Building Management, Your Home or Office & Nest?

I'm a bit of a nerd when it comes to technology working in your home, office, or common areas of an association I manage. That said, when I read about nest's thermostat and smoke detector I was immediately engaged. I'm not sure how it all came together, and I decided to look into the product, but I'm pretty sure I saw a glimpse here and there on social media, or a news article and I kept thinking, "what is nest." I let the thought leave my mind quickly, and continued mindlessly scrolling the headlines of my news feeds. Finally, I saw a news article that nest was purchased by google, and for some reason I think google has a big idea of taking over every aspect of how technology engages with us, "the humans." I can't help but think, "why is google buying nest, and what is their master plan to take over the in-home tech space, and how will it make me ever so happy in the process?" So, I started in on the google machine and began my research. First thing I pull up is Tony Fadell and bang, he's "one of the fathers of the iPod." Uh oh, my thirst for research must continue. It must.

I land on the website and feel refreshed and overjoyed by it's simplicity. Just to side step a bit, I'm a little neurotic when it comes to alleviating clutter and streamlining everything in my life. It sounds odd but I like the idea of the fire department coming to my house, telling me I have an hour to pack everything, and knowing I can accomplish the task in less time than they provide. Interestingly enough, nest's smoke alarm, my neurosis of eliminating clutter, teamed with the hypothetical of leaving my house in an emergency are, without a doubt, a match made in heaven that was birthed by cupid himself. I can imagine being in a room, receiving a text from nest about a potential fire, calling the fire department and then taking all my valuables before any damage to the rest of the house occurs. I win. The only problem I foresee is explaining to my insurance company that every valuable in the house was successful taken away, but the entire structure was burned down ...

How the nest smoke alarm works for me:
1) It tells me where the problem is in the house/building. Not by beeping but by saying, "there is smoke in the living room," or by sending a message to my tablet or smart phone. Brilliant!

2) It tells me when the batteries are running low via smartphone or tablet. Awesome, no beeping.

3) If the alarm goes off and it's not an emergency, then I can simply wave my hand in front of it and it will silence. No piercing noise, no annoyance, just a calm voice alerting you of a problem. I'm overjoyed.

Alright, that's perfect for at home, but now my mind wonders to my place of business. My office is in an older building, no fire spinklers, no centrally monitored smoke alarms and as far as I can tell, no way to dispatch the fire department. What ever do I do? Install nest in my office, get notifications of any potential fires on my phone, and save my entire office complex. I'm a hero, everybody loves me and, yes, I win property manager of the year even though I don't manage my office complex.

Okay, I'm not sold on nest yet (totally lying to myself), what's up with the nest thermostat? Well, it's the sexiest thermostat I've ever seen and I've seen a lot. And you can definitely see and feel the father of the iPod resemblance here. I'll keep this portion short and hopefully by now you'll look into this for yourself.

How the nest thermostat works for me ... And maybe you.
1) It is always learning. Always. Every time you adjust the temperature it takes note.

2) You can adjust the temperature from your smartphone or tablet. Ever forget to turn off the heater and you leave for awhile?

3) You save on energy costs because you can monitor, and you have the nest looking out for you, and monitoring your habits.


In conclusion, I love nest and really want to know how it can go to work for me in a commercial management atmosphere. I plan on pitching the idea to some clients, but a couple things are coming to mind as possible concerns.

1) Theft.
2) Upfront cost and realized savings.
3) My clients may become suspicious of google taking over the in-home tech space, and wonder how it will make them ever so happy in the process.

Association Tax Return Filing Requirement

Association Tax Returns

"The hardest thing in the world to understand is the income tax." 

~ Albert Einstein

I wanted to touch on this topic since tax season is still fresh in everyone's mind. I'm sure everyone has filed their personal taxes, and paid the second installment of property taxes, but has the tax return for your association been filed? If you don't know the answer to that question then I recommend taking a second to check the status of your association's corporation with the State of California. The process is easy and only takes a minute:

1) Go to: http://kepler.sos.ca.gov/cbs.aspx

2) Under "search type" check the box next to "corporation name"

3) Fill in your association's name under "entity name or number"

4) Hit the search button

After your search results are displayed on the screen, you will want to pay attention to the "status" of your corporation. If your "status" is "active" then you're in good shape! Should the "status" read "suspended" or "inactive" then you're, well, in bad shape (at least with the State). There are a few different reasons for a suspended corporation, but many times it's an oversight with filing a tax return ... Or multiple years of tax returns!

