Ascentia Policy & Procedure Manual

Policy & Procedure Manual

Our mission is to provide vibrant, affordable housing communities for our residents, rewarding careers for our employees, and consistent returns to our investors.

Policy & Procedure Manual

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Revised as of March 11, 2014

TABLE OF CONTENTS
1. ASCENTIA MISSION AND STATEMENT OF ETHICS A. Mission Statement & Purpose B. Statement of Ethics 2. INTRODUCTION A. Organization of the Policy and Procedure Manual C. Authority D. Updating and Maintaining 3. INVESTMENT STRATEGY A. Overview B. Real Estate Investment 1. Prospecting 2. Acquisitions 3. Dispositions C. Home Investment 1. New homes 2. Used homes D. Capital Spending 1. Maintenance 2. Amenity and expansion E. Planning 1. Long-range planning 2. Annual property budgets 4. SERVICE AND LEADERSHIP AT ASCENTIA A. Overview B. Servant Leadership 1. How to communicate effectively 2. How to listen effectively C. Gold Star Service Program 1. Maintenance calls 2. Quarterly home assessments 5. MARKETING AND LEASING: THE ART OF OCCUPANCY A. Overview
Revised as of March 11, 2014 TABLE OF CONTENTS

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Policy & Procedure Manual B. Market surveys, analysis, and plans 1. Market survey and analysis 2. Market plans 3. On-site marketing manual C. Making a Great First Impression 1. Presentation and appearance 2. Leasing preparation 3. Email leasing and service 4. Telephone leasing and service 5. Walk-in or face-to-face leasing and service 6. Professional dress standards 7. Internet and social media D. Managing Prospects 1. Sources of prospects: RentCafé 2. Sources of prospects: general marketing websites 3. Sources of prospects: drive-by and telephone calls 4. Quick guest card 5. Popcard and reporting E. Property Showings 1. Showing basics 2. Showing with children 3. Showing after dark 4. Showing in inclement weather

6.

REVENUE AND COLLECTIONS A. Overview B. Evaluation of Prospective Residents 1. Fair housing and other legal considerations 2. Resident screening process 3. Application fees C. Leases 1. Components of the lease 2. Setting the rent 3. Security deposits and high-risk fees 4. Concessions 5. Special rules for resident-owned homes 6. Lease execution and processing D. Determining What the Resident Owes 1. Overview 2. Lease charges 3. Utility charges 4. Vacant cost recovery charges 5. RV lease charges (short- and long-term)

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Policy & Procedure Manual 6. Late fees 7. Note payments, installment contracts, lease-to-purchase and escrows 8. Ancillary charges E. Collecting What the Resident Owes 1. Monthly collections 2. Producing and delivering statements to the residents 3. Processing recurring payments 4. Processing special payments 5. Processing online payments 6. Notices 7. Bad debt and accounts receivable write-offs F. The End of the Resident Lifecycle 1. Lease renewal Moving-out (voluntarily) 2. Eviction of renter 3. Eviction of home owner 4. Deposit accounting G. Scheduled Monitoring Activities 7. RESIDENT RELATIONS AND MANAGEMENT A. Overview B. Resident Orientation at Move-in 1. Resident orientation 2. Pet policy C. Resident Communications and Notices 1. Communication methods 2. Community Guidelines for Living 8. PROPERTY MANAGEMENT A. Overview B. The Community Manager 1. Monthly management calendar 2. Daily tasks 3. Monthly tasks 4. As needed C. Understanding the Property Through Yardi 1. Managing unit types D. Property Safety and Liability Management 1. Proper planning, disciplined scheduling, and consistent follow-up 2. Managing emergencies 3. Effective resource management 4. Personnel job responsibilities and workers’ compensation
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TABLE OF CONTENTS

4 5. Resident service requests

Policy & Procedure Manual

E. Curb Appeal 1. Signage 2. Entries and public street frontage 3. Buildings 4. Landscaping and grounds 5. Mailboxes 6. Playgrounds 7. Pools 8. Other amenities F. Infrastructure 1. Water systems 2. Sewer systems 3. Gas and electrical systems 4. Streets and gutters 5. Sidewalks 6. Parking pads 7. Lighting 9. HOME MANAGEMENT A. Overview B. Exterior Standards 1. ADA compliance 2. Roof 3. Gutters and downspouts 4. Siding 5. Skirting 6. Decks 7. Parking 8. Landscaping C. Interior Standards 1. Safety 2. ADA compliance 3. Carpet and flooring 4. Walls 5. Windows 6. Doors 7. Lighting 8. Appliances 9. Cabinets 10. Plumbing 11. HVAC 12. Furniture

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Revised as of March 11, 2014

Policy & Procedure Manual 13. Miscellaneous amenities D. Home Lifecycle 1. Key control 2. New home setup – physical 3. Home purchases – administrative 4. Inspections 5. Taking pictures of the home 6. Pre-move-out process 7. Normal turn – make ready 8. Capital refurbishment 9. Abandoned homes 10. PURCHASES AND DISBURSEMENTS A. Overview B. General Policies 1. Documenting accounts payable and required vendor information 2. Disbursement approval amounts 3. Payable responsibilities C. Invoice Approval 1. Operational expenses 2. Utility expenditures 3. Corporate credit card 4. Employee reimbursement 5. Home purchase and setup expenditures 6. Capital expenditures 7. Rushed payments 8. Resident purchases 9. Petty cash 10. Out of office 11. HUMAN RESOURCES A. Overview B. Employee Regulations 1. Employee recognition 2. Work from home (home office only) 12. ACCOUNTING AND FINANCE A. Overview B. General Accounting Policies 1. Overview 2. Financial operations 3. General accounting policy 4. Financial reporting documentation
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Policy & Procedure Manual 5. Conflicts of interest 6. Concerns of financial misstatements C. Delegation of Authority 1. General policy statement 2. Establishment of delegation of authority 3. Changes to delegation of authority (including communications) 4. Signing documents 5. Temporary delegation of authority 6. Policy exceptions 7. Delegation of authority matrix 8. Miscellaneous D. Compliance 1. Overview 2. Financial statement audit 3. Financial covenants 4. Federal taxes 5. State and local taxes 6. Payroll taxes E. Internal Controls 1. Overview 2. Policies and procedures 3. Risk assessment 4. Control activities 5. Information and communications 6. Monitoring 7. Components of the control activity 8. Record retention 9. Internal control limitations F. Segregation of Duties 1. Overview G. General Ledger and Chart of Accounts 1. Overview 2. Account code structure 3. Accounting transactions 4. Accounting estimates H. Cash, Treasury Management, and Bank Reconciliations 1. General policy on handling cash 2. Bank account structure 3. Bank account reconciliation I. Accounting for Assets 1. Capitalization policy 2. Depreciation and useful life

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Revised as of March 11, 2014

Policy & Procedure Manual 3. Prepaids and other assets J. Accounting for Liabilities, Debt, and Partners’ Capital 1. Accrued liabilities 2. Debt 3. Partners’ capital

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K. Financial Reporting 1. Scheduled reports 2. Ad hoc system reports L. General Administrative Policies 1. Overview 2. Official notices 13. TECHNOLOGY AND INFORMATION SYSTEMS A. Overview B. Information Technology Controls 1. Access controls 2. User account management 3. Passwords 4. Disaster recovery backup 5. Change management 14. GLOSSARY 15. APPENDIX

Revised as of March 11, 2014

TABLE OF CONTENTS

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1.
A.

ASCENTIA MISSION AND STATEMENT OF ETHICS
Revised as of March 6, 2014

Mission Statement & Purpose
Our mission is to provide vibrant, affordable housing communities for our residents, rewarding careers for our employees, and consistent returns to our investors. We create, manage, and return value everywhere we can. We believe our values drive value. At Ascentia, we believe there is no other way to do business. To augment our values and add specific description to our business process, we've adopted these six qualities that guide our actions:       Decisive - Quick to act with the freedom to invest in our communities Conscientious - “Win-Win" – Focused on the need of all parties involved Expert - Proven, results-oriented Progressive - Transformative, forward thinking Courageous - Steadfast in the face of adversity Authentic - True to our word

B.

Statement of Ethics
The owners, directors, executives, managers and employees of Ascentia endeavor to operate to the highest ethical values and will abide by all laws and the policies set forth in this manual. We collectively encourage a positive work environment, a strong work ethic, and truthful and appropriate interaction with our customers and employees. With any organization there can be failures in attaining this high ideal. Failure to comply with either the law or the policies of the company will lead to disciplinary action up to and including immediate termination.

Policy Initiatives
Initiative Editing Final approval Additional explanation Requires content and style editing. BBV and JJE to provide final approval. Assigned DDB JJE, BBV Reviewed 3/6/14 3/6/14

Revised as of March 6, 2014

ASCENTIA MISSION AND STATEMENT OF ETHICS

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2.
A.

INTRODUCTION
Revised as of March 7, 2014

Organization of the Policy and Procedure Manual
This manual establishes Ascentia’s policies, the rules by which we operate, and the procedures, the steps that are taken to ensure we comply with those policies. This manual does not include training materials on best practices, technique, or the steps required to use the Yardi system. The policies and procedures of Ascentia are organized in the following manner around key business cycles:           Investment Strategy – what real estate we invest in and why; Marketing: Finding New Residents – finding the right resident for our communities; Revenue and Collections – charging and collecting rent; Resident Relations and Management – holding are residents accountable to our standards in order to build outstanding communities; Property Management – making sure we get the most out of our communities; Home Management – making sure we get the most out of our homes; Purchases and Disbursements – paying our bills; Human Resources and Payroll – managing our employees; Accounting and Finance – recording, reporting, controlling, and analyzing our business date; and Technology and Information Systems – our best practices for implementation and utilization.

Within a business cycle are one or processes that can be broken down into one or more activities, for which there are defined policies and procedures. The following heading formats match with each of these divisions:

1. BUSINESS CYCLE
A. Process
1. Activity
a.) Policy, procedure, or definition

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INTRODUCTION

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Policy & Procedure Manual

C.

Authority
All material operations of Ascentia are governed by this policy and procedures manual and are effective as of March 17, 2014. The absence of a policy or procedures in this manual is in no way approval of an undocumented process. Any material and undocumented process should be identified and an appropriate policy and procedure developed and approved. The policy and procedure manual will evolve as our business model and technology evolves. In its current version, it is not complete, with many policy initiatives in process, which are designated at the end of each section. Even an incomplete policy governs how we operate, and if you have any questions, always consult your supervisor.

D.

Updating and Maintaining
All policies and procedures ultimately must be approved by the Chief Executive Officer and the President. If any defect, inconsistency, or gap in the policies and procedures is identified, it should be immediately discussed with your supervisor. You and your supervisor should develop a draft policy and procedure to be submitted to the Vice President of Operations and the Vice President of Finance for review. If the draft policy is approved, the Controller and the Director of Data Operations and Technical Services will edit the policy for language, grammar, and consistency with other policies. Upon completion of their edit, the proposed policy will be submitted for approval by the Chief Executive Officer and the President. The approved policy will be added to the policy and procedure manual in the appropriate section and published to the entire company. While hard copies of the policy and procedure manual will be made available and updated, the preferred mode of publication is through the internet. The most up to date version of the policy and procedure manual will always be available on the Ascentia Employee Portal as a searchable, interactive document. The Controller and the Director of Data Operations and Technical Support will have the responsibility of maintaining the policy and procedure manual.

Policy Initiatives
Initiative Editing Additional explanation Requires content and style editing. Assigned DDB Reviewed 3/6/14

INTRODUCTION

Revised as of March 7, 2014

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3.
A.

INVESTMENT STRATEGY
Revised as of March 6, 2014

Overview
Our proven track record establishes us as one of the elite organizations in the affordable housing sector of the real estate industry. We enjoy a resource advantage over many of our competitors as the business is capital intensive. Most participants in our sector are individuals or family operators without access to the capital needed to be successful. Better equipped for these challenges, we can acquire properties at attractive values, thus driving strong cash-on-cash returns and increasing equity. We know the field best and navigate it best.

Policy Initiatives
Initiative Content development Additional explanation Complete policy overview once the particulars of the overall policy have been determined. Assigned DDB Reviewed 3/6/14

Revised as of March 6, 2014

INVESTMENT STRATEGY

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B.

Real Estate Investment
Revised as of March 6, 2014

Policy Initiatives
Initiative Content development Additional explanation Complete policy overview once the particulars of the overall policy have been determined. Assigned DDB Reviewed 3/6/14

Revised as of March 6, 2014

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Policy & Procedure Manual

1.

Prospecting
Revised as of March 6, 2014

a)

Target return: (1) Ascentia is currently targeting mobile home communities that can provide minimum lifetime cash on cash return of 8%.

b)

Broker packages and outside referrals: (1) These are sent initially to Chief Executive Officer and Vice President of Asset Management for screening.

c)

Prospecting system leads: (1) These leads come from continual follow up and contact with current owners through the business development process. Owners who show an interest in selling are flagged by the Vice President of Asset Management and their property is presented to the Chief Executive Officer. If the Chief Executive Officer wishes to go forward, the following Acquisitions process ensues, which is shown in the next sections.

(2)

(3)

Policy Initiatives
Initiative Content development Additional explanation Policy based on memo written by MJ Vukovich dated July 17, 2013. Additional content is intended to be developed to provide further detail on each of the steps. Assigned MJ Reviewed 3/6/14

INVESTMENT STRATEGY

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2.

Acquisitions
Revised as of March 6, 2014

a)

Targets for investment: (1) Return: (a) Minimum of 5% cash on cash in place (b) Minimum of 10% cash on cash in three years (c) Minimum of 16% IRR in seven years Property size: (a) Minimum of 150 units in an existing market (b) Minimum of 300 units in a new market Purchase price: (a) Minimum blended cap rate (real estate and home) of 9% (b) Maximum rent multiplier of 75

(2)

(3)

b)

Procedure for acquisition: (1) Initial leads are to be given to the Vice President of Asset Management for screening. Leads that pass the initial screening are discussed with the Chief Executive Officer, to decide if they are worth full underwriting. Once the potential acquisition is approved for full underwriting, the Vice President of Asset Management will gather more detailed information and run cursory numbers on the project. These are to be reported back to the Chief Executive Officer and President to make a determination whether to proceed further and prepare an offer. Leads that pass the second screening go into full underwriting with both the Vice President of Asset Management and the Vice President of Accounting and Finance. This process completes a full pro forma and examination of the seller’s materials to present to the Investment Committee, which consists of the Chief Executive Officer, President, Vice President of Asset Management, Vice President of Accounting and Finance, and Vice President of Operations. Property is presented to Investment Committee, who will decide: (a) To make an offer or not (b) If an offer is made, at what price and terms (c) What the highest offer price will be based on counterproposals Properties that are approved to make an offer have the offer completed and sent by the Vice President of Asset Management. Counters require the approval of the President and the Chief Executive Officer to complete.

(2)

(3)

(4)

(5)

(6)

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INVESTMENT STRATEGY

3-B|4 (7)

Policy & Procedure Manual Once under contract, the contract is taken by the Acquisitions Administrator and the due diligence is completed on the property. Final release of the earnest money must have signatures of approval and inspection by the Investment Committee. Property Closing (a) All principal members of the deal (General Partners and the Vice President of Asset Management) must be present from 8:00 am to 5:00 pm on the day of closing for signature and approval. (b) Executed documents are to go to the Acquisitions Administrator.

(8)

(9)

Policy Initiatives
Initiative Content development Additional explanation Policy text from investor brochure dated October 24, 2013. The procedure text without brackets is from the memo written by MJ Vukovich dated July 17, 2013. This section will require additional review and editing. Assigned MJ Reviewed 3/6/14

INVESTMENT STRATEGY

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3.

Dispositions
Revised as of March 6, 2014

a)

General policy for property disposition: (1) Any property that consistently has negative cash flow for 12 months and does not have a reasonable chance of obtaining the minimum 8% lifetime cash on cash return will be sold.

b)

Procedures for disposition: (1) Properties that are on the marketing for disposition list must be approved by the Investment Committee. The properties included on the marketing for disposition list are decided upon and discussed during Quarterly Board meetings to inform all pertinent parties of the intent to sell and to share information about the strategic importance of the sale of the property Property pricing is analyzed and presented by the Vice President of Asset Management and presented to the Chief Executive Officer. Property marketing channel is decided by the Vice President of Asset Management and the Chief Executive Officer. (a) Listing with a broker (b) Preparation of marketing materials for dissemination (c) Marketing channels Offers received by the Vice President of Asset Management are to be discussed with the Investment Committee. Counterproposals are made by the Vice President of Asset Management at the approval of the President and the Chief Executive Officer. Once a contract has been executed, the General Partners, Chief Executive Officer, President, and the Vice Presidents of Asset Management, and Acquisitions Administrator must be alerted within 24 hours of acceptance of contract. The executed contract is forwarded to the Acquisitions Administrator and all documents sent to the Buyer must be routed through the Acquisitions Administrator. Property closing (a) All principal members of the deal (General Partners and Vice President of Asset Management) must be present from 8:00 am to 5:00 pm on the day of closing for signature and approval. (b) Executed documents are to go to the Acquisitions Administrator.

(2)

(3)

(4)

(5)

(6)

(7)

(8)

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INVESTMENT STRATEGY

3-B|6 (9)

Policy & Procedure Manual Properties that receive an unsolicited offer must be presented to the Chief Executive Officer and the President. (a) If the offer is deemed to be within the acceptable range of negotiation (i.e. has a reasonable chance of arriving at an agreeable price), the Investment Committee must be alerted and, if necessary, will meet to discuss and decide on an appropriate course of action. (b) If a counterproposal is made, it will follow the same procedure as a marketed property.

Policy Initiatives
Initiative Content development Additional explanation The content of this policy comes from a memo written by MJ Vukovich dated July 17, 2013. Further editing or content may be developed. Assigned MJ Reviewed 3/6/14

INVESTMENT STRATEGY

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C.

Home Investment
Revised as of March 7, 2014

Ascentia currently has a long-term occupancy improvement program predicated on the desirability of our homes as a rental option to working families, who are unable to purchase a home and find the traditional 3 bed 2 bath apartments too small for their families. Ascentia will continue to invest annually in new homes and select used home to fill site vacancy. Homes purchased by the company are intended as a rental first. In select situations, the sale of the home to a resident may be warranted.
Policy Initiatives
Initiative Content development Additional explanation Additional details and policy will need to be developed in addition to the general position statement. Assigned DDB Reviewed 3/7/14

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Policy & Procedure Manual

1.

New homes
Revised as of March 7, 2014

a)

The strategic goal of new homes: (1) A bulk purchase of new homes is executed annually, locating the homes in our communities per the following guidelines to ensure an appropriate risk adjusted return on investment: (a) Community vacancy (b) Market absorption (c) Profitable rent

Policy Initiatives
Initiative Content development Additional explanation The parameters that predict and measure this investment need additional development. Assigned DDB Reviewed 3/7/14

INVESTMENT STRATEGY

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2.

Used homes
Revised as of March 7, 2014

a)

The strategic goal of used homes: (1) In general terms, Ascentia does not seek out used homes to be purchased and brought into our communities. Ascentia performs an economic evaluation on every used home that become available in our communities. The economic evaluation is based on the following items to determine if the used home provides the appropriate risk-adjusted return: (a) Home exterior (b) Refurbishment cost (c) Useful life (d) Rent (e) New home opportunity cost

(2)

(3)

Policy Initiatives
Initiative Content development Additional explanation The parameters that predict and measure this investment need additional development. Assigned DDB Reviewed 3/7/14

Revised as of March 7, 2014

INVESTMENT STRATEGY

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D.

Capital Spending
Revised as of March 7, 2014

Capital spending refers to those expenditures that add future value to Ascentia’s assets by either adding a new asset or prolonging the life of an in-place asset, in contrast to expenses, which are current expenditures that simply maintain our ability to generate rental revenue. Capital spending priorities and budgets are determined through the long-term planning and budget process as directed by the Executive Committee as described in this policy.
Policy Initiatives
Initiative Content development Additional explanation Additional detail on the parameters of capital spending to be developed. Assigned DDB Reviewed 3/7/14

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Policy & Procedure Manual

1.

Maintenance
Revised as of March 7, 2014

a)

Definitions: (1) Maintenance capital is an expenditure that (1) extends the useful life of an inplace asset by more than one year, and (2) is in excess of $2,000. The capital project schedule is a listing of anticipated and approved capital projects, both maintenance and expansion, consistent with long-range planning and site condition reports.

(2)

b)

Determining maintenance capital spending priorities: (1) Maintenance capital spending priorities are determined by the Executive Committee consistent with long-range planning and property condition reports in support of our long range distribution goals.

c)

Maintenance capital procedures: (1) Prior to the development of the annual community budgets, the district managers, the Vice President of Operations, and the Executive Committee will: (a) Draft a scope of work for each maintenance capital project for the coming year; (b) Obtain preliminary unit, or other appropriate pricing estimates, from contractors; (c) Prepare a summary of the business logic for the capital investment; (d) Provide pictures of the project, where possible; (e) Prepare a capital project schedule that includes: (1) project name, (2) cost, (3) summary business justification; and (f) Review final summary schedule. During annual community budget meetings, the district managers, Vice President of Operations, and Vice President of Finance will: (a) Incorporate value-adding capital projects in the budget; (b) Finalize the budgets for review by the Chief Executive Officer and President; (c) Prepare a revised summary capital project schedule, with the information described above; (d) Determine if additional (professional) resources are needed; and (e) The final community budgets will be published to the Ascentia Team, including the approved capital project schedule. 30 days or more before the capital construction is to commence, the district managers will: (a) Obtain 3 bids on the project, unless otherwise directed by the Vice President of Operations;

(2)

(3)

INVESTMENT STRATEGY

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Policy & Procedure Manual (b)

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(c) (4)

Verify the cost of the project and compare it to the amount budgeted. Any variance to the budgeted amount in excess of 10% on projects under $100,000 and 5% on projects over $100,000 will need to be re-submitted and re-approved by the Executive Team; and Identify the contractor for the work.

Upon completion of step 3 above, the Vice President of Operations will submit the project to verify funds availability with the Vice President of Finance and the President at which time the project will be released to proceed.

Policy Initiatives
Initiative Content development Additional explanation Long-range community-level plans to be developed along with property condition reports to aid in the long range resource allocation planning. Assigned DDB Reviewed 3/7/14

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Policy & Procedure Manual

2.

Amenity and expansion
Revised as of March 7, 2014

a)

Definition of amenity and expansion capital: (1) Amenity capital is an expenditure that (1) puts into place a new amenity asset intended to improve that quality of the community with a useful life longer than one year, and (2) is in excess of $2,000. Amenity assets would include any asset that is intended to provide more value to our residents, like a playground. Expansion capital is an expenditure that (1) increases our unit count through the development of land or reclaiming a non-revenue producing site, and (2) is in excess of $2,000.

(2)

b)

Additional economic evaluation: (1) Amenity and expansion capital projects require additional evaluations to those detailed in the maintenance capital policy.

Policy Initiatives
Initiative Content development Additional explanation The detailed procedures to submit, evaluate, and schedule amenity and expansion capital projects to be developed. Assigned DDB Reviewed 3/7/14

INVESTMENT STRATEGY

Revised as of March 7, 2014

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E.

Planning
Revised as of March 7, 2014

At the core of our responsibilities as asset managers is thoughtful, thorough and accurate planning that produces consistent market return to our investors
Policy Initiatives
Initiative Content development Additional explanation Introductory text and principles to be developed after detailed policy and procedures that follow are completed. Assigned DDB, MD Reviewed 3/7/14

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Policy & Procedure Manual

1.

Long-range planning
Revised as of March 7, 2014

a)

Long-range goals are set by the Executive Committee: (1) Annually, the Executive committee determines the financial and related operating goals for the next five years, referred to as the Ascentia Five Year Plan.

b)

The Five Year Plan will be updated annually: (1) The Five Year Plan will be consistent with the overall Ascentia investment goals and the individual property budgets.

Policy Initiatives
Initiative Content development Additional explanation Need to establish how the individual property level five year plans relate both to the overall plan and to the individual annual budgets. Assigned DDB, MD Reviewed 2/28/14

INVESTMENT STRATEGY

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2.

Annual property budgets
Revised as of March 7, 2014

a)

General policies: (1) A budget for each property will be completed annually, consistent with the goals of the Ascentia Five Year Plan, and the Property Five Year Plan if available. The budgets will contain the following financial components: (a) Revenue (i) Home, site, apartment, and commercial rent (ii) Concessions (iii) Utility recovery income (iv) Other material revenue items (b) Expenses (i) Fixed and corporate expenses (ii) Payroll (iii) Administrative (iv) Repair and maintenance (v) Utilities (c) Capital spending (d) Home investment The budgets will contain the following key performance indicators: (a) Occupancy (b) Unit rents (c) Turnover (d) Turnover costs (e) Delinquency and bad debt (f) Operating Expense Ratio

(2)

(3)

b)

Step One: Finance and accounting creates the initial budget: (1) Accounting and finance will prepare initial budgets for each property in Excel consistent with the Five Year Plan, and if available the Property Five Year Plan. Accounting and finance will begin this process on September 1. Once the templates are completed, a training session will be conducted. The goal of this session is to (1) provide a review of the financial goals built into the initial draft of the budget, and (2) provide any needed template training. The initial budgets and training should be completed by September 30.

(2) (3)

(4)

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Policy & Procedure Manual Step Two: The District Managers review the initial budgets with their Community Managers: (1) The District Managers will conduct an in-person one day budget review with each Community Manager. The District Managers should exercise good judgment in the amount of time they spend with each Community Manager. The times spent should be commensurate with the complexity of the community. The Community Manager should have the following information for the budget review: (a) Expected rate increases from key contractors (b) Cost of repair items and upgrade projects for the upcoming year (c) Bids on anticipated capital projects (d) Bids on any material items (e) List of equipment needs or repairs (f) Costs for local advertising (g) Costs for resident functions planned for the upcoming year (h) Details on staffing needs, changes or pay increases The District Manager should assemble and review the following information: (a) Property Five Year Plan (b) Rent increases (c) Home listing (d) Most recent box score summary (e) Property turnover history (f) Payroll register (g) Three years of income statements and current YTD income statements (h) Previous budgets The focus at this stage should be on methods, metrics and key reports. The District Manager should review the completed budget thoroughly. Review each account as it compares to the previous year’s projection and percentage change column. The District Manager must understand why each account is budgeted significantly higher or lower than the previous 12 months and must provide explanation and justification for significant year over year variances and most importantly to the stated Operation Expense Ratio goals. Reviewed budgets with all appropriate explanations should be submitted to the financial analyst by October 31.

(2)

(3)

(4)

(5)

d)

Step Three: Conduct final budget conference to review budgets with Vice President of Operations and Vice President of Finance: (1) The District Manager will review each community budget with the Vice President of Operations, Vice President of Finance and the President. During the conference, adjustments will be made to the budgets directly.

(2)

INVESTMENT STRATEGY

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Policy & Procedure Manual (3)

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This completed budget will be officially submitted to the President and Chief Executive Officer for final approval. Budgets ready for final approval will be submitted by December 1.

