATION AND

SERVICES CREATED EXCLUSIVELY FOR DEVELOPERS

AND DIRECTORS OF COMMUNITY ASSOCIATIONS”

Issue 3

2 0 1 1 R2 0 1 1 R2 0 1 1 R E A LE A LE A L EEE S T A T ES T A T ES T A T E FFF O R E C A S TO R E C A S TO R E C A S T : : : I T SI T SI T S E F F E C T SE F F E C T SE F F E C T S I NI NI N T H ET H ET H E C O M M U N I T YC O M M U N I T YC O M M U N I T Y A S S O C I A T I O NA S S O C I A T I O NA S S O C I A T I O N LLL I V I N GI V I N GI V I N G . . . BBB YYY OOO R L A N D OR L A N D OR L A N D O PPP E R E I R AE R E I R AE R E I R A , L C A M , C M C A , A M S, L C A M , C M C A , A M S, L C A M , C M C A , A M S

Jan. / Feb. 2011

COMMUNITY ASSOCIATION CLIPPING PALM BEACH AND BROWARD COUNTIES EDITION

Services & Products pg

Access Systems 14

Artificial Grass 14

Background Screening 4

Banking 4

Funding 10

Furniture Restoration 7

General Contractor 2

Insurance Services 13

Landscaping 6 , 8

Lake Maintenance 10

Legal Services 6

Odor Control 8

Pressure Cleaning 13

Property Management 9 , 16

Security Services 11 , 15

Water Damage Restora-tion

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WATER DAMAGE: BAD THINGS HAPPEN FROM WATER THAT WILL RUIN WATER DAMAGE: BAD THINGS HAPPEN FROM WATER THAT WILL RUIN WATER DAMAGE: BAD THINGS HAPPEN FROM WATER THAT WILL RUIN YOUR DAY YOUR DAY YOUR DAY By Paul T. Sabatello, CIEC, CMRS

The exterior surfaces of your

home or building- the windows,

doors, wall assemblies, skylights

and roof are technically the

building envelope, the ―skin‖ of

your home or building, and is the most important protection as it relates to water and air

intrusion (leaks). The building envelope is designed to separate the indoor environment

from the exterior environment, and keep the moisture and unconditioned air where it be-

longs- outside.

The air conditioning system of your home is not designed to manage the additional mois-

ture load and unconditioned air that may be leaking into the climate controlled environ-

ment of your home. This additional load placed on the air conditioning system degrades

the system, … (continues on page 12).

Among the specialists the current consensus

is that home-buying activity will rise slightly in

2011. Home prices in most areas could de-

cline another 6 – 9 percent in 2011. Mort-

gage rates will gradually increase between

now and the end of next year, reaching or

exceeding 5 percent. Unemployment will con-

tinue to be the biggest drag on the housing

market. Foreclosure moratoriums or ―freezes‖

will also delay housing recovery.

With an unemployment rate hovering around

10%, it can be argued the foreclosure situa-

tion will not get better until the labor market

picks up. As the number of foreclosures in-

crease, the value of real estate decrease. As

more and more people lose their homes,

rents increase to a point of 125% of what it

would cost to hold the mortgage. New demo-

graphic trends indicate consumers of the fu-

ture would rather pay high rent instead of

holding a mortgage. … (continues on page

7). Articles pg

2011 Real Estate Forecast 3

Water Damage 3

Background Screening 5


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BACKGROUND SCREENKING: WHAT YOU DON’T KNOW CAN HURT YOU” BACKGROUND SCREENKING: WHAT YOU DON’T KNOW CAN HURT YOU” BACKGROUND SCREENKING: WHAT YOU DON’T KNOW CAN HURT YOU”

By Andrew Scott and Robert Buchholz By Andrew Scott and Robert Buchholz By Andrew Scott and Robert Buchholz

The value of proper and thorough background screenings has never been more important for employers and landlords than at

any other time in our history. As a society, we have become an extremely litigious nation and any opportunity to file a legal

civil action is now the norm rather than the exception. Conducting background screenings on prospective tenants or employ-

ees demonstrates that the owner of the property or business is taking reasonable measures to mitigate future problems. Fail-

ure to conduct the most basic of background screening places any organization at risk for a law suit. Particularly if infor-

mation about a tenant or employee’s past criminal history was not discovered because a background check was not done.