CAUTIONS TO CONSIDER IF YOUR CORPORATION IS SUSPENDED/INACTIVE: 

Director & Officer (D&O) Insurance: If your association's corporation is suspended, and you're paying for D&O coverage, are those premium dollars being wasted? You should ask your insurance broker that question, but most likely you're wasting money because there is no corporation, much less a Board of Directors.

Due Diligence: If you're looking at buying into an association check and make sure the corporation is active. If the corporation is suspended there could be years of back taxes and penalties owed to the Franchise Tax Board and IRS. Those penalties could be a tough pill to swallow for a new buyer. 

Corporate Protection: The whole purpose of setting up an association's corporation is to protect the membership. The corporation limits liability and affords protection to all members of an association. If your corporation is suspended, then your opening yourself up to unnecessary liability. 

We've worked through many "broken associations" on the front end of taking over an association. It's a lot of work but even 40 years of back taxes can be resolved. We're here to help and have a team of professionals ready to assist you.

Community Association Managment in Ontario, California

Case Study: LED Technology Shedding Light on Energy & Maintenance Savings

Properties that are looking to save money on their energy bill need to look no further.  Retrofitting your property with LED fixtures can save money on maintenance, and 60 to 80 percent on energy consumption. The types of lights typically found on properties are: Incandescent, Halogen, Fluorescent or HID (High Intensity Discharge) lamps, such as Low Pressure Sodium, Mercury Vapor or Metal Halide. A little bit of information on each bulb is provided below, and following that information this case study will explore the benefits of LED lighting.

Keep in mind with the information provided below that the average building’s parking lot light is on 3,650 hours per year.

Incandescent Lights

A 125-year-old technology originally created by Edison, and most typically found in household lights. The lamp does not need a ballast or transformer to operate, and light is created by a filament that grows when heated by an electrical current.

Burn Hours:  1,000 - 2,500 (approximately 1 year)

Approximate Bulb Replacement Cost: $1- $6

Halogen Lights (Member of Incandescent Family)

Halogen lamps are a step-up from incandescent bulbs, and are typically providing up-lights for signs, trees, canopy fixtures, and bollards. The lamp has a tungsten filament and a small amount of halogen gas.  The lamp does not have a ballast and may have EPA implemented disposal requirements.

Burn Hours: 3,000 - 6000 (approximately 1 year)

Approximate Bulb Replacement Cost: $3 - $12

Flourescent Lights (Canopy Fixtures): Compact & Linear

Fluorescent lights are typically found in canopy fixtures, and are connected to internal or external ballasts. The fluorescent tube is a gas-discharge lamp that uses electricity to react with mercury. This lamp is a good replacement for incandescent lamps, but there are EPA implemented disposal requirements.

Burn Hours: 5,000 – 30,000

Approximate Bulb Replacement Cost: $4 - $30 (approximately 1-3 years)

Approximate Cost to Replace Ballast: $15 - $150 for magnetic or electronic internal/external ballast. Usually come with a 1 to 5 year warranty.

High Intensity Discharge (HID) Lights

HID lights are typically found on parking lot poles, under canopy, wall packs, and are operated off magnetic and electronic ballasts. The lamp is an electrical gas-discharge fixture, and because the gas is toxic and has high levels of mercury, the EPA has implemented disposal standards for ballasts and lamps. There are many different types of HID lamps, but most common are high/low pressure sodium and metal halide lamps. 

Burn Hours: 8,000-15,000 (approximately 3 years)

Approximate Bulb Replacement Cost: $8 to $80 and have a 90 day to 1 year warranty.

Cost to Replace Ballasts: $50- $150 for 400w and below. Ballast can last 10 years with a 3 to 5 year warranty.

Solid State Lighting (SSL)

This type of lighting uses semiconductor light-emitting diodes (LEDs) as sources of illumination rather than filaments or gases. There is no ballast needed for this type of light. These lamps are a “green” alternative to regular lamps because there are no disposal requirements due to the low levels of mercury and phosphorous.

