Concerning HOA Assessments

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What’s the deal with HOA assessments? Why do we pay monthly assessments instead of weekly? What happens when we don’t pay? At some point, we’ve all asked these questions, hopefully before having learned the hard way. The cost of living in America has never been cheap, I mean, it can’t be – freedom has never been cheap either. The American dream is all about earning and reaping your reward. It’s a testament to what we’ve strived to gain, and here it is: in the form of down-payments and assessments with the hope that someday we will have paid off the final sum. Though, we should also be asking, what does the money from our payments go towards?

Why Pay HOA Assessments Monthly?

Not only is it easier for management companies to keep track of monthly payments rather than weekly, but it also ensures that all funds go towards the needs of the community, which is of the utmost importance. Treasurers of the board in HOA communities keep track of budgeting. The budget is assurance for the expense of necessary maintenance and care of a community, and if all payments are made on time, then the board can afford to cover all expenses. Every budget is accounted for by the treasurer but determined by the community. It’s like everyone chipping-in to buy a pizza for the group.

What Happens if I Don’t Pay My HOA Assessments?

We say this without meaning to threaten or debilitate, but frankly you’d be cheating yourself and your neighbors if you don’t pay your HOA assessments. It’s a two-way street, and since there is no profit to be made as a Home Owners Association, there’s no real point to not pay as a homeowner – with exception to financial troubles that clash with your financial obligations (which in that case do not be alarmed, there are people that are willing to help you out). If a delinquent is flat-out NOT paying their dues by whatever motive they uphold, then the board of directors makes it their business to ensure the payment comes in – if it doesn’t, then the board’s job gets a bit more complicated. The budget falls out of order and the pool that the community wants cleaned and up to code has to stay dirty for a little while longer because they instead have to put your neighbors’ payments towards hiring a lawyer to make sure you pay up.

What if I Can’t Pay My HOA Assessments on Time?

Firstly, take a deep breath and realize that you’re not alone in the matter. Nearly 60% of Americans are living paycheck to paycheck, with this in mind it is reasonable to assume that your community’s board can and will help you out in this matter, since they have most likely been in your shoes before. After taking a deep breath, take inventory and check to see if you have any cash that you have yet to deposit from your Peer-to-Peer payment accounts such as PayPal, Cash App and Venmo. It is always encouraged and highly advised that you have an emergency fund in another account as a homeowner to use at your discretion. If you decide to use some of your emergency funds to pay your assessment, then remember to make deposits to the emergency fund weekly/monthly. If you are waiting on a paycheck to come in, or had to pay for damages or address an emergency, then get in touch with a local board member and explain your situation to them. Be mindful that your history of timely payments will pay off if you can’t pay on time. Though, if coming up short or late on your payments has become routine, then your neighbors and board members may not be so endearing in these matters and will have to bring in a local attorney to try and speed-up the process.

Play Your Hand

There is no shame in having financial struggle, we all have had them at some point. Living is not cheap, and neither is freedom. With all that being said, be thorough when looking through your options. When partnered with the proper help, you can get through most anything – just contact the board or community manager, be diligent in the midst of your struggle and play your hand.

Talking TechCollect: The Future is Now

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The traditional methods of manual paperwork, checks, and in-person payments can be time-consuming, inefficient, and prone to errors when working with delinquents. However, with the advent of technology, a solution has emerged.  TechCollect is revolutionizing the collection process.

Click Here for a brief overview of what TechCollect is about.

Debtor Friendly Process

Providing a unique collection report and recovery roadmap for debtors, TechCollect has made our collection processes at Equity Experts faster, easier and debtor friendly. The Recovery Roadmap suggests a sequence of specific steps to go about the collection process based on the delinquents’ current financial situation, their real estate value, and how they prefer to communicate. For example: TechCollect operates like a GPS, it’s providing directions to help the delinquent to get to their destination of resolving their delinquency no matter where they are or what direction they’re heading.

Saving Time

The system provides live updates for each step in the collection process, noting which were completed successfully by the debtor and which were not, giving the property manager a real-time look at how the process is coming along with TechCollect. Unlike attorneys, which generally get paid more for a lengthly collection process, TechCollect resolves delinquencies quickly and efficiently since it is completely automated.