(4) e)

Step Four: Chief Executive Officer and President officially approve each property budget: (1) The Vice President of Finance will provide the President a summary analysis of the property budgets that provides all relevant information to evaluate the property budgets vis-à-vis the Ascentia Five Year Plan. If the budgets are satisfactory to the President, he will review with the Chief Executive Officer and obtain final approval. If the budgets are not approved, they will be resent to the District Manager for modification with an explanation for the requested revision. If the budgets are approved, they will be sent to the District Managers to keep for their records the financials uploaded into Yardi. This step will be completed by November 30.

(2)

(3)

(4)

(5) f)

The annual budget timeline: (1) September: Accounting and finance builds initial budget models and send to the District Managers. October: District Managers submit budgets for review. November: Budget conference completed and budget submitted to President and Chief Executive Officer for approval. December: Final approval of the budget and upload into Yardi.

(2) (3)

(4)
Policy Initiatives
Initiative Editing Content development

Additional explanation This section requires a final technical edit. How this policy relates to long-range planning and property condition assessment will require further development.

Assigned DDB JJE, DDB, MD

Reviewed 3/7/14 3/7/14

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4.
A.

SERVICE AND LEADERSHIP AT ASCENTIA
As of March 7, 2014

Overview
At Ascentia we strive at all times to provide the highest quality service, whether to resident or employee or investor. The standards are high, demanding that each of us every day: deliver a quality community experience to our residents, work together and serve each other as a team, and create and execute our strategy, consistent with our core values, to provide the highest return possible to our investors.

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As of March 7, 2014

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B.

Servant Leadership
As of March 7, 2014

The core philosophy that drives Ascentia is that of servant leadership. To be servant leaders, we seek to provide the highest level of results through the ongoing service or residents and our fellow employees. The servant leader begins by focusing primarily on the growth and well-being of the community to which they belong, not the accumulation of power.

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As of March 7, 2014

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Policy & Procedure Manual

1.

How to communicate effectively
Revised as of March 7, 2014

a)

Defining communication: (1) Communications can be defined as “a process by which information is exchanged between individuals through a common system of symbols, signs, or behaviors.” It’s a simple definition for a complex concept. The need to communicate is built in to virtually every job description. But while communication is commonplace, effective communication is not. The main reason effective communication is a challenge is because the meaning of all communications is determined by the person receiving it – not the person communicating.

b)

The door is always open: (1) Clear, concise and direct communication by all employees is mandatory for any company to achieve optimum operational efficiency. At Ascentia we embrace the concept of an open door policy that promotes open and honest communications with all customers, internal and external. It is imperative that all employees apply this concept in all communications at all times. The following is a guideline intended for the employees of Ascentia to utilize in developing professional and effective communication practices.

c)

Three basic rules for effective communication: (1) Know your message – What is it that you are trying to convey and why? Is it purely informational or persuasive; is it to elicit action from another person? If you are not sure what you are trying to say and what your objective is, others won’t know either. Know your audience – Who is the message intended for? Consider what they already know and any feelings you may have on the subject at hand. How does this person receive information best? Remember that one message may have many different interpretations. Know yourself – What are your strengths, weaknesses, and preferences in delivering communication? Are you too verbose? Do you use jargon or too many catch phrases? Consider how effective your body language and other nonverbal skills are. You must understand your own communication style in order to modify it to meet the needs of your audience.

(2)

(3)

d)

Avoid common communication barriers: (1) Emotional Noise: Being too emotional, extremely nervous, having a personal agenda, or feeling the need to be right can taint objectivity. Being aware of your emotional mindset will help you in crafting your message.

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Uncertainty of Message: This happens when we are simply unsure of what to say, when to say it and how to deliver it. If the length of communication is long, or the method of delivery is inappropriate, the communication will not be effective. Cultural Background and Biases: People often allow their past experiences to change meaning of the message. The norms of social interaction and the ways in which emotions are expressed vary greatly in different cultures. Cultural background, age, gender, education, religion, ethics, assumptions, and priorities can separate one person from another, creating a barrier. To effectively communicate, you need to understand how your background and that of your audience affects your message and how it is received. Ambiguity and Overuse of Abstractions: This happens when you leave things half said or use too many generalizations or sayings, leading to communications that are not clear and can be misinterpreted. Unstated Assumptions: If both parties are unaware that they have different assumptions about the message, the communication will be ineffective. Incompatible Viewpoints: This can cause a failure to communicate because both parties view circumstances from completely differing perspectives. Nonverbal Message Does Not Match Verbal Message: People often believe what they see more than what they hear. Your nonverbal message needs to be consistent with your verbal message. Language: This might seem obvious, but it is important to remember that even when speaking the same language, people can still have trouble understanding one another. Slang, professional jargon, and regional idioms can hurt communicators with even the best intentions. Information Overload: It takes time to process a lot of information and too many details can overwhelm and distract from what is important. Keep it as simple as you can, while also taking the audience into account.

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(10) Not Listening: If we fail to listen, we fail understand the audience.
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Policy & Procedure Manual

2.

How to listen effectively
Revised as of March 7, 2014

a)

Listening effectively can be extremely difficult: (1) The most common problem in communication is not listening. Hearing is just the act of perceiving sound. Listening is interpreting the meaning of the message being received. Listening is not easy. We normally speak at a rate of 600 to 800 words per minute, so there is a natural tendency for our minds to wander when others talk. We often tend to jump ahead and determine what another person will say before they say it – sometimes finishing their sentences for them. We might preemptively formulate our response based on what we think they will say, or we might get distracted by some other thought. Effective listening requires work and concentration. It might require temporarily suspending judgment and evaluation. It requires giving full physical and mental attention to the speaker.

b)

Keys to effective listening: (1) Seek to understand before seeking to be understood: Understanding your audience will help them understand you. Look for underlying feelings and biases. We need to remember to collect information before we disseminate it. Be non-judgmental: Empathetic listening means understanding others emotions and biases. When speaking to someone about something of importance to them, we need to avoid sharing our judgment until we have learned their judgment. Empathy means understanding or acknowledging others feelings – it doesn’t mean we have to agree. Give you undivided attention to the speaker: Concentrate on the speaker and what they are saying. Avoid rehearsal answers while listening and be mindful of your nonverbal behaviors. Use silence effectively: As an active or empathetic listener, silence is a valuable tool. Do not interrupt unless absolutely necessary. Ask questions: If you don’t understand what is being said, or you need more information, ask for it. Rephrase or summarize what you hear: When someone is done talking, rephrases what you have just heard, seeking confirmation that you understood the message as it was intended to be understood.

(2)

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(6)

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C.

Gold Star Service Program
Revised as of March 7, 2014

The Ascentia Gold Star Service program exists to ensure that our residents receive the highest level of customer satisfaction in the area of home and community maintenance. Gold Star Service visits enable Ascentia to actively meet the needs of its residents by conducting preventative maintenance and responding to maintenance requests in a timely, effective and efficient manner. Customer service excellence (see Section XX on Customer Service in the manual for more information) applies to all work order requests in the Gold Star Service program. Ascentia is committed to providing our residents with a well maintained, energy efficient and safe living environment. The Gold Star Service program helps us live up to our commitment by consistently assessing and correcting issues in our rental homes and in our communities. The Ascentia Gold Star Service program is comprised of two parts: 1) Maintenance Calls and 2) Quarterly Home Inspections.
Policy Initiatives
Initiative Editing Additional explanation Requires final technical edit Assigned DDB Reviewed 3/7/14

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Policy & Procedure Manual

1.

Maintenance calls
Revised as of March 7, 2014

a)

We are responsible: (1) From time to time in our communities, residents will call into the community maintenance line with a request for service. It is the responsibility of the community staff to respond to each and every maintenance request in a timely and courteous manner.

b)

Per our Gold Star Policy, we will do the following: (1) Each service call shall receive a call back within 24 hours of reporting any nonemergency maintenance issue to repair or schedule a repair with the resident. Emergencies require an immediate response and calls must be returned within two hours. Any staff the makes a service call on a resident’s home must have a clean and professional appearance, display an Ascentia logo on their clothing and conduct themselves in a courteous and helpful manner. Listen carefully to the resident’s issue(s). Take notes or pictures as necessary to remember the full scope of work to be completed. Discuss the process you will take to complete the repair work in a clear and concise manner. Make sure to give an estimated timeline to completion and to properly set the expectations for the resident. If it is an emergency situation that requires a resident to leave their home, assist the resident with identifying a safe place to go until the situation is resolved. Follow up communications updating resident on the status of each maintenance request (including the status of repairs, part orders and any other items relating to the repair) as frequently as possible with a minimum of once per week. All work areas must be maintained in a neat and orderly condition throughout the project. All work areas must be cleaned prior to leaving a job site, even if job is not yet completed. All repair and maintenance work must be completed to an excellent, workmanlike standard and the residence must be returned to its pre-work condition or better. If the resident is not at home when a service call is made, a “We Were Here” notice must be posted on the front door with an accurate and thorough description of the work performed. A copy of the notice must be retained for filing at the office.

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(10) Any repair work that is completed on the home by Ascentia, the staff member completing the repair and the resident need to sign a receipt or “Completed Work” form. (11) No later than one week after the completion of any repair or maintenance project, a community staff member must follow up with the resident to ensure satisfactory completion.
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Policy & Procedure Manual

2.

Quarterly home assessments
Revised as of March 7, 2014

a)

Managing our homes effectively means we must make quarterly service calls: (1) The quarterly service call is a part of the Ascentia Gold Star Service program and is designed to be implemented with each and every Ascentia owned home in each community on a quarterly basis. This is to ensure a satisfactory experience for our rental home residents within our communities and to ensure that the resident is properly caring for our home. Each home will receive a written assessment and a schedule for any follow up items upon each service call. There is no exception for any home to go unassessed for more than a three month period at any time. The quarterly assessment must be performed by the community manager or a qualified staff member under the direct supervision of the community manager.

(2)

b)

The required steps to complete the quarterly service call in the Gold Service program: (1) Check every area and component on the assessment form for any damage and to confirm proper operation. Make detailed notes of any item that needs attention. Pay special attention to each of the items listed below at each quarterly assessment as well as during every “make ready” visit. (a) Test smoke alarms (replace batteries as needed). (b) Check all plumbing including sinks, toilets, washing machines and any other plumbing items for leaks or malfunctions. This will help residents save money on their water bill. (c) Check for air and water leaks around exterior doors and windows. This will save on heating and cooling bills for our resident and prevent damage to the home. (d) Check HVAC to make sure it is operating properly. Test the fan, pilot light and that the air conditioner is cooling the home and none of the parts have frost on them. Replace the filters as a service to the resident and to help them save on electricity costs. (e) Leave resident survey card to capture any other resident feedback or issues. Let them know to call you if there are any issues that were missed or if there was anything that was done that was not satisfactory. At this time, confirm any new roommates or other changes and refer those changes to the manager and office staff. (f) Leave customer appreciation bag with coupons from partnering businesses (e.g., free appetizer from local restaurant, discounted oil change, community resident referral coupon, etc.) and a contact card for the office.

(2)

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(h)

(i)

As you are leaving the home, assess home site and confirm maintenance compliance of the exterior. The site must be clean and free from unsightly storage or trash. Make a note of the landscape maintenance. Make detailed notes of any non-compliance issues. The Ascentia staff member assessing the home and the resident need to sign the forms and the date of inspection must be stated on the form. A copy of the completed form must be delivered to the resident within 24 hours. If any repair work is completed on the home by Ascentia, the Ascentia person completing the repair and the resident need to sign a receipt or “Completed Work” form. Lastly, all assessments must be entered into the log at the community office (see section below).

(3)

All completed assessment forms are delivered to the community manager for review and resolution.

c)

The community manager is responsible for addressing all needed repairs immediately by: (1) Generating and assigning a work order for all maintenance needs that are the community’s responsibility. To be completed as per the policies outlined in “Resident Service Requests.” (Refer to Section XX of the Policy and Procedure manual) Generating a notice to the resident to correct the deficiencies or damage caused by the resident and/or notice of any non-compliance issues the resident needs to correct. (a) Resident notices should include the scope of work for which the resident is responsible, (b) The reason the resident is responsible and the potential consequences of not correcting the issue in a timely manner (i.e. additional damage to the home, loss of deposit at move-out, termination of the lease, etc.), (c) A list of applicable resources (preferred vendors list, material suppliers that might offer discounts, resident purchase program) available to the resident, (d) Clearly state that the work can be performed by a contractor of the resident’s choice but the repairs have to be finished to a professional workmanlike and/or community standard and require management’s approval, (e) For repairs that might result in additional damage to the home, the notice must include a specific time line for compliance and notice that failure to comply will result in management making the repairs and charging the resident for the work in accordance with the lease agreement.

(2)

d)

The community manager will create and maintain a log of all quarterly assessments:

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Policy & Procedure Manual The log of all Ascentia owned home inventory assessments must be maintained on site at all times, The log will be used to schedule quarterly visits, identify when assessments are completed and what work needs to be completed, verify that work has been completed and define the date on which the next assessment is due, All pending inspections should be entered on the calendar in the manager’s dashboard and must include reminders The assessments are documented using the GSS assessment form and all completed forms must be uploaded and attached to the unit in Yardi (Refer to Section XX in the Policy and Procedure manual for more information on attaching files to a unit in Yardi).

(2)

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Policy Initiatives
Initiative Content development Editing Additional explanation The Gold Star program log, inspection/assessment form, and resident notice need to be developed. Requires final technical edit Assigned MD DDB Reviewed 3/4/14 3/7/14

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5.
A.

MARKETING AND LEASING: THE ART OF OCCUPANCY
Revised as of March 9, 2014

Overview
Marketing is promoting and advertising the community to prospective residents to increase occupancy. Our marketing success will depend on how well we know and meet the needs of the market and on how professional our presentation is. Marketing is often a misunderstood term. It is more than advertising; it is more than sales. It is the difference between a successful business and one that fails. In Ascentia’s case, effective marketing results in high occupancy levels, employee and resident community pride, customer satisfaction, and company profitability. Many factors contribute to successful marketing, including the professional appearance of the employees, property buildings, vehicles, streets, common areas and signage. Success in leasing home sites or selling homes requires knowing a few essentials that will help you attain your goals. Product knowledge is the backbone of any leasing effort, for with knowledge comes the power of confidence and credibility. You must learn everything you can about your community, the home you are leasing, the prevailing economic factors that affect housing, the submarket where your property is located, and your competition. Couple your knowledge with a professional appearance, an outgoing and friendly personality, good rapport, and an appealing community; and you will have the competitive edge in any market. Customers are more likely to rent a home from someone they trust and whom they feel provides good customer service.

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B.

Market surveys, analysis, and plans
Revised March 9, 2014

Every level of management at Ascentia needs to know and understand the market factors that impact our business. Knowing your competition is a critical leasing and management tool. Each district manager and community manager must make a point to “shop” the competition regularly and know them as well as you know your own community(s). In order for your community to remain competitive in the marketplace, in terms of rates and/or incentives etc., it is imperative that you are consistently informed of the economic conditions. You need to know what the competition is doing, and how your community compares in curb appeal, amenities, location, parking, cleanliness, service, profile, rates, etc.
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Revised March 9, 2014

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Policy & Procedure Manual

1.

Market survey and analysis
Revised as of March 9, 2014

a)

Components of the annual market survey and analysis: (1) The community manager, under the direction of the district manager, is responsible for conducting a formal market survey and completing the Ascentia Market Analysis annually. The data captured in these surveys will be used in determining quarterly unit rent adjustments, annual site rent increases and will be utilized in the District Marketing plans. The annual Ascentia Market Analysis will include the following; (a) The comparative apartment survey (b) The comparative MH survey (c) Rent Increase history (d) Local market evaluation

b)

The market survey and analysis will be updated quarterly: (1) The DM and CM are responsible for updating the comparative apartment survey and the district marketing plans quarterly and submitting those updates to the VPO and VPF for pricing consideration and modification purposes.

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2.

Market plans
Revised as of March 9, 2014

(1)

Created annually; updated quarterly- elaborate (a) Overview of local market (b) Recent year/quarterly lease up data (c) Current year/quarterly occupancy goals (d) Comparative apartment survey-updated quarterly (e) Market demographics-target market (f) Current SWOT analysis (g) Local economic activity projections (h) Others??

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Policy & Procedure Manual

3.

On-site marketing manual
Revised as of March 9, 2014

(1) (2) (3) (4) (5) (6)
Policy Initiatives
Initiative Content development

AMA Quarterly updates Area map with location of competitors Marketing plans Current advertising Brochures/outreach materials

Additional explanation Additional materials and detail to be developed. Specific instructions for how a property should position itself will be created.

Assigned MD

Reviewed 3/9/14

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C.

Making a Great First Impression
Revised as of March 7, 2014

Superior marketing performance is based on your best use of the following tools:    
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Presentation/Appearance Email and other written communication and Customer Service Telephone Leasing and Customer Service Walk-in or Face-to Face Customer Service

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Policy & Procedure Manual

1.

Presentation and appearance
Revised as of March 7, 2014

a)

The community should always make a great first impression: (1) Community: Community appearance is the first impression for a prospective resident. This begins the moment they come within view of the community. A clean, well-cared for community helps the property sell itself. (a) Pick up trash (b) Keep sidewalks free of debris (c) Make sure all exterior lights are operating (d) Weeds pulled (e) Create positive curb appeal with things like flowers and picnic tables (f) Amenities such as pool or community areas should be clean and ready to show at all times Office: The office atmosphere should be conducive to business activity and reflect the company’s commitment to professionalism. It is the responsibility of the onsite staff to make sure that the office is neat, clean and ready for business before and during all normal business hours. The next visual impression is the office. It should be clean, cheerful and professional as well as easy to find. Make sure you have signs that clearly indicate where the office is located. Make it part of you morning routine to ensure the following: (a) Desk should be neat and clean and free of clutter and debris. The desk is part of your image so make it look professional! (b) The office should smell fresh…use deodorizers. (c) The office must look inviting: blinds and door open, “open” sign up (d) Office hours on door should reflect reality and be consistent with the website (e) No smoking in the office or within 50 feet of the entrance. (f) Seating area neat and clean-magazines organized, furniture dusted and arranged in an orderly manner; no clutter or debris (g) Floors swept and/or vacuumed (h) Trash cans emptied (i) All glass surfaces including windows and doors cleaned (j) Prepare and/or restock refreshments for your customers Home and Site: The final impression is the home or home sites that are being displayed. (a) All units should be market ready as defined in the Home Management section of the manual…would the CEO be comfortable showing the home? (b) Professional marketing flyers should be available in each home (c) The site should be immaculate as described in the section of this manual

(2)

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MARKETING AND LEASING: THE ART OF OCCUPANCY

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Policy & Procedure Manual (d) (e) (f) (g) (h) (i) (j) b) The entry should be swept and clean Lights should be on Drapes should be open Potpourri may be used for smell or a plate of fresh baked cookies A dish of candy may be on the counter Carpet should be freshly vacuumed All counters should be clean and free of dust

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The community manager and all the staff should make a great first impression: (1) Your presence reflects an image to prospective and current residents. This image is projected in your attitude, overall appearance, manners, speech, tone of voice, body language, clothing, product knowledge and your overall interest in helping people. Ascentia knows that customers are satisfied, homes are leased and residents retained because of the effort of the PEOPLE behind the product. A professional: (a) Has excellent product knowledge (b) Knows the competition (c) Uses professional language; never uses slang or profanity in the presence of any customer (d) Dresses professionally (e) Constantly seeks to increase their knowledge and education (f) Has genuine interest and cares about all customers, internal and external (g) Believes in the company (h) Believes in him/herself How you look has a big impact on your customers. When dressed appropriately and professionally, not only will you look and feel better, you will look like someone worth listening to; in other words you will gain credibility and command the respect of your residents, your peers and prospects. (a) • Wear your name tag? (let’s discuss) (b) • Wear an Ascentia logo of some kind (c) • Dress professionally (d) • Hair must be neat and of a professional style (e) • Never smoke in front of a resident or prospective resident. (Remember that smoking is prohibited in community offices and clubhouses) (f) • Do not chew gum or tobacco products in front of resident or perspective resident. (g) • Sit and stand straight, be alert, don’t multi-task when engaging ANY customer; they deserve your undivided attention. Remember that your body language, facial expression and tone of voice have as much impact on people as your spoken word.

(2)

(3)

A good rule of thumb: if you think it might be inappropriate, it probably is.

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Policy Initiatives
Initiative Editing

Policy & Procedure Manual For professional dress standards please reference the next section of the manual.

Additional explanation Requires technical edit.

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2.

Leasing preparation
Revised as of March 8, 2014

a)

Always be closing: (1) Never forget that the only reason you are talking to any prospect is to convince them that your property is where they should live, if we have the product that meets their needs. Every contact you make with the prospect should be consistent with, and support this objective. Keep in mind that regardless of what the prospect tells you almost all prospects will make a decision within 48 hours after meeting you. Most prospects will view several housing options before making their decision so your job is to make your presentation the most “memorable.” Also remember the A, B, C’s of leasing…ALWAYS BE CLOSING!!! Before you attempt to lease a home, you must make certain you are in the right frame of mind. Reviewing the following information each morning may help you refresh yourself and help you focus on the prospect and your presentation. Think about the last bad customer service experience you had…did you buy anything from that company, would you refer a friend to them? Is this the way you want your customers to think about you? Conversely, Think about the last great customer service experience you had…need I say more?? Attitudes are contagious and many times will be the deciding factor when a prospect has several choices in a competitive market. Your Attitude must be positive, accommodating and reflect that you are excited the prospect is interested in your property, excited about your product and that you genuinely want to help the future resident you are talking to. To project a winning attitude you must enjoy your job and the opportunity to serve. If you would rather not be there you will not be successful. Interest in helping people requires you are genuine…there’s that word again. You must understand that people know when someone is faking an interest in serving them. If the prospect senses false interest they will not do business with you. See “attitudes.” Enthusiasm comes from within and, like attitudes, is extremely contagious. Enthusiasm shows that you believe in strongly in your product and when expressed appropriately it will help the prospect believe in your product as well. BE positive, THINK positive, and BELIEVE your prospect will lease! Always remember that YOU are a part of the product!

(2)

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b)

Face-to Face Leasing and Service
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Policy & Procedure Manual Every person in every business should know the importance of making a positive first impression. Many times our success in leasing will depend on how the potential resident perceives us in the first 30 seconds of interaction. Effective leasing agents develop an almost instantaneous rapport with potential residents. Customers like them, follow their advice and, as a result, rent in their community. The reality is that we prefer doing business with those we like and trust. Impressions are the key to developing trust and confidence in the customer. Customer loyalty increases when trust and connections are made.

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3.

Email leasing and service
Revised as of March 7, 2014

a)

Email is a key tool for communication: (1) Email is a fundamental form of communication for any business and is used both as a means of communicating internally and as an avenue for leasing. Not only is e-mail an important communication line with your residents and potential residents, it is often used by them to gauge that you are trustworthy. The biggest advantage to communicating via email is how quick and efficient it is. The most important aspect of communicating over email is a timely response. If a customer sends you an e-mail with a simple question, and you take forever to answer it, what does that say about the rest of your operation?

b)

Email best practices: (1) All business email should be answered the day it is received if received before 5pm, but never later than 24 hours after.. Schedule to respond to e-mails when you first come into the office, right after lunch, and just before you leave. Doing so will prevent you from being constantly distracted by your e-mail throughout the day. Use an effective and clear subject line that relates to your purpose and identifies yourself as something other than spam. Each email should be tailored for that specific person and should not appear to be scripted. Create a professional, yet personal tone in your email. Email can be casual and informal but it doesn’t have to be sloppy or unprofessional. Re-read your e-mail once before you hit the send button to make sure there are no errors and it carries the right tone. Be brief and concise. People only read so much, so keep the important things at the top and don’t water down your message with too much information. Include all of your contact information in the signature of your email so the customer can reach you in other ways if desired or necessary. When using email for leasing, answer the prospects question but always ask questions so as to solicit a response. Do not just give information in an attempt to end the conversation so no further action is required. Follow-up all site visits and phone calls with an email to thank people for their time and provide them with necessary follow up information and applications. Use email as a way to cultivate the conversation and relationship. As with all business email correspondence use spell check and proof read your email before you hit the send button.

(2)

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Additional explanation Requires technical edit.

Assigned DDB

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4.

Telephone leasing and service
Revised as of March 8, 2014

a)

Tone of your voice is the key: (1) Many potential residents will first contact the office by phone, so the telephone response creates that all important first impression. The moment you pick up a telephone, body language and visual perceptions disappear and your tone of voice becomes dominant. The telephone is often the first or last place a customer comes in contact with an organization or company. Being telephone friendly is one of the least expensive and cost effective ways to deliver better customer service. Almost the entire message you project to the customer over the phone is derived from tone of voice and attitude. Community Managers must practice and train their staff to do the following:

b)

Telephone best practices: (1) Be prepared: When the telephone rings always assume it is a prospect and treat ALL callers with the same warmth and interest. Have guest cards, area maps, unit availability lists all within easy reach. SMILE. Your smile can be heard through the phone. Answer the phone with a short upbeat greeting and try not to sound “automated” Ascentia’s standard for answering the phone is as follows: Thank you for calling (community name), an Ascentia Community, this is (your name) how can I help you today? Pick up the phone within the first three rings. More than three rings signals chaos in your office or inattentiveness on the part of your company or organization. Ask their name, repeat their name and thank them for calling and use their name throughout the conversation. i.e.: Hello John, I appreciate you allowing me the opportunity to help you with your housing needs today.” Listen. Put aside ALL other work, do not attempt to multi-task so you can give the caller your undivided attention. Qualify the prospect by asking questions. Asking qualifying questions help you and the prospect determine if they meet the criteria established for the property and helps you determine what the specific needs of the prospect are. Be consistent and treat every prospect the same in compliance with Fair Housing practices.

(2) (3)

(4)

(5)

(6)

(7)

(8)

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Policy & Procedure Manual Sell by matching their needs to your property and what you have to offer. Provide information that is relevant to that caller. Don’t just recite inventory and prices, create interest.

(10) Apply the ABCs of leasing: Always Be Closing! Always attempt to set up follow-up action, either a tour or an application sent. (11) Have the office phone roll over to your cell phone so that while you are out of the office and on the property, you are not missing calls. (12) When and where appropriate, be sure you have bilingual staff and messaging available. (13) If you have caller ID, use it to record the number as you take notes, but verify with the person that number is in fact the best to reach them. (14) When necessary to put a customer on hold, ask the customer if you can put them on hold; wait for them to say “yes” or “no” and then explain it will only be for a short period of time.
Explain to customers why you are putting them on hold. Thank customers for holding. (15) In the case of a missed call and voicemail, all calls must be returned within 24 hours but, preferably, the same day. (16) Attempt to schedule a tour and provide directions. (17) Apply the ABCs of leasing: Always Be Closing! (18) End the call on a positive note, repeating any actions agreed to be taken and what is going to be done to help or serve the customer. Thank them for calling and make sure they feel that you genuinely would like to have them move into your community. “Ok, Sarah, thanks so much for calling. I look forward to meeting you on Tuesday at 10 for your tour! We would love to have you in our neighborhood!” (19) Document the call and schedule your follow-up action and reminders (Guest Card/Pop Card/CM Dashboard calendar).
Policy Initiatives
Initiative Editing Additional explanation Requires technical editing. Assigned DDB Reviewed 3/8/14

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5.