Burn Hours: 50,000 to 80,000 (approximately 11 to 18 years)

Approximate Bulb Replacement Cost: $25 - $150 and have a 5 year warranty.

The average energy savings is 60% to 80% per LED retrofitted fixture.  Additional savings can be realized through rebates that provide five cents for every kWh saved.

Trestle Street Partners believes that the future of energy savings and maintenance savings are realized in Solid State Lighting (SSL), especially parking lot lighting. The exciting part of this technology is that property lighting, and individual lights can be controlled remotely -- if proper equipment is purchased -- allowing the property owner to turn on lights as needed from anywhere wirelessly. Additionally, this technology has the ability to remotely monitor lights that are working or burnt out – eliminating the need for traditional maintenance, and monthly/quarterly on-site inspections. The only maintenance required is every six months fixtures are cleaned to help slow degradation of light out-put, and help maintain the dissipation of heat. 

See graph below for information on each lamp. The most notable savings can be found in switching your parking lot poles from commonly found HID lamps to SSL.

	Incandescent	Halogen	Flourescent	HID	SSL	Notes
Average Burn Hours	2,250	4,500	17,500	11,500	65,000
Average Lamp Cost	$4.00	$9.00	$17.00	$44.00	$100.00	SSL lights cost as low as $25
5 Yr Lamp Replace Cost	$486.67	$547.50	$265.93	$1,047.39	$421.15	15 lamps on 3,650 hrs per yr. Warranty savings not included. Ballast, maint. & disposal costs not included. Lamps only.
Average Ballast Cost	N/A	N/A	$83.00	$100.00	N/A	HID ballast lasts approx. 10 years
Maintenance	1 x month	1 x month	1 x month	1 x month	2 x year
EPA Disposal Reqs	No	Yes	Yes	Yes	No	Approximately $5 for disposal of lamp & ballast under 500w

2012 CHANGES TO CALIFORNIA MECHANICS LIEN LAWS

The article below was provided to me by Scott Levitt at Levitt Law. You can find more information on Levitt Law at http://www.levittlawca.com/.

Effective July 1, 2012 the State of California has created new code sections which cover the lien laws and other related items (stop-notice, bonds, foreclosures, etc.).  The major change is that the Code numbers have been moved from the 3000’s to the 8000’s and 9000’s.  It will take some time for most people to begin referencing the new codes.  However, such must be done as there is no “grace period” for citing old codes.

The actual verbiage of many of the codes has been changed.  Below are the pertinent changes that your company should be aware of.  Please contact Levitt Law, APC for further information regarding these changes to the California mechanics lien laws.

Definition of Completion. The deadline for recording a mechanics lien is generally triggered by the "completion" of a work of improvement.  Under current law, acceptance by the owner is one of the criteria deemed to constitute "completion".   Under new §8180, such is no longer the case.  Each of the following constitute "completion": (1) actual completion of all work on the project, (2) occupation or use coupled with cessation of labor, (3) a cessation of labor for 60 continuous days or (4) for 30 days after recording of a notice of cessation).   Acceptance by a public entity remains unchanged.

Time for Recording Notice of Completion. Under the current law, owners have to record notices of completion within 10 days after actual completion of the project. Under the new law (§8182), that time period is extended to 15 days.

Preliminary Notice. Under existing law, the "Preliminary 20-Day Notice" must be served by most types of lien claimants (not the general contractor) at the outset of their work.  Under the new law, this notice is referred to simply as a "Preliminary Notice” and the required language for the Preliminary Notice has been changed (contact Levitt Law for further information). 

Also, §8200 clearly states that contractors in direct contract with the project owner (GC’s) need only provide a Preliminary Notice to construction lenders, if any.

Waiver and Release of Lien Rights. In order to ensure that a "downstream" subcontractor has validly released its right to assert lien, stop notice, or payment bond rights, the law requires that specific waiver and release language be used. Under the new law (§§8132, et seq.), the required language has been changed slightly; one should be careful to utilize the current form as of July 1, 2012 (contact Levitt Law for further information).

The form utilized for progress payments (as opposed to final payment) does not cover certain disputed or extra work items, or claims based on breach of contract, so “upstream” parties may want to supplement the statutory form with additional releases.