Click Here for a deeper look into the process.

Predictive Analytics and Reports

Taking data and information from our sources based on the delinquents’ financial state, their real estate value, and their communication preferences, TechCollect predicts the likelihood of a quick resolution. The system estimates the potential number of days required for recovery, the likelihood of legal action, and the likelihood of an early settlement. Each delinquents’ profile is provided with a score that helps determine the likelihood of a successful resolution based on these predictive analytics.


A Wise Man Once Said…

The simplest solution is almost always the best. Sooner is always better when dealing with delinquencies, for both the sake of the community, the delinquent owner, and the community manager.  Efficiency is the future, and Equity Experts represents the future with the help of TechCollect. Join us in making a change for the better in our communities and lives. It’s the simple solution, the best solution.

Click Here to schedule a demo presentation.


The Impact of Inflation on HOA Collections

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Understanding Inflation and HOAs

Homeowners’ Associations (HOAs) play a crucial role in maintaining the value and quality of life within a community. To fund their operations and services, HOAs rely on collecting fees from homeowners. However, as with any system, HOA collections are not immune to the effects of economic factors such as inflation. Here’s everything to know about the effects of inflation on HOAs and how to navigate the challenge at hand. 

Inflation refers to the general increase in prices of goods and services over time, resulting in a decrease in the purchasing power of money. It is influenced by various factors such as supply and demand dynamics, government policies, and global economic trends. The Federal Reserve aims for a target inflation rate of 2% to keep a healthy economy. In 2022, America had generated an inflation rate of 8%,  the highest it’s been since 1981. No matter the case or time, inflation creates challenges for HOAs since they rely on consistent revenue streams to keep both their businesses and communities afloat. 

The Challenges for HOA Collections:

1. Rising Operating Costs:
Inflation leads to an increase in the cost of materials, labor, utilities, etc. HOAs find it challenging to maintain the same level of service without adjusting their budgets. When operating costs rise, HOAs need to reduce other expenses or increase homeowners’ fees to cover the shortfall, which can create financial strain for residents.

2. Delinquency Rates:

Inflation also affects a homeowners’ ability to meet their financial obligations. As the cost of living rises, financial pressures are a given, which often result in higher delinquency rates. Reduced collections can limit an HOA’s ability to effectively maintain the community and provide amenities such as trash removal, lawn care, and road maintenance.

3. Budget Shortfalls:

Inflation devastates the purchasing power of the HOA’s reserve funds and budget. If the fees collected do not keep pace with inflation, it can lead to budget shortfalls, making it difficult for the HOA to meet its financial obligations. This may force the HOA to make tough choices such as cutting back on services or deferring necessary repairs and maintenance.

How to Mitigate the Effects of Inflation:

1. Annual Increases:

HOAs need to regularly assess their financial situation and adjust their fees accordingly. By accounting for inflation and rising operating costs in the budgeting process, HOAs can better ensure that they have sufficient funds to cover expenses without burdening homeowners with sudden increases.

2. Emergency Reserve Fund:

It is crucial for HOAs to maintain an adequately funded reserve fund to address unexpected expenses and long-term capital projects. HOAs should review and update their reserve fund plans regularly, prior to and during times of inflation for potential future cost increases. This proactive approach helps tremendously when trying to mitigate the impact of inflation on the HOA’s financial stability.

3. Community Communication:

HOAs must proactively communicate with homeowners about the impact of inflation on the community’s finances. By keeping residents informed about the reasons behind fee adjustments and the importance of timely payments, HOAs can foster a sense of understanding and cooperation within the community.

4. Financial Planning and Investments:

HOAs can explore investment strategies to help preserve the value of their reserve funds. When working with financial professionals, HOAs will identify investment opportunities that align with their risk tolerance and long-term financial goals. However, it is crucial to balance the potential returns with the associated risks and regulatory requirements.

5. Collection Costs:

Legal fees and costs should not be paid in advance. Communities that pay these legal fees and costs up front are essentially penalizing the entire community. Deferred cost providers like Equity Experts pay the legal fees and costs on behalf of the community and recover those fees from the delinquent owner. Managers also benefit by leveraging work-flow automation and predictive analytics offered by advanced service providers like Equity Experts.