Walk-in or face-to-face leasing and service
Revised as of March 8, 2014

a)

Make a great first impression: (1) Every person in every business should know the importance of making a positive first impression. Many times our success in leasing will depend on how the potential resident perceives us in the first 30 seconds of interaction. Effective leasing agents develop an almost instantaneous rapport with potential residents. Customers like them, follow their advice and, as a result, rent in their community. The reality is that we prefer doing business with those we like and trust. Impressions are the key to developing trust and confidence in the customer. Customer loyalty increases when trust and connections are made. (a) Greet immediately: Stand up and introduce yourself by name and Smile (these are also contagious) Even if you are busy with someone else or on the phone, excuse yourself, ask the new prospect to be seated and let them know you will be with them shortly. NEVER leave the prospect standing without a warm acknowledgment. If you are working on prospect your undivided attention. (Did I mention that smiles are contagious and have a positive impact on YOUR attitude as well as the prospects??) Even if you believe you can multitask effectively, the prospect will assume you do not value their business and you will lose the initial opportunity to develop trust and establish rapport with the customer. After you finish with the customer you were with or your phone call, introduce yourself again using your name and title and ask their name. Repeat their name, Shake their hand and thank them for visiting your property. i.e.: “It’s my pleasure to meet you John, again, my name is Stephanie and I really appreciate you taking the time to visit us today.” SMILE. Offer a bottle of water, cup of coffee or other appropriate refreshment. Ask them how they are doing today, how they know about your property and what their specific needs are. . Refer to what you learn later as a means of connecting and developing rapport. Be consistent and very careful not to ask questions that can be interpreted as discriminatory or an effort to steer the prospect, in compliance with Fair Housing and antidiscrimination practices. Asking qualifying questions help you and the prospect determine if they meet the criteria established for the property and helps you determine what the specific needs of the prospect are. Be consistent and treat every prospect the same in compliance with Fair Housing practices.

(b)

(c) (d)

(e)

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Policy & Procedure Manual Superior product knowledge is essential to a successful leasing program. Have a thorough understanding of the product and the features of that product that make it more appealing than the competition. Your knowledge and presentation should include details on the services you are offering; i.e.: Gold Star Service; online payments; community amenities, resident functions and activities, etc. Especially effective is knowing your competition and how your property and product is a better value than theirs! Give them a Property Packet (these need to be pre-made). Packet should include a site map, property highlight sheet, new home highlight sheet, application, and a property qualifying criteria guideline that indicates what is needed to apply and how the process works (show example packet). Remember the ABCs of leasing…Always Be Closing Give a tour. Use your time to get to know your potential resident. Ask questions. Take notes if necessary. Homes should only be shown when they are market ready…this is an industry standard that supports the concept of quality product = high market appeal = higher caliber resident. A home CAN NOT be shown if showing the home creates any potential liability to the property. i.e.: decks or steps not installed or secured; floor damage; material/tools/tripping hazards. (i) online tour of homes (include link that gives visual tour of the inventory) (ii) walk to playground, pool and/or mailboxes and highlight amenities (iii) Provide a community tour of some kind (walk or cart depending on weather and how far) Employees cannot drive the prospect to the home in their personal vehicles. Do not leave the office without clear and professional signage indicating where you are, when you will be back, and how you can be reached. ABCs: Close the deal. Did you show them a unit that meets their needs? If so CLOSE – if not will you have a unit that meets their needs ready in the near future. Ask them on-site to fill out an application. If they don’t have time or don’t want to, send one with them (should be in the packet you have already given them) or refer them to the Rent Café resident portal (Amy? Proper terminology) Set yourself up for Follow-up. Ask them if it would be ok to follow-up with them. There is an application included in your Community packet, in case you need it. Would it be alright if I followed up with you in a few days to see if you had any further questions or if there was anything else I could do for you?” schedule follow up calls on your CM dashboard calendar. Reference current resident pipeline/Yardi and/or Popcard (Amy?)

(g)

(h) (i)

(j) (k)

(l)

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At the end of each day?? Use the “Office Visit Evaluation” sheet (to be given at training) to evaluate the service you offered that day and take appropriate notes to track your lead and set reminders for yourself to follow-up.

Policy Initiatives
Initiative Editing Additional explanation Final technical edit required. Assigned DDB Reviewed 3/8/14

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Policy & Procedure Manual

6.

Professional dress standards
Revised as of March 8, 2014

a)

Guidelines for Women’s Wardrobe (office staff) (1) Acceptable: (a) Business Suits/Business Dresses (b) Coordinated Separates (skirt/blouse or skirt/sweater) (c) Pant suites/Dress Slacks/Khaki pants (d) Dress Blouses/Oxford shirts/Cardigan or pull over sweaters/Ascentia Polos (e) Dress Shoes (heel heights not to exceed 2”)/Hose or Stockings – conservative colors and styles (f) Scarves or ties/tasteful jewelry (earing length not to exceed 1 1/2 “) (g) Skirt length: No shorter than 3” above the knees (h) Colors: Should portray a professional image

(2)

Unacceptable: (a) Denim skirts, dresses or jeans of any color/Minidresses or miniskirts (b) Sheer fabrics without appropriate undergarment/ Low-cut, cropped or backless tops (c) Tight-fitting leggings or stirrup pants/Thigh-reveling split skirts/Tightfitting ensembles (d) Ankle-wrapped or flip flop shoes/athletic or canvas shoes/platform shoes (e) Multiple rings, bracelets, and earrings/Ankle bracelets or ear cuffs

MARKETING AND LEASING: THE ART OF OCCUPANCY

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Policy & Procedure Manual b) Guidelines for Men’s Wardrobe (office staff) (1)

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Acceptable: (a) Business suits/Sports coats (b) Dress or business shirts/Cardigan or pull over sweaters/shirts with collars/Ascentia Polos (c) Dress slacks/Khaki pants (d) Dress shoes/socks that coordinate with pants or shoes/Belts or suspenders Unacceptable: (a) Denim pants or jeans of any color (b) Casual shirts/Tee shirts/Ties with inappropriate logos/tank tops (c) Sandals/Athletic or canvas shoes/Western-style belt buckles

(2)

c)

Guidelines for Maintenance Staff Wardrobe (1) Acceptable: (a) Neat, clean denim or khaki pants (shorts?) (b) Ascentia Polos or Ascentia t-shirts (c) Flat rubber sole shoes/Hats that identify Ascentia or the property (preferred) (d) All pants and shits should be in good repair and fit properly (e) Shirts should be buttoned and tucked in to present a professional image Unacceptable: (a) Torn, patched or ripped pants, shirts or jeans (b) Any t-shirts with inappropriate or offensive logos or text/tank tops (c) Sandals/Earrings/Obnoxious western-style belt buckles (d) Hats that advertise other products or companies

(2)

d)

Basic dress and personal appearance guidelines (1) (2) (3) Hairstyles – hair must be clean, well groomed and of a professional style Clothing colors: Should portray a professional image Clothing Maintenance: Clothing must be clean, pressed (if applicable), in good repair and reflect a professional image Name Tags – still debating this???? If yes – All employees are required to wear Ascentia approved name tags during work hours.

(4)

Policy Initiatives
Initiative Editing Additional explanation Final technical edit required. Assigned DDB Reviewed 3/8/14

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Policy & Procedure Manual

7.

Internet and social media
Revised as of March 7, 2014

Policy Initiatives
Initiative Content development Additional explanation With the increased use of the internet and the implementation of RentCafé how to effectively use the internet to find new residents, additional content will need to be developed. At this time, the Vice President of Asset Management, manages our internet usage for marketing purposes. Assigned MD, MJV Reviewed 2/27/14

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D.

Managing Prospects
Revised as of March 7, 2014

Policy Initiatives
Initiative Edit for content and continuity Additional explanation The content for this section was provided in the early brainstorm phase of the policy and procedure manual development. It appears to be duplicative of other sections and requires further editing. All caps need to be removed. Assigned MD Reviewed 2/27/14

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1.

Sources of prospects: RentCafé
Revised as of March 7, 2014

Policy Initiatives
Initiative Content development Additional explanation Prospective residents may contact the community after finding information on Ascentia’s main advertising web site, known as RentCafé. Up to date information on all available homes is searchable for prospective residents to view. They may see photos, description of the community, and even videos. RentCafé is in the process of being implemented. Until full implementation the specific policies and procedures cannot be determined. The implementation is expected in next several months with full implementation in the summer of 2014. Assigned DDB Reviewed 2/27/14

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2.

Sources of prospects: general marketing websites
Revised as of March 7, 2014

Policy Initiatives
Initiative Content development Additional explanation Social media is an important tool to connect with prospective residents. With the installation of Rent Café and PopCard, how we manage our prospects will evolve. PopCard implementation is expected in the summer of 2014, after which the policies and procedures will be developed. Assigned DDB Reviewed 2/27/14

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3.

Sources of prospects: drive-by and telephone calls
Revised as of March 9, 2014

Policy Initiatives
Initiative Content development Additional explanation Additional materials to define our detailed policy to effectively turn prospective residents into members or our community. Assigned JJE, MD Reviewed 3/9/14

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4.

Quick guest card
Revised as of March 9, 2014

a)

Definitions: (1) The quick guest card is the standard Yardi interface to gather information and manage prospects. To be used only by those properties do not use PopCard.

b)

Policy: (1) (2) (3) If your property is setup with PopCard, disregard this policy and procedure. All prospects should be recorded in the quick guest card. All follow-up conversations with the prospect should be recorded in the quick guest card.

Policy Initiatives
Initiative To be discontinued Additional explanation This interface will be replaced by PopCard. Once the implementation of PopCard has occurred this section will be deleted. Assigned DDB Reviewed 3/9/14

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5.

Popcard and reporting
Revised as of March 9, 2014

Policy Initiatives
Initiative Content development Additional explanation The policies for managing the data and reports that come from PopCard will need to be determined and written after the full PopCard implementation in the summer of 2014. Assigned DDB Reviewed 3/9/14

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E.

Property Showings
Revised as of March 9, 2014

The primary objective is to maximize our exposure to the highest caliber residents possible. In order to bring the highest caliber residents, we must present a quality and consistent product. Property showing leads to Resident Screening and this process begins the moment a potential resident sees us in print or online or in person. As the prospect “enters”, our quality standards must be obvious. This is our message and this is what our Community is. Currently our entry to our property is via the Guest Card. Getting to know the potential resident and his needs and preferences are very important. The potential resident getting to know our requirements and vision of how they can enjoy the Community is equally important. A professional staff (in action and appearance) introduces the potential resident to our image and what we expect from the residents in words that do not have to be spoken. The qualified leasing agent is one that knows the extended Community attributes (single family, seniors, schools supporting the community, transportation availability, community programs, police and fire presence, etc. ). As the leasing agent presents the extended Community to the potential resident, he also collects data regarding the potential resident for future notes when the potential resident completes the application. The introduction to us is via the Guest Card at this time. This entrance can be over the telephone or in person. PRE-REQUISITE – KNOWING AND UNDERSTANDING AND PRACTICING THE FAIR HOUSING LAWS/RULES FOR FEDERAL AND STATE GOVERNEMENTS
Policy Initiatives
Initiative Editing Additional explanation Requires technical editing. Assigned DDB Reviewed 3/9/14

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1.

Showing basics
Revised as of March 9, 2014

a)

Know the prospects specific needs: (1) After you determine that you can meet the prospect’s needs and that he/she is qualified, you should show the property, vacant home(s), model and appropriate amenities to the prospect. Use the knowledge of the prospect’s specific needs obtained during the qualifying process in the tour. This is more than just a walk or cart ride through the property- it is a sales/closing tour. You should highlight the ways the property and the home can meet the prospect’s needs on the tour. Each time the prospect agrees that you have met one of their needs, the prospect moves closer to moving into your community.

b)

Taking a prospective resident on a tour: (1) Make a copy of the visitor’s ID and place leave it with a co-worker or place it in an assigned place Make sure you have the correct key(s) for the vacant unit and/or the model. Make sure the vacant unit is market ready…be sure because you’ve checked it yourself. Have your Property Marketing Package in hand and a notebook so you can take notes. Let your co-worker know which units you will be showing AND ALWAYS carry your telephone with you Map out and follow the most appealing route to the model or vacant home available. If you are driving to the home in anything other than a leasing cart, the resident must follow you in their vehicle. You cannot offer to drive them on your vehicle or accept an offer to ride in their vehicle. For this reason it is preferable to conduct a walking tour if a leasing cart isn’t available of in inclement weather. Continue qualifying the prospect. Always ask questions about their needs and interests Talk about the benefits of the community and the surrounding area as you make your way to the vacant unit or model. Be casual and relaxed, if you’re confident in your community you don’t need to “sell” these benefits they “sell” themselves.

(2)

(3)

(4)

(5)

(6)

(7)

(8)

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Emphasize VALUE: point out what is included in the rental rate including amenities and services (Ascentia Gold Star Service) that will make their residency with you more enjoyable. Point out the added value of living in one of your homes vs. a traditional apartment: no one living above them or next to them; private entrance; front door parking; front deck relaxation; yard space, etc. Never: (a) Gossip or make negative comments about other employees, management, residents or competitors (b) Walk too fast or hurry the prospect through the door (c) Make promises you can’t keep (d) Step over a piece of trash (Always pick it up! The prospect will recognize your efforts to maintain an attractive community and will appreciate it) (e) Use slang or profane language (f) Smoke or chew tobacco in front of a prospect (or resident).

(10)

c)

Demonstrating the home: (1) Open the door and have the prospect enter first (you already know the home is in good condition because you checked it today) Remain between the door and the prospect at all times – this will not be obvious if done correctly. This allows you to observe the prospect so you can identify what is important to them and the highlight that feature. It will also prevent you from being blocked in. “Talk Up” each room – beginning with the front deck as you approach the unit (apartments don’t have private decks!); appliances in the kitchen, lighting in the dining area, space in the living area, closet space, garden tub, washer/dryer connections, back deck so trash does not have to be carried through the home, etc. Avoid pointing out the obvious! This is a living room…really? Try something like: This Living room is much more spacious than most apartments, it will be able to accommodate your sofa, love seat and the entertainment system you said you had.” Ask questions – how do you like the floor plan, isn’t the kitchen lovely, wouldn’t it be great to come home to that garden tub, where would you put your TV, isn’t it great you can cook dinner and see the children at play, isn’t it wonderful you don’t have to purchase window coverings Pay attention to the prospect’s comments; you may be showing them the incorrect home for their needs – that is why knowing your inventory is SO important.

(2)

(3)

(4)

(5)

(6)

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Policy & Procedure Manual Know when to back off! Pay attention and if you sense that your prospects need some time alone to discuss the home or finances, it is better to allow them that time ON the property. Simply excuse yourself with a statement like “if you’ll excuse me, I am going to step outside and give you some time to talk things over.” Most prospects appreciate a leasing agent who is intuitive enough to sense the need and considerate enough to accommodate the need. Maintain control of the demonstration and get the prospect involved. Direct the prospect through the home and make sure they “discover” all the features that are important to them (you know what’s important to them because you “listened” to what they were saying during your qualifying interview.) make suggestions like: “go ahead and open those cabinet doors and see how much space you’ll have to store your utensils.” Continue Listening to the prospective resident Always respond by stressing value when possible

(8)

(9)

(10) What if your prospect has never lived in a manufactured home? Yes, it is different than living in an apartment. WOW, you have your own space; there will not be any waking up with your neighbor’s alarm clock on the other side of the wall. (If appropriate)…you can sit on your deck while your children play in the yard. (I am certain you can brainstorm many more scenarios appropriate to your property.) (11) As you visit the home, you will get positive and not so positive comments. When possible, turn that objection into a positive. Make a list of the positive comments as well as the objections – you can review these when you get back to the office. This shows the potential resident you were really listening and you can spend more time discussing and demonstrating the positive sides of the community and the home. (12) Always remember the ABCs of leasing….Always Be Closing. It is amazing how many leasing agents don’t close the prospect simply because they don’t ask…”It looks like you appreciate the space and value of this home and our community. Let’s go back to the office where you can fill out the application and start planning to move in to your new home!” (13) Now is the time to get the application and the application fee(s). This is the closing. You will want to make certain the prospect knows how important they are to you and to the community. You will want them to also understand the urgency to complete the application because of the interest in the property from other. It is NOW. (14) Go back to the office and complete the application/fee taking process. Make certain the prospect understands the timeline for the process. ALSO, AND MOST IMPORTANT- Don’t forget the ABCs of leasing…Always Be Closing!

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(15) Mr/Mrs X, I think you have chosen the perfect home for you and your family. I can just see you in the living room playing games with the children, or I can just see you coming home to that garden tub, etc. (16) Now we just need to complete the paperwork and get all the information back so we can complete the move in.
Policy Initiatives
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2.

Showing with children
Revised as of March 9, 2014

a)

How to best show the property when children are present: (1) Make a child friendly office. You must be cautious about the size of toys in case some of your visitors allow children on the floor that are under three years old. Keeping the floor clean and sanitized is another challenge – Lysol, etc. on hand Some of the toys to think about are (a) Play School (again be sure the pieces are not too small) (b) Run rugs (cars or trains, etc) – this keeps them occupied (c) If you have an area that you can actually “fence” with children fencing, it is great (d) Many parents worry about everything being sanitary. That is difficult with stuffed toys. (e) When ready to visit the Community and home, have the child pick a friend out of the toy box to take on the tour. This should be something that does not need a lot of interaction from the parent such as a book, but will keep the child occupied. (f) Tell the child there is another surprise when they get to the home you are visiting. Have toys hidden under a counter or in a drawn for that purpose. Again, pick something that will not need parental guidance. (g) Do not take the toys away from the child until you return to the office and they are ready to go. This is something parents are usually really good at.

(2) (3)

Policy Initiatives
Initiative Editing Additional explanation Requires technical edit Assigned DDB Reviewed 3/9/14

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3.

Showing after dark
Revised as of March 9, 2014

a)

Guidelines for showing after dark: (1) Be certain you make a copy of the ID and place it in an area that is locked or give it to a co-worker. If you are in the office alone, call the designated support person and let them know you are going on property with Mr/Mrs X and will be showing them a, b, c. Do not deviate from your plan without notifying your designated support person. Lock the office unless there is another person staying at the office while you are showing. Be sure the lights are on prior to entry. If you have properties that show after dark on a regular basis, lights should be on timers so you do not walk into or approach a darn home. Always take your mobile telephone or other communication device. Make it obvious that another person knows where you are and what you are doing. Never have the potential resident between you and the door. Practice this so it does not look obvious. Do not worry about turning off lights. The best way to handle this is have a timer for at least one light.

(2)

(3) (4)

(5)

(6) (7)

(8)

(9)

(10) When you get back to the office, open the door, contact your designated support person and let them know you have returned to the office. (11) You will go into the screening process. (12) Have a specific plan to communication with your designated support person so they can call you within fifteen or twenty minutes. This can be disguised as a follow-up call regarding a leak or whatever. (13) Once the application and paperwork is completed, and the potential resident leaves, lock the door if after hours, call your designated support person, and prepare to leave. (14) When you leave after dark, you should already have a process in place.

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Policy Initiatives
Initiative Editing

Policy & Procedure Manual

Additional explanation Technical edit required

Assigned DDB

Reviewed 3/9/14

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4.

Showing in inclement weather
Revised as of March 9, 2014

a)

All Communities experience some kind of unpleasant weather. You cannot just show homes in the sunshine. Each Community will have its specific requirements. Some of the obvious are: (1) (2) (3) (4) (5) Daily -Be certain the home temperature is appealing Daily -Be certain water pipes are OK Be certain to have umbrellas available in the office for you and your guest Have the office weatherized with mats for rain and snow and potential mud/dirt Prepare your homes to be shown with plastic runners that are easy to clean; if you have a long season of bad weather, be sure your plastic runners allow your potential renter to see everything without damaging the floor and carpet. Don’t hesitate to have an air freshener that reminds your potential resident of the comfort of a nice sip of cider or a nice pie in the warm oven Prepare in area in the home to accept the wet umbrellas. Insist that staff dress for the weather – there is nothing worse than having a person complaining about how cold he/she is when trying to market your home Have a nice warm drink of coffee and tea and cider to come back to.

(6)

(7) (8)

(9)

(10) Allow the potential resident to get settled again before starting the screening process (11) Do not keep your office too warm as coming from the outside can be uncomfortable hitting an 85 degree office in the winter. (12) In many parts of the country, the heat in summer can be a uncomfortable to the showing process as winter. For those in the warmer areas, we need to have water available and also the office at a comfortable but not freezing temperature. The homes need air conditioning and it needs to be working at a comfortable level. Not everyone wants to walk into a freezer.
Policy Initiatives
Initiative Editing Additional explanation Technical edit required Assigned DDB Reviewed 3/9/14

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6.
A.

REVENUE AND COLLECTIONS
Revised as of March 11, 2014

Overview
This policy outlines the full resident revenue cycle: resident screening, lease signing and processing, creating and recording charges, accumulating and reporting those charges to our residents, collecting, and managing a resident who becomes delinquent. Accounting will maintain accurate records over cash, revenue recognition, accounts receivable and bad debt. Accounting, through the reports and tools provided in the Yardi system, will provide the required information to operations, so they may fulfill their custodial responsibilities of accounts receivable. Operations is responsible for notifying residents who are delinquent or in violation of lease terms, and per the policies of Ascentia, operations must evict residents that fail to pay in a consistent, timely manner or fail to comply by the lease terms.

Policy Initiatives
Initiative Content development Additional explanation Several components of this policy will require additional content to be developed, especially in regard to the new leases being developed. The update of the lease and its incorporation into the system will be completed by the summer of 2014 The accounting rules may need to be modified based on content development and system updates. Requires technical edit Assigned DDB Reviewed 3/11/14

System update Accounting procedure Editing

AM EP DDB

3/11/14 3/11/14 3/11/14

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B.

Evaluation of Prospective Residents
Revised as of March 11, 2014

Properly conducted resident screening minimizes potential risks to Ascentia. By qualifying a prospective resident per our standards, we ensure protection of the home from damage, control delinquencies, protect other investments in the community, and minimize general liability. We want to fill our communities with residents who will honor the lease agreement and make the community their home. The criteria and rules set forthwith are to be followed without exception. In certain circumstances, exceptions to the policy may be warranted. Prior to any exception to policy approval must be granted in writing by the District Manager, and in some cases, by the Vice President of Operations. Each policy notes if exceptions can be made and with whose approval.
Policy Initiatives
Initiative Editing Additional explanation Requires technical editing Assigned DDB Reviewed 3/11/14

Revised as of March 11, 2014

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Policy & Procedure Manual

1.

Fair housing and other legal considerations
Revised as of March 11, 2014

a)

Policy: (1) All employees of Ascentia must abide by federal, state and local laws. Failure to comply with the law will lead to disciplinary action up to and including immediate dismissal. Certain statutes detailed below specifically apply to our business, and Ascentia requires that the employees understand how those statutes govern their employment activities. Key applicable federal laws: (a) Fair Housing Act (FHA): Title VIII of the Civil Rights Act of 1968, as amended, prohibits discrimination in the sale, rental, and financing of dwellings, and in other housing-related transactions, based on race, color, national origin, religion, sex, familial status (including children under the age of 18 living with parents or legal custodians, pregnant women, and people securing custody of children under the age of 18), and disability. (b) Americans with Disabilities Act (ADA): [INSERT: BASIC LEGAL LANGUAGE] (c) The Service Members Civil Relief Act: [INSERT: BASIC LEGAL LANGUAGE] (d) Housing for Older Persons Act (HOPA): [INSERT: BASIC LEGAL LANGUAGE] State laws: (a) Colorado: [INSERT: SPECIFIC STATUTES] (b) Nebraska: [INSERT: SPECIFIC STATUTES] (c) Nevada: [INSERT: SPECIFIC STATUTES] (d) New Mexico: [INSERT: SPECIFIC STATUTES] (e) North Carolina: [INSERT: SPECIFIC STATUTES] (f) Texas: [INSERT: SPECIFIC STATUTES] (g) Wyoming: [INSERT: SPECIFIC STATUTES] Local laws: (a) [INSERT: MUNICIPAL AND/OR COUNTY STATUTES] Requirements for approval must be clearly displayed in the office and communicated to prospective residents. Each property must provide reasonable accommodations for people with disabilities as defined by the Americans with Disability Act. The complete text of relevant statutes and regulations discussed in this policy are posted to the Ascentia Employee Portal. Community Managers and District Managers, as part of their employment responsibilities, must have a full understanding of these statutes.

(2)

(3)

(4)

(5)

(6)

(7)

(8)

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Revised as of March 11, 2014

Policy & Procedure Manual
Policy Initiatives
Initiative Content development Additional explanation Need to identify and insert information about the specific laws that apply to fair housing. Need to identify the procedural steps to remain compliant with the laws mentioned and develop detailed step-by-step process to manage any complaints. Legal information needs to be posted to the Ascentia Employee Portal. Requires technical edit. Assigned DDB, MD

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Reviewed 2/27/14

System update Editing

AM DDB

3/11/14 3/11/14

Revised as of March 11, 2014

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Policy & Procedure Manual

2.

Resident screening process
Revised as of March 11, 2014

a)

Definitions: (1) Resident Screening is the service provided through Yardi used by Ascentia to evaluate the credit history, rent-to-income ratio, and criminal background of a prospective resident. The resident screening application consists of (1) general application with required personal and financial information to complete resident screening, (2) employment verification forms, (3) landlord verification forms, and (4) total debtto-income ratio verification. All components must be completed before an application is submitted for screening.

(2)

b)

General policies: (1) All prospective residents, 18 years or older, desiring to live on property or financially responsible for the lease payments must provide: (a) A complete and accurate resident screening application, with all fields on the application filled out (if a field is not applicable, write in “N/A”); (b) (1) a passport, permanent resident card, alien registration receipt card, or employment authorization document containing a photograph; OR (2) a valid government identification card with photograph and a Social Security Card or birth certificate; (c) One month’s paycheck advices (stubs), letter from employer on letterhead, with contact information, date of hire, salary, and position; or if self-employed, most recent year’s tax return; and (d) If receiving government benefits or assistance, official documentation or a bank statement that can substantiate the frequency and amount of the benefit. The information provided by the prospective resident will be used to evaluate criminal and credit history through Resident Screening, and rental and employment history through a manual verification process. Rent Bureau will be checked if the prospective resident has any recorded history through that service. Prior to final application approval, the prospective resident will be informed of the community standards, and by signing the lease, agrees to abide by those standards, and that failure to do so, will result in eviction. The Guidelines for Living must be provided and explained to the prospective resident. In particular the following should be highlighted: (a) The number of roommates cannot vary from the application and that any new roommate must apply for residency. (b) All pets must be approved before they can live in the community. (c) When a minor reaches the age of majority while living in the community, they become subject to these resident screening policies.
Revised as of March 11, 2014

(2)

(3)

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Policy & Procedure Manual (d)

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Failure to abide by the rules outlined in the Guidelines for Living will result in eviction.

c)

Credit history screening: (1) Based on the prospective resident’s history relative to the standards established, Resident Screening will provide a recommendation of (1) collecting a standard security deposit, (2) collecting a security deposit plus a high-risk fee, or (3) rejecting the applicant or obtaining a guarantor. The following table lists the factors that will impact this evaluation:

Figure 1: Application Approval Criteria: Credit History Credit history Collections, charge-offs, judgments, open bankruptcy Late payments Closed bankruptcy Foreclosures (reevaluations) Student loans Medical debt Rent-to-Income ratio No Impact None in last 3 years None in the last 3 years None in the last year None in the last year Not evaluated Not evaluated 35% or lower High-risk Fee or Reject Within 3 years Within 3 years Within 1 year Within 1 year Not evaluated Not evaluated Greater than 35%

d)

Criminal history screening: (1) Resident Screening searches all federal, state and local records for criminal activity. Based on criminal history, Resident Screening will automatically reject applicants that have committed any of the following criminal offenses within the years shown. For misdemeanor offenses with no year, the criminal offense is reported and reviewed by the Community Manager, but it is not an automatic rejection.

