River Pines of Farmington Condominium Association Spring Informational Meeting May 26, 2010

River Pines of Farmington Condominium Association

Spring Informational Meeting

May 26, 2010

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Meeting Agenda

Introduction -- Board of Directors Operating Budget Status Reserve Plan Financial Status FHA Certification Project Updating the Association Bylaws. Development of a Consolidated Master Deed

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Meeting Agenda (Cont’d)

Status of Association projects Roof replacements Concrete Asphalt Siding replacement Painting Window repair and replacement Deck repair and replacement Deck Staining Others

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Meeting Agenda (Cont’d)

Minimum Maintenance of Areas B and C Neighborhood Watch Closing Remarks Questions and Answers

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Board of Directors

President Ed LeFevrel Vice President Donna Jones Treasurer Thomas Cornell Secretary Gene Kerwin Director Joyce McFadden Director Shirley Niesyto Director Bob Eix

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Financial Information

Operating Budget – (as of 4/30/10) 2010 Budget $1,128,593 Spent to Date – 350,169 Commitments - 619,403 Balance of funds - $ 159,021 – 14%

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Financial Information (Cont’d)

Reserve Plan – (as of 4/30/10) Projected Expense $ 604,301 Spent to Date – 132,435 Commitments - 234,599 Funds to be spent - $ 243,912 – 40%

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2010 Reserve Fund Update 5Spending vs Reserves Balance

December 2009

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

$1,800,000

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35Years

Fund Balance

Spending

2005 203020202010 2040

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FHA Certification Project

In 2009, the FHA issued new rules and regulations for FHA Condominium mortgages

These new rules became effective February 1st, 2010.

FHA will now insure condominium mortgages up to $297,000

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FHA Certification Project (Cont’d)

New FHA rules for the following: Delinquencies 50% Owner-Occupancy requirement Number of FHA mortgages allowed Review of the association budget Professional reserve studies every 2 years Insurance requirements Investor ownership

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Why did the FHA issue these new rules for Condominiums?The FHA identified several

condominium issues that needed to be addressed to support the co-owners

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Why did the FHA issue these new rules for Condominiums?Many condominiums around the

country have problems with insufficient funds for maintenance

Insufficient Reserve FundsDevelopers not completing

construction as planned

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Why do we want FHA Certification?FHA rules establish minimum

requirementsThere is concern that banks and

mortgage lenders may not approve new mortgages without the condominium site having FHA Certification

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With the decline of property values in Michigan, all River Pines Condo’s fall within the FHA maximum mortgage limit.

FHA will grant insured mortgages for up to 50% of the units within the complex The 50% rule applies thru December 31,

2010 Concentration may be reduced to 30% after

12/31/10

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What do we have to do? An updated professional reserve study was

completed in March 2010 Revise our Bylaws to conform to the FHA

requirements Provide financial documentation regarding

our operating budget and reserve plan funding

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What do we have to do? The Bylaws must be approved by 67%

of the co-owners The Bylaws must then be approved by

51% of the mortgage lenders

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What do we have to do? This approval process may take until

September 2010 to complete

During this time mortgage availability may be seriously limited

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What do we have to do? So, under these circumstances the

Board feels FHA Certification is “desirable”

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Bylaw Revisions – Within the past 2 weeks you received a

Ballot from our association attorney, Alexander, Zelmanski, Danner, Fioritto, PLLC

If you did not receive a ballot we will provide one at the end of this meeting.

As mentioned, these revisions are necessary to meet the FHA Certification requirements

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Bylaw Revisions (Cont’d) – There are 6 sections of the Bylaws that

need to be revised. Article V, Section 1)b)….. change from

75% approval to 67.5 % approval. Another change involves the unit lease

term of 6 months

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Bylaw Revisions (Cont’d) – Under Article VII Mortgages,, co-owner

and association responsibilities are defined when a co-owner mortgage is initiated

Under Article XIV Amendments, wording changes have been incorporated to meet FHA Certification requirements.

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Bylaw Revisions (Cont’d) –

In reviewing the Bylaws for this project we observed some clarification and general “housekeeping” items that should be corrected

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Bylaw Revisions (Cont’d) – There are 6 additional

changes to the Bylaws that are considered “housekeeping” items

We have added some clarification to Article V, Section 4 Co-owner responsibilities

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Bylaw Revisions (Cont’d) – Paragraph (a) - The unit furnace is a co-

owner responsibility and the furnace stack is now specified as part of the furnace system

Paragraph (b) - The door wall lock system is part of the unit security and is now specified as co-owner responsibility

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Bylaw Revisions (Cont’d) – Paragraph (c) – Clarified that the

electrical circuit breakers and electrical panel are co-owner responsibility

Paragraph (d) – Added owner installed outside faucets are co-owner responsibility

Paragraph (h) (i) – Skylights installed on the roof are co-owner responsibility

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Bylaw Revisions (Cont’d) – Section 6, Aesthetics – The restrictions

for car washing and the shaking of rugs has been removed

We encourage and ask you for a “Yes” vote on this proposal for the benefit of all Co-owners

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Bylaw Revisions (Cont’d) – We have our association attorney Greg

Fioritto, McShane & Associates Vice President Lloyd Silberman and Board Members available tonight to provide clarification on the Bylaw changes.