Communities should be looking for solutions like Equity Experts to reduce their operating budget and the inflationary fee increases their owners are forced to pay.

For more on how we help reduce the impact of inflation, click here.

Trillions Going, Going, Gone

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Most financial experts believe US households had between $2-3 Trillion in excess savings at the end of 2021. That is TRILLIONS with a T! Those same experts believe that the amount has been reduced by 50% as of the end of 2022, and that those savings would be depleted by the middle of 2023. That is a lot of money to burn through in 18 months.

The good news for HOAs is that households have been able to stay on top of their assessments. Delinquencies have not been much of a problem in recent years, but that is changing. Savings are being depleted and we are likely in a recession or entering one soon.

What are you doing to prepare your communities for increased delinquencies? If your answer is “nothing” or referring them to their attorney, I encourage you to consult someone in our industry that worked through the Great Recession. We had a severe problem with delinquencies 10 short years ago, and the cost of legal services for collections is hard to justify when times are tight.

Hopefully, we will never experience that kind of fallout again, but the cyclical nature of our economy says we will have more delinquencies soon. When that happens, paying legal fees for collections on top of lost revenue is not a sound fiduciary strategy. Even communities that can “afford it” should not take on that extra burden.

Do not wait for the problem to appear before you look for a solution. Plan now and you will be ahead the problem with our unique solution (deferred fees), recovering 100% of your delinquencies at no out-of-pocket costs for liens, foreclosures, and filing fees.

Review this short video to understand our process. As a fiduciary, the benefits could not be clearer for communities, CAMs, and attorneys.

We Don’t Have a Delinquency Problem… Yet

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I recently attended a symposium for HOA Board Members and served on a panel with other experts addressing HOA Financial Planning.  The 200+ Board Members in attendance should be commended for taking time out of their schedule to help their communities prepare for their financial future. 

My co-panelists represented HOA insurance and reserve studies.  Clearly, you don’t look for insurance in the middle of a claim or a reserve study when starting a major project – you plan ahead so you have the right coverage and resources in place before they are needed. 

The same is true for collections.  Choosing the right solution now ensures you don’t have excessive legal fees or financial shortfalls in the midst of a recession.  Yet, I am surprised at how often I am told “delinquencies are not a problem” by Community Managers and Board Members.

To be fair, it has been over 10 years since we had a serious problem with delinquencies.  I expect that many Community Managers and Board Members were not in their current role to experience the challenges of the Great Recession.  Hopefully, we never experience that kind of fallout again, but the cyclical nature of our economy says we will have a recession soon (if we are not already in one). 

Most financial experts believe the extra savings accumulated by households from COVID stimulus will be gone by the middle of this year.  Combine that with further rate increases by the Fed to rein in inflation and we have the recipe for increased delinquencies. 

Don’t wait for the problem to appear before you look for a solution.  Plan now and you will be ahead of the problem with our unique solution (deferred fees), recovering 100% of your delinquencies at no up-front costs for liens, foreclosures, and filing fees.

 Take a look at this short video to understand our process.  As a fiduciary, the benefits could not be clearer for communities, community managers, and attorneys.  

Reducing the Impact of Inflation

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I wanted to call this blog our “Inflation Reduction Act”, but then I thought better of it.  We can see that inflation reduction will not be here in time for 2023, but we can help. Consider the following:

inflation reduction

If you are looking for a way to offset increases, consider a deferred collection solution like Equity Experts that does both proactive outreach and legal actions with attorneys. This approach will reduce your budget and increase cash based on the following:

  • Fees are deferred for the community, so owners that pay timely are not forced to finance the collection activity of neighbors who do not pay their assessments.
  • Fees are fixed and not subject to additional hourly charges that can bloat the cost of collections.
  • Delinquencies are resolved much faster than the industry average.


Much of our success at Equity Experts is based on our unique approach to collections.  We use data analytics to determine the best method to collect a debt and the best way to communicate with each debtor.  We proactively reach out to debtors to educate them on the importance of timely payment to avoid additional costs and actions.  Once we open the lines of empathetic and respectful communication, we offer numerous payment methods to help quickly resolve the delinquency.