Figure 2: Application Approval Criteria: Criminal History Criminal history Alcohol related Arson Assault and/or battery Bad checks Burglary Crimes against animals Crimes against children Crimes against the government or government officials Crimes involving computers Destruction/damage/vandalism of
Revised as of March 11, 2014

Felony 7 7 7 7 7 7 7 7 7 7

Misdemeanor

7

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Policy & Procedure Manual Criminal history property Disturbance to peace and order Domestic crimes Drug – related Drug – sale, manufacture, or distribution Embezzlement Fraud Gambling Harassment Homicide Kidnapping Organized Crime/Conspiracy OUI, OVI, DWI Petit Theft Purposefully obstructing, impairing or perverting the law Registered sex offender Robbery Sex crimes - other Sex Crimes against a person Theft/larceny Traffic violations Trespassing Weapons Incarceration due to conviction. Any offense not listed above Felony 7 7 7 7 7 7 7 7 Any Year Any Year 7 7 7 7 Any Year 7 7 Any Year 7 7 7 7 7 7 Misdemeanor

7

Any Year

7

e)

Rental history screening: (1) The Community Manager will verify a minimum of three years of rental or residency history, and any application for residency can be rejected for any of the following deficiencies:

Figure 3: Application Approval Criteria: Rental History Rental history Late payments in 12 months Followed community standards Acceptable personal conduct Provide notice Leave unit in acceptable condition Approve 0-1 No violations No incidents Yes Yes Reject 2 Any violations Any incidents No No

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Revised as of March 11, 2014

Policy & Procedure Manual (2) (3) A payment is deemed late if it is more than 30 days delinquent.

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If a prospective resident has no rental history, the application for residency must be approved in writing by the District Manager. The Community Manager must follow the script of questions per the rental history screening form.

(4)

f)

Employment history screening: (1) The Community Manager will verify three years of employment history, specifically confirming employers, positions, and type of termination. Any application for residency can be rejected for any of the following deficiencies:

Figure 4: Application Approval Criteria: Employment History Employment history Consistent and accurate history Verifiable employment Approve Yes Yes Reject No No

(2)

If a prospective resident has no employment history, the application for residency must be approved in writing by the District Manager.

g)

Financial ratio screening: (1) The total debt-to-income ratio is calculated as the sum of all scheduled debt plus proposed monthly rent payment divided by gross income. A prospective resident’s total debt-to-income ratio cannot exceed 70%. A ratio in excess of 70% is an automatic rejection. The rent-to-income ratio is calculated as the proposed monthly rent divided by gross income. This ratio is calculated through Resident Screening, which makes the following determinations based on the ratio: (a) 35% or lower: normal security deposit. (b) 36% to 40%: security deposit plus high-risk fee. (c) 40% or greater: reject applicant or obtain guarantor.

(2)

h)

Communicating the application for residency decision: (1) (2) Community Manager must document in writing why a resident was rejected. In the case of a rejected application, the Community Manager within seven days must explain in detail in the form of a letter mailed to the prospective resident’s address, consistent with law and Ascentia policy, why the application for residency was rejected. All communication with the prospective resident and documents associated with the application are to be retained in Resident Screening indefinitely and for two
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(3)

Revised as of March 11, 2014

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Policy & Procedure Manual years in hard copy at the community office in a secure, locked filing cabinet, in which only the Community Manager has access. i) Handling policy exceptions: (1) From time to time, an application for residency may have unique and extenuating circumstances, in which the above policies may not be applicable. Any exception to the resident screening policies must be approved in writing by the District Manager prior to a final decision on an application for residency. Written approval should include a brief explanation why the above policies did not apply.

(2)

(3)

j)

Procedure: (1) Detailed procedures to complete forms found in training manuals on the Ascentia Employee Portal.

Policy Initiatives
Initiative Editing Additional explanation Requires technical editing Assigned DDB Reviewed 3/11/14

REVENUE AND COLLECTIONS

Revised as of March 11, 2014

Policy & Procedure Manual

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3.

Application fees
Revised as of March 11, 2014

a)

Definition: (1) Application fees are charges collected from prospective residents to cover Ascentia’s costs to execute a background check.

b)

Policy: (1) For every prospective resident application, a $35 fee will be charged, and for every additional roommate over the age of 18, an additional $20 will be charged. A charge will be generated and for every prospective resident and roommate application for residency processed and those charges will be collected. Only with written prior approval from both the District Manager and the Vice President of Operations, can this application fee be credited by use of a concession or waived completely. The application fee concession method is to (1) charge and collect the application fee at time of application, and (2) credit the application fee amount against the first month’s charges. Concessions will be given for collected application fees only. The application fee will be collected as (1) a money order or (2) an online payment. With money orders, the t-code should be written on the money order and sent immediately to the appropriate lock box. If the application fee has been waived, the prospective resident must sign an acknowledgement that their application fee was waived. This acknowledgement must be kept with the application.

(2)

(3)

(4)

(5) (6)

(7)

Policy Initiatives
Initiative Accounting procedure Editing Additional explanation Need to document accounting steps. Requires technical editing. Assigned EP DDB Reviewed 3/11/14 3/11/14

Revised as of March 11, 2014

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Policy & Procedure Manual

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C.

Leases
Revised as of March 11, 2014

The lease is the cornerstone of the relationship between Ascentia and our residents, detailing the rules by which we mutually agree to abide, and establishing the basis for all rents and fees charged to the resident.
Policy Initiatives
Initiative Content development Additional explanation This section will have additional information on the centrality of leases once the revised lease is completed and implemented along with the detailed procedures that follow. The new leases will need to be uploaded into the system. Requires technical editing. Assigned DDB Reviewed 2/27/14

System update Editing

AM DDB

3/11/14 3/11/14

Revised as of March 11, 2014

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Policy & Procedure Manual

1.

Components of the lease
Revised as of March 11, 2014

a)

Definitions: (1) The site lease is the legal agreement between the Community (lessor) and the resident (the lessee) by which the Community guarantees the resident use of the land within a specific site, with certain limitations, and as long as the terms of the contract are upheld, for monthly rent payments. The Community’s site lease for a resident-owned home is month-to-month. A site lease in conjunction with a home lease will have the same term as the home lease. The home lease is the legal agreement between Pelican Finance (lessor) and the resident (the lessee) by which Pelican Finance guarantees the resident use of the home on the specified site for a specified time period, with certain limitations, and so long as the terms of the contract are upheld, for monthly rent payments. The home lease is typically one year long, but may be of a shorter duration consistent with policy below. The move-in settlement statement is a document that itemizes all initial charges and concessions to provide the resident an amount owed at the time of move-in. Lease addendums document additional binding terms to the lease contract, including the penalties for violation, or additional requirements mandated by local and state regulations. The concession verification is a document signed by the resident that details the amount of the discount granted to the resident. The move-in day or “move-in” is the date, subsequent to lease execution, on which the Community Manager provides full access to the rental unit by giving the keys to the resident, thereby providing full access to all benefits granted per the lease. For a resident-owned home, this is the date in which the home is brought into the Community or the ownership of the home changes. The move-out day or “move-out” is the date when the resident returns the keys to the rental to the Community Manager, or in the case of a skip, the day the home is identified as vacant. For a resident-owned home, this is the date in which the home is removed from the Community or the ownership of the home changes. Proration, separate from the move-in or move-date day, is the convention used to determine the amount a resident owes in the first and last month of occupancy, if less than a full month.

(2)

(3)

(4)

(5)

(6)

(7)

(8)

b)

General lease policies: (1) For a site lease, the lessor is the Community.
Revised as of March 11, 2014

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Policy & Procedure Manual (2) (3) For a home lease, the lessor is Pelican Finance.

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When a home is leased, there are two separate leases, one for the site and one for the home. Prior to move-in, the lease(s) must be completed and fully executed, including any required addendums and acknowledgements. The current approved lease is available through Yardi.

(4)

(5) c)

Required components of a valid lease: (1) Key elements of our lease are: (a) Parties to the lease, (b) Legal description of what is being leased, (c) Effective dates of the lease, (d) Security deposit, (e) Rent to be charged monthly, (f) Renewal terms, (g) Contract termination provisions, (h) Utility billing method and rates (if applicable), (i) Late fee structure, (j) Community standards and compliance fees if violated, (k) Approved payment methods, (l) Definition of damages and recourse to recover cost, (m) Condition of property when turned over to resident, (n) Occupancy and use agreement, (o) Rights of entry and inspection, (p) Concessions granted, and (q) Dates and signatures Addendums are required for any additional agreement not included in the lease between the Community or Pelican Finance and the resident. Any addendums must be consistent with the policies of Ascentia, and included with the executed lease. A resident signed acknowledgement must be included for any concessions granted.

(2)

(3)

d)

Guidelines on lease duration: (1) All leases should be one year in duration. Six-month leases are allowable as long as the rent charged is consistent with rent setting policy below. Three-month leases, prior to execution, must be approved by the District Manager. Month-tomonth leases on homes are not allowed, except when going beyond the lease terms.

Revised as of March 11, 2014

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Policy & Procedure Manual How proration is to be calculated for leases: (1) Proration of the first month’s rent will be as follows: (a) Resident-owned home: no rent charged for first, partial month. (b) Rental home: prorated based on the number of days of occupancy, consistent with the move-in day. Proration of the last month’s rent will be as follows: (a) Resident-owned home: full rent charged for the last, partial month. (b) Rental home: prorated based on the number of days of occupancy, consistent with the move-out day.

(2)

Policy Initiatives
Initiative Content development Additional explanation This section will require further refinement once the new lease is finalized. The definitions and sections of the lease will be fully explained. The new leases will need to be uploaded in the system Requires technical editing. Assigned DDB Reviewed 2/27/14

System update Editing

DDB DDB

3/11/14 3/11/14

REVENUE AND COLLECTIONS

Revised as of March 11, 2014

Policy & Procedure Manual

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2.

Setting the rent
Revised as of March 11, 2014

a)

Definitions: (1) The market (unit) rent is the approved rent that Ascentia has determined the next resident will likely pay. This value is stored in Yardi in the unit rent field in the unit record. This rent can refer to the site only or to the combined rent for the site and the home, depending on the unit type. The site rent is the amount the Community charges the resident for the lease of the site. The home rent is the amount Pelican Finance charges the resident for the lease of the home. The all-in home rent is the combined amount charged to a resident renting a home and the associated site. For marketing and ease of communication, the combined rent of both the site and the home can be referred to as the “market rent of the home,” “home rent,” or “rent.”

(2)

(3)

(4)

b)

Establishing and updating the market rent: (1) The Chief Executive Officer establishes the market site rent annually, based on the annual market survey and the recommendations of the managers and Executive Committee. The Chief Executive Officer in consultation with the Executive Committee continually reviews and establishes the market home rents informed by the market data gathered through: (a) The annual, comprehensive market survey completed for each market in August, (b) Quarterly market surveys, and (c) Ongoing feedback from the Community and District Managers. Community and District Managers are required to report material changes to the market to their supervisor, the Vice President of Operations, and the Vice President of Finance. DOTS may only change a unit rent in Yardi on the final authorization of the Vice President of Finance, consistent with the rents approved per the process above.

(2)

(3)

(4)

c)

How to set the home and site rent: (1) The all-in home rent charged to the resident will be equal to or greater than the unit rent in Yardi, unless the District Manager provides prior written approval for a lower rent.

Revised as of March 11, 2014

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Policy & Procedure Manual The site rent in the lease will be the market site rent as approved by the Chief Executive Officer. The difference between the all-in home rent and the site rent will be the home rent to be included in the home lease and payable to Pelican Finance.

(3)

d)

Lease term and rent rate increase for homes: (1) (2) One-year lease will be set at the market rent or higher as established in Yardi. Six-month lease will be set at the market rent or higher as established in Yardi plus $50. Three-month lease will be set at the market rent or higher as established in Yardi plus $200.

(3)

e)

Lease term and rent rate for resident-owned homes: (1) Site leases for resident-owned homes will always be month-to-month.

f)

Exceptions to the established market rent: (1) Only with District Manager approval can a rent lower than the market rent be charged. An employee discount of 30% of the total rent is allowed with written approval of the District Manager.

(2)

g)

Key rent review and setting procedures: (1) Operations: District Managers will coordinate the completion of the annual market survey by completing the competitive apartment and community survey form and provide market rent recommendations for site rent for the upcoming year. Executives: The Executive Team will review and establish market site rent taking into consideration the annual market survey and operations recommendations. The Chief Executive Office will give final approval Operations: Once approved, District Managers will inform the Community Managers of any site rent increases. Community Managers will post any required notices consistent with the law. DOTS: The DOTS team will update the unit rents.

(2)

(3)

(4) (5)

Operations: District managers and community managers will communicate any material changes to the market during the year formally at the quarterly district manager meeting.

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Policy & Procedure Manual (6)

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Executives: Rent revenue and occupancy will be reviewed monthly. Based on market information and rental data, the Executive Team will recommend rent rate changes. Chief Executive Officer will give final approval. DOTS: The DOTS team will update the unit rents. Accounting: The Gross Potential Rent report will be reviewed monthly to identify any units that are being rented for less than the market rent.

(7) (8)

Policy Initiatives
Initiative Content development Additional explanation At this time, this provides an overview of the price setting policy and procedure. Further refinement of this policy may be required. Requires technical edit Assigned DDB Reviewed 2/27/14

Editing

DDB

3/11/14

Revised as of March 11, 2014

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Policy & Procedure Manual

3.

Security deposits and high-risk fees
Revised as of March 11, 2014

a)

Definition: (1) The security deposit is money that Ascentia requires our residents to pay to offset any costs due to resident caused damage beyond normal wear and tear, or failure to pay rent that results in eviction. A high-risk fee is an additional amount required to be paid by a resident if they are deemed to be a high credit risk per Resident Screening. This fee is nonrefundable.

(2)

b)

General policies: (1) A security deposit must be collected in full from every resident prior to occupying the rental unit. A high-risk fee must be collected from any resident if required per Resident Screening. Security deposits are separately accounted for and reconciled through the Yardi system. Security deposits will be kept in a separate physical bank account, if required to do so by state law. No part of the security deposit will be returned to the resident until the resident moves out, the unit has been inspected, and a Statement of Deposit Accounting has been completed. In the case of a unit transfer, the security deposit will be handled consistent with move-out, security deposit refunding, and move-in policies, in effect, treating the transfer as two separate transactions.

(2)

(3)

(4)

(5)

(6)

c)

Determining the amount of the security deposit and high-risk fee: (1) (2) The security deposit amount is equal to one month’s all-in rent. Based on the information provided by the prospective resident, Resident Screening will determine if a high-risk fee needs to be paid in addition to the security deposit. Each community has a predetermined, approved high-risk fee amount. [INSERT: TABLE OF FEE AMOUNTS.] The criteria for determining the need for a high-risk fee are detailed above.

(3)

(4)

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Revised as of March 11, 2014

Policy & Procedure Manual d) Special rules for collecting and depositing the security deposit and high-risk fees: (1)

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The security deposit and high-risk fee can be paid for by (1) a money order, (2) an online payment, or (3) through the Walk-In-Payment program. With money orders, the t-code should be written on the money order and sent immediately to the appropriate lock box. If either the online or Walk-In-Payment methods are used, the security deposit and high-risk fee must clear the bank prior the resident taking possession of the home.

(2)

(3)

e)

Returning the security deposit: (1) (2) The security deposit refund due to the resident must be returned in 30 days. The security deposit refund must be in the name of the resident(s) who signed the lease. A Statement of Deposit Accounting must be completed in accordance with the deposit accounting policy below prior to the return of a security deposit. Any money refunded to the past resident will be sent directly to a forwarding address provided by the resident. Any security deposit refund that is returned as undeliverable will be kept by the controller and managed according to our unclaimed property policy.

(3)

(4)

(5)

Policy Initiatives
Initiative System update Additional explanation Resident Screening needs to reflect the change from a security deposit to a high-risk fee. Until the system is updated, double deposit should be interpreted as high-risk fee. Need to determine the rules that establish the amount of the high-risk fee. Need to detail the steps in the accounting process Assigned AM Reviewed 2/27/14

Content development Accounting procedure

MD EP

2/27/14 2/27/14

Revised as of March 11, 2014

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Policy & Procedure Manual

4.

Concessions
Revised as of March 11, 2014

a)

General policies: (1) (2) The maximum move-in concession is equal to one month’s rent. The full rent will be charged and reflected on the resident’s ledger, including any prorated rent. The concession will appear as a single credit less than or equal to a full month’s all-in rent, in the case of a home rental, or the site rent, when leasing the site only. All move-in concessions must be approved by the District Manager and the Vice President of Operations in advance through predetermined campaigns. The resident must sign a concession verification form, which must be included with the lease and kept in the permanent record. Alternatively, the concessions may appear directly in the lease. The concession must appear on the move-in settlement statement. The security deposit cannot be waived or reduced as part of a concession. Market conditions may demand alternative concession structures. Any modification to the above structure must be preapproved by the District Manager and the Vice President of Operations.

(3)

(4)

(5)

(6) (7) (8)

Policy Initiatives
Initiative Content development Additional explanation The above policy limits the amount of an initial move-in concession. Management wants to allow multi-month concessions; however, how often and how much these concessions would be has not been determined. Further policy needs to address the relationship between a longterm concession and the market rent. Requires technical and continuity editing. Assigned DDB Reviewed 2/27/14

Editing

DDB

3/11/14

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Revised as of March 11, 2014

Policy & Procedure Manual

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5.

Special rules for resident-owned homes
Revised as of March 11, 2014

a)

Definitions: (1) A resident-owned home is a single home that is titled in the name of the primary occupant of that home. A block-owned home is two or more homes owned by a third-party and subleased to another resident. Block-owned homes are not allowed in our communities going forward.

(2)

b)

General policies: (1) The Community Manager is responsible for verifying that primary occupant of a resident-owned home has legal title to that home. The Community Manager is responsible to verify all roommates as well. If a resident wishes to sell the home in which they live, the resident is expected to notify the Community Manager, who will inform the resident, prior to selling, that: (a) The buyer of the home must submit an application for residency and be approved. (b) The resident’s home must meet the appearance standards of the community. The community will evict any resident or roommate, who purchased or moved into a home, who failed to apply for residency. In addition to the lease, the Community Manager must ensure that the title of the home is properly transferred from the seller to the buyer. At no time, will the Community Manager take into their position a signed title from a departing resident with the intention of signing the title over to new resident. The “brokering of titles” is strictly prohibited. The Community Manager will submit a title transfer verification form complete with the signatures of the seller and buyer. A copy (front and back) of the title will be kept on file and uploaded into Yardi.

(2)

(3)

(4)

(5)

(6)

Policy Initiatives
Initiative Content development Editing Additional explanation Additional forms need to be created to support this policy. Requires technical edit. Assigned MD DDB Reviewed 3/11/14 3/11/14

Revised as of March 11, 2014

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Policy & Procedure Manual

6.

Lease execution and processing
Revised as of March 11, 2014

a)

Definition: (1) A move-in can refer to either (1) the physical move-in of the resident into the community, or (2) the technical process of converting a future resident into a current resident in Yardi.

b)

Lease execution: (1) The lease must be filled out completely and correctly, including signatures and correct dates. Any required addendums must be completely and correctly filled out, including signatures and correct dates. Any concessions given must be documented in the lease or a concession verification form and properly signed and dated. If any part(s) of the lease, the addendums, or the concession verification are incorrect and/or incomplete, they will need to be corrected and/or completed prior to setting up lease charges on the resident record.

(2)

(3)

(4)

c)

Lease processing: (1) Once the lease is completed, a move-in settlement statement is created that itemizes all charges and concessions that the resident will receive on the day of move-in and added to the resident’s ledger. In the case of move-in concessions, the resident may owe nothing at move-in except the security deposit, which needs to be paid separately from the lease charges and other fees. On the day of closing, all documents must be signed and dated accordingly. All documents must be scanned into a single electronic document and attached to the resident record and verified as complete and accurate before the move-in is completed in the system and lease charges added to the resident’s ledger. The single electronic document must be in the following order: (a) Move-in settlement statement (b) Home lease (if applicable) (c) Site lease (d) Addendums (if applicable) (e) Concession verification or other required acknowledgments A hardcopy of the documents should be retained per local needs in a secure location that only the Community Manager may grant access.

(2) (3)

(4)

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Revised as of March 11, 2014

Policy & Procedure Manual d) Collecting funds prior to taking occupancy: (1)

6 - C | 13

Prior to a resident taking occupancy of a rental unit the security deposit and first month’s rent must be collected in full per the move-in settlement statement. (a) The funds collected prior to a resident taking occupancy can be paid for by (1) a money order, (2) an online payment, or (3) through the Walk-InPayment program. (b) With money orders, the t-code should be written on the money order and sent immediately to the appropriate lock box. (c) If either the online or Walk-In-Payment methods are used, the security deposit must clear the bank prior the resident taking possession of the home.

e)

Updating the resident record: (1) A resident will not be moved-in and no lease charges or fees, other than the application fee, will be added to the resident’s record until (1) the lease package has been uploaded to the resident record, and (2) verified as accurate and complete.

f)

Procedure: (1) Operations: The community manager or designated community staff member will complete accurately the lease and any addendums. Operations: If someone other than the community manager prepares the documents, the community manager will review them for accuracy. Operations: The community manager or designated community staff member will prepare move-in settlement statement based on lease and addendums. The move-in settlement statement should tie out to the lease and addendums. Operations: The community manager or designated community staff member will have the resident sign the lease, all addendums, any additional required acknowledgments, and the move-in settlement statement. Operations: The community manager or designated community staff member will scan all the signed documents into a single electronic (pdf) document in the following order: (1) move-in settlement statement, (2) home lease, (3) site lease, (4) addendums, and (5) concession verification or other required acknowledgements. Operations: The community manger or designated community staff member will attach the electronic copy (pdf) to the corresponding resident record in Yardi. Operations: The community manager or designated community staff member will inform DOTS of the newly signed lease and provide the projected move-in date.

(2)

(3)

(4)

(5)

(6)

(7)

Revised as of March 11, 2014

REVENUE AND COLLECTIONS

6 - C | 14 (8)

Policy & Procedure Manual DOTS: A DOTS staff member will review the scanned documents and confirm completeness and accuracy. If determined to be complete and accurate, the lease charges will be added to the resident record. Operations: The community manager or designated community staff member will inform DOTS when the resident has received the keys to the rental unit.

(9)

(10) DOTS: A DOTS team member will complete the move-in process in Yardi.
Policy Initiatives
Initiative Policy in transition Additional explanation This section details the current process that will need to be updated once the new lease is in place that utilizes the automation in Yardi. Until the transition is complete, this policy will govern how leases are processed. The new policy and procedure with regard to the processing of the leases will need to be updated. For the new policy to be implemented the system will need to be updated with the new lease. The controls to manage the leases will need to be updated accordingly. The final policy will require technical and continuity editing. Assigned DDB Reviewed 2/27/14

Content development Systems update Accounting procedures Editing

MD AM EP DDB

3/11/14 3/11/14 3/11/14 3/11/14

REVENUE AND COLLECTIONS

Revised as of March 11, 2014

Policy & Procedure Manual

6-D|1

D.

Determining What the Resident Owes
Revised as of March 11, 2014

Determining what a resident owns starts with the lease. Every charge added to a resident ledger must have a basis in the lease or the addendums to that lease. By putting a charge on a resident ledger, we are saying the charge is (1) in accordance with the lease, (2) that it is correct, and (3) we will collect it.
Policy Initiatives
Initiative Editing Additional explanation Requires technical and continuity edit. Assigned DDB Reviewed 3/11/14

Revised as of March 11, 2014

REVENUE AND COLLECTIONS

6-D|2

Policy & Procedure Manual

1.

Overview
Revised as of February 27, 2014

a)

Definitions: (1) A charge is an amount owed by the resident according to the terms of the lease or its addendums. All charges must be supported by the lease or its addendums. See the following tables for the timing of billing. There are six broad categories of charges: (a) Lease – these charges are set amounts that recur every month. (b) Utility – these are charges that reflect the allocated utility costs charged to the resident on a monthly basis for the use of water, electricity, and/or gas. These charges can be metered, based on actual usage, allocated, estimated, based on number of occupants, or flat, divided by the number of units in the property. (c) Late Fees – these charges are added due to a resident’s failure to pay the full amount due when it is due. (d) Ancillary – these are charges that are incurred due to resident’s noncompliance, for example for improper lawn maintenance, or are other miscellaneous incidental charges. (e) RV – these are rental charges for use of sites designated for recreational vehicles. (f) Note Payments and Escrows – these charges stem from the discontinued financing offered by Pelican. These charges include the note payment (combined principal and interest), tax escrow and insurance escrow.

Figure 5: Charge Types Posting Schedule Charge Type Lease Utility Late Fees Ancillary RV – Long Term RV – Short Term Note Payments Review & Posting Monthly Posting Allocation Charges Per Late Fee Process Ad hoc Monthly Posting Ad hoc Monthly Posting Date Posted 1st 1st Day charged 1st 1st Day charged 1st Period Posted Subsequent Subsequent Current Subsequent Subsequent Current Subsequent

(2)

The charge code is the mechanism that ties what the resident owes, and shows are their ledger, to where the revenue is recorded in the general ledger. The resident ledger is a complete record of all resident charges, payments and credits. The ledger is available anytime from the resident record screen. The ending balance on the resident ledger is the current balance when the ledger is viewed. For amounts owed at specific times, refer to the section on Statements.

(3)

REVENUE AND COLLECTIONS

Revised as of February 27, 2014

Policy & Procedure Manual (4) The change form is used to add ancillary charges or make corrections to a resident ledger.

6-D|3

(5)

The monthly posting report contains all recurring lease charges to be added to the resident ledgers for the subsequent month. A charge report is generated for each community for every month. See Figure 6, Charge and Allocation Report and Statement Timing Charges, for specific dates for each property. The allocation charges report contains the utility charges to be added to the resident ledgers for the subsequent month based upon the specific bill back method for the property and the most recent cost of the utility to the property. This report is provided monthly for the Community Manager to review prior to posting of charges. See Figure 6, Charge and Allocation Report and Statement Timing Charges, for specific dates for each community.

