Commercial FAQ
These are the answers to some of the most frequently asked questions we receive regarding commercial properties. Please glance through them - it may save you time in getting answers to your question.
What is a Commercial Association?
Why do we need a Commercial Association?
Why do we need a professional association management company?
How is the assessment calculated?
How is the assessment rate established?
What is the ARC (Architectural Review Committee)?
What is required to submit a plan for ARC approval?
What is a Commercial Association?
A Commercial Association is similar to a Homeowners Association in that the governing documents, rules and regulations of that Association bind each entity purchasing property within the Association's boundaries.
Why do we need a Commercial Association?
The Association enforces deed restrictions and Architectural Control Guidelines assuring that a standard of quality is maintained throughout the Association long after the original developer is gone.
Why do we need a professional association management company?
Each facet of real estate is it's own discipline. A professional management company, under the guidance of the Board of Directors strives to preserve and enhance the value of the property. The management of commercial property owners associations is different than the management of homeowners associations or office buildings or retail centers. There are different taxing requirements, different laws regarding deed restriction enforcement, etc. A professional association management company should have personnel who specialize in commercial association management.
How is the assessment calculated?
The method by which an association's assessment is calculated is dictated by the governing documents. Some commercial associations pay by the frontage foot, some by the square foot of acreage owned, and some by property use; i.e., retail, office, office service center, etc. The governing documents also dictate the requirement of annual, quarterly or monthly assessment billings.
How is the assessment rate established?
The assessment rate is based on the budgeted needs of the Association for a fiscal year. The Board of Directors approves the annual budget for each fiscal year, thus establishing the assessment rate for that year.
What is the ARC?
The "ARC" is the Architectural Review Committee. This committee reviews all plans for any exterior changes to existing buildings or the construction of new buildings or additions.
What is required to submit a plan for ARC approval?
Generally, three copies of the construction drawings are needed. (Some Associations may vary the number required.) The drawings should include detail regarding setbacks, paving thickness, screening of HVAC equipment, dumpster locations and screening, landscape and irrigation plans, etc. The committee would also need to see samples of exterior materials. Photographs of a similar facility (in the case of national chains) are also helpful.
How is an Estoppel Letter obtained from the Association?
The managing agent of the Association should be able to issue Estoppel Letters upon request. The requesting party must provide the legal description of the property and the person(s) to whom the letter is to be issued.