Release Bond. Under the new law (§8424), the amount of the bond required to release property from a lien has been reduced from 150 percent to 125 percent of the lien amount.

Separate Notices of Completion Permitted (Private Works) §8186(a).  In projects where the scope of work is being performed under separate direct contracts with the owner, the owner can now record separate notices of completion upon completion of the scope of work under each separate contract.

Design Professionals’ Liens Can Now Be Converted Into Mechanic’s Liens §8319.  Under existing law, design professional liens were extinguished upon commencement of work. After July 1, 2012, design professionals have the added protection of being allowed to convert their design professional liens into a mechanic’s liens.

Construction Contracts: Space Provided For Identification of Lender §8170(b).  Construction contracts after July 1, 2012, must provide a space for the owner to identify any construction lender.  This requirement does not apply to home improvement contracts or pool contracts.  Also, this section does not relieve a contractor from the service of preliminary notice requirements.  If a construction lender is not identified in the contract, a contractor as part of its due diligence should conduct a search of the county clerk records to identify any undisclosed construction lenders and serve them with the required Preliminary 20-day Notice prior to commencement of work.  For subcontractors, §8202 requires direct contractors to make owner and construction lender information available to subcontractors seeking this information for their Preliminary Notices.

Terminology Updates. The term “stop notice” has been replaced with “stop payment notice.” (§8044).   The term “original contractor” has been replaced with “direct contractor” (§8018).

Errors In A Claim Of Lien Will Not Invalidate The Lien §8422(a)(b).  This new Section codifies existing case law that holds that errors in a claim of lien (i.e., errors in a claimant’s demand, credits, and offsets deducted; the work provided; or the description of the site) do not invalidate the lien.  However, such errors will render the lien invalid if a court determines that: (1) the claim of lien was made with the intent to defraud or slander title; or (2) an innocent third party, without notice, actual or constructive, became the bona fide owner of the property after recordation of the claim of lien, and the claim of lien was so deficient that it did not put the party on further inquiry in any manner.

Attorney's  Fees on Petition to Expunge Lien. The new law removes the current $2,000 limit on the amount of attorney's fees that are recoverable on petitions to expunge stale liens; under the new law, all "reasonable" fees will be recoverable to the prevailing party.  The new law also requires that an owner first make a demand that the lien claimant withdraw the lien at least 10 days before initiating a petition to expunge. 

Inland Empire Association Management

I recently had a condominium association approach me about installing solar panels on the roof of their commercial building. I love these projects because nothing gets me more excited than looking at return on investment.

Electricity Meters in Condo Associations:

Each association is developed differently in regards to utility expenses for condominium complexes. The typical set-up for electricity in condominium complexes is to have one house meter and separate, individual meters for each unit owner. The house meter is paid through the association, and covers electricity usage for parking lot lights, wall packs, irrigation controllers, and other elements that are used for the common benefit of all owners. The individual meters are paid directly by the owner, and cover electricity usage for their interior lights, HVAC, machinery, and anything else that draws power for operating their business. That is how I typically see electricity set-up, but I have seen associations where the electricity is on one meter, and expenses are shared on the pro-rata share outlined in the CC&R's. 

Where does solar energy get complicated for condominium associations?

Most of the boards I’ve worked with on solar projects want a solar energy company to install the system at no cost to the association. In these circumstances a solar energy company owns the equipment they install on the association's roof, and they sell the energy generated from the equipment back to the association at a lower cost than SCE. Here’s the problem: This option requires a lot of electricity use to save any money because the company that installs the solar panels for free needs to recoup their costs. To save money with this option of solar energy every owner that is individually metered needs to contract with the solar energy installer. For example, take a park that has fifteen individual meters and one association meter. Then there would need to be sixteen contracts in place (15 owners + association meter) for this to actually save anyone money. It's all about economies of scale to return on this investment. 

The other complication is there is usually one HVAC unit on the roof for every condo unit.  That usually means there is very limited space for solar panels. Less space on your roof for solar panels means you cannot generate as much electricity. Limited space on the roof typically means solar panels are sectioned off to one area of the roof.  If this is the case running a conduit to service each owners’ electrical meter can become very costly, and off-set the ability for the solar company to be competitive with the rate SCE is charging.