(6)

Figure 6: Charge and Allocation Report and Statement Timing Community Aloha Vegas Buckingham Cedar Village Country Oaks Countryside Dream Island Eagle River Foothills Forest Vista Fountainhead Foxridge Gaslight Golden Eagle Hillside Holiday City Kingswood Lake Fork Lawson Meadowood Medicine Waters Mountain Springs North Breeze Oak Creek Oregon Trails Pine Village Rancho Bridger Regency Village
Revised as of February 27, 2014

Day Reports To CMs 8 13 15 13 18 13 13 16 13 10 11 18 8 8 22 14 11 13 18 13 10 13 14 11 13 12 13

Day Statements Printed 10 15 18 15 20 15 15 18 15 15 13 20 11 11 26 18 13 15 20 15 12 15 16 13 15 14 15

Statement Type Utility Utility Utility Utility Utility Utility Rent only Utility Rent only Rent only Rent only Utility Rent only Rent only Utility Utility Rent only Rent only Utility Rent only Utility Rent only Utility Rent only Utility Utility Rent only
REVENUE AND COLLECTIONS

6-D|4 Community River Valley Riviera de Sandia Robbins Nest Sheltered Valley Skyline Village Sugar Creek Trails End Valle Grande Valley Ridge Vals W bar K West Park Plaza West Winds Western Hills Willow Hill Windgate Woodlawn Estates Woodview

Policy & Procedure Manual Day Reports To CMs 12 9 13 10 12 8 8 13 13 13 10 16 15 12 14 13 15 13 Day Statements Printed 14 13 15 13 14 11 11 15 15 15 13 18 17 14 16 15 18 15 Statement Type Utility Rent only Rent only Utility Utility Rent only Rent only Rent only Rent only Utility Utility Utility Utility Utility Rent only Utility Utility Utility

Policy Initiatives
Initiative Content development Accounting procedure Policy in transition Additional explanation The dates of the above table need to be confirmed. Create flowchart of overall charge process. The policies that follow will remain in effect until Yardi is upgraded to 7s and the data entry of Yardi is decentralized. All the policies that follow will require some modification. Requires technical editing Assigned AM DDB DDB Reviewed 2/27/14 2/27/14 2/27/14

Editing

DDB

3/11/14

REVENUE AND COLLECTIONS

Revised as of February 27, 2014

Policy & Procedure Manual

6-D|5

2.

Lease charges
Revised as of March 11, 2014

a)

Definitions: (1) A lease charge is a set amount owed by the resident every month per the lease and/or the addendums to that lease. These amounts are setup in Yardi on the resident record under lease charges.

b)

General policies: (1) The rules that govern the addition of lease charges to the resident ledger are contained in the executed lease and/or the addendums to that lease. The amount and timing of the lease charges are setup on the resident record at the time of move-in. These parameters govern when and how often the resident will be charged consistent with the lease and addendums to that lease. Lease charges are generated monthly through the system by the DOTS department. The date that those charges are generated vary by community. See table below for current dates. Lease charges are reviewed and approved by the community manager. Once approved by the community manager, the DOTS department will post the lease charges to the resident ledger.

(2)

(3)

(4) (5)

c)

To implement the policies above the following procedures should be followed: (1) Operations: Provides fully executed lease to DOTS by attaching the scanned copy of the executed lease on the resident record. DOTS: Sets up the lease charge parameters on the resident record upon receipt of the executed lease. DOTS: Initiates procedure to create monthly posting report that will report all lease charges to be added to the resident ledger per the schedule below. DOTS: Sends the report to each community manager to review and approve. Operations: Community manager reviews and approves the charges to be added to the resident ledger within 48 hours. DOTS: Immediately posts the approved charges to the resident ledger. Accounting: [REFERENCE DATE ON BILLING TABLE – NEED TO CLARIFY THE DATE THEY HIT THE GENERAL LEDGER] By posting the lease charges, the following entries are made into the general ledger by the Yardi system (the associated charge codes are shown in brackets):

(2)

(3)

(4) (5)

(6) (7)

Revised as of March 11, 2014

REVENUE AND COLLECTIONS

6-D|6

Policy & Procedure Manual Figure 7: Accounting for Rent 13101 – Tenant Receivable 41300 – Rent: Site 41305 – Rent: Home 41310 – Rent: Apartment 41315 – Rent: Commercial 41320 – Rent: Storage $ X,XXX [site] [1home] [1apt] [1comm] [1storage] $ X,XXX $ X,XXX $ X,XXX $ X,XXX $ X,XXX

(8)

Accounting: At the end of each month, accounting will reclassify home rent, moving it from the property to Pelican Finance.

Policy Initiatives
Initiative Policy in transition Editing Additional explanation The steps in the procedure may need to be modified with the implementation of Yardi 7s. Requires technical edit. Assigned AM DDB Reviewed 3/11/14 3/11/14

REVENUE AND COLLECTIONS

Revised as of March 11, 2014

Policy & Procedure Manual
From Leases

6-D|7

DOTS setups recurring lease charges on resident record

Digitized lease on resident record

Resident record updated with lease charges

DOTS initiates monthly charge batch routine

Charge batch report

DOTS forwards Charge Batch Report to CM

CM reviews and approves

NO

DOTS reviews and updates resident record accordingly

YES DOTS posts charges in Charge Batch Report to resident ledgers

GL updated with entries to revenue and AR

Accounting reviews

To Financials

Figure 8: Process Flowchart: Posting Lease Charges
Revised as of March 11, 2014 REVENUE AND COLLECTIONS

6-D|8

Policy & Procedure Manual

3.

Utility charges
Revised as of March 11, 2014

a)

Definitions: (1) A utility charge is an amount paid by the resident to reimburse the property for utility costs. There are four categories of utility charges: (1) metered, based on the actual usage as measured by a sub meter, (2) allocated (or RUBS), based on dividing the total utility cost to the property by the number of occupants in the homes (counting the resident as 1 and any additional roommate as 0.7), (3) per unit, based on dividing the total utility cost to the property by the number of occupied units, and (4) flat, where a set amount is charged to resident each month, which is not necessarily consistent with the property utility billing. Yardi Energy Services (YES) is the outside vendor used to manage our utility bill back process and provide statements to all properties. Vacant cost recovery (VCR) is the process to recover the cost from residents who fail to change direct-billed utilities into their name in a timely manner. This would apply to those communities in which the public utility directly bills the residents.

(2)

(3)

b)

General policies: (1) For each property in which the resident is not directly billed by the utility for the use of water, sewer, electricity, and/or gas, a bill back method has been established and complies with any local, state or federal regulations. Whenever legally allowable, an appropriate utility management/billing fee will be charged to the resident. Utility charges are managed per the utilities management summary (See Appendix). If the property is billing back utility charges, the specific utility bill back method is disclosed in the lease and must include the following information: (1) the utility(ies) (water, sewer, gas/electric, and/or trash) to be billed back, (2) the method used to determine the amount of the bill back, and (3) the timing of the bill back. When a bill back method is employed, the community employees will be responsible for providing the accurate and timely usage data, occupant counts, and move-in and move-out dates. Based on this information, YES will calculate utility bill back amounts based on agreed upon methods. The community manager will be responsible for the accuracy of the bill back charges and will have final review of the utility bill back allocations charges detail report prior to utility charges being added to the resident ledger.

(2)

(3)

(4)

(5)

REVENUE AND COLLECTIONS

Revised as of March 11, 2014

Policy & Procedure Manual (6)

6-D|9

The district manager must give prior approval in writing to any exception to the bill back method agreed upon in the executed lease. The bill back method will be reviewed annually with YES to ensure that the maximum amount allowable by law is billed back to the residents. Proration of utility charges in the first and last month of residency is determined on a property level. YES must be kept up to date on all bill back methods.

(7)

(8)

(9) c)

Exceptions to the bill back method: (1) For properties that bill back utility charges, exempting a resident from utility bill backs must be pre-approved in writing by the District Manager. An approved exclusion needs to be communicated to DOTS, who will inform YES. The resident must sign an acknowledgement, which must be uploaded to the resident’s record in Yardi.

(2) (3)

d)

Procedures for metered water charges: (1) Operations: Community staff member reads resident sub meters on the day of the master meter read for that community. Operations: The recorded reads are entered into the YES meter read form (in Excel) and sent to YES. Vendor: YES uploads the meter reads and generates the metered water charges for each individual resident based on the bill back method established in the utility management system. Vendor: YES sends the allocations charges detail report to the community manager for review. Operations: The community manager reviews the allocations charges detail report for accuracy, checking to ensure the water usage and charge amount are reasonable. Any errors identified are sent back to YES for correction. Vendor: YES will inform DOTS that the allocations charges detail report has been reviewed and approved by the community manager. DOTS: A member of DOTS will post the metered charges.

(2)

(3)

(4)

(5)

(6)

(7) e)

Procedures for metered electric charges: (1) Same procedure was metered water charges.

Revised as of March 11, 2014

REVENUE AND COLLECTIONS

6 - D | 10 f)

Policy & Procedure Manual For all types of utility charges: (1) Accounting: By posting the utility charges as approved through the allocations charges detail report, the following entries, depending on what utility charges are billed back, are made into the general ledger by the Yardi system (the associated charge codes are shown in brackets):

Figure 9: Accounting for Utility Charges 13101 – Tenant Receivable 41202 – Water Income 42103 – Sewer Income 42104 – Trash Income 42105 – Gas & Electric Income 42106 – Utility Admin Fee $ X,XXX [water] [sewer] [trash] [utility] [ubadmin] $ X,XXX $ X,XXX $ X,XXX $ X,XXX $ X,XXX

Policy Initiatives
Initiative Policy in transition Accounting procedure Editing Additional explanation This policy may be modified with the implementation of Yardi 7s. Create flowchart for each of the different utility procedures. Requires technical editing Assigned AM DDB DDB Reviewed 3/11/14 2/27/14 3/11/14

REVENUE AND COLLECTIONS

Revised as of March 11, 2014

Policy & Procedure Manual

6 - D | 11

4.

Vacant cost recovery charges
Revised as of March 11, 2014

a)

Definitions: (1) A vacant cost recovery (VCR) charge is a utility expense, paid by the property, which should have been paid by the resident. This occurs when a resident fails to properly transfer the utility into their name. The accuracy of this process is completely dependent on the accuracy of the move-in and move-out dates in the Yardi system.

b)

Policy: (1) Any utility cost that is rightly the responsibility of the resident will be billed back to the resident without exception and a $35 fee will be added in addition to the utility cost. While the VCR process is intended to be used to ensure that residents transfer utilities in a timely manner, it may be used for regular utility billing, where either the deposit or administrative burden of the local utility is onerous, with approval of the Vice President of Operations. The administrative fee of $35 will be charged. YES must be kept up to date on all bill back methods.

(2)

(3) c)

Procedure: (1) Operations: The community manager will maintain accurate and timely move-in and move-out records, as they are used to determine if a VCR charge is applicable. Vendor: Based on the bill back method established for the property and any applicable exceptions, YES will generate the appropriate VCR charges, if any, as they review and setup payable batches to pay the property’s utilities. DOTS: Review the information and notify the community manager of the VCR charge batch. Operations: Community Manager to review and approve or reject charges. DOTS: Cancel rejected charges and post approved VCR Charges. Accounting: By posting the VCR charges, the following entries are made into the general ledger by the Yardi system (the associated charge codes are shown in brackets):

(2)

(3)

(4) (5) (6)

Revised as of March 11, 2014

REVENUE AND COLLECTIONS

6 - D | 12

Policy & Procedure Manual Figure 10: Accounting for Vacant Recovery Cost Charges 13101 – Tenant Receivable 42107 – Vacant Cost Recovery Fee [vcrelec] [vcrgas] [vcrswr] [vcrtrsh] [vcrwtr] $ X,XXX $ X,XXX

Policy Initiatives
Initiative Policy in transition Accounting procedure Editing Additional explanation This policy may be modified with the implementation of Yardi 7s. Develop flowchart. Requires technical edit. Assigned AM DDB DDB Reviewed 3/11/14 3/11/14 3/11/14

REVENUE AND COLLECTIONS

Revised as of March 11, 2014

Policy & Procedure Manual

6 - D | 13

5.

RV lease charges (short- and long-term)
Revised as of March 11, 2014

a)

Definitions: (1) Long-term RV lease charges are for rental amounts for the use of sites specifically for recreational vehicles in excess of one month. They are charged in the same manner as site rent and are not subject to sales tax. These are managed like recurring lease charges. Short-term RV lease charges are for rental amounts for the use of sites specifically for recreational vehicles of less than one month. These charges have a special procedure and are subject to sales tax. Daily RV activity report shows the RV spaces in a community, whether they are occupied, and by whom.

(2)

(3)

b)

Processing short-term RV charges: (1) All RV park visitors are required to be recorded in Yardi as a resident, but do not need to be processed through Resident Screening. The daily RV activity report must be submitted daily to accurately record shortterm RV charges.

(2)

c)

Procedure: (1) Accounting: By posting the lease charges, the following entries are made into the general ledger by the Yardi system (the associated charge codes are shown in brackets):

Figure 11: Accounting for RV Charges 13101 – Tenant Receivable 41325 – RV (Long Term) 41330 – RV (Short Term) $ X,XXX [1rv] [1rvst] $ X,XXX $ X,XXX

Policy Initiatives
Initiative Content development Additional explanation Current procedures do not provide adequate control, as the customer is often not known and cash is involved in the transaction. Additional policy may need to be developed. This policy may be modified with the implementation of Yardi 7s. Develop flowchart of both the long-term and short-term RV charge procedure. Requires technical editing. Assigned DDB Reviewed 3/11/14

Policy in transition Accounting procedure Editing

AM DDB DDB

3/11/14 3/11/14 3/11/14

Revised as of March 11, 2014

REVENUE AND COLLECTIONS

6 - D | 14

Policy & Procedure Manual

6.

Late fees
Revised as of March 11, 2014

a)

Definition: (1) Late fees are paid by the resident as a result of delinquent payment of any charges, excluding notes receivable and associated escrows.

b)

Policy: (1) Each property has a predetermined property late fee policy that is consistent with the local market and compliant with all government regulations. See chart below for current late fee policy by property. The late fee policy is disclosed in the lease and/or the addendums to that lease. Exceptions to the property late fee policy are available to those residents that are solely dependent on Social Security or other government support programs that have a set payment calendar that is past the due date. Any exception under this rule must be approved by the District Manager in writing, a waiver signed by the resident, and both documents added the resident’s record. Late fees are added to the resident ledger automatically per the parameters setup in Yardi consistent with property late fee policy and any properly approved and documented resident exceptions. Late fees can be waived only with pre-approval from the District Manager in writing.

(2) (3)

(4)

(5)

c)

Procedure: (1) Accounting: By posting the late fee charges, the following entries are made to the general ledger by the Yardi system (the associated charge codes are shown in brackets):

Figure 12: Accounting for Late Fee Charges 13101 – Tenant Receivable 44251 – Late Fee Income $ X,XXX [late] $ X,XXX

REVENUE AND COLLECTIONS

Revised as of March 11, 2014

Policy & Procedure Manual
Policy Initiatives
Initiative Content development Policy in transition Additional explanation Complete final table of late fees charged by each community. This policy may be impacted by the implementation of Yardi 7s, and may be modified depending on the assignment of accounts receivable responsibilities. Develop flowchart to detail late fee procedure. Requires technical editing. Assigned MD DDB

6 - D | 15

Reviewed 3/11/14 3/11/14

Accounting procedure Editing

DDB DDB

3/11/14 3/11/14

Revised as of March 11, 2014

REVENUE AND COLLECTIONS

6 - D | 16

Policy & Procedure Manual

7.

Note payments, installment contracts, lease-to-purchase and escrows
Revised as of March 11, 2014

a)

Definitions: (1) A note payment refers to the monthly principal and interest payment a resident pays to Pelican Finance. The entire payment amount is credited to the home rent account and manually reclassified to interest income and principal for accounting purposes. A resident, who has financed there home with a note from Pelican Finance, is a home owner. Pelican Finance holds a lien on the home until the terms of the note receivable are satisfied. A lease-to-purchase payment is a monthly payment made by a resident as a part of a lease-to-purchase (or lease-with-option) contract. Typically, these are three year contracts that give the opportunity for the resident to buy the home at a price determined when the contract was written and provides a certain amount of credit against that price based on the lease-to-purchase payments made. An installment sales contract payment is a monthly payment made by a resident as part of an installment sales contract, which is a long-term purchase agreement in which the resident agrees to pay a set amount over a period of time that will add up to the agreed upon purchase price. The title of the home is retained by Pelican Finance until the terms and conditions of the contract are fulfilled. Tax escrow payments are monthly payments made by a resident to Pelican Finance in conjunction with a note receivable. Pelican Finance accumulates the payments and uses the funds to pay the property tax on the home on an annual basis. Insurance escrow payments are monthly payments made by a resident to Pelican Finance in conjunction with a note receivable. Pelican Finance accumulates the payments and uses the funds to pay the property tax on the home on an annual basis.

(2)

(3)

(4)

(5)

b)

General policies: (1) All sales financing programs (notes receivable, lease-to-purchase, and installment sales contracts) at this time have been discontinued, and this policy covers how the legacy financing programs should be managed. If a prospective or current resident wishes to purchase a home, it must be paid for in full with certified or electronic funds, approved by the Vice President of Operations and the Vice President of Finance, and sent to the attention of the Controller.

(2)

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Revised as of March 11, 2014

Policy & Procedure Manual (3)

6 - D | 17

Any questions regarding these contracts should be directed to the Fixed Asset Administrator first. If the Fixed Asset Administrator cannot answer the question or resolve any issues raised, the issue will be elevated to the Vice President of Finance.

c)

Note receivable payments: (1) The note receivable payments are determined by the executed note receivable and detailed in the accompanying amortization schedule. The note receivable payments cannot be adjusted, or in any way modified, without approval from the Vice President of Finance. When the resident reaches the end of the term and has satisfied the terms and conditions of the note receivable, the title of the home will be sent to the resident by the Fixed Asset Administrator. If a resident requests a payoff, the Fixed Asset Administrator will determine the amount required to fulfill the terms of the note receivable. Only the Fixed Asset Administrator and the Vice President of Finance are authorized to provide a payoff amount for a note receivable. The payoff, in the form of certified or electronic funds, is sent to the attention of the Controller.

(2)

(3)

(4)

(5)

d)

Lease-to-purchase payments: (1) The number and amount of lease-to-purchase payments are determined by the executed lease-to-purchase (lease-with-option) contract. To exercise the option price in the contract, the resident must pay the net option price within the terms laid out in the contract. If the resident fails to exercise the option, the contract reverts to a month-to-month rental until a new rental lease is signed. The Fixed Asset Administrator or the Vice President of Finance will determine the net option price of the contract. The net option price, in the form of certified or electronic funds, is sent to the attention of the Controller.

(2)

(3)

(4)

e)

Installment sales contract payments: (1) The number and amount of the installment sales contract payments is determined by the installment sales contract. The Fixed Asset Administrator or Vice President of Finance will determine the payoff amount.

(2)

Revised as of March 11, 2014

REVENUE AND COLLECTIONS

6 - D | 18 (3)

Policy & Procedure Manual The payoff, in the form of certified or electronic funds, is sent to the attention of the Controller.

f)

Tax and insurance escrow payments: (1) Tax and insurance escrows are collected monthly and accumulated to pay annual tax and insurance costs on behalf of the resident. Annually, the escrow accounts are reconciled to the actual cost and the monthly escrow amount adjusted accordingly for the next year. If the escrow collected is in excess of the cost, the amount of the excess is refunded to the resident in the form of a check.

(2)

(3)

g)

Administrative procedures for notes receivable payments: (1) Accounting: By posting the note receivable charges, the following entries are made into the general ledger by the Yardi system (the associated charge codes are shown in brackets):

Figure 13: Accounting for Notes Receivable Charges 13101 – Tenant Receivable 41305 – Rent: Home (community) $ X,XXX [1note] $ X,XXX

(2)

Accounting: As part of the monthly close process, the following manual journal entry is made to reclassify note revenue to Pelican Finance and to interest income and principal (intercompany entries have been eliminated for simplicity):

Figure 14: Journal Entry to Reclassify Rental Revenue to Pelican 41305 – Rent: Home (community) 41305 – Rent: Home (Pelican Finance) 41825 – Less: Installment Payments (Pelican Finance) 13420 – MH Notes Receivable (Pelican Finance) 85100 – Interest Income (Pelican Finance) $ X,XXX $ X,XXX $ X,XXX $ X,XXX $ X,XXX

h)

Lease-to-purchase payments: (1) Accounting: [INSERT STEPS]

REVENUE AND COLLECTIONS

Revised as of March 11, 2014

Policy & Procedure Manual i) Installment sales contract payments: (1) Accounting: [INSERT STEPS]

6 - D | 19

Policy Initiatives
Initiative Policy in transition Additional explanation Specific changes to the LTP and ISC accounting may be requested. Once the results of the audit are known, the specific policy and procedure around these areas will be created. Develop flowchart for each of the procedures above. Requires technical editing. Assigned DDB Reviewed 2/27/14

Accounting Editing

DDB DDB

2/27/14 3/11/14

Revised as of March 11, 2014

REVENUE AND COLLECTIONS

6 - D | 20

Policy & Procedure Manual

8.

Ancillary charges
Revised as of March 11, 2014

a)

Definition: (1) Ancillary charges are comprised of any miscellaneous, non-recurring charges that are not classified as any other type of charge. There are two categories of ancillary charges, compliance and ad hoc. Compliance charges are charged to residents for not following the Guidelines for Living. Ad hoc charges are any miscellaneous charges that include charges for purchase of supplies, facility rentals, or lost keys.

(2)

(3)

b)

Compliance charges: (1) Each property has predetermined living standards by which the residents must abide. These include, but are not limited to, the outside appearance of the house, how many roommates are allowed, pets, and the landscaping of the site. These living standards are disclosed in the lease and/or the addendums to that lease. If the Community Manager determines a resident is in violation of the living standards of the community, the Community Manger will provide written notice of the violation and the amount of the charge for failure to comply. A reasonable amount of time will be allowed for correction, but a deadline will be set in the notice. If the violation is not corrected per the notice, the Community Manager will authorize the addition of a compliance charge consistent with the written notice.

(2)

(3)

(4)

c)

Ad hoc charges: (1) All funds collected from a resident must have an associated charge to ensure the accuracy of the charge and protect against any fraudulent activity. At the time the supply or service is rendered or fee charged, the community staff is required to add an appropriate charge.

(2)

d)

Procedure: (1) (2) (3) Operations: Submit change form to DOTS with requested additional charges. DOTS: Enter charges as requested per the change form. Accounting: By posting the ancillary charges, the following entries are made into the general ledger by the Yardi system (the associated charge codes are shown in brackets):
Revised as of March 11, 2014

REVENUE AND COLLECTIONS

Policy & Procedure Manual

6 - D | 21

13101 – Tenant Receivable TDB – [NEED TO REVIEW ACCOUNTS USED.]

$ X,XXX $ X,XXX

Policy Initiatives
Initiative Policy in transition Additional explanation How these charges will be handled in the future may need to be reviewed with the implementation of Yardi 7s, and the decentralization of data entry. Develop flowchart for each of the procedures above. Requires technical edit. Assigned DDB Reviewed 3/11/14

Accounting procedure Editing

DDB DDB

3/11/14 3/11/14

Revised as of March 11, 2014

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E.

Collecting What the Resident Owes
Revised as of March 11, 2014

The following procedures outline the Ascentia collection method. The goal is always to collect 100% of what the resident has been charged.

Policy Initiatives
Initiative Content development Additional explanation Most of the following information was derived from collections policy as developed by Mike Douglas. The policy has not been fully written out, especially to include the new collections agency agreement. Assigned MD Reviewed 3/11/14

Revised as of March 11, 2014

REVENUE AND COLLECTIONS

6-E|2

Policy & Procedure Manual

1.

Monthly collections
Revised as of March 11, 2014

a)

Definition (1) Delinquent is when a resident fails to pay all charges in full by the 5th of the month, Delinquency is a measure of the effectiveness of our collections, as measured at the last day of the calendar month.

(2)

b)

To be the most effective in collections, follow the monthly collections calendar: (1) (2) (3) We always strive for 100% collected. Target for current delinquency is 5% or less. Community Managers are expected to follow the Monthly Collections Calendar.

Figure 15: Monthly Collections Calendar Step 1 2 3 4 5 6 Action Delivery of statements Rent is due! Friendly reminder – personal contact is the most effective. Call or visit residents who have not paid – the last chance to avoid initiating legal action. Deliver notice to pay or quit – applicable to every resident who has not paid in full. Follow-up on commitments to pay, deliver door knocker to contact office, and prepare delinquency explanations for district manager. Establish all payment plans as prescribed by policy Three-day notices receive pre-court letter/instructions – personal contract for final negotiations to arrange payment or surrender home Five-day notices expire – in lieu of payment plan or acceptable arrangement to vacate, documents are filed with the courts and eviction process is initiated. Three-day notices expire – in lieu of payment plan or acceptable arrangement to vacate, documents are filed with the courts and eviction process is initiated. Five-day notices expire – in lieu of payment plan or acceptable arrangement to vacate, documents are filed with the courts and eviction process is initiated. Ten-day notices receive pre-court letter/instructions – personal contact for final negotiations to arrange payment plan or surrender home. Ten-day notices expire - in lieu of payment plan or Day Prior 1st 5th 11th 7th Ongoing 7th – 10th 10th 12th 11th 13th 17th 18th

7 8

9

10

11

12

13
REVENUE AND COLLECTIONS

Revised as of March 11, 2014

Policy & Procedure Manual acceptable arrangement to vacate, documents are filed with the courts and eviction process is initiated. Negotiations with resident is ongoing and should include personal contact the day before court is scheduled to make one last attempt to collect or gain an amicable exit.

6-E|3

14

Ongoing

(4)

All collection related communication must be documented using the memo function on the resident record. The company cannot accept payments from residents that are in the process of eviction. When the eviction process begins, the on-site staff must place the resident in eviction status. By doing this, the resident record will automatically be sent to the lock box, preventing any payments from being accepted from the on notice resident.

(5)

Policy Initiatives
Initiative Content development Additional explanation Dates may need to be updated in the calendar. This section may be duplicative of other sections. Need to determine if the correct status is “evict” or “notice.” Delinquency and late fee charging needs to be updated relative to new payment structures. Policy needs to reflect that delinquency cannot be effected in the same immediate way now as when community managers collected and deposited, making an immediate impact just prior to the cut off, by creating deposits in transit. Measures should not encourage community manager involvement in the payment process, which should go directly from the resident to the bank, as stated in the policy above. Requires technical edit. Assigned MD, DDB Reviewed 2/27/14

Editing

DDB

3/11/14

Revised as of March 11, 2014

REVENUE AND COLLECTIONS

6-E|4

Policy & Procedure Manual

2.

Producing and delivering statements to the residents
Revised as of March 11, 2014

a)

Scheduled printing and delivery of statements: (1) At this time, YES produces and mails hardcopy statements to all residents, reflecting the current charges plus any prior unpaid charges. The statements are printed throughout the month prior to the due date of the charges, depending on utility billing method. See table below for dates of meter reads and statement production and mailing. Statements are never to be modified or altered in any way by the community manager. The statement presented to a resident, if hand delivered by the community manager, should reflect the amount owed as it is on the resident ledger in Yardi.