Unlike most law firms, our attorneys receive insights from our analytics that help them choose the most efficient legal action.  Our scale helps keep legal costs down, and our platform remains available for prompt communication and convenient payment methods.


We offer a debtor hardship program called RelEEf to provide debtor assistance.  Once again, our analytics help us identify and qualify cases where assistance is needed.  We may waive up to 100% of our fees and provide extended payment terms to help the delinquent owner repay their assessments.  

different. better.

This is not your typical “contingency” collection agency or a “churn and burn” law firm.  We recover 100% of the assessments owed to our clients and collect our fees from the debtor.  We do it all, including legal actions, and we pay our own way because we are confident in our approach. 

Use the following calendar link if you or your Board would like to learn more.

Bursting Your Bubble?

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Bursting your bubble?

What if I told you that inflation was at 5.6%, gas was averaging $4.11 per gallon, and house prices had risen dramatically?  No big deal, right?  We are working our way through it… but those statistics are from 2008, immediately before the housing collapse.  Our present stats are worse.  Here is a quick comparison:

Bursting Your Bubble Table

There are plenty of reasons to believe that we will not see a repeat of the Great Recession, but the Fed is signaling that there will be a correction in housing.  The link and summary below are directly from the Federal Reserve Bank.

Managers should expect a decline in resale activity in the coming months, which will level-off and remain modest for 2-3 years.  Resale transactions have been a shot in the arm as we exit Covid, but it couldn’t last forever.  So how can you plan now to limit those losses with offsetting revenue sources?

Our team can provide a free revenue analysis if you are interested in ways to increase revenue during an economic downturn.  We can suggest options ranging from first-party workflow automations to integrated partnerships

What is the fed saying?

Our evidence points to abnormal U.S. housing market behavior for the first time since the boom of the early 2000s. Reasons for concern are clear in certain economic indicators — the price-to-rent ratio, in particular, and the price-to-income ratio — which show signs that 2021 house prices appear increasingly out of step with fundamentals. While historically low interest rates are a factor, they do not fully explain housing market developments. Other drivers have played a role, including pandemic-related U.S. fiscal stimulus programs and COVID-19-related supply-chain disruptions and associated policy responses. The resulting fundamental-driven higher house prices may have fueled a fear-of-missing-out wave of exuberance involving new investors and more aggressive speculation among existing investors.

Foreclosures Increase as Moratoriums Expire

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As we indicated in our August 9th, 2021 article, owners could still request COVID mortgage relief through September 30th, potentially extending forbearance until March 31st, 2022. In a recent article from DS News, the trend in active forbearance plans continues to decline, as show in this graph:

Active Forbearance Plans

Attom Data shows a corresponding impact in foreclosures. In their January 2022 U.S. Foreclosure Market Report, default notices, scheduled auctions or bank repossessions were up 29% from a month ago and 139% from a year ago.

Repossessions by banks also increased, up 57% from last month and 235% from last year. These were the hardest hit states:


A recent article on Yahoo! Finance says it all: A Wave of Bankruptcies and Foreclosures Appears to be Building. Maybe. Maybe not. But, good managers will be prepared. Here are some steps to consider:

  1. Ensure your collection policy is being followed. Many communities slow-rolled collections during the pandemic, but now is the time to be vigilant and consistent.
  2. File liens to protect your interests if you are not in a state with statutory lien laws for condos & HOAs.
  3. Use a hardship verification service like the free tool at when hardship claims or payment terms are requested by a homeowner.
  4. Make sure your collector does a thorough risk analysis of all delinquencies to screen for bankruptcies, military activity, bank foreclosure, and lien priority.
  5. Require your collector to use current technology and predictive analytics to maximize ROI and reduce costly legal actions.
  6. Keep in mind that your collector or attorney are vendors and fiduciaries. You should circulate an RFP annually to ensure your community is getting the best value and performance when addressing delinquencies.

As we indicated back in August, we don’t yet know the extent to which delinquencies will increase, but they will increase. The astute Board and Manager will be prepared.

