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WHAT IS ALTERNATIVE FUNDING?
By
Rafael Aquino
Published February 9, 2022
It seems as if we are moving toward reserves
being required within our communities or, at a minimum, associations
have some alternative funding aligned. I want to touch on today's
blog's topic of the "alternative funding" obligation. In my opinion,
I believe this language is too vague. We need to define what
alternative funding means to our legislators? Does it mean you have
to have an approved LOC (Line of Credit)? Does it mean that you can
have a simple letter that states the bank will lend you such funds
when the time comes?
At the moment, most banks have been friendly
lending associations money as long as they have a decent financial
position, the association's accounts receivable are in good
standings, and they aren't over-leveraged. My concern with an
alternative funding source is what will happen when market
conditions change? Most banks have the right to cancel a LOC at any
time; what would an association do if the bank pulls the LOC? Will
they be required to fund the reserves fully at that moment? Further,
we all know interest rates are expected to climb in the coming
years. Will the Board be required to communicate the potential loan
payment/cost to the residents?
I can appreciate that our legislators are trying
to provide multiple options; however, I'm concerned that some Board
members may use this to kick the can down the road or not understand
the future implications of using the alternative funding method. How
will an association manage the debt if the interest rate shoots up
to six to seven percent? There isn't enough clarity on the
definition of alternative funding and how it should be managed.
Changing our laws is no easy task; however, we
need to get this right to avoid the changes that happened this year
from being revoked the following year, no different from what
happened with State Representative Robaina's building inspection
legislation, which was overturned in 2010.
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As the Co-Founder and CEO
of Affinity Management Services, Rafael P. Aquino leads his team to
redefine excellence. They serve community associations
efficiently |
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and effectively with
dedication and passion. Rafael’s energy and positive
spirit is the foundation of Affinity Management
Services’ company culture, which instills enthusiasm and
excitement when providing expert advice to its board
members and relieving the day-to-day burdens of running
a community association.
Since 2007, Rafael has
developed a work culture that values responsive and
high-quality services. He has led his team by following
a proactive vs reactive philosophy. The same approach
Rafael instills in the day to day operations of each
association. Today, Affinity Management Services
maintains its success and benefits as a result of the
foundation Rafael has built and continues to foster by
providing educational seminars, continuing education
classes for association managers and board members
alike.
Rafael and his team help condominium and homeowners’
associations save money and improve their communities.
His calm, personable, and service-oriented nature helps
him to establish strong relationships with ease. Rafael
is known as a sincere and honest leader who looks out
for the best interests of his clients and communities,
and he strongly advocates for their needs. His role
requires coordination and communication, as such he
takes logical and intelligent steps to approach
challenges head-on.
As a graduate of Florida International University’s
electrical engineering program and a licensed community
association manager, Rafael’s education and skills equip
him with unique insights to tackle complex problems
through critical thinking. He understands how each
component within a system works together in order to
effectively arrive at solutions, techniques, and
conclusions. Therefore, as he manages the multiple
challenges of running a community association management
company, he understands how each property is its own
unique system and tailors’ specific services to assure
that all their needs are met.
For more information about Rafael P. Aquino and Affinity
Management Services please visit
www.ManagedByAffinity.com or call 1-800-977-6279
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Doral Office: 8200 NW 41st ST
Suite 200
Doral, FL 33166
Broward Office: 150 S Pine Island RD Suite 300
Plantation, FL 33324
O: 800-977-6279 ● F: 305-325-4053
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