(2)

b)

Online resident ledger: (1) Any resident who registers online will have access to their ledger at all times.

Policy Initiatives
Initiative Content development Additional explanation Need to determine global policy on the delivery of statements: convenience or required monthly? Need to determine if we want to develop a “paperless” policy to reduce mail time costs. Full review of control procedures in this area and appropriate policy development required. Requires technical edit. Assigned DDB Reviewed 2/27/14

Accounting procedures Editing

EP DDB

3/11/14 3/11/14

REVENUE AND COLLECTIONS

Revised as of March 11, 2014

Policy & Procedure Manual

6-E|5

3.

Processing recurring payments
Revised as of March 11, 2014

a)

Definition: (1) Recurring payments satisfy scheduled lease other contractual obligations in the form of charges added to the resident ledger. These payments satisfy the following obligations: (a) Rent (b) Utility charges (c) Late fees (d) NSF Fees (e) Compliance fees

b)

How payments are processed: (1) All recurring payments from residents must be directly received into the lock box through (1) the mail, (2) the on-line payment portal, or (3) a Walk-in Payment Solution (WIPS) card. No payments are allowed to be processed by the on-site staff. On-site staff must direct residents to one of the three payments options above.

(2)

c)

Allowable exceptions to this payment policy: (1) Exceptions to the recurring payment policy at this time are limited only to (a) Aloha Vegas due to Nevada state law; and, (b) Robbins’ Nest due to Nevada state law; (c) Any community that has short-term RVs. Any community that is required to accept cash and has an allowable exception must follow the cash handling policy.

(2)

Policy Initiatives
Initiative Content development Additional explanation Additional information needs to be included about the walkin payment solution, and how cash is to be handled in those communities for which we must accept cash. Flowchart and specific controls need to be documented Technical edit required. Assigned AM, EP Reviewed 3/11/14

Accounting procedure Editing

DDB DDB

3/11/14 3/11/14

Revised as of March 11, 2014

REVENUE AND COLLECTIONS

6-E|6

Policy & Procedure Manual

4.

Processing special payments
Revised as of March 11, 2014

a)

Definition: (1) Special payments do not fit the definition of recurring payment and do not satisfy charges that appear on a resident ledger. These payments include: (a) Payoff payments for a note receivable, lease-to-purchase, lease with option, or installment contract. (b) Convenience store or other ancillary income, such as revenue from home supplies sales to residents.

b)

How special payments should be processed: (1) Payoff payments are mailed directly to the Home Office to the attention of the Controller.

Policy Initiatives
Initiative Content development Accounting procedure Editing Additional explanation Convenience store and RV income need to be addressed in a more detailed policy. Flowchart and specific controls need to be documented Technical edit is required. Assigned DDB DDB DDB Reviewed 2/27/14 3/11/14 3/11/14

REVENUE AND COLLECTIONS

Revised as of March 11, 2014

Policy & Procedure Manual

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5.

Processing online payments
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation With the recent implementation of the online payment system, a set of policies and procedures are needed to (1) set rules for which staff members have access and what responsibilities they have, (2) what to do if there is a technical issue, and (3) what do to in the case of potential fraud issues. Need detail steps in the cash management process. This section may overlap with the cash management section below. Develop a flowchart for online payments. Requires technical edit. Assigned DDB Reviewed 3/11/14

Accounting procedures

DDB

3/11/14

Editing

DDB

3/11/14

Revised as of March 11, 2014

REVENUE AND COLLECTIONS

6-E|8

Policy & Procedure Manual

6.

Notices
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation This section needs to be developed vis-à-vis other references to the use and management of notices. This policy needs to be updated with the recent changes in the management of the notices, as they have recently been made available through automatically through Yardi. Assigned AM Reviewed 3/11/14

REVENUE AND COLLECTIONS

Revised as of March 11, 2014

Policy & Procedure Manual

6-E|9

7.

Bad debt and accounts receivable write-offs
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation A new bad debt collation process has been implemented. How that process needs to be documented here with the rest of the bad debt policy. Develop accounting steps and flowchart. Assigned DDB Reviewed 3/11/14

Accounting procedure

EP

3/11/14

Revised as of March 11, 2014

REVENUE AND COLLECTIONS

Policy & Procedure Manual

6-F|1

F.

The End of the Resident Lifecycle
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation This whole section may overlap with other sections of this manual. The policies below will require further development and organization. Assigned DDB Reviewed 3/11/14

Revised as of March 11, 2014

REVENUE AND COLLECTIONS

6-F|2

Policy & Procedure Manual

1.

Lease renewal
Revised as of March 11, 2014

The lease renewal process is designed to manage the volatility of community attrition and provide for a more stable market rental increase evaluation and implementation. This is also a key component to a much larger resident retention program. a) Policy: (1) The lease renewal process is designed to manage the volatility of community attrition and provide for a more stable market rental increase evaluation and implementation. This is also a key component to a much larger resident retention program. The lease will be renewed at the new market rent for a year-long lease. Six month lease renewal plus 35 Month to month is plus 200

(2) (3) (4)

Policy Initiatives
Initiative Content development Additional explanation This policy is referenced in part in other sections of this manual and needs to be developed and reconciled with those sections. With the implementation of Yardi 7s, this policy would be modified with the community manager taking full advantage of the lease renewal process in Yardi. This policy would also be impacted by the enforcement of other lease-related policies. Control mechanisms and flowchart need to be developed Technical edit is required. Assigned MD Reviewed 3/11/14

Policy in transition

AM

3/11/14

Accounting procedure Editing

EP DDB

3/11/14 3/11/14

REVENUE AND COLLECTIONS

Revised as of March 11, 2014

Policy & Procedure Manual

6-F|3

Moving-out (voluntarily)
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Policy that was designated for this section has been partially covered in the other sections of this manual. Further development required to complete. Assigned MD Reviewed 3/11/14

Revised as of March 11, 2014

REVENUE AND COLLECTIONS

6-F|4

Policy & Procedure Manual

2.

Eviction of renter
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation This section needs to be reviewed and possibly combined with the collections section. Specific state requirements need to be documented. Eviction covered in apart in other sections. Document accounting controls and develop flowchart Assigned DDB Reviewed 3/1/14

Accounting procedure

EP

3/11/14

REVENUE AND COLLECTIONS

Revised as of March 11, 2014

Policy & Procedure Manual

6-F|5

3.

Eviction of home owner
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation This section needs to be reviewed and possibly combined with the collections section. Specific state requirements need to be documented. Eviction covered in apart in other sections. Document accounting controls and develop flowchart Assigned DDB Reviewed 3/1/14

Accounting procedure

EP

3/11/14

Revised as of March 11, 2014

REVENUE AND COLLECTIONS

6-F|6

Policy & Procedure Manual

4.

Deposit accounting
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Parts of the process are covered in other sections. This policy needs more development, especially with controls on what the final charges are, which are prorated, and the treatment of the security deposit. More detailed policy on handling of charges posted due to deposit accounting. Assigned DDB Reviewed 3/11/14

REVENUE AND COLLECTIONS

Revised as of March 11, 2014

Policy & Procedure Manual

6-G|1

G.

Scheduled Monitoring Activities
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Monitoring activities include review of management reports, following the procedures on the management of the community manager dashboard, and reconciliations. These procedures need to be detailed more fully. Some reference to them is made in the accounting section. Develop flowchart. Assigned EP Reviewed 3/11/14

Accounting procedure

DDB

3/11/14

Revised as of March 11, 2014

REVENUE AND COLLECTIONS

Policy & Procedure Manual

7-A|1

7. RESIDENT RELATIONS AND MANAGEMENT
Revised as of March 11, 2014

A.

Overview
Polices on how to work with residents and the standards at which they need to maintain the community.

Policy Initiatives
Initiative Content development Editing Additional explanation Overall statement and highlights of the section to be developed. Technical edit required. Assigned DDB DDB Reviewed 3/11/14 3/11/14

Revised as of March 11, 2014

RESIDENT RELATIONS AND MANAGEMENT

Policy & Procedure Manual

7-B|1

B.

Resident Orientation at Move-in
Revised as of February 27, 2014

The resident orientation and move in process delineates and documents the responsibilities of both the resident as the resident and the Ascentia staff as landlord in order to provide a strong foundation upon which to build the business relationship. The resident orientation and move in process is critical in developing a successful landlord/resident relationship and determining the longer-term success of the community/company (?) in meeting its financial expectations, community standards and a high level of customer satisfaction. An effective and engaging orientation and move-in process can make a Manager’s job much easier as there will likely be less late payments and violations, and more resident loyalty, lease renewals and prospect referrals as a result.

Policy Initiatives
Initiative Editing Additional explanation Technical edit required. Assigned DDB Reviewed 3/11/14

Revised as of February 27, 2014

RESIDENT RELATIONS AND MANAGEMENT

7-B|2

Policy & Procedure Manual

1.

Resident orientation
Revised as of March 9, 2014

a)

The importance of the orientation session: (1) Before a lease is signed, the community manager must schedule an orientation session to be attended by all adult members of the new household. During this orientation, each new resident should be briefed by the Manager about the terms of the Lease Agreement, Guidelines for Living, and Community Standards. The Manager should clearly define what the resident can expect from management and what management expects from the resident. It is imperative that the resident understands and accepts his/her responsibilities under the terms of the lease agreement. The more thorough the orientation is conducted the fewer conflicts management will have to address during the residents occupancy in the community.

b)

Content of the orientation session: (1) Each new resident must be provided with copies of the following (Welcome Packet): (a) Move-in settlement statement (b) Home lease (if applicable) (c) Lot lease (d) Addendums (if applicable) (e) Concession verification or other required acknowledgments (f) Guidelines for Living (g) Community Standards (h) Social Calendars

(2)

During the orientation session, the Manager should state that all rules, regulations and community standards are applied uniformly to all residents. Stress the following: (a) Rent collection/late fee policies (b) Procedures for maintenance work orders (c) Quarterly inspections (d) Personal conduct and Pet Policies (e) Sub-leasing (f) Procedures for vacating the home or home site (g) Security deposit. Also clarify any other areas that are specific to the community. These may include parking /vehicle storage, laundry, recreation regulations, amenity access & regulations, etc.

(3)

RESIDENT RELATIONS AND MANAGEMENT

Revised as of March 9, 2014

Policy & Procedure Manual (4)

7-B|3

Social Calendar and Lifestyle. New residents should be given information about the community’s social calendar and lifestyle. Any helpful information about the neighborhood that can be conveniently compiled should be made available to them, as described in the “Welcome Packet” noted above. Community Standards. Community standards should be emphasized. All residents must meet certain requirements regarding landscaping and home site maintenance. Residents must also understand the community’s system of refuse disposal. During orientation, the Manager should explain the reasons behind each policy (health, safety, fire code regulations, insurance company rules and requirements, landlord-tenant law compliance, good business practice, etc.). Community Documents. The community documents (Lease Agreement, Guidelines for Living, and Community Standards) should be provided in duplicate, and the new resident must sign both copies of each one. Prior to signing, all blanks must be filled in with the appropriate information. For more information and examples, consult the Ascentia Employee Portal. The Manager retains one copy of each community document and the other copy is for the resident to keep. All documents held by the Manager become a part of the resident’s file. New Resident Arrival. The Manager or a qualified member of the staff MUST be available when the new resident arrives. The move in condition form must be completed by management in the presence of the new resident at the time keys are assigned. Home installation requires supervision to assure that everything goes smoothly and in accordance with governmental and community requirements. The Manager is responsible for offering resources and assistance that will help make the move-in process go as smoothly and quickly as possible.

(5)

(6)

(7)

Policy Initiatives
Initiative Editing Additional explanation Requires technical edit Assigned DDB Reviewed 3/9/14

Revised as of March 9, 2014

RESIDENT RELATIONS AND MANAGEMENT

7-B|4

Policy & Procedure Manual

2.

Pet policy
Revised as of February 28, 2014

a)

Allowable pets and documentation requirements: (1) The only allowable pets are: (a) Dogs 20 inches or shorter at the shoulder and weigh 40 pounds or less; (b) Domestic cats; and (c) Birds (but no agreement or deposit required). All pets must be current with all required immunizations and licensing. Prior to a pet coming into a community, documentation of current immunization and licensing must be provided and kept on file. This information must be updated annually thereafter.

(2) (3)

b)

Prohibited dog breeds: (1) Under no circumstances will the following dog breeds or mix of dog breeds be allowed into the community: (a) Pit Bulls & Staffordshire Terriers (b) Doberman Pinschers (c) Rottweilers (d) German Shepherds (e) Chows (f) Great Danes (g) Presa Canarios (h) Akitas (i) Alaskan Malamutes (j) Siberian Huskies (k) Wolf-hybrids

c)

Prohibited animal species: (1) All of the following animals are prohibited from being kept as a pet in the community with no exceptions: (a) Reptiles (b) Snakes (c) Wolves (d) Farm animals of any kind (e) Exotic animals of any kind If the animal is not a dog or domestic cat and not listed above, assume it is prohibited.

(2)

RESIDENT RELATIONS AND MANAGEMENT

Revised as of February 28, 2014

Policy & Procedure Manual d) Allowable pets by unit type: (1)

7-B|5

A resident in a resident-owned home, including a financed home, can keep a maximum of two allowable pets. For rental homes, unless provided with written exception, no pets are allowed. If market conditions warrant, and with approval from the Vice President of Operations, a resident of a rental home may keep one allowable pet.

(2) (3)

e)

Application, pet deposits, and lease pet addendum: (1) A prospective resident’s pet must be approved for residency through the standard application process. If the pet is a dog, the Community Manager will inquire with prior landlords about its behavior and will reject residency for the dog if it has any history of aggressive behavior. A one-time pet deposit will be charged as follows for rental homes: (a) Dogs – minimum of $500 per. (b) Domestic cats – minimum of $250 per. The lease pet addendum must be filled out completely and accurately.

(2)

(3)

(4) f)

Defining what a service animal is: (1) A service animal per Americans with Disability Act (ADA) is dog that is individually trained to do work or perform tasks for a person with a disability. ADA classifies only dogs as service animals and excludes emotional support animals. The U.S. Department of Housing and Urban Development, following its Fair Housing Act (FHA), upholds that service animals are not limited to dogs, that emotional support animals are to be included, and disabled individuals may request reasonable accommodation for assistance animals other than dogs. There is no legal requirement for service animals to be registered.

g)

Accommodating a service animal: (1) We are required by law to make reasonable accommodation for a service animal.

h)

Adding pets after move-in: (1) If a resident wants to keep an allowable pet in a rental unit in a community that allows pets in rental units, that allowable pet must be approved through the standard approval process above.

Revised as of February 28, 2014

RESIDENT RELATIONS AND MANAGEMENT

7-B|6 i) Eviction: (1)

Policy & Procedure Manual

Any resident found with an unauthorized pet must either move the unauthorized pet out of the home or be evicted.

Policy Initiatives
Initiative Content development Additional explanation Determine what “reasonable accommodation” will mean in regards to certain breeds of dog used as service animals. The most current rulings seem to both put the property owner at risk of liability in state law, but at the federal level must accommodate service animals that are consider high-risk for bite and attack. Our current liability insurance Technical edit required Assigned DDB, MD Reviewed 2/28/14

Editing

DDB

3/11/14

RESIDENT RELATIONS AND MANAGEMENT

Revised as of February 28, 2014

Policy & Procedure Manual

7-C|1

C.

Resident Communications and Notices
Revised as of March 11, 2014

Clear and concise resident communications is paramount in order to maintain and convey what is required to reside in our communities, and to keep an open dialogue between each resident and the community management. Resident notices are required to ensure compliance with community policies and to serve as evidence in any possible legal proceeding. Regular communications in various forms help to foster a good relationship between the resident and the management. Through various avenues of communication we are able to instill a sense of community among everyone that chooses one of our communities as their home.
Policy Initiatives
Initiative Editing Additional explanation Technical edit required. Assigned DDB Reviewed 3/11/14

Revised as of March 11, 2014

RESIDENT RELATIONS AND MANAGEMENT

Policy & Procedure Manual

7-C|1

1.

Communication methods
Revised as of March 11, 2014

a)

Scope of resident communications: (1) Resident communications would include any contact whether by phone, in person, by written notice, through a newsletter forum, e-mail and other multimedia outlets. Type of communications: (a) Formal (b) Informal (c) Verbal (d) Non Verbal (e) Effective Listening (f) Visual

(2)

b)

Specific types of communication: (1) Types of resident communications-(Notification can be by door to door notification, mailing, or face to face. Would like to see email become part of process for some items) (a) Newsletters (monthly or quarterly) Newsletters-ongoing communications. Newletters should always be uplifting and include only short reminders of policy. This is not the forum in which to preach (b) Thank you letter/notices (c) Resident Function notifications (i) Help your Neighbor (ii) Mercy Fund (iii) Resident functions, easter, xmas, ect… (d) Quarterly inspection notices (e) Clean up notices (i) Use of Would you please notices (ii) Notice of non-compliance (f) Weather specific notifications (i) Insulation of water risers and resident responsibility (ii) Water billing notices/violations/responsibilities (iii) Water cooler leaks, ect. (g) Pet policy letter (h) Vehicle Policy (i) Tag notices (ii) CCAP notification- site specific (iii) Resident Survey (iv) Conduct letters (v) Violation notices (vi) Renew your lease notices( long term leasing)
RESIDENT RELATIONS AND MANAGEMENT

Revised as of March 11, 2014

7-C|2 (vii) (2)

Policy & Procedure Manual How to handle and process each

Tone of the communication is key to successful management of the process. Friendly reminder to the more stern final notice before action. Habitual offenders would skip certain steps in the process.

Policy Initiatives
Initiative Editing Additional explanation Technical edit required. Assigned DDB Reviewed 3/11/14

RESIDENT RELATIONS AND MANAGEMENT

Revised as of March 11, 2014

Policy & Procedure Manual

7-C|3

2.

Community Guidelines for Living
Revised as of March 11, 2014

(1) (2)

A. Guidelines Overview B. Ways to Monitor Compliance (a) Resident complaints/concerns/observations (e.g., calls to office, enrolling residents walking their dogs, etc.) (b) Staff observance (e.g., work orders, trash pick-up, showing rental properties, posting notices, etc.) (c) Regularly scheduled inspections of community (i) Who is responsible (roles of the Manager and staff) (ii) How often (d) Quarterly Gold Star Service calls (i) What they include (ii) When to schedule (iii) Conduct during home visit/inspection (iv) Reporting and handling conditions C. Types of Standards (a) Zero tolerance standards (b) Moderate impact (c) Minor impact D. Enforcement – How to Respond to Non-compliance (a) Zero tolerance violations (b) Moderate impact violations (c) Minor impact violations (d) Documenting the process E. Next steps for “Repeat Offenders” (a) Actions which can be taken (i) Violation-based fees? (ii) Three strikes for minor infractions? (iii) When to pursue eviction (iv) Formal meeting with resident and manager (b) Roles of Manager and District Manager F. Creative Ways to Assist Residents in Complying (a) Provide list of qualified vendors they can hire (NO recommendations) (b) Resident Purchase Program and other possible financing options (c) Community Watch and Community policing activities (d) Provide a list of agencies that will help those who have limited income do repairs to their homes (i) If you are demoing a home, can any of the pieces be used to help upgrade the site of an existing resident
RESIDENT RELATIONS AND MANAGEMENT

(3)

(4)

(5)

(6)

Revised as of March 11, 2014

7-C|4 (ii) (7) (8)
Policy Initiatives
Initiative Editing

Policy & Procedure Manual Other

How to ensure residents are abiding by the standards of the community. What to do with violations?

Additional explanation Technical edit required.

Assigned DDB

Reviewed 3/11/14

RESIDENT RELATIONS AND MANAGEMENT

Revised as of March 11, 2014

Policy & Procedure Manual

8-A|1

8. PROPERTY MANAGEMENT
Revised as of March 11, 2014

A.

Overview
The purpose of the Community Standards is to create and maintain a safe, attractive and positive living environment which protects the assets of the company and provides a high quality of life for residents that is consistent among Ascentia properties. Appearance and Condition of the Physical Assets

Policy Initiatives
Initiative Content development Additional explanation Assigned Reviewed

Revised as of March 11, 2014

PROPERTY MANAGEMENT

Policy & Procedure Manual

8-B|1

B.

The Community Manager
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Editing Additional explanation The summary section will be developed after following sections are finalized. Technical edit required Assigned DDB DDB Reviewed 3/11/14 3/11/14

Revised as of March 11, 2014

PROPERTY MANAGEMENT

Policy & Procedure Manual

8-B|1

1.

Monthly management calendar
Revised as of March 11, 2014

The Community Manager Dashboard provides instantly a snapshot of overall community occupancy.

Policy Initiatives
Initiative Content development Editing Additional explanation The summary section will be developed after the detail sections are completed. Technical edit required. Assigned DDB DDB Reviewed 3/11/14 3/11/14

Revised as of March 11, 2014

PROPERTY MANAGEMENT

8-B|2

Policy & Procedure Manual

2.

Daily tasks
Revised as of March 11, 2014

a) b) c)

Drive the community Review Community Manager Dashboard Calendar Check the Ascentia Employee Portal (1) (2) Daily News Policy and procedure updates.

d)

Conduct morning staff meetings: (1) Assign daily tasks: (a) Community appearance (b) Work orders (c) Home refurbishment (d) Gold Star Service schedule Review work order status and inspections Post resident non-compliance notices Address new issues Review policy updates and company communications (as applicable)

(2) (3) (4) (5) e)

Follow up with all messages: mail, email, and voicemail: (1) All communication should be consistent with Ascentia’s communication policy.

f) g)

Approve payables in PayScan. Follow up with delinquent accounts (1) (2) (3) Community dashboard -> Residential Analytics -> Aged Receivables Delinquency should be managed consistent with Delinquency policy above. Make sure you add memos to resident record.

h)

Provide excellent resident relations: (1) (2) (3) Make sure all interactions are consistent with our customer service standards. Planning community events and activities. Communicate work order status.

i)

Walk vacant homes:
Revised as of March 11, 2014

PROPERTY MANAGEMENT

Policy & Procedure Manual (1) (2) j) k) l) m) Verify market-ready conditions Satisfactory completion of work

8-B|3

Clean office, clubhouse, and bathrooms. Approve hours worked for payroll. Update marketing as needed. Manage your Community Manager Dashboard (1) Resident Activity should be all zeroes prior to leaving for the day: (a) Process and review applications (b) Expiring leases and lease renewals (coming soon!) (c) Move-ins and move-outs (d) Deposit accounting (e) Alerts – must be zero before going home. Unit Statistics (a) Confirm occupancy and home types. (b) Process corrections and updates as needed. Follow-up on Traffic (a) Prospect Pipeline: Follow-up with prospects in the pipeline and update with detailed notes. PopCard. (b) Today’s Showings: Confirm showings and availability. Contact prospective residents to confirm showing. (c) Pending Applications: Verify application status and take necessary actions. Review and approve open charges (a) Lease (b) Late fees (c) Utility (d) VCR (e) Anything else you might like (f) Process corrections as necessary

(2)

(3)

(4)

n)

Provide reporting as requested

Policy Initiatives
Initiative Editing Additional explanation Requires technical edit. Assigned DDB Reviewed 3/11/14

Revised as of March 11, 2014

PROPERTY MANAGEMENT

8-B|4

Policy & Procedure Manual

3.

Monthly tasks
Revised as of March 11, 2014

a)

Monthly Operations and VariancE Reports (MOVERs) (1) Know your community per district manager instructions.

b)

Utilities recapture (1) (2) Usage Cost recapture

c)

Employee reimbursement, petty cash, commissions (1) Make sure they are submitted.

d)

Resident event planning- let’s have fun building community!

Policy Initiatives
Initiative Content development Editing Additional explanation Reports referenced in this section need to be finalized. More detailed policy to be developed on how to use the reports. Requires technical edit. Assigned MD DDB Reviewed 3/11/14 3/11/14

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4.

As needed
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Additional ad hoc procedures to be identified. These processes may ultimately fold into other sections. Assigned MD Reviewed 3/11/14

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C.

Understanding the Property Through Yardi
Revised as of March 11, 2014

To more effectively manage our properties, we utilize the Yardi Voyager information system. This section covers the Yardi tools and reports, and what they contain about the property, laying out policies and procedures to ensure that the information is accurate and usable to all levels of management. The company faces a unique challenge compared to apartments: what we rent can change over time, unit by unit. As a property replaces resident-owned homes and empty sites with rental homes, what can be rented increases, reflected in the growth of gross potential rent. This possibility of change puts an additional burden on the company to accurately and efficiently manage what is rentable. We do this through the management of unit types. Unit types comprise the foundation of almost all reports and management tools in the Yardi system.
Policy Initiatives
Initiative Content development Additional explanation The different ways in which the parameters of the community are tracked and managed in Yardi new fuller development. This will evolve with the implementation of Yardi 7s. It is also possible that this section could be combined with the appropriate topic. Assigned DDB Reviewed 3/11/14

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Policy & Procedure Manual

1.

Managing unit types
Revised as of March 11, 2014

a)

Definitions: (1) The unit type is a designation (complete list in table below) that is used to categorize each property unit (site) to reflect the rent potential of that unit (site), based on: (a) Whether the unit (site) is empty, or has either a rental home, financed home, or resident-owned home on it; (b) The number of bedrooms and bathrooms (rental home only); (c) The manufacturer of the home (rental home only); (d) The floor plan of the home (rental home only); and (e) The model year of the home (rental home only). The global unit type is a summary designation used to categorize units (sites) as follows: (a) 1empty: a site that currently does not have a home on it, but can accommodate a home at standard cost. (b) 1enchrch: a site, while empty, that cannot accommodate a home due lack of sufficient space as a result of the placement of neighboring homes. (c) 1nonrev: a site that would require either additional capital spending and/or reconfiguration of sites to accommodate a home. (d) 1residnt: a site with a resident-owned home on it. (e) 1finance: a site with a Pelican financed home on it. (f) mh_be_ba: a site with a rental home it, where the blanks represent the number of bedrooms and bathrooms. (g) 1demo: a site with a home that has been determined to be economically unviable and will be removed from the community. (h) 1pending: a site with a home that requires further evaluation before determining whether the home will be refurbished or demolished.

(2)

b)

A change in unit type is a material economic event: (1) A change in unit type is a change in the status of the home on that site. It indicates that a home has been demolished, sold or purchased, and each of these events is material. Prior to all unit type changes approval must be obtained from the vice president of operations and the vice president of finance.

c)

Updating a unit – empty site (1empty) to rental home (mh_be_ba): (1) This change represents the purchase of home new to the property that is being placed on a formally empty site. The following unit information must be updated: (a) Unit type; (b) Market rent;
Revised as of March 11, 2014

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In addition to the unit information, the fixed asset should be immediately updated consistent with the unit information above.

d)

Updating a unit – resident-owned home (1residnt) to rental home (mh_be_ba): (1) A resident-owned home has been acquired and determined to economically viable as a rental home. In addition to the unit type, the following information must be updated on the unit record: (a) Market rent; (b) Square footage; (c) Bedrooms; and (d) Date ready.

e)

Updating a unit – resident-owned home (1residnt) or rental home (mh_be_ba) to determining status (1pending): (1) The pending status would be changed immediately and used by the vps to manage the evaluation process. No more than 30 days. [REVIEW THIS POLICY FURTHER. PUTTING A HOME IN PENDING STATUS WOULD BE PROBLBEMATIC. EVALUATION OF THE HOME SHOULD HAPPEN JUST PRIOR TO THE SWITCHING OF THE UNIT TYPE TO EITHER RENTAL OR DEMO.]