Vaccinate Your 2022 Budget

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VACCINATE your 2022 budget

Good News:  We are exiting the pandemic!  Many have found new freedom in their work routine, increased wages, higher home values, and healthy stock portfolios.

Bad News:  Some have really struggled, and the programs that helped them stay afloat are expiring.  Forbes referenced a Harvard research project that explains how hard some have been hit.  

5 Ways to save:

  1. Lock in Prices Now: If you have good vendors in place, negotiate extension of their agreements now.  Going out for bid on contracts will be a harsh wakeup call.  Vendors worth their salt have plenty of work, and most are being forced to pay higher wages.  If you can lock in current pricing or even a modest increase, do it now.
  2. Review Long Term Agreements: If you already have multi-year agreements in place, review them to make sure you have strong termination provisions.  You cannot afford to get a last-minute termination notice in this environment.
  3. Prioritize Capital Projects: Material prices are skyrocketing.  You may need to revisit your reserve budget and push back some projects until prices come back to earth.
  4. Support from Utilities: Input from your utility providers may help you reduce expenses through a variety of programs.  Government regulations and incentives have your utility providers looking for ways to help you reduce consumption – take advantage of it!
  5. Insurance Deductibles: Check the amount of your insurance deductible and determine if it can be increased.  The goal should be to minimize the cost of insurance, have adequate emergency reserves, and only use insurance for significant loss events.

When it comes to revenue, the calculation is simple: community associations need 100% of it.  In the most recent issue of Common Ground, CAI identified some chilling statistics that could impact delinquencies.  Mortgage delinquencies have doubled since the start of the pandemic.  And a survey of CAI members found that 5% of owners were 90 days or more behind on assessments.  Giving adequate attention to projected revenue for your community is essential in this environment.  Here are some ways to “vaccinate your budget” against decreased revenue.

5 ways to retain revenue:

  1. Look for trends.  How has your AR and collection expense changed compared to 2020? What happens if you extend that pattern through 2021?  Now double it based on the elimination of federal moratoriums and subsidies. 
  2. Revisit your budgets from 2009-2011.  No one thought we would repeat the Great Recession, but pandemics don’t respect economic cycles.
  3. Make sure your financial statements show visibility and ROI into all collection costs:
    1. What is the total time and total cost of recovery for each delinquency?
    2. Create a line in your budget item for unrecovered legal/collection fees
    3. Create a Bad Debt line item in your budget for unpaid assessments
  4. Ask your collector or attorney to defer their fees.  Communities struggling with unpaid assessments can’t afford to pay fees now in the hope that they are recovered in the future. 
  5. Share the pain.  If collection and legal costs are deemed unreasonable, or if they are reduced in order to get a settlement, ask your collector to absorb those costs.

According to TechCollect, a data and predictive analytics provider, the average cost assessed to a homeowner for a lawsuit or a foreclosure is around $2,500. Alternatively, their data shows that the average cost of collections without legal action is around $500.  Up to 60% of owners will resolve their account without legal action if given an appropriate opportunity.  Predictive analytics and data mining improve results by providing multiple communication methods for outreach along with a path to the shortest and least-punitive resolution.

Collection Costs

Law firms that perform collections rarely have the resources or incentive to provide effective proactive efforts.  And the collection policies proposed by many attorneys suggest prompt legal action after a single warning letter.  This is troubling for Boards that want to avoid costly legal action against their members.

Bottom line: There is great uncertainty regarding increased expenses and revenue loss for communities.  Some resourceful and proactive effort can limit increased expenses, and data science can tell us how best to preserve revenue while making legal action increasingly rare.  More settlement options and better recovery methods are a positive evolution for our industry.  And the fiduciary obligation of Boards and managers is well-served by finding human-first solutions that reduce the need for legal action.

Besides, a compassionate, proactive approach, like the one detailed below, is just good business. 

  • Risk assessment prior to collection action
    • Evaluate risk of bankruptcy, military activity, bank foreclosure, etc.
  • Proactive outreach prior to legal action
    • Phone, email, SMS and Social Media
  • Debtor location methods for effective communication
    • Address, emails, phone numbers, and digital footprint
  • Payment plan options

Gar Liebler is active in real estate investment and technology services for the property management industry.  His original property management firm, LandArc, was founded in 1985 and sold in 2015. 