The immortal words of President Ronald Regan ―Trust But Verify‖ should be the mantra of every employer hiring an individual

or any landlord or leasing agent renting out an apartment or home. Accepting an applicant’ word on face value is commenda-

ble, however, the prudent employer, landlord or leasing agent understands that verification of the information submitted on

the application of an applicant is vital for maintaining a safe environment and mitigates

potential problems in the future.

For landlords and leasing agents the standard background search of an applicant con-

sists of a national criminal history data- base search, tenant eviction history, and a credit

report. Each report provides an informa- tive snapshot of the prospective tenant. In order

for a background check to be conducted, the applicant must authorize, by signature, that a

background check be performed. This requirement is mandated by the federal Fair

Credit Reporting Act (FCRA) and which is the guiding legislation to which Consumer Report-

ing Agencies (the company conducting the background screening) must adhere. The FCRA

also details requirements with which the employer or leasing agent must comply as well.

It is important to note that the Consumer Reporting Agency (CRA) when reporting information does not make a leasing or

hiring decision. Hiring, leasing and renting decisions are indeed the responsibility of the respective company’s policies and it

is incumbent upon the property management or agent to make that decision based on those policies. However, the Consum-

er Reporting Agency should be able to help to interpret the reported record and clarify any questions one would have about

what was reported.

Consider the background screening provider as a partner who has your best interests in mind. The company should be cus-

tomer friendly and focused on providing you with the most accurate report on your applicant. The background screening com-

pany you use should have trained research staff who are knowledgeable, friendly, and readily available. Too many back-

ground screening providers have staff members who are inexperienced, cannot interpret a reported record, or have no inclina-

tion to assist you with your inquiries.

Background screenings should be part of an comprehensive vetting process for either employment or leasing. If you choose

not to conduct background checks on prospective tenants or employees what you don’t know can, eventually, hurt you.

Andrew Scott and Robert Buchholz are retired law enforcement executives and own Scott-Roberts and Associates, LLC, a

national and international background screening company. Inquiries can be directed to their attention at 561-253-6380 or

[email protected].


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… Here are some of the predictions from various specialists:

On December 8, 2010, Oliver Chang and other financial analysts from Morgan Stanley released a report

with their thoughts on the housing market. According to the report, the analysts expect home prices in the U.S. to fall as

much as 11 percent by 2012. The reasons cited? Supply and demand, of course. ―We see the

trough occurring in 2012 instead of our previous call of 2011,‖ said Chang.

Rick Sharga, Senior VP of the foreclosure-tracking company RealtyTrac, sees a rise in the

number of pre-foreclosure homes over the next few months. He predicts that many of these

homeowners will simply walk away from their homes. ―Even with today’s low interest rates,‖

Sharga said, ―you’re looking at an average of $1,000 or more in mortgage payments on loans

that are overvalued by about 30 percent. That is where you will see a high level of walkaways.‖

Freddie Mac appeared on our housing market predict-o-meter back in October. Here’s an-

other set of predictions, this time from their chief economist Frank Nothaft. This commentary

comes from the Freddie Mac blog, where Mr. Nothaft recently shared his thoughts on the type of

housing market we’ll see in 2011. He feels that fixed mortgage rates will remain below 5 per-

cent next year, while the 5/1 ARM will remain below 4 percent. He also forecasts a rise in pur-

chase loans and a decline in refis.

In late November, Fannie Mae released its housing forecast for that month. The report also

included a forecast for home sales through 2011 and beyond. When you compare their 2011 end-of-year predictions

to actual sales numbers from the beginning of 2010, you basically have a flat line. This suggests another sluggish year

for the housing market.

Economic analysts from Standard and Poor’s have made the prediction that home prices will drop another 7 – 10 per-

cent in 2011. Here again, the usual suspects are cited as being the cause for the potential declines — unemployment

and inventory. S&P credit analyst Erkan Erturk said that the price declines at least seem to be slowing, when compared

to the last two or three years. . … (continues on page 15).