(2) (3)

f)

Updating a unit – resident-owned home (1resident) to to-be-demolished (1demo): (1) A resident-owned home has been determined to be economically unviable; the cost to refurbish is greater than the future economic benefit.

g)

Updating a unit – rental home (mh_be_ba) to to-be demolished (1demo): (1) A rental home has been determined to be economically unviable; the cost to refurbish is greater than the future economic benefit. In addition to the unit type the following information must be updated on the unit record: (a) Market rent; (b) Square footage; (c) Bedrooms; and (d) Date ready.

h)

Updating a unit – to-be-demolished (1demo) to empty site (1empty): (1) Once the home has been removed from the community, the unit type should be updated to empty site.

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Policy Initiatives
Initiative Policy in transition

Policy & Procedure Manual

Additional explanation This policy is in some transition. While it was written in anticipation of changes to the unit types with RentCafé, there may be additional modification with practice.

Assigned DDB

Reviewed 3/11/14

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D.

Property Safety and Liability Management
Revised as of March 11, 2014

As Property Managers, Ascentia provides certain physical assets that meet our customers’ needs. These assets preserve Ascentia’s investments and provide for the enjoyment, safety, health, and welfare of the residents with regard to community-owned homes, streets, parking pads, utilities services, recreation and service amenities, etc. Conscientious maintenance of these assets adds years to a property’s life, reduces resident turnover, decreases the possibility of accidents or lawsuits, reduces insurance costs, and provides a better return on investment. Cost effective maintenance expenditures in the long run save money and reduce problems.
Policy Initiatives
Initiative Content development Additional explanation Additional details on safety rules and training will be developed. Currently, working with Aon to identify an appropriate training program. Assigned DDB Reviewed 3/11/14

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Policy & Procedure Manual

1.

Proper planning, disciplined scheduling, and consistent follow-up
Revised as of March 11, 2014

a)

Policy: (1) Management must stay alert and employee the following practices: NOTE: The DM and CM of each property will develop and and maintain a daily, weekly, monthly and annual routine schedule to address each of the following areas: (a) Inspect — inspect the community daily to identify violations of Guidelines for Living, infrastructure issues and maintenance needs, or anything that are not consistent with the policies and procedures herein. All infractions or maintenance needs must be documented and assigned to the proper team member to correct immediately (b) Repair — Initiate and assign a work order for repairs of any nonfunctioning, non-compliant or dangerous condition daily (c) Debris – establish a daily maintenance routine to remove all debris and trash for the community. (d) Maintain — Maintain the common grounds, equipment, vehicles, buildings, streets and any other physical assets pertaining to the community; (e) Anticipate — Anticipate future repairs and maintenance through a detailed inspection and asset review procedure; (f) Be Prepared — Be prepared for emergencies. Familiarize yourself with all aspects of the maintenance function so that you will know when something is not operating correctly. Included are: valves, meters, gauges, regulators, breakers, clean outs, emergency horns or lights, etc. It is very important that you find and maintain a community blueprint that shows utilities and other features. (g) Customer service consideration — Work hard to maintain good rapport with all customers. Resident cooperation and understanding is priceless in making our maintenance easier and more effective and their cooperation is directly proportionate to the effectiveness of our communications with the residents.

Policy Initiatives
Initiative Editing Additional explanation Technical edit required. Assigned DDB Reviewed 3/11/14

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2.

Managing emergencies
Revised as of March 11, 2014

a)

Policy: (1) Management will develop and maintain an emergency response plan that incorporates each of the following: (a) Maintain a current list of any and all emergency phone numbers close at hand (in the office, at your home, with each maintenance technician) for fire, police, utilities and the health department. (b) Providing the residents with a list of these numbers, as well as a 24-hour emergency procedure plan including 24/7 community contacts. Depending on the size of the property, this could be an answering service, a special 24-hour emergency number, or instructions that are part of your answering machine message. Emergencies could include, but are not limited to: (a) Breaker burnout or any problem that stops electrical flow (b) A severe water break (c) Sewer backup (d) Criminal activity – can be a management emergency but residents must be instructed to contact local law enforcement first and then notify the community so we can follow up. Management and maintenance staff must know where all water shutoff valves are located; especially those that will close water lines in a row of spaces. A map of all known valve locations must be included in the emergency plan and be available on site at all times. Maps locating sewer lines and septic tanks must be available. The plan must include where electrical circuit breakers are located, and be sure that electrical boxes with more than one breaker have clear instructions as to what breaker controls what area.

(2)

(3)

Policy Initiatives
Initiative Content development Editing Additional explanation Detailed plans for each property to be developed. Requires technical edit. Assigned MD DDB Reviewed 3/11/14 3/11/14

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Policy & Procedure Manual

3.

Effective resource management
Revised as of March 11, 2014

a)

Policy: (1) You will succeed if you intelligently apply your resources. Use your time, people, tools, etc. to keep everything in the best shape possible with the least expense possible. Properly trained community employees should handle certain maintenance duties, and other jobs should be farmed out to contractors, especially if: (a) Licensing is required (such as pest control, plumbing, or electricity) (b) Specialized equipment or skills are required for safety or legal reasons (e.g. annual recharging of fire extinguishers) (c) In many instances, using contract labor represents a much lower expense when considering taxes, benefits, equipment, etc. (When using contract services, request bids based on precise specifications so that all quotes are identical in scope, allowing you to compare “apples to apples” from one contractor to another.) In general, plan ahead for time, equipment, supplies, and budget purposes. Discuss your needs with your District Manager prior to each year’s budgeting process. Avoid waste. Know your equipment, and keep up with the latest technology.

(2)

Policy Initiatives
Initiative Editing Additional explanation Technical editing required. Assigned DDB Reviewed 3/11/14

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4.

Personnel job responsibilities and workers’ compensation
Revised as of March 11, 2014

a)

Policy: (1) Community Managers and other Ascentia staff must adhere to specific roles in the maintenance program on each property due to the manner in which each state classifies workers for Workmen’s Compensation insurance premiums. The Workmen’s Compensation commission is quite strict in the definition of maintenance, and considers any form of personal presence as an involvement in the work itself. Community Managers of small properties who do perform maintenance duties as part of their job are properly classified as maintenance personnel for Workmen’s Compensation premiums and coverage.

(2)

Policy Initiatives
Initiative Editing Additional explanation Technical editing required. Assigned DDB Reviewed 3/11/14

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Policy & Procedure Manual

5.

Resident service requests
Revised as of March 11, 2014

a)

General policy: (1) It is mandatory for all Ascentia employees to respond promptly to a Resident’s Request for service and ensure that a high level of customer service is applied by every staff member involved in the process. Management must respond verbally or in writing to all resident requests the day the request is received. All work orders must be completed within 24 hours of the initial contact or as soon thereafter as possible depending on the nature of the work, availability of materials and/or the use of contract services. Management is responsible for ensuring that all maintenance and repairs are performed effectively and efficiently the first time, and that all involved staff is friendly and courteous, keep the resident informed throughout the process until final resolution is reached. Maintenance technicians must return the work area to the same, or better, condition after completing any work and before leaving the premises. All service personnel must leave a notice informing the resident they were at the home or site; what work was performed; what the disposition of the job is; if and when they will return, if applicable, prominently displayed at the resident’s home any time work is performed at a rental home or on an occupied home site. REMEMBER that there is no better advertising available to Ascentia that a recommendation made by a satisfied resident. Every contact with every prospect and resident by every Ascentia employee must reflect the attitude that “It is our pleasure to serve you.” (Note to DB and me; this statement needs to be inserted at the end of every P&P that involves resident interaction)

(2)

(3)

b)

Managing the service call with the resident: (1) Pay attention to service requests as important sources of resident - manager communication, and as an exchange of valuable information. Conduct the work order interview with the resident. Ask questions, Identify the real problem, not only what is stated. Remember we don't always know what is wrong until we personally investigate. Be sure you and the resident are in full understanding as to the exact nature of the problem, and what Ascentia’s responsibilities are as well as what the resident’s responsibilities are. (i.e.: drain stoppage resulting from the resident’s actions. Also communicate very clearly what your plan for solving the issue is, and a, realistic, expected time frame.

(2)

(3)

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Follow through and complete the plan – hold you employees to a high standard of customer service and ensure that all repairs are completed within 24 hours of the request or as soon thereafter as possible (pending material availability, etc.)

c)

Procedure: (1) Request is received and contact with the resident is initiated in the same business day. Interview the resident, ask questions and identify the “real” problem. In no instance should this work order interview take place later than 12 hours after receiving the request. Based on work load the Manager or staff member who conducts this interview should provide the resident with a clearly defined expectation of when the resident can expect maintenance to be on the premises addressing the issue. Work order is created and assigned to qualifying personnel, in house or contractor. Work order should be precise and include as much of the pertinent information obtained during the work order interview as possible. Ascentia personnel responds to the work order within 24 hours. The maintenance personnel should have any materials required to initiate the repairs as indicated by the work order interview. Work areas will be maintained as clean as possible during the course of the project and will be returned to pre-work condition at the completion of the job. Remember – you are in someone’s home so treat it with respect. Maintenance will complete a notification form and leave it with the resident or on the premises at any point during the work that the technician has to leave the premises OR at the conclusion of the work.

(2)

(3)

(4)

(5)

Policy Initiatives
Initiative Editing Additional explanation Technical edit required. Assigned DDB Reviewed 3/11/14

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E.

Curb Appeal
Revised as of March 11, 2014

Curb appeal is simply defined as the visual attractiveness of a community when initially seen by a prospect, resident or other person standing in front of the property "at the curb". On a global level the curb appeal of an Ascentia community is measured by the appeal at the entrance, the office, around common areas and at every home site. The required standards are intended to create and maintain a safe and attractive environment that promotes pride in the community by the residents and the employees. A community standards booklet, the Guidelines for Living, is provided to each resident at move-in to assist him or her in gaining a clear understanding of the standards. It is the Manager’s responsibility to assure that the community and each home and site is in compliance with these standards. The goal of 100% compliance can only be achieved through the efficient management of resources and consistent enforcement. Report your monthly progress on the Upgrade and Occupancy Progress Spreadsheet, which is due with your financials. Curb Appeal        
Policy Initiatives
Initiative Content development Additional explanation Each of the following areas in curb appear require either additional information in general policy or development of the specific standards for each community, consistent with the investment strategy. Technical editing required. Assigned DDB Reviewed 3/11/14

Signage Entries and Public Street Frontage Buildings(interior and exterior) o Community Space (including office greeting space) Landscaping and Grounds(commons) Pool and playgrounds Mailboxes Homes- resident and ours Amenities

Editing

DDB

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1.

Signage
Revised as of March 11, 2014

a)

Policy: (1) Ascentia signage should be standardized in order to provide owner recognition and a consistent standard throughout the company. All signage must be approved by the executive team and be professionally installed and maintained in a workmanlike manner at all times. No faded or peeling paint; no exposed/raw wood; post must be plumb with the sign and vertically straight. Additional signage that includes phone numbers, office hours and other pertinent information should be on or near the office. When a sign becomes obsolete a new sign should be ordered. All new signage request must be submitted through the capital request process.

(2)

(3)

Policy Initiatives
Initiative Content development Editing Additional explanation Additional policies to be developed consistent with our brand management policies. Technical editing required. Assigned MJ DDB Reviewed 3/11/14 3/11/14

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2.

Entries and public street frontage
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation This policy is intended to cover the proper way to manage the appearance of the front of the community, ensuring that the appearance is consistent with branding strategy. Assigned MJ Reviewed 3/11/14

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3.

Buildings
Revised as of March 11, 2014

a)

Definitions: (1) The office is that part of the building used to conduct the business of the community. This area should be clean, free of clutter, and project an image of professionalism. Residents should not be in this area unattended. The clubhouse is the public part of the building, which the residents can have access and use, per community policies. The maintenance building is where equipment and supplies are stored for the property. A resident should never enter this building.

(2)

(3)

b)

General building policies: (1) The outside must be freshly painted or sided [STANDARD OF APPEARANCE TO BE DETERMINED]. The doors and windows must be cleaned at least once a month. Windows should be free of dirt, fingerprints and other “smudges” at all times. The sidewalk up to the front door must be in good repair and the approach nicely landscaped [STANDARD OF APPEARANCE TO BE DETERMINED. SPECIFIC DEFINITION OF “GOOD REPAIR” REQUIRES FURTHER DEVELOPMENT.] The interior must be professionally maintained, organized and cleaned on a weekly basis. All lights should be in good repair and in working order, inside and out. The premises must be well lit at night. All signage and notices should be professional, welcome the customer and be informative. [ASCENTIA LOGO GUIDELINES – SHOULD THIS BE IN MARKTING?]

(2)

(3)

(4)

(5)

(6)

c)

The appropriate standard: (1) Workmanlike manner to describe the quality. The desired quality of workmanship and materials for a construction project. Would the CEO or President of the company move into this home?

(2)
Policy Initiatives
Initiative Content development Editing

Additional explanation Policy requires additional development of specific standards. Requires technical editing.

Assigned MD DDB

Reviewed 3/11/14 3/11/14

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4.

Landscaping and grounds
Revised as of March 11, 2014

a)

Written maintenance plan: (1) Every Ascentia community will have a 5 year written landscape plan. The plan will be drafted by the CM and DM and presented to the VPO for final approval. All plans will include tree maintenance, tree planting, flowerbed upgrades and development, irrigation issues, fertilizing and weed control.

b)

Maintaining trees: (1) Since we have properties all over the country and in many different climates, landscape issues will vary greatly. However, there are some fundamental problems that affect every property. Every Manager needs to cultivate a basic knowledge of what plants and trees do best in that particular climate. On properties with hundreds or even thousands of trees, a tree care company should be brought in on a yearly basis to keep liability and cosmetic issues to a minimum. These are the liability issues that each Manager needs to manage: (a) Dead branches or whole trees can fall on homes and do great damage or cause injury. (b) Sucker trees can sprout up next to a home and 20 years later push a home off its blocks. (c) Trees allowed to grow up in front of a home (near the hitch) will force you to cut them down before the home can be removed. (d) Sucker trees can sprout up around electric pedestals and other utilities and render them useless. (e) Tree roots can split driveways and infiltrate sewer lines. (f) Shrubs and trees planted too close to intersections can create blind corners. (g) In order to avoid these liability issues every Manager should adopt the following strategy: (h) All trees should be planted far enough away from homes, streets, parking pads and sewer lines so they are least likely to cause any damage to property. (i) Most large deciduous trees need to be shaped and have 8 feet of trunk before the first branches. Large dead limbs should be removed every year or when they look threatening. Smaller trees should be pruned and trimmed to eliminate sucker growth and clearly define the trunk of the tree. Shrubs need to be trimmed and shaped annually. (j) Sucker trees (volunteers) that are sprouting up in gardens, next to homes or vacant lots should be removed on a monthly basis during growing season and should be sprayed with an herbicide to keep them from coming back. This will avoid costly removal expenses when these trees are full-grown.

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Policy & Procedure Manual When trees are removed, trunks should also be ground and then seeded over. Often stumps that are left will continue to sprout new growth and if unattended become unsightly. Diseased prone trees should be removed whenever possible. Dutch Elm, Poplar and Box Elder trees are particularly problematic. Having staff cut down large trees or trim high branches is very dangerous and should be contracted out. While you cannot avoid all liability issues with landscaping, careful and consistent maintenance will prevent 90% of the problems just mentioned.

(l) (m)

c)

Maintaining lawns: (1) Lawn care and maintenance must be designed and executed to maintain a wellmanicured lawn and maximize the overall appearance of the property yearround. Mow regularly as determined by the grow season of the local climate. Treat for weeds using a commercial grade lawn fertilizer and weed killer at least twice/year in all common areas with an emphasis on the community entrance, around the office and all common/amenity areas AND around all community owned homes. Edge around all walks, parking pads, curbs and gutters throughout the community at least twice a year. Apply weed killer around all structures, homes, and in cracks or on gravel surfaces on streets and parking pads Flowers should be planted annually to add color and appeal at the entrance of the park, around the community sign, and around the office. Annual plants should be selected and planted based on the local climate and growing season. In communities where no landscaping has been implemented in the past, the DM should consult with a local landscape contractor to develop a program that creates high curb appeal and cost and labor effective to implement and maintain. Landscaping implementation that exceeds $2000(?) in a season must be submitted in compliance with the Capital request policies and approved by the VPO/Executive team.

(2) (3)

(4)

(5)

(6)

(7)

(8)

Policy Initiatives
Initiative Editing Additional explanation Requires technical edit. Assigned DDB Reviewed 3/11/14

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5.

Mailboxes
Revised as of March 11, 2014

a)

Policy: (1) (2) At all times, a clearly labeled mailbox will be available for reach residence. At all times, the mailboxes will be properly maintained and in good repair at all times. A minimum of one mailbox key is to be assigned to each resident. A master set of all mailbox keys will be in managements possession at all times. A lost mailbox key can be replaced for any resident listed on the lease at a cost of $5 per mailbox key.

(3) (4) (5)

Policy Initiatives
Initiative Editing Additional explanation Requires technical edit. Assigned DDB Reviewed 3/11/14

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Policy & Procedure Manual

6.

Playgrounds
Revised as of March 11, 2014

a)

Policy: (1) The playground is intended to be an attractive amenity that provides value to the current residents and appeal and added appeal for prospects who are considering living in our community. A poorly maintained playground area is more of a deterrent to resident retention or attracting new residents than no playground at all. Must comply with ASTM standards (American Society for Testing and Materials) and the Consumer Product Safety Commission playground safety guidelines. Must be maintained in proper working order with an emphasis on safety and appearance. Broken swings, chains or damaged components should be repaired or removed immediately to limit liability. Painted surfaces should be avoided but surfaces with faded, peeling paint should be repainted annually or as needed to maintain aesthetic appeal. Fall zones must be compliance with ASTM standards and/or local building code requirements. Falls zones should be revaluated on an annual basis and restored as needed to maintain compliance. Aesthetic or functional/safety repairs under $2,000 should be made immediately and simply require the approval of the DM. Capital request policy and procedure applies to all new installations, additions, upgrades major repairs or renovation that exceed $2000 and must be approved by the VPO/Executive team

(2)

(3)

(4)

Policy Initiatives
Initiative Editing Additional explanation Requires technical edit. Assigned DDB Reviewed 3/11/14

PROPERTY MANAGEMENT

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7.

Pools
Revised as of March 11, 2014

a)

Policy: (1) The pool is intended to be an attractive amenity that provides value to the current residents and added appeal for prospects who are considering living in the community. A poorly maintained pool and surrounding area is more of a deterrent to resident retention or attracting new residents than no pool at all. Pool facilities and maintenance must comply with the Consumer Product Safety Commission Guidelines, ASME/ANSI (American Society of Mechanical Engineers/American National Standards Institute) standards and state and local regulations. All communities should have a pool service manual on site. That manual should covers specific procedures relevant to the operations of the community pool in accordance with the above referenced agencies and should be consulted for all pool maintenance. All Ascentia employees or consultants must be properly trained and certified in pool maintenance and handling associated chemicals. Also, carefully comply with any local or state regulations regarding permits, chemical treatment, inspection, safety, health, first aid equipment, or operational matters. Maintain a six-foot fence with a self-latching, locking gate that will prevent children from crawling underneath, through or opening the gate area into the pool during closed hours. Keep signs clearly posted at all times such as: (a) Hours (b) Ages allowed without parent or guardian (c) No food, glass, smoking, or oils (d) Shower before entering (e) Warning that no lifeguard is on duty and that all swimmers do so at their own risk. (f) Community pools should be opened no later than the weekend of Memorial Day and remain open at a minimum until Labor Day. In some warmer climate communities pool operations can be extended to provide additional value to the resident at the DM/CM discretion. (g) Close the pool for a minimum of one half-day each week to allow for deep cleaning and routine maintenance during the pool season. Aesthetic or functional/safety repairs under $2,000 should be made immediately and simply require the approval of the DM. Capital request policy and procedure applies to all new equipment installations, upgrades, major repairs or renovation that exceed $2000 and must be approved by the VPO/Executive team

(2)

(3)

(4)

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Policy Initiatives
Initiative Editing

Policy & Procedure Manual

Additional explanation Requires technical edit.

Assigned DDB

Reviewed 3/11/14

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8.

Other amenities
Revised as of March 11, 2014

a)

Policy: (1) Additional community amenities include; picnic/pavilion areas; soccer fields, basketball courts – others?? Maintained to above appearance, functional and safety standards. Aesthetic or functional/safety repairs under $2,000 should be made immediately and simply require the approval of the DM. Capital request policy and procedure applies to all new equipment installations, upgrades, major repairs or renovation that exceed $2000 and must be approved by the VPO/Executive team

(2) (3)

(4)

Policy Initiatives
Initiative Editing Additional explanation Requires technical edit. Assigned DDB Reviewed 3/11/14

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F.

Infrastructure
Revised as of March 11, 2014

Defined as the basic, underlying framework or features of a system or community; the fundamental facilities and systems serving a community, as transportation facilities and systems necessary to provide utilities services to the community. Components of a community’s infrastructure o o o o o Streets, gutters and parking Sidewalks/walkways to homes Water and Sewer lines/facilities, lagoons and fields Electrical service: Lighting. Pedestals Gas service

Due to the different types of systems, variations of materials, and state or local codes and regulatory requirements, the specific maintenance required to maintain the infrastructure components of each community must be detailed in a separate utility management plan for every community. That plan will include the following: • Blue prints or as built diagrams OR in-house drawings that reflect the location and composition of all major components of the water system; the sewer or waste water system; electrical service lines and connections; the gas service lines and connections; others??? • •
Policy Initiatives
Initiative Content development Additional explanation The specific asset management plan for each community needs to be developed in accordance with the property condition assessment for capital planning. Requires technical edit Assigned DDB Reviewed 3/11/14

Service providers and contractor contact information All current service contracts

Editing

DDB

3/11/14

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1.

Water systems
Revised as of March 11, 2014

a)

Defining what the water system is: (1) The water distribution system is defined as the components that are that are necessary to generate, store and deliver water to the residents or grounds. Generally the system consist of mainline pipes, lateral pipes and risers, valves, meters, fittings, and in some cases wells, pumps, storage tanks and monitoring systems and controls.

b)

Best practices to manage the water system: (1) Water systems must be monitored regularly to eliminate waste, promote conservation and control costs. There are two primary units of measurement that must be monitored and analyze monthly: 1) Gallons of water consumed per site per day to gauge potential lost water or excessive use and 2) the variance between the amount of utility income compared to the amount we are billed by the providers. Ascentia has adopted the standard measurement of 240 gallons per day per site to measure global consumption against. Consumption that exceeds this benchmark is an indication of leaks in the system or excessive use by some of the residents. Usage that exceeds this standard in any given billing cycle requires the completion of a variance report and an action plan that outlines immediate action to correct the excessive costs and waste. In communities that have sub meters: reconcile individual sub-meter readings to master meter(s) readings. Do the total of the master meter(s) equal the total of all individual meters less reasonable allocations for common area usage? If there is a discrepancy, can it be explained? In communities where sub meters aren’t installed or in good repair: divide the total number of gallons used per day by the number of occupied sites to identify the average gallons used per day per site. The target number of gallons per day/site is 240. Higher per site usage indicates potential leaks that need to be addressed immediately or excessive water consumption that must be accounted for. Verify that the property is collecting money for the same amount of gallons of water as it is being charged for less common area allocations. Evaluate higher or lower than average usage on individual sub-meters. Are the sub-meters in working order (If a meter malfunctions it usually slows down not speeds up)? Are the Meters and Remotes reading the same? Check the wiring (cut or disconnected and reversed). Check the calibration of the meter vs. remote (1 to 1). Are the monthly meter readings consistent? The number of occupants affects the meter reads; verify how many people are currently in the home.

(2)

(3)

(4)

(5)

PROPERTY MANAGEMENT

Revised as of March 11, 2014

Policy & Procedure Manual (6)

8-F|3

Maintain a water usage roster that reflects the average usage by site. Review current and historical “gallons per day” numbers from the water roster for each site. If they are lower than 60gal/day or higher than 300gal/day those home sites must be investigated to find the cause of the readings. Review recent maintenance records for repairs related to the water system Perform a weekly visual inspection of the entire property for evidence of water (under homes, shutoff valve accesses, meters and meter pits, vacant homes, swamp coolers, etc.). Check the master meter at non-use or minimal use times (i.e., between midnight and 5am) to see if low flow conditions exist, as would be expected.

(7) (8)

(9)

(10) All Water meters should be checked quarterly to ensure proper operations. (11) Water lines must be heat taped in communities that are subject to freezing temperatures. (12) In resident owned homes, remind residents that the lines from the water riser into their home as well as the water meter are their responsibility and must be maintained properly; any leaks that occur past the water riser are the responsibility of the residents. (13) Each property will a site-specific community utility plan/manual. (14) When the analysis of metered consumption indicates water loss through the system that cannot be identified by visual inspections it is mandatory that more sophisticated methods of evaluation and leak detection are engaged immediately. These methods include a systematic isolation and evaluation process and/or the use of commercial grade leak detection equipment or contract services.
Policy Initiatives
Initiative Content development Editing Additional explanation Current policy is draft. Further development of propertylevel plans required plus refining of the global policy Requires technical edit. Assigned MD, DDB DDB Reviewed 3/2/14 3/11/14

Revised as of March 11, 2014

PROPERTY MANAGEMENT

8-F|4

Policy & Procedure Manual

2.

Sewer systems
Revised as of March 11, 2014

a)

The sewer system: (1) The sewer system is a collection of pipes and mains, treatment works, and discharge lines that remove and treat the wastewater of a community.

b)

Best practices to manage the sewer system: (1) Periodic inspections and routine maintenance are required to keep the sewer lines flowing adequately. Preventive maintenance includes: (a) The sewer drops and connected lines should be inspected before a home moves on a site to confirm that the line is free from any obstruction. (b) All sewer drops must be capped if the site is vacant. (c) The home sewer line connection must have proper drop to allow drainage of common waste. Frequent or reoccurring incidents of back up or blockage is an indication of pipe damage or potential build up in the lines. Periodic high pressure jetting of the lines will help maintain proper flow and minimize emergency maintenance needs. Some sewer line clogs are the result of the deterioration of the sewer line pipes caused by age or tree roots. If the same section of sewer line is clogged twice in one quarter and resident negligence is not an issue, this section of the main must be evaluated using a video camera to identify the source of the problem. Any section of pipe that is deteriorating must be replaced immediately. If we discover foreign materials such as: feminine products, rags, toys, or other foreign objects in a line the resident is responsible for the cost to clear the stoppage. In owner occupied homes, improper pitch or installation of the homeowner sewer line, the homeowner will be charged for the cost to clear the stoppage even though it is deposited to our riser. The cost of repairs and or routine maintenance should be projected and included in the annual budget process. Unplanned or emergency repairs under $2,000 require the approval of the DM. Significant upgrades and/or improvements that exceed $2000 must be submitted as per the Capital/extraordinary expense request procedure.