Equity Experts is a tech-based collection and foreclosure service for assessment recovery in community associations.

Expiration of Moratoriums

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Expiration of Moratoriums (and what it means for community associations)

The Federal moratorium on evictions and foreclosures expired July 31, 2021.  While this rule was specifically for federally backed mortgages, many other mortgage providers and agencies, including condo/HOA collectors, were honoring this guidance. 

Now that the moratorium has expired, what should we expect?  There is a fair amount of confusion over the program and the significance of July 31.  An article from CNET helps clarify the program and the relevant dates.  Here is what we need to understand for community associations:

  • There will be an increase in condo/HOA foreclosures in the coming months.
  • The majority of the remaining forbearance plans will expire between September 30 – December 31, 2021.
  • Owners can still request mortgage forbearance until September 30 that could extend through March 31, 2022.

Based on this information, we can surmise that there will be some immediate uptick in activity simply because many non-FHA collectors were honoring the July 31 date.  And the trend will continue through March 2022 as the remaining forbearance plans expire.  The chart below from the FHA lays out the forbearance periods. 

Covid Forbearance Periods

The Washington Post provides a dire perspective, characterizing the deferred debt as a tsunami that is about to hit homeowners.  Regardless of whether the impact comes as a tidal wave or a flood, the impact will be felt by communities.  Here are the numbers that you and your community need to know:

  • Over 2 million homeowners are delinquent on their mortgages
  • 8 million are in forbearance
  • 5 million are 3+ months behind
  • 10% of those in forbearance do not have adequate equity
  • 5% of delinquent homeowners are unemployed
  • 8% of those in forbearance are using the money to pay other bills

Attom Data sees a concentration of foreclosures in 50 vulnerable counties: “The report reveals that a stretch of states running from Connecticut through Florida, plus Illinois, had 43 of the 50 counties most vulnerable to the economic impact of the pandemic.”  Most owners that had the means to get out of forbearance are already back on track, but those still in forbearance are unlikely to get caught up on their mortgage, property taxes, and insurance.  And once that reality sets in, we will see an increase in HOA/condo delinquencies.  Homeowners facing the reality that they can’t afford to keep their home will keep whatever cash they can and let the debt holders, including their HOA, jockey for position once the home is sold or foreclosed. 

Here are some important steps to take for your community:

  1. Ensure your collection policy is being followed. Many communities slow-rolled collections during the pandemic, but now is the time to be vigilant and consistent.
  2. File liens to protect your interests if you are not in a state with statutory lien laws for condos & HOAs.
  3. Use a hardship verification service like the free tool at when hardship claims or payment terms are requested by a homeowner.
  4. Make sure your collector does a thorough risk analysis of all delinquencies to screen for bankruptcies, military activity, bank foreclosure, and lien priority.
  5. Require your collector to use current technology and predictive analytics to maximize ROI and reduce costly legal actions.

Now would also be a good time to circulate an RFP to your current attorney/collector while requesting proposals from other collectors in your area.  This will bring transparency and accountability to collections, just like you require for all other vendors.  The following best practices are suggested to limit risk and cost exposure while increasing transparency into the collection process:

  1. Use separate agreements for legal representation versus collections with no requirement to use the same firm for both services.
  2. Require that legal fees related to collections are deferred and collected from the debtor (not paid by your HOA) so that your community does not have to “finance” this cost.
  3. If your attorney will not defer their collection fees, create a separate budget line for legal fees and costs related to collections to ensure 100% is being recovered.
  4. Ask your manager to track and report the time to reach a resolution on each delinquency and maintain a running average on the number if days to resolve delinquencies.
  5. Use proactive efforts to contact owners and negotiate payment prior to legal action and track the percentage of accounts that are successfully resolved without legal action.

For the moment, we may have dodged a bullet when it comes to the economic impact of COVID-related delinquencies in community association.  We should be grateful but ever-vigilant in this season of first-ever experiences.  We don’t yet know the extent to which delinquencies will increase, but they will increase. The astute Board and Manager will be sure to be prepared.