Monthly Archives: April 2014

Two Sides to Rental Questions

Opinion

by Buz Whelan
house_with_a_for_rent_signAt the open meeting of the board on Saturday, April 26th landlord David Samad read aloud a letter he had written to the Emerald Lakes Board of Directors. In it he makes the case for rentals. He states that it is his belief that rental properties are important to the health of a community for a variety of reasons. This is in contrast to the position of several members of the Real Estate Committee who believe strict limitations, including establishing a minimum rental period, are needed to correct intolerable conditions that exist near some short-term rental properties.
So we have two very different positions, one that says we need rental properties and another that says we would be better off without them. How do we reconcile these oppositional attitudes?
The Real Estate Committee was re-established after repeated complaints by homeowners near rental properties, one in particular, that had become serious nuisances. I know personally several of the most vocal complainants, and I have found them to be reasonable people. If they tell me they have a situation that is ruining the quality of life in their area, I take them at their word. But I also have contrasting experience. I live two houses away from a short-term rental that has never once given me a problem. I live across the lake from another rather large short-term rental property that has only occasionally produced loud parties, mostly in the summer, and I can live with that. The tenants have also shot off fireworks every so often, usually around a summer holiday, but I remind myself that this is a fireworks state that out-of-staters are not used to. The temptation to take advantage of the opportunity is difficult to resist. I can live with that as well. So, while some properties produce nuisance periods, others rarely do.
If we are to accept what Mr. Samad’s research seems to have revealed, there is little we will be able to accomplish by attempting to regulate short-term rentals out of the community. Perhaps our efforts would be better served by better enforcement of various behavioral rules and regs we already have. Rather than waste a great deal of time and effort in a futile attempt to prevent short-term rentals, let us develop a forward-looking policy for maximizing the potential of these properties. Money shortage is a constant source of difficulty in maintaining our amenities, and therefore our quality of life. If we become a landlord-friendly community, we may be able to turn foreclosed and abandoned structures into revenue sources, while at the same time turning eyesores and squatter magnets into neighborhood assets. The vast majority of renters in this community are good citizens. Let’s send the message to landlords and potential landlords: investing in Emerald Lakes and renting to responsible tenants, whether long- or short-term, will be rewarding. And those who cannot follow our simple rules and be good neighbors will pay a price.
Editor’s note: The following is the letter sent by David Samad to the Board of Directors. It is reprinted with his permission.

 

David & Johanna Samad
April 15, 2014

To: ELA, Inc. Board of Directors:

Alex Leslie, President
Daniel Glasgow, Vice President
Carmen Brodnax, Exec. Secretary
Earl Frank. Treasurer
Millie Bishop, Director
Margaret Fitzgerald, Director
June Solla, Director

Re: Home Owners Rental Policies and Procedures in Emerald Lakes

Dear Directors of the Emerald Lakes Board,

The problems I have experienced as a property owner in Emerald Lakes whenever I rent my homes have pushed me to get proper legal advice. I am told that, in general, an owner of property is entitled to use his property in any way he desires, “provided he does not (1) violate any provision of the Federal or State Constitutions; or (2) create a nuisance; or (3) violate any covenant, restriction or easement; or (4) violate any laws of zoning or police regulations which are constitutional.” Parker v. Hough, 215 A.2d 667, 669 (Pa. 1966). I am also told that whenever a deed restriction or covenant limits the use of my real estate, the limitation is narrowly construed in my favor as the owner.

I also received specific information on renters and rentals that is based on a very recent court decision, which I believe is also very important to Emerald Lakes because of important similarities. The Holiday Pocono private community is run under a common set of restrictive covenants much like Emerald Lakes. And also like Emerald Lakes, because the Holiday Pocono development is located in the Poconos market, many of the homes there are second homes used as vacation properties by their owners. The most important similarity is that lots at Holiday Poconos must be used for ‘residential purposes’, just like the lots in Emerald Lakes. I am told that the meaning of that restriction was tested in state court quite recently.

