Leasing & Occupancy

ABC’s of Age-Restricted Active Audit Communities

Many, but not all aspects of age-restricted active adult communities have niche qualities with respect to marketing, legal, management, activities, and operations. Using “active adult” or “age restricted” to describe a community is one of the first attributes used when discussing such a community along with its unit count, whether it’s an HOA, condominium or co-op and location. Let’s peel the onion on these niche qualities and see what it means when someone says active adult or age-restricted community.

A lot of communities have generalized monikers such as bedroom or commuter community, retirement, assisted living, family, singles, high rise, single family, etc. that are reflected in the makeup of the community. Active adult is such a moniker and more because it has a legal basis and specificity that other community descriptions do not have. 

The legal basis for active adult communities stems from the U.S. Department of Housing & Urban Development’s (HUD) 1968 Fair Housing Act as amended that protects all residents from various classes of discrimination. HUD includes in this Act a “Housing for Older Persons” exemption which allows a community to legally discriminate based on age, i.e. refuse to sell or rent to persons, not 55 or older. Note this federal exemption to legally discriminate is based only on age and does not include discrimination based on race, color, religion, sex, disability, or national origin.

State and local governments also have laws allowing communities to legally discriminate based on age, but local governments have pursued age-restricted communities for an additional goal- active adult communities add less to the government’s burden of providing schooling, recreation, and transportation than non-age restricted communities.  So, governments will sometimes mandate a developer will only get permits for housing if the community is designated as an active adult or age-restricted community.

Board of directors and association managers of active adult communities have a HUD-imposed onus they are subject to: (1) they must be able to demonstrate 80% of the occupied units are occupied by persons 55 years of age or older, (2) be able to provide documentation for verification of occupancy through reliable surveys and affidavits and (3) include examples of published written policies and procedures for determination of compliance of the Act.  Boards and managers must be able to demonstrate compliance with these three specific criteria under threat of a lawsuit and significant costs. Other community types do not have this legal burden.

Common ways to fulfill this legal burden are to require all new residents sign an application for parking, door fobs, amenity use, etc. that includes a statement the community is age restricted, they attest they comply with the age requirements and to provide space for them to enter their birth dates and sign it.  This age data should be kept in a database or paper files that are maintained and organized to demonstrate the age restriction requirements are being met effectively.  Also, the community’s marketing, legal and descriptive documentation should state it’s an active adult community with age restrictions.  Note the age restrictions apply to residents and tenants and not owners.  This allows a younger adult such as a relative to own the housing, but the residents such as parents that meet the age criteria can live there.

A section in the bylaws must exist that states the community is age restricted in order for the community to be an active adult age-restricted community.  A board of directors cannot simply pass a motion or resolution declaring itself to be one.  Boards often pass a resolution that expands on the community’s bylaw’s age restrictions to include criteria that lower the age restriction from age 55, states how long minors can live or visit in the community and other age rules.  The bylaws and age restriction resolution are part of the requirements for written rules and procedures stated in (3) above.  So are documents from procedures of age restriction violations processes.

Other legal criteria in the community’s documents can affect the activities part of an active adult community.  The governing documents can mandate activities and amenities appropriate for adults remain funded, and the requirement to do so is codified in the government permitting process and bylaws.  Specific amenities such as pools, exercise or hobby facilities can be mandated by the government in order for a developer to pass the permitting process.  Sometimes the governing documents prohibit or constrain the reducing of budgeting for operating activities and amenities without a vote from the membership.  The legal requirements are one thing, but many of the owners’ expectations are that they will be offered an array of activities and amenities on an ongoing basis and woe to the director or manager that does not respect or deliver on these expectations.

A trip wire for boards and managers of active adult communities can be how far to go in supporting elements of an assisted living community.  There can be tension between the older or aging active adult residents making demands for more services or assistance and the more vibrant active adult residents that do not want their assessments to go towards fostering an assisted living environment.  The more active residents will cite they bought into an active adult community, their home values could suffer if appearances of assisted living emerge and their self-image will suffer if the active adult environment becomes meshed with elements of an assisted living environment.

So, in ways described above, there are unique, hard ways that differentiate an active adult age restricted community from other types of communities.  There are also unquantifiable, general, soft ways that distinguish an active adult community from other communities.  Volunteerism, sense of community and pride are often more evident in active adult communities.  These elements may manifest their selves to management and the board of directors by increased resident interaction, more rules to manage, more demand for activities and services and more needing out of the box reaction and thinking to meet the expectations of residents.  More often than not, meetings are held during the daytime (which annoys the active adults that still work yet want to be involved).  There are more pressures to work outside the traditional scope of work in community management and governance, especially from increasingly needy residents or aging active adults. Examples of this are getting into the social services space of providing meals, coordinating transportation, interpreting documents, technology support and sometimes just being a good listener and giver of your precious time.

Another way of saying this is that there is more room for compassion in an active adult community than other community types.  When you get involved in an active adult community be prepared and patient with the inevitable time management conflict between compassion and the daily tasks of community management and governance.

In a holistic comparison between managing and governing age-restricted active adult communities and other types of communities, there are more similarities than differences.  By and large, residents in all common interest communities want the same thing from their management and governance of their community:  professionalism, communications, openness, awareness, accessibility, and accountability.  These fundamentals apply to community management, the board of directors and community volunteers.  These fundamentals are taught and practiced by Community Associations Institute (CAI) and their largest chapter the Washington Metropolitan Chapter of CAI (WMCCAI). Both are at www.caionline.org. They offer a lot of resources, information, and training that will help you manage your community.

By Craig Magargel, CMCA, AMS, PCAM

Craig Magargel is a building manager at Lansdowne Woods of Virginia. He has over twelve years of community management experience in the Virginia and Washington, D.C. area and is active in the D.C. Chapter of CAI. He has managed active adult communities ranging from 225 – 2,000 units in condos and HOAs as an on-site manager and portfolio manager.

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