Questions regarding the Bylaw changes will be answered at this time.

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Consolidated Master Deed

Why do we need a Consolidated Master Deed?

The final amendment to the Master Deed has never been recorded with the Oakland County Register of Deeds

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The final amendment to the Master Deed must include the final or “as built” drawings for the complex and includes:

Unit location and square footage Locations of street and roads Utility easements Final property survey

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The existing “Black Book” that all co-owners have consists of a 22 page Master Deed and 23 amendments with many supporting drawings.

The entire document consists of nearly 500 pages

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The drawings are currently shown as “Proposed” drawings.

All of the drawings have to be finalized and our engineering firm, Zeimet Wozniak, is required to certify them as “As Built” drawings.

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By developing a Consolidated Master Deed we will end up with a document that consists of approximately 13 pages with 70 drawings.

The CMD will be a significantly smaller document for co-owner records and the “black book” can be discarded.

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In developing the CMD there is some “housekeeping” that needs to be done. There are typo’s that should

be corrected

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There are some references to “high rise” condominiums and these sections do not apply to River Pines

There are some terms and definitions that need to be clarified

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Therefore, the CMD will include the applicable sections of the original Master Deed and the finalized drawings Once the document is recorded

with the Oakland County Register of Deeds a copy will be mailed to all co-owners

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So this is another project we have been spending a significant amount of time and effort to finalize

Also, the FHA Certification regulations requires us to have all our legal documents in order

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Status of Association Projects

Each year we have reviewed the major projects that are planned for River Pines

In light of the discussion and time spent on the FHA Certification Project I have decided to dispense with the detail review of these projects

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With the cooperation from the “weatherman” this year we have gotten off to an early start on most of our projects particularly the addition of the trim boards, unit painting and window repairs

The project costs are tracking very close to our cost projections

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Minimum Maintenance Areas – defined as:

Area B - the wooded area bordered by Lancrest, Blue Spruce and Lone Pine Lane

Area C – the wooded area by the Pump House

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Minimum Maintenance Areas (Cont’d)

Many of you walk through these area and I’m sure you have noticed the improved look this year.

The Trees are flourishing and we have planted grass that has really made the area look great.

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As you walk these areas I’m sure you have noticed we have a growing crop of “Garlic Mustard”

Minimum Maintenance Areas (Cont’d)

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Here are some Photos of the Garlic Mustard -

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These plants are easily pulled and we are asking you walkers to help us keep this crop to a minimum

When walking through these areas please help us by pulling any of these plants you see and put them in a pile or the trash cans we plan to provide

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We will have Greg, our maintenance man, pick them up and dispose them

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Garage Sale

Our Annual Garage Sale is scheduled for June 11th and 12th.

“We need a volunteer to coordinate this event”

Joyce McFadden will provide the information needed to do this coordination

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Neighborhood Watch

Unit Break-ins continue to be a reality There are many reasons for break-ins:

Economy Opportunity Leaving garage doors open

Pay attention to the activity around your unit

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Neighborhood Watch

Unusual activity should be investigated Don’t be afraid to call the

Police…..particularly after hours Call our Site Manager - Bob Goodman

or our Maintenance Man - Greg Confronting a potential burglar sends a

message to other criminals

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Neighborhood Watch

Be alert…… and pay attention to what is going on in your area

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Neighborhood Watch

We have Bill Dwyer here tonight and he is well know for his Police activity within our community

Comments --

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Social Committee

Bev Cornell has a couple of announcements --

Social Committee items Volunteers for Flower Planting

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River Pines Information Meeting

We have copies of the River Pines

“2009 Financial Audit “

available on the table as you exit

Pick up a copy if you are interested

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We have covered many items here tonight and I trust the evening has been informative for you

It is amazing how many issues we have to deal with in managing this Association

The Board takes all these issues seriously and tries their best to resolve them satisfactorily

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Sometimes we succeed easily and other times we struggle………but we are trying!!!

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I hope you have had a good evening and we’ll answer a few more questions and then adjourn the meeting

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Thank You

Drive Home Safely

Documents

River Pines of Farmington Condominium Association Spring Informational Meeting May 26, 2010