The court found that “common sense dictates that the right to lease these vacation homes, especially on a short-term basis, is very important to all owners”. To relinquish the right to lease a home, the court said a deed covenant must state in a clear statement that the right to rent does not exist. The court found that the words ‘residential purposes’ must be interpreted to include occupancy by renters, and do not preclude rentals.

And the court said further that an association’s bylaws or the rules and regulations cannot contradict or override that meaning because deed covenants are more important legally than the bylaws or the rules. The court specifically refused to enforce such bylaws or rules which attempted to prohibit rentals because the bylaws or rules conflicted with the meaning of ‘residential use’ as determined by the court. This court decision should end the legal discussion on this point, and confirm that rentals are allowed here as well. Truth be told, not only are they allowed, rentals are actually essential to our future success here at Emerald Lakes.

The fact is that one fundamentally important issue about rentals in particular, and our future in general, has been missing in all our discussions. The problem is that the Association has never developed a winning vision and a strategy about the future of the community. Today we really do not know what our vision of the future is and we do not know how to make that future happen. One result is that our community will actually endanger its future if it chooses to attack vacation rentals and renters. Doing so is not only shortsighted and misguided; it also polarizes the community. We are in an emotionally driven state of affairs, where we have no other plan on the table other than to police perceived problems from so-called problem renters, and somehow drive the so-called problem renters out. In fact, doing so is just the opposite of what we should be doing in the best interest of the community.

Use of rentals to our advantage really is a fundamental strategic marketing issue. Properly qualified renters who are attracted to a successful, strategically driven community become the future owners in that community.

In stark contrast to that very successful strategy, any community that polarizes itself and mistakenly attacks rentals and renters, and fails to reinvest in itself, will eventually face continuing economic decline and failure.

There is compelling proof of the positive results of vision and reinvestment just down the road a bit, not far at all from Emerald Lakes. It is the Lake Naomi community. That community was started at about the same time as Emerald Lakes, and had similar lot prices and similar amenities at the beginning. Lake Naomi, however, has always chosen to be strategic about its future and it has reinvested in itself for decades: and it still has a wide range of house prices in the community. As a key part of Lake Naomi’s vision of the future, the community long ago decided that vacation rentals would be the key to a successful long-term marketing plan and the community’s continuing economic success.

We seem destined to do just the opposite here at Emerald Lakes, and if we do, we are making a fundamental, even fatal, error. Such a choice must be reversed. If we do not, we will continue to spiral down economically, with property values falling even more. We must wake up, and decide to market and fund the community so it attracts “qualified renters” as a matter of highest priority along with providing higher levels of service.

I have taken the time to do my homework carefully on these issues and I am prepared to work hard to be part of the solution in this situation. If necessary, though, I am also prepared to stand behind my words and do what is necessary to protect the future of my properties here and the future of Emerald Lakes generally. That said, I believe that the Board can quickly re-learn that its primary role is to be smart and strategic, and that continuing to act without a proper vision and strategy for the future is a formula for failure. Rentals are essential for us all to thrive here.
Sincerely,

 
David & Johanna Samad

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April 26, 2014 Monthly Open Board of Directors Meeting