2 0 1 1 R2 0 1 1 R2 0 1 1 R E A LE A LE A L EEE S T A T ES T A T ES T A T E FFF O R E C A S TO R E C A S TO R E C A S T : : : I T SI T SI T S E F F E C T SE F F E C T SE F F E C T S I NI NI N T H ET H ET H E C O M M U N I T YC O M M U N I T YC O M M U N I T Y A S S O C I A T I O NA S S O C I A T I O NA S S O C I A T I O N LLL I V I N GI V I N GI V I N G ... BBB YYY OOO R L A N D OR L A N D OR L A N D O PPP E R E I R AE R E I R AE R E I R A , , , L C A ML C A ML C A M , , , C M C AC M C AC M C A , , , A M SA M SA M S ((( C O N T I N U A T I O NC O N T I N U A T I O NC O N T I N U A T I O N F R O MF R O MF R O M P A G EP A G EP A G E 333 )))

http://www.morganstanley.com

http://www.realtytrac.com

http://www.freddiemac.com/news/blog/frank_nothaft/20101206_next_years_housing_and_mortgage_market.html?attr=FP120610

http://www.fanniemae.com

http://www.homebuyinginstitute.com/news/fannie-mae-forecast-103/

http://www.standardandpoors.com

http://www.homebuyinginstitute.com/news/home-value-killers-104/


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BAD THINGS HAPPEN FROM WATER THAT WILL RUIN YOUR DAY (continuation from page 3) By Paul T. Sabatello, CIEC, CMRS

... shortens the life expectancy of the equipment, and raises energy costs by virtue of the increased force of work imposed

on the equipment to rid the indoor air of the added moisture.

Leaks in the building envelope may have developed over

years, or may have been the result of attempted repairs that

were not completed to proper protocol, leaving an improper

or unrepaired leak to unknowingly progress. Water is de-

structive to the interior surfaces of a building’s walls and

roof assemblies and can create adverse effects on the struc-

ture.

Water is the single most destructive factor to the structural

soundness and performance of the building envelope.

Moisture in the building envelope will gain access to the

interior surfaces of the wall cavities through penetrations

and openings which will allow both liquid water and water

vapor to move via mechanisms of diffusion, capillary suc-

tion, and pressure gradient differences to create enormous

adverse effects such as mold and bacterial growth on the

building materials and degradation of the building structure due to microbial growth.

The intrusion of outdoor air entering the wall cavities and living areas of your home will also carry moisture into these spaces

which are not designed to be exposed to moisture. This air leakage will produce negative effects of increased energy con-

sumption and will raise the costs of your monthly energy bill.

The repairs associated with breaches in the building envelope and persistent and stubborn leaks, are often not the easiest

or the most obvious. It takes a trained professional to review the circumstances and study the effects of the leak in order to

first find the real cause and source of the leak, and then to effectuate a professional repair. The simple application of

caulking most often is not the cure, and will eventually fail, causing the leak to reappear, perhaps in an unexpected area.

Don’t ignore stubborn or persistent leaks. They will not resolve themselves, and the effects of prolonged exposure to mois-

ture intrusion will have dramatic and adverse effects on the building structure and indoor air quality of your home or build-

ing.

At SabCo, Inc., we are licensed and certified in multiple disciplines to assure our cli-

ents of the most up-to-date experience, knowledge, and technology in our investiga-

tions, assessments, protocols and remediation. Our use of non-invasive infrared ther-

mography as an initial investigative tool allows us to interpret with our clients prelimi-

nary findings and possible conditions which might offer further information in the

analysis which shorten the learning curve of the problem while seeking the source.

The source must be determined before any fix can be established.

The uniqueness of our company and the extensive menu of our services offered is

that we not only are licensed and certified to perform the assessments and establish

corrective protocols, but as a Florida licensed general contractor, we can initiate the

protocols, making our performance guarantee one of ―the buck stops here‖.

As a preferred insurance company provider, our procedures, reports, and documenta-

tion are thorough and organized, resulting in frequent comments of appreciation,

praise, and rapid response.

