Cohousing-L Mailing List: Re: Some questions

[Shari Hirst (sharihirst13]

Thank you for your thorough response.

Shari Hirst

Sent from my iPhone

> On Jan 16, 2021, at 5:27 AM, Peter Orbeton <peter.orbeton [at] gmail.com> 
> wrote:
> 
> Nubanusit Neighborhood & Farm (NN&F) relies to a great extent on in-house
> expertise with professional consultations when appropriate.
> 
> As for seeking advice from a management company, there are some
> fundamentals to consider, and is there expertise in-house now or the
> possibility of one or more residents becoming familiar with it/them.
> 
> New Mexico condominium law applies to Sand River. This means state condo
> law prevails. Do your governing documents and in particular, bylaws, follow
> current law? Even if your governing documents conflict in some way with NM
> condo law or are out of date, you are bound to follow the law. Do you
> periodically review your Bylaws and revise them based on changes to state
> law? One need not consult an attorney necessarily; rather, Search - New
> Mexico Legislature nmlegis.gov <https://nmlegis.gov/Search> using the
> keyword 'condominium'. NN&F does engage an attorney when needed. One aspect
> of attorney consultations is being comfortable with an attorney who not
> only knows condo law, but also understands the underlying tenets of
> co-housing, as I imagine your agreements actualize them. Good practice is
> to periodically bring all governing documents, agreements, etc. up-to-date
> to be consistent with the law.
> 
> For financial reports and taxes, what are your existing systems, and does
> NM condo law require an audit? NN&F is located in NH, which does not
> require it, and is confident our systems are transparent in the following
> ways:
> 
> Although we don’t have a formal internal audit, we do essentially have in
> place a system comprising a compilation; we follow basic accounting
> principles, and provide detailed reports showing the balance sheet, income
> & expense, and a transaction ledger.
> 
> All disbursements above $5,000 require two signatures, all operating
> checking account disbursements require either a vendor invoice or an
> expense report approved by the team lead accompanied by a receipt, and all
> disbursements are electronically reviewed and approved by the Treasurer.
> 
> All income and expense transactions, including invoices and expense
> reports, are recorded using Xero, a cloud-based accounting software
> package. All banking accounts are accessible online (restricted access),
> and all transactions are downloaded to the Xero software (also restricted
> access).
> 
> The Treasurer handles all banking deposits and withdrawals, and our Bylaws
> do not permit the Bookkeeper (in-house) to conduct banking. The bookkeeper
> provides reports, which are posted online and accessible to all members. The
> Board controls account signatories as the officers (Chair, Treasurer &
> Clerk) and Board members provide the second signature when needed, and can
> sign checks and make withdrawals in the Treasurer’s absence. Annual tax
> filings are prepared by a CPA, whom we expect to be current with respect to
> IRS regulations. All filed tax forms are also viewable online.
> 
> The NN&F Agreement & Guideline Handbook contains a number of
> financial-related documents covering topics such as financial operations,
> account funding, operating reserves, disbursements, and transfers between
> team line items. Our annual budget, because we are self-managed and are a
> small-sized association (30 units), is relatively low, and transparency is
> relatively high.
> 
> Legal issues also extend to casualty and liability insurance matters.
> Simply having insurance policies in place, required by the NH condo law, is
> insufficient in my opinion. For example, signage for unmonitored play
> structures or to provide notice for snow/ice dangers - slip & fall, or
> community-owned PV panels. Also, would you expect a management company to
> be knowledgeable about premises liability and attractive nuisances? While
> consulting your agent or provider may be an option, there are some aspects
> that require MBWA - management by walking around. Whom better to do it than
> a community member?
> 
> Then add in your applicable building and fire codes, knowledge of
> delineation between common area and limited common area, what a unit owner
> may or may not do to their unit, etc. and it becomes both broad and deep
> for a management company. Expensive too most likely as economies of scale
> are not in your favor.
> 
> Tasks such as legal issues and taxes can be taken to a professional for, in
> all likelihood, much less expense.
> 
> Thanks, Peter Orbeton
> Former NN&F BoD Chair, BoD Member, and Treasurer
> Now still walking around but only wearing one hat.
> 
>> On Sat, Jan 9, 2021 at 8:14 PM Shari Hirst <sharihirst13 [at] gmail.com> 
>> wrote:
>> 
>> Dear All-
>> 
>> Many people at Sand River are concerned regarding the “risks” we have with
>> financial reports, taxes and legal issues.  Please advise how your
>> community handles their risks - we are considering a Management company who
>> is able to advise how changes in the tax law and legal considerations
>> affect a co-housing community.  Are you fortunate to have in house
>> expertise?
>> 
>> I would appreciate hearing your response asap.
>> 
>> Thank you for your time
>> Shari Hirst
>> sharihirst13 [at] gmail.com <mailto:sharihirst13 [at] gmail.com>
>> Sand River Co-housing
>> Santa Fe, NM
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