by Buz Whelan
meeting[1]It was an unusual Board of Directors meeting in that no old or new business was conducted. The meeting was dominated by reports and public comments. About 30 members were in attendance in the main meeting/dining room of the Community Center. All board members and interim GM Judy Kennedy were present. It was called to order by President Al Leslie shortly after 9:30 and following the standard Pledge of Allegiance to the Flag the minutes of the March 22nd meeting were approved without correction.
President’s Report: President Al Leslie opened on a very sad note extending his and the board’s condolences to former Board President Jerry Viola whose son was tragically killed in a Florida traffic accident the previous day. Murmurs of agreement rippled through the crowd, many of whom were unaware of the sad event. Leslie went on to report that the ad hoc GM search committee had completed its work and that a decision on a new, permanent GM would be announced at the May Open Meeting.
Treasurer’s Report: Treasurer Earl Frank gave his report based on the first eleven months of fiscal year 2013/2014. He said that revenue of $1.754 million exceeds our budget by $44K. This is primarily due to an increase over budgeted amounts in the areas of various fees, resale certificates, permits, code and public safety citations of $52K. We also were awarded $6,800 from our insurance company on the damage – due to snow – to the Ford truck. These positive variances are partially offset by operational costs of $18,000 (net, ytd) of the bar & grill. Dues collected so far this year of $1.381 M surpass last year’s 11 month total by $16K. In addition, our attorney had collected $178K on delinquent dues compared to $130K for the entire 12 months. With a month to go, at our current rate we will collect approximately $195K for the year, an increase of 50%.
Total operating expenses, excluding depreciation, are $1,590M, under budget by $108K. Projecting operating expenses for the balance of the year, we should underrun our annual budget by $125K, or 7%.
Members are cautioned to keep in mind, said Frank, that even though our revenue slightly exceeds our budget and our expenses are under budget, this is being done to maintain a positive cash flow, while we struggle to keep our community maintenance on track and our amenities from further deterioration. Many of our members have made it known that they wish our amenities to be open and available for longer periods. Our maintenance department needs better equipment, vehicles and machines in better repair. In many cases we need upgraded equipment. We have major projects ahead that we should be addressing, such as the Pine Tree Lake dam valve, community center equipment and structure and much more. This will be impossible to do within our current dues assessment. We are living on reduced services and deferred maintenance. The Finance and Planning Committee has recommended to the board that we increase the annual dues by $100 per year.
And now, briefly,
Admin costs are under budget by $30K
Public Safety is under budget by $2K
Maintenance is under budget by $35K
The Community Center is under budget by $52K
The Bar & Grill revenue is $63K, total expenses are $82K for a shortfall of $19K
Finally, the board has selected a new auditor to perform our annual year-end audit, Riley & Co. of Stroudsburg. This is order to give us a fresh look at our records.
If any more detailed financial information is required, contact the office or stop by in person.
Manager’s Report: Interim GM Judy Kennedy delivered the manager’s report. She said that the Paylease charge system for dues payment was being well-received. They are updating and enlarging the email blast package to reach as many members with as much up-to-date information as possible. She said that some homeowners have redirected drainage and that they are being contacted to correct and refrain from doing this. She went on to say that our insurance package has been updated to eliminate unnecessary coverage and increase coverage where appropriate. The Annual Meeting has been set at Pocono Mountain West High School on Saturday, August 16th. Amenities, such as beaches and the outdoor pool are being prepared for the summer season. A camera system is being considered for wider and longer period coverage. Ms. Kennedy closed by explaining that last week’s indoor pool closing was due to a pump glitch that has been corrected. She apologized for any inconvenience caused.
Old Business/New Business: As stated in the first paragraph, no old or new business was conducted.
Committee Reports:
Nominating Committee: Committee Chairperson Cookie Lietwinski said that the committee is currently seeking candidates to run for the Emerald Lakes Board of Directors at the August 16th Annual Meeting. There will be three directorships contested. Anyone interested may sign up at the Admin Office. A candidate must be a member-in-good-standing and sign an agreement to serve for 3 years. Interested parties may also call Ms. Lietwinski @ (570)646-2053.
Ad hoc Committee to Revise the Bylaws: Chairperson Buz Whelan asked for clarification on the two committee recommendations. (They are to eliminate Amendment III dealing with unsightly property, properly covered in the Rules and Regulations, and to allow absentee balloting). President Al Leslie said that these are currently being considered by the association attorney.
Public Comments:
Connie Simpson asked if the pool was being maintained at the proper temperature of 84 degrees. President Leslie stated that this had been changed by board resolution to 82 degrees. Ms. Simpson also inquired about For Sale signs for homes. According to Secretary Carmen Broadnax these are proscribed by our covenants and cannot be overridden by the board. Signs naming a realtor are allowed and can be gotten at the Admin Office. These in actuality provide similar information that the home is on the market.
Joan Gregorio inquired as to why lifeguard certification classes were no longer being offered. GM Kennedy said that cost was a factor, that there is little benefit to the association to train and certify lifeguards who can then hire themselves out to the highest bidder.
David Pope said that the current reporting of association finances does not give a clear and true picture of our financial situation. He also stated that any request for an increase should be accompanied by detail on how the additional collected funds would be used. In other comments, Mr. Pope said we need to develop long range plans based on real information rather than simply reacting to whoever makes the most noise (author’s characterization). He said that without definitive knowledge of our membership’s makeup, we are merely thrashing about. While last year’s survey did not produce the desired results, Pope suggested a more complete survey could be done by requiring all members to obtain updated ID cards during a designated period. During that office visit, members could be required to fill out an information sheet that would produce the comprehensive demographic information needed. Planning could then be based on our true condition rather than guesswork.
Flo Mauri rose to propose that any initiative for absentee or mail-in voting be accompanied by some sort of revenue escalator. She said that it is her belief that dues increases would be very unlikely to be approved if meeting attendance was not required for voting.
Bob Leon pointed out that CC manager and chef, Todd W. was told he could no longer give cooking tips during meetings of the Cooking Club. He said club members greatly enjoyed the 15 minute sessions on such things as crepe-making and wanted to know why this was forbidden. GM Judy Kennedy explained that Todd had many duties and his time was already sufficiently burdened. He simply could not satisfactorily complete his duties and perform individual tasks for members as well.
Joe Olall asked about the status of the maintenance barn. Ms. Kennedy said that insurance had green-lighted the repair. He also sought clarification on the Bar & Grill costs, and Treasurer Frank restated that there was a net ‘loss’ of $18,000 year-to-date.
David Samad read aloud a letter he had written to the board. He said that he owns 2 homes which he rents. In an exhaustive, detailed report (the letter) he described both the importance of rentals to a community and the legal justification, including case law, that grants him the freedom to act as a landlord. In a separate article to be published here in the next few days, we will print the full text of Mr. Samad’s letter as well as commentary on the rental question.