Paul Sabatello is VP for SabCo, Inc., and Sabatello Companies, is a Certified Indoor Environmental Consultant , a Florida

State Licensed Mold Remediator and State Licensed Mold Assessor; Certified Aging-in-Place Specialist; Certified Green Pro-

fessional; Certified EPA Renovator; and Certified Microbial Remediation Supervisor.

www.sabco.us • www.sabatellocompanies.com

Remediation technician in personal

protective equipment

LEFT: Infrared image of wet floor and drywall wall. The dark green

indicates wet areas.

RIGHT: Digital image of the same area, taken simultaneously

http://www.sabco.us/

http://www.sabatellocompanies.com/


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On October 26, 2010, the Mortgage Bankers Association released its mortgage finance forecast for

2011. If their predictions are accurate, mortgage rates will slowly rise between now and the end of

2011. For example, consider the benchmark 30-year fixed-rate mortgage. The current average rate in

this category (as of October 21, 2010) is 4.21 percent. The MBA is predicting that these rates will gradu-

ally rise through 2011, exceeding 5 percent by the end of that year

On October 19, 2010, John Mauldin wrote an interesting post to his blog on Forbes.com. Mr. Mauldin revised an earli-

er prediction he made about nationwide housing bottoms — and not for the better. ―I wrote three years ago that it

could be well into 2011 before we get to a bottom,‖ he said. ―That may have been optimistic.‖ He agrees with Gary

Shilling that home prices might fall another 20%, before we find a true bottom.

―THE MORTGAGE CRISIS: FORECLOSURE RATES WILL CONTINUE TO AFFECT COMMUNITY ASSOCIATIONS‖

The recent slowdown in foreclosure cases, announced months ago by the giants Bank of Ameri-

ca, JPMorgan, Chase and other lenders , could not have been more damaging to community

associations, nationwide. For the past years, board members had struggled to fight back to,

with the support and advice from specialized lawyers , find legal alternatives, bring relief and

prevent their communities from being strangled by the foreclosure crisis. Just now, when finan-

cial stabilization was beginning to appear in the horizon, these big players determined they

were temporarily suspending foreclosure sales to review the accuracy of the documentation

being submitted to the courts.

During these years, many community associations have been suffering as a result of the strate-

gy utilized by most lenders, to delay retaking title of distressed homes, to avoid paying condo

dues accrued during the foreclosure process.

This so called temporary moratorium will certainly bring even more uncertainty to many commu-

nity associations already struggling with the slow paced foreclosure landscape. To make matters even worse, lawmakers

are increasingly pushing for a nationwide moratorium on foreclosure sales.

In light of all of these predictions indicating that things may get worse before getting better, it is imperative for the decision

makers of community associations to continue adopting a conservative approach when developing their budgets. It is also

equally important to seek for qualified professional advice when considering legal and administrative alternatives in order

to generate cost effective solutions to face this continuing challenging economic environment.

Orlando Pereira , LCAM, CMCA, AMS is the Managing Director of LG Asset Management & Consulting, Corp. in Boca

Raton Florida. [email protected]

2 0 1 1 R2 0 1 1 R2 0 1 1 R E A LE A LE A L EEE S T A T ES T A T ES T A T E FFF O R E C A S TO R E C A S TO R E C A S T : : : I T SI T SI T S E F F E C T SE F F E C T SE F F E C T S I NI NI N T H ET H ET H E C O M M U N I T YC O M M U N I T YC O M M U N I T Y A S S O C I A T I O NA S S O C I A T I O NA S S O C I A T I O N LLL I V I N GI V I N GI V I N G ... ((( C O N T I N U A T I O NC O N T I N U A T I O NC O N T I N U A T I O N F R O MF R O MF R O M P A G EP A G EP A G E 777 ))) BBB YYY OOO R L A N D OR L A N D OR L A N D O PPP E R E I R AE R E I R AE R E I R A

http://www.mbaa.org/NewsandMedia/PressCenter/74457.htm

http://blogs.forbes.com/investor/2010/10/19/where-is-the-housing-recovery/

http://www.agaryshilling.com/gary.html

http://www.agaryshilling.com/gary.html


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