Conclusion:

Solar energy is a great option and can work, but every case is different. Think about what your community is willing to spend, not spend, and the available space you have to make the project work. 

Irvine Property Management

In November 2009 the National Fire Protection Agency (NFPA) released some new additions to the NFPA 72, National Fire Alarm and Signaling Code. The additions made it possible for new communication technologies (GSM & cellular) to be implemented for fire control panel communications. Ratifying this code is beneficial to properties with fire life safety monitoring because it allows for significant cost savings on a monthly basis.

How fire panels work & costs associated with fire panel communication:

Fire panels have two dedicated phone lines to each panel. One phone line is used for primary communication between the building and monitoring company, and the secondary line acts as a back-up to the primary. The monitoring company receives communication from the panel about system status, errors, and possible problems on-site. If there is a problem being reported from the property's fire panel then the monitoring company notifies the property manager or owner, and the necessary steps are taken to address the problem. However, if there is a "water flow" on-site then the fire department is dispatched by the fire monitoring company, and other proper parties (property manager, owner, etc) are notified. The term "water flow" is used to describe water flowing out of fire sprinkler system. If water is flowing out of the sprinkler system then it is safe to usually assume there is a fire.

Understanding the basics of fire monitoring is important because you can better break down the costs associated with these systems. The two basic costs are phone lines and a monitoring contract.

Why it saves money to switch to cellular communication vs. land line:
Land line phone lines have become very expensive to maintain because of copper and how expensive it is to repair/replace. I recently switched a FLS account from 10 hard phone lines to cellular and was able to save $3,780 per year. That is a significant savings, and much larger savings can be achieved on properties that have 20+ phone lines.

How to implement the change to cellular:
You'll want to see the contract you have in place with your current monitoring company. Hopefully you didn't sign an unnecessary long term contract. If you didn't sign a long term contract then you will want to confirm with the monitoring company you're switching to that there are no lock out codes on the fire panel. Some companies lock down panels so other providers can't use the panel in the future. You can get these unlocked but it is difficult to do if you terminate service first. If locked then request them to be unlocked and terminate after.

Also, I've heard of FLS companies telling their clients they will take FLS control panels with them if service is terminated. They aren't allowed to do this because it would leave the system without monitoring capabilities. Push back and you'll win that argument all day. I'm always available if you have more questions and want more details. 

Trestle Street Property Management

We are pleased to announce that Trestle Street Partners has been hired on as the community association manager for four new accounts, effective March 1, 2012! The Board of Directors hired us to facilitate association operations, represent the individual owners, advise the board of California Laws, and manage the common area property.

These four accounts add an additional 2,678,062 square feet of industrial and office product to our management portfolio. We look forward to servicing each account and have provided some information on them below...

Information on New Accounts:

1. This association is located in Ontario, California and consists of twenty-four industrial condominium units. The total building square footage of the property is 163, 411. The association is responsible for maintaining the parking lot, parking lot lighting, landscape, physical building structures, fences, fire life safety systems, and roofs. Each owner is responsible for insuring and maintaining the interior of their units.
2. This association is located in Ontario, California and consists of an eight building industrial park that is structured as a planned unit development. The total building square footage is 278,744. The association is responsible for maintaining the park lot, parking lot lighting, landscape, and fire pump system that services each building in the park. Each owner is responsible for insuring their physical building structure, and is responsible for maintenance of the interior and exterior of their building.
3. This association is a sub-association of the association described in item two above. The association consists of nine industrial condominium units in Ontario, California. The total square footage of the property is 30,690. The association is responsible for maintaining the parking lot, parking lot lighting, landscape, physical building structures, fences, fire life safety systems, and roofs.  Each owner is responsible for insuring and maintaining the interior of the units.
4. This master association is located in Ontario, California and consists of twenty-five parcels. The total parcel square footage is 2,235,907. The association is responsible for maintaining the interior streets, parking lot, street lights, landscape, fences and security service. Each owner is responsible for maintaining their building and parcel improvements.

We understand management of community association business parks is a specialized niche that services sophisticated clientele. Our approach to the industry is uniquely driven by personalized relationships with our clients. We look forward to servicing these new accounts and truly appreciate the great opportunity we have been provided.