Summer Schedule: Changes and a GM Decision

 

by Buz Whelan

     You may have read on our Facebook page of the new beach, pool and Community Center scheduling changes. To recap, the outdoor pool will be open seven days, from 11 to 6 weekdays and from 9 to 6 on Saturday and Sunday. And unless there’s a change of heart, there will be no snack shack. The Community Center will be open Wednesday through Sunday. Wednesday and Thursday the Emerald Bar & Grill will be open 6 to 10pm. Friday the grill will be open 5 to 10 while the bar will remain open until midnight. On Saturday the grill will be open from 1pm to 10 and the bar will again remain open until midnight. As of this writing, the pool only Sunday schedule will be 1 to 4:30pm, but Community Center Manager Chris Tarvin reported that there may be a trial opening of the other services, but that is currently under discussion. The indoor pool in the center will be open Wednesday and Thursday from 6 to 9pm, Friday from 5 to 9pm and Saturday from 1 to 9. Adult Water Aerobics will continue to be held Monday, Wednesday and Friday from 9:30 to 10:30am.

     The outdoor pool will be open Monday through Friday from 11am to 6pm. Saturday and Sunday it will be open from 9am to 6pm. As of now, there are no plans to open the snack shack.

     You may have already read that main and Pine Tree Beaches will be open 7 days a week from dawn to dusk; however, they will no longer staffed with lifeguards and the stands are being removed. Signs will warn that it is “Swim at your own risk.” It may be more accurate to say that the beaches will be ‘there’ 7 days a week, and if you show up between dusk and dawn you will be shooed away.

     The Emerald Lakes Board of Directors announced at their workshop Friday that they had decided to remove the designation ‘interim’ from General Manager Judy Kennedy’s title. They have extended the offer of a two year contract to Preferred Management Services. It is expected to be signed on Tuesday, May 20th. Over the last 4 months the team has drawn high praise from directors and other observers. We wish them the best and offer our support whenever it may be appropriate.

 

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