(2)

(3)

(4)

(5)

(6)

Policy Initiatives
Initiative Content development Edit Additional explanation Current policy is draft. Further development of propertylevel plans required plus refining of the global policy Requires technical edit. Assigned MD, DDB DDB Reviewed 3/2/14 3/11/14

PROPERTY MANAGEMENT

Revised as of March 11, 2014

Policy & Procedure Manual

8-F|5

3.

Gas and electrical systems
Revised as of March 11, 2014

a)

Policy: (1) Similar to water: detail global policy and reference detailed community utility plan/manual. Global issues: circuit breakers, pedestals, etc. The cost of repairs and or routine maintenance should be projected and included in the annual budget process. Unplanned or emergency repairs under $2,000 require the approval of the DM. Significant upgrades and/or improvements that exceed $2,000 must be submitted as per the Capital/extraordinary expense request procedure.

(2) (3)

Policy Initiatives
Initiative Content development Editing Additional explanation Current policy is draft. Further development of propertylevel plans required plus refining of the global policy Requires technical edit. Assigned MD, DDB DDB Reviewed 3/2/14 3/11/14

Revised as of March 11, 2014

PROPERTY MANAGEMENT

8-F|6

Policy & Procedure Manual

4.

Streets and gutters
Revised as of March 11, 2014

a)

Policy: (1) (2) Provide general guidelines to preserve the integrity of the current roads. The cost of repairs and or routine maintenance should be projected and included in the annual budget. Unplanned or emergency repairs under $2,000 require the approval of the District Manager. Significant upgrades and/or improvements that exceed $2,000 must be submitted as per the capital/extraordinary expense request procedure.

Policy Initiatives
Initiative Content development Editing Additional explanation Current policy is draft. Further development of propertylevel plans required plus refining of the global policy Requires technical edit. Assigned MD, DDB DDB Reviewed 3/2/14 3/11/14

PROPERTY MANAGEMENT

Revised as of March 11, 2014

Policy & Procedure Manual

8-F|7

5.

Sidewalks
Revised as of March 11, 2014

a)

Policy: (1) Sidewalks should be maintained in good repair to minimize trip hazards and the liability associated with those hazards. The cost of repairs and or routine maintenance should be projected and included in the annual budget. Unplanned or emergency repairs under $2,000 require the approval of the District Manager. Significant upgrades and/or improvements that exceed $2,000 must be submitted as per the capital/extraordinary expense request procedure.

(2)

Policy Initiatives
Initiative Content development Editing Additional explanation Current policy is draft. Further development of propertylevel plans required plus refining of the global policy Requires technical edit. Assigned MD, DDB DDB Reviewed 3/2/14 3/11/14

Revised as of March 11, 2014

PROPERTY MANAGEMENT

8-F|8

Policy & Procedure Manual

6.

Parking pads
Revised as of March 11, 2014

a)

Policy: (1) The cost of repairs and or routine maintenance should be projected and included in the annual budget. Unplanned or emergency repairs under $2,000 require the approval of the District Manager. Significant upgrades and/or improvements that exceed $2,000 must be submitted as per the capital/extraordinary expense request procedure.

Policy Initiatives
Initiative Content development Editing Additional explanation Current policy is draft. Further development of propertylevel plans required plus refining of the global policy Requires technical edit. Assigned MD, DDB DDB Reviewed 3/2/14 3/11/14

PROPERTY MANAGEMENT

Revised as of March 11, 2014

Policy & Procedure Manual

8-F|9

7.

Lighting
Revised as of March 11, 2014

a)

Policy: (1) The cost of repairs and or routine maintenance should be projected and included in the annual budget. Unplanned or emergency repairs under $2,000 require the approval of the District Manager. Significant upgrades and/or improvements that exceed $2,000 must be submitted as per the capital/extraordinary expense request procedure.

Policy Initiatives
Initiative Content development Editing Additional explanation Current policy is draft. Further development of propertylevel plans required plus refining of the global policy Requires technical edit. Assigned MD, DDB DDB Reviewed 3/2/14 3/11/14

Revised as of March 11, 2014

PROPERTY MANAGEMENT

Policy & Procedure Manual

9-A|1

9. HOME MANAGEMENT
Revised as of March 11, 2014

A.

Overview
The homes that we manage, whether owned by the resident or Pelican Finance, are the lifeblood of the company and the ultimate source of our profitability. Without homes, the communities would generate no revenue. This section covers the physical and administrative management of the homes. For every step in the home lifecycle there is an associated administrative step.      Home purchase Setup Occupancy Turnover Home disposition

. Company-owned Homes  Exterior standards o Market ready v Non Market Ready o How to determine what level of aesthetic improvements to make on a turn  Interior standards o Market ready v Non Market Ready o How to determine what level of aesthetic improvements to make on a turn
Policy Initiatives
Initiative Content development Additional explanation The basic policies are outlined in this section, but additional more detailed policies are needed, consistent with our investment and marketing policy. Summary completed once the detailed sections are completed. Requires technical edit. Assigned MD Reviewed 3/11/14

Editing

DDB

3/11/14

Revised as of March 11, 2014

HOME MANAGEMENT

Policy & Procedure Manual

9-B|1

B.

Exterior Standards
Revised as of March 11, 2014

Nothing has as significant of an impact on the overall appearance of the community as the exterior condition of the homes in that community. The management team is charged with maintaining all company owned inventory to the standards described below and to consistently enforce these standards for all resident owned homes.
Policy Initiatives
Initiative Content development Additional explanation The basic policies are outlined in this section, but additional more detailed policies are needed, consistent with our investment and marketing policy. Summary completed once the detailed sections are completed. Requires technical edit. Assigned MD Reviewed 3/11/14

Editing

DDB

3/11/14

Revised as of March 11, 2014

HOME MANAGEMENT

9-B|2

Policy & Procedure Manual

1.

ADA compliance
Revised as of March 11, 2014

a)

Policy: (1) Every effort will be made to accommodate reasonable request for modification for a qualified disabled resident. Minor “accommodations” will be provided at management’s expense: support animals (with documentation); parking signs; late payments for SSI residents…others? Physical modifications or alterations will be accommodated at the resident’s expense. Note that management will assist in any way possible to assist with the modifications and to limit the cost to the resident. All modifications require written preapproval from management to include identifying responsibility for resident to restore to original condition IF required. If the disability and the need for the modification or exception is obvious, the manager should submit the request to the DM for review and approval. If the disability is not obvious the resident/prospect will be required to have a doctor or third party verifier complete a standard verification form.

(2)

(3)

(4)

(5)

Policy Initiatives
Initiative Content review Additional explanation This section may be combined with the general section on legal considerations. Assigned DDB Reviewed 3/2/14

HOME MANAGEMENT

Revised as of March 11, 2014

Policy & Procedure Manual

9-B|3

2.

Roof
Revised as of March 11, 2014

a)

Policy: (1) Roofs must be uniform in color and should not have any visible damage; all homes moving into the community (resident owned, used and new community owned) must have pitched, shingle roofs. Management MUST physically inspect every community owned home roof on a quarterly basis as a part of the Gold Star Service program. Due to the potential for damage resulting from roof damage, it is imperative that the integrity of the roof is preserved and any and all damage is repaired immediately. Any interior signs of moisture must be evaluated and addressed immediately. The color of the roof must remain consistent. Full evaluation of physical damage by a qualified maintenance tech or contractor (i.e.: missing or damaged shingles OR indications of leaks inside the home). Extensive roof damage requires 3 bids to repair or replace; a MERF is completed by the manager and submitted to the DM with pictures and copies of the bids for review and approval.

(2)

(3)

Policy Initiatives
Initiative Content development Editing Additional explanation Additional, more detailed policies to be developed. Requires technical edit. Assigned MD DDB Reviewed 3/11/14 3/11/14

Revised as of March 11, 2014

HOME MANAGEMENT

9-B|4

Policy & Procedure Manual

3.

Gutters and downspouts
Revised as of March 11, 2014

a)

Policy: (1) If home does not have an overhang we should install gutters on each side of the home to preserve the integrity of the windows and doors and limit the potential for water damage to the interior of the home…costs!

Policy Initiatives
Initiative Content development Editing Additional explanation Additional, more detailed policies to be developed. Requires technical edit. Assigned MD DDB Reviewed 3/11/14 3/11/14

HOME MANAGEMENT

Revised as of March 11, 2014

Policy & Procedure Manual

9-B|5

4.

Siding
Revised as of March 11, 2014

a)

Policy: (1) Siding must be painted, intact and in good condition with no holes, missing pieces, damage or loose and frayed edges. Paint must not be faded. Paint and siding colors for resident homes must be approved by management. House numbers must be uniform and visible. Exterior fixtures must be maintained in good repair or removed. All exterior lights should be verified to be in proper working condition and clean on a quarterly basis and at every make ready.

(2) (3) (4) (5)

Policy Initiatives
Initiative Content development Editing Additional explanation Additional, more detailed policies to be developed. Requires technical edit. Assigned MD DDB Reviewed 3/11/14 3/11/14

Revised as of March 11, 2014

HOME MANAGEMENT

9-B|6

Policy & Procedure Manual

5.

Skirting
Revised as of March 11, 2014

a)

Policy: (1) Conventional factory skirting must be installed as per factory specs with no missing or damaged sections. Management must pre approve the style and color of skirting for all resident homes. All hitches must be removed. Skirting should be cleaned regularly and must be clean and well maintained on all rental homes at all times.

(2) (3)

Policy Initiatives
Initiative Content development Editing Additional explanation Additional, more detailed policies to be developed. Requires technical edit. Assigned MD DDB Reviewed 3/11/14 3/11/14

HOME MANAGEMENT

Revised as of March 11, 2014

Policy & Procedure Manual

9-B|7

6.

Decks
Revised as of March 11, 2014

a)

Policy: (1) Decks must be constructed and installed according to approved Ascentia deck standards. Decks must be maintained in good repair at all times. Decks will be stained never painted. Decks and walks must be free of all debris and cleaned to new condition at every make ready.

(2) (3) (4)

Policy Initiatives
Initiative Content development Editing Additional explanation Additional, more detailed policies to be developed. Incorporate the current deck standard fully. Requires technical edit. Assigned MD DDB Reviewed 3/11/14 3/11/14

Revised as of March 11, 2014

HOME MANAGEMENT

9-B|8

Policy & Procedure Manual

7.

Parking
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Editing Additional explanation Additional, more detailed policies to be developed. Requires technical edit. Assigned MD DDB Reviewed 3/11/14 3/11/14

HOME MANAGEMENT

Revised as of March 11, 2014

Policy & Procedure Manual

9-B|9

8.

Landscaping
Revised as of March 11, 2014

a)

Landscaping should be properly managed: (1) Landscaping must be well manicured in keeping with the standards described in the landscaping and grounds section above.

Policy Initiatives
Initiative Content development Additional explanation Policy to be developed. Each community has unique landscaping needs and each community will need to develop individualized landscaping plans. Requires technical editing. Assigned MD Reviewed 3/2/14

Editing

DDB

3/11/14

Revised as of March 11, 2014

HOME MANAGEMENT

Policy & Procedure Manual

9-C|1

C.

Interior Standards
Revised as of March 11, 2014

Generally – in addition to the preservation of the asset, the quality level of the finished product is directly related to our ability to be competitive in the market and attract the highest quality residents available. The interior make ready should be finished to the highest workmanlike standards possible, considering available resources and prevailing market standards, with an emphasis on all details. Would I move in to this home?
Policy Initiatives
Initiative Content development Additional explanation The standards at which we want the interiors kept requires further development as we understand better the demands of our customers. Requires further editing. Assigned MD Reviewed 3/11/14

Editing

DDB

3/11/14

Revised as of March 11, 2014

HOME MANAGEMENT

9-C|2

Policy & Procedure Manual

1.

Safety
Revised as of March 11, 2014

a)

Basic safety rules: (1) (2) Smoke detectors must be installed and properly operating in all rental homes. Carbon monoxide detectors must be installed and property operating in rental homes with gas appliances and all homes in Colorado.

Policy Initiatives
Initiative Content development Additional explanation Additional safety rules need to be developed to ensure there are no additional hazards in the homes. These safety considerations may be covered in the individual sections. Assigned MD Reviewed 3/2/14

HOME MANAGEMENT

Revised as of March 11, 2014

Policy & Procedure Manual

9-C|3

2.

ADA compliance
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation This section is duplicative of the legal section and the exterior standard. This section need to be reviewed and potentially combined with the above sections. Assigned DDB Reviewed 3/2/14

Revised as of March 11, 2014

HOME MANAGEMENT

9-C|4

Policy & Procedure Manual

3.

Carpet and flooring
Revised as of March 11, 2014

a)

Policy: (1) Floors – carpet and vinyl should be in good repair; no tears, holes or burns; and be clean to new or commercially acceptable standards at every turn-over.

Policy Initiatives
Initiative Content development Additional explanation Requires additional content development including minimum specs, plus additional information on appropriate upgrades for high quality homes. Pictures to be included to clarify. Assigned MD Reviewed 3/2/14

HOME MANAGEMENT

Revised as of March 11, 2014

Policy & Procedure Manual

9-C|5

4.

Walls
Revised as of March 11, 2014

a)

Policy: (1) Walls – no holes, with the exception of minimal nail holes, and a consistent finish on all walls by room. Walls should be uniformly painted with a neutral color eggshell or semi-gloss paint to allow for easy cleaning. Walls must be cleaned or painted at every turn-over. Ceilings – cleaned, no cobwebs, or painted if any damage or stain in evident

(2)
Policy Initiatives
Initiative Content development

Additional explanation Definition of minimum specs. Plus inclusion of pictures to clarify the standards.

Assigned MD

Reviewed 3/2/14

Revised as of March 11, 2014

HOME MANAGEMENT

9-C|6

Policy & Procedure Manual

5.

Windows
Revised as of March 11, 2014

a)

Policy: (1) No broken windows – wood or other material cannot be used to cover any glass opening; all windows on all community owned inventory must be cleaned inside and out at every make ready. Approved window coverings only – no towels, sheets, flags etc. Installation of satellite dishes must be approved by management.

(2) (3)
Policy Initiatives
Initiative Content development

Additional explanation Specs to be developed and pictures included.

Assigned MD

Reviewed 3/2/14

HOME MANAGEMENT

Revised as of March 11, 2014

Policy & Procedure Manual

9-C|7

6.

Doors
Revised as of March 11, 2014

a)

Policy: (1) (2) Doors must be plumb and in good repair – no torn screens or broken windows The integrity of the exterior doors must be sufficient enough to provide a reasonable level of security to the resident. All exterior door locks must be replaced following every resident. All exterior locks on each individual unit will be keyed alike.

Policy Initiatives
Initiative Content development Additional explanation Specs to be developed and pictures included. Assigned MD Reviewed 3/2/14

Revised as of March 11, 2014

HOME MANAGEMENT

9-C|8

Policy & Procedure Manual

7.

Lighting
Revised as of March 11, 2014

a)

Policy: (1) Lighting fixtures are an important focal point for many perspective renters. In addition to providing light they are also an important accent component affecting the overall appearance of a room, area or even the exterior of the home. Replacing outdated light fixtures with a more modern fixture Missing, broken, dirty or mismatched globes are not acceptable in any rental unit. All fixtures must have the required number and wattage of bulbs installed prior to showing the unit.

(2) (3)

Policy Initiatives
Initiative Content development Additional explanation Specs to be developed and pictures included. Assigned MD Reviewed 3/2/14

HOME MANAGEMENT

Revised as of March 11, 2014

Policy & Procedure Manual

9-C|9

8.

Appliances
Revised as of March 11, 2014

a)

Policy: (1) All appliances should be thoroughly inspected and proper operations verified quarterly and during the make ready. All appliances will be moved and all components, such as the coils, the exterior of the unit and the areas behind and under the unit cleaned completely during every make ready. Exterior and interior of all appliances must be cleaned to new condition at every make ready.

Policy Initiatives
Initiative Content development Additional explanation Specs to be developed and pictures included. Assigned MD Reviewed 3/2/14

Revised as of March 11, 2014

HOME MANAGEMENT

9 - C | 10

Policy & Procedure Manual

9.

Cabinets
Revised as of March 11, 2014

a)

Policy: (1) Counter tops and cabinets should be in good repair, with no cuts, holes, burns, missing trim, or water damaged wood. These components must be cleaned to new conditions during the make ready. Damaged cabinets or counter tops must be repaired or replaced during the make ready process. Repairs must be performed by competent contractors with an emphasis on restoring the appearance as close to new condition as possible. If repairs can’t be made to these standards the damaged components should be replaced with an emphasis on maintain the aesthetic integrity by marching the original product as closely as possible. In some cases it will be necessary to replace sections of the cabinets to achieve an acceptable level of market appeal.

(2)

Policy Initiatives
Initiative Content development Additional explanation Specs to be developed and pictures included. Assigned MD Reviewed 3/2/14

HOME MANAGEMENT

Revised as of March 11, 2014

Policy & Procedure Manual

9 - C | 11

10.

Plumbing
Revised as of March 11, 2014

a)

Policy: (1) All plumbing fixture must be adequately caulked and sealed to prevent water damage; faucets and pipes should be inspected and any leaks or drips repaired. These fixtures should be cleaned to new condition during the make ready. Drains should be evaluated for proper drainage and strainers should be installed where applicable. (Properly installed strainers will help reduce drain stoppage considerably. Note that residents are responsible for drain stoppage caused by their negligence or improper use) (lease clause)

Policy Initiatives
Initiative Content development Additional explanation Specs to be developed and pictures included. Assigned MD Reviewed 3/2/14

Revised as of March 11, 2014

HOME MANAGEMENT

9 - C | 12

Policy & Procedure Manual

11.

HVAC
Revised as of March 11, 2014

a)

Policy: (1) HVAC systems must be inspected and proper operations verified; all accessible components should be cleaned and manufactured deferred maintenance should be performed quarterly and at every turn-over. New filters should be installed quarterly and during the make ready.

Policy Initiatives
Initiative Content development Additional explanation Specs to be developed and pictures included. Assigned MD Reviewed 3/2/14

HOME MANAGEMENT

Revised as of March 11, 2014

Policy & Procedure Manual

9 - C | 13

12.

Furniture
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Specs to be developed and pictures included. Policy to develop control procedures. Assigned MD Reviewed 3/2/14

Revised as of March 11, 2014

HOME MANAGEMENT

9 - C | 14

Policy & Procedure Manual

13.

Miscellaneous amenities
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Specs to be developed and pictures included. Policy to develop control procedures. Need to identify items within the home that we want to manage as amenities and charge additional rent premiums. Assigned MD, DDB Reviewed 3/2/14

HOME MANAGEMENT

Revised as of March 11, 2014

Policy & Procedure Manual

9-D|1

D.

Home Lifecycle
Revised as of February 27, 2011

Policy Initiatives
Initiative Content development Additional explanation Summary to be completed once detail sections completed. This section is intended to create policy and procedure around each step of the home management process. Parts of this policy will overlap with the resident lifecycle. Assigned MD Reviewed 3/11/14

Revised as of February 27, 2011

HOME MANAGEMENT

9-D|2

Policy & Procedure Manual

1.

Key control
Revised as of March 11, 2014

a)

General policies for key management: (1) The use of master keys is strictly prohibited. All occupied rental homes must be independently keyed. Both employees and residents must strictly adhere to established key guidelines. All rental home doors must be independently keyed, with all 4 locks keyed-alike. The integrity of the key control system is the responsibility of the CM. Properties with more than 100 rental units should maintain the equipment on-site to comply with this policy.

(2)

b)

Key cabinet and coding system to identify keys must be used: (1) All home and mail keys must be stored in a locked key cabinet. The cabinet must be locked at all times and must be stored on-site in a secure location not visible to on-site visitors. The manger will keep one key to the cabinet in their possession at all times, and a second, unmarked key will be stored in a secure location on site. Each home should have two sets of keys, including keys to all door locks and mail keys, in the cabinet at all times: one set for management and a spare set for the resident. The exact number of keys needed to issue to the residents and to maintain spares is determined in advance of the new move-in. Resident keys stored in the cabinet cannot be numbered to the individual home site. The property will employ a coding system that will be used to identify these keys. The master key code is to be stored in a locked filing cabinet or in the community safe on site.

(2)

c)

Managing resident keys: (1) One home lock key and one common mail box key is issued to each adult occupant on the lease at check-in. The keys issued cannot be marked with the unit numbers. In the event of a lock out, at any time a key is released to a resident, the resident will be required to sign the property key check out log. The resident is required to show ID and management must verify residency before releasing the key. Duplicate keys are available for residents with proof of residency at a cost to the resident of $10 each. Locks can be changed at the request of the resident providing all residents in the unit sign the request or the vacating residents have signed a release acknowledging that they are no longer on the lease. All lock change request must be in writing. A lock change fee of $35, payable to the community will apply for each incident.

(2)

(3)

HOME MANAGEMENT

Revised as of March 11, 2014

Policy & Procedure Manual (4)

9-D|3

The same number of keys that were issued at move-in must be received at moveout. Missing keys will result in charges equivalent to the costs of the locksets and keys being assessed to the resident.

d)

Vacancy lock system: (1) Follow these steps to facilitate make-ready and leasing activity: (a) Key all vacancies alike all locks alike– change locks to the vacancy locks within 24 hours of move-out. This requires multiple sets of 4 locks each keyed alike. All 4 locks on all vacant units must be locked at all times. (b) Vacancy locks remain on the home until the day the unit is rented and the security deposit is received. (c) The only key an employee or contractor will need is the vacancy key. (d) The vacancy locks are replaced with a set of locks that was not used by the former resident of that home. Maintenance and office staff should be assigned one vacancy key each. All vendors/contractors must sign the property key check out log to receive a “do not duplicate” vacancy key. These keys must be returned and signed in before the contractor is paid for any work performed in the home.

(2)

Policy Initiatives
Initiative Editing Additional explanation Policy requires consistency and technical edit Assigned DDB Reviewed 3/5/14

Revised as of March 11, 2014

HOME MANAGEMENT

9-D|4

Policy & Procedure Manual

2.

New home setup – physical
Revised as of February 27, 2014

Policy Initiatives
Initiative Content development Additional explanation Detailed specifications of each part of the setup with the appropriate standards for the workmanship. Assigned DDB Reviewed 3/11/14

HOME MANAGEMENT

Revised as of February 27, 2014

Policy & Procedure Manual

9-D|5

3.

Home purchases – administrative
Revised as of February 27, 2014

a)

Definitions: (1) The Home Bulk Purchase Request is the official tracking mechanism for the purchase of 10 or more homes at the same time. This form serves as a global purchase order. Define MERF and other documents required in this process.

(2) b)

General policy: (1) When 10 or more homes are being purchased, the bulk purchase policy should be followed. With fewer homes, the individual purchase policy should be followed.

c)

New home from factory – bulk purchases: (1) Each year as part of the long-range planning and budget process, the general home needs of the portfolio will be determined. Purchases that include 10 or more homes are typically planned for in advance and should have been incorporated into the budget. The District Manager, in consultation with the Community Manager, will determine the number, maximum size, location, and estimated setup costs of the to-be-purchased homes for each community consistent with the long-range plan and budget. The District Manager will provide the information in columns B through E of the Home Bulk Purchase Request for each of the homes. The Vice President of Operations, based on the information provided by the District Manager, will identify the manufacturer(s) to produce the requested homes and will complete columns F through N on the Home Bulk Purchase Request. The Home Bulk Purchase Request will be submitted to the Chief Executive Office and President for final approval before purchase. With approval and upon receipt of the invoices for the homes, the homes will be paid for, typically by electronic funds transfer. The Fixed Asset Administrator will fill in the date of purchase on the Home Bulk Purchase Request in column O. When the homes are completed, the Serial (VIN) number and HUD ID will be provided by the manufacturer and sent to the Fixed Asset Administrator and forwarded to the District Manager, allowing permit work to begin.

(2)

(3)

(4)

(5)

(6)

(7)

Revised as of February 27, 2014

HOME MANAGEMENT

9-D|6 (8)

Policy & Procedure Manual Manufacturer certificate of origin will be forwarded to the Fixed Asset Administrator, who will cross reference them to the Home Bulk Purchase Request and confirm accuracy. When the homes arrive at the community, the Community Manager within one business day will confirm that the homes and sites match the approved Home Bulk Purchase Request, filling out columns P through V, by completing the serial (VIN) number, the HUD ID, date of landing, the final community, and final site. By providing the information, the Community Manager is representing that the home matches the invoice description and the final location of the home.

(9)

(10) Pictures must be taken and submitted to the Fixed Asset Administrator within one business day of the home setup being completed, consistent with home picture policy. (11) The Community Manager will immediately notify the Fixed Asset Administrator, if the home has to be moved after verification has been sent. d) Purchase of individual home: (1) The MERF will be the purchase order and must be submitted to the Home Administrator.

e)

Determining if home needs to be demolished: (1) (2) (3) (4) Same process as for any home transaction. No pre-HUD homes. No flat roofs and other homes with undesired features. 45 day period to sell for scrap or liquidation price. Needs to be demolished thereafter.

f)

The MERF – how to use: (1) Basic guidelines on use and level of detail for consideration.

g)

Procedure: (1) (2) (3) [PROCEDURE] [ADDITIONAL NOTES PER EMAIL FROM JV: These are the items that I saw that I would like to see added however, they might be mentioned in the procedure section: The CM fills out the spreadsheet once the home has arrived and sends it to who? Clarification on who is taking the pictures (I am assuming CM)
Revised as of February 27, 2014

(4) (5)
HOME MANAGEMENT

Policy & Procedure Manual (6) (7) -Policy on correct unit typing once the home lands

9-D|7

When will we start using these policies? Do you want us to start using this spreadsheet now?]

Policy Initiatives
Initiative Content development Additional explanation This covers the purchase of multiple new homes. Additional policies need to cover the evaluation of buying individual used homes, both on and off site. Assigned DDB Reviewed 3/11/14

Revised as of February 27, 2014

HOME MANAGEMENT

9-D|8

Policy & Procedure Manual

4.

Inspections
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation This section overlaps with Gold Star Service. In this section, need to define more fully the quality standards. Assigned DDB Reviewed 3/11/14

HOME MANAGEMENT

Revised as of March 11, 2014

Policy & Procedure Manual

9-D|9

5.

Taking pictures of the home
Revised as of March 11, 2014

a)

Basic policy: (1) 2 exterior – minimum; (a) Front of home – describe angle – horizon – ground line – (b) Entry side of home – above detail 4 interior minimum (a) Kitchen (b) Master suite (c) Living area > kitchen (d) Bathroom (e) Built-ins (f) Others?

(2)

Policy Initiatives
Initiative Content development Additional explanation Requires additional development of detail on pictures to take in different situations. Assigned MJ Reviewed 3/9/14

Revised as of March 11, 2014

HOME MANAGEMENT

9 - D | 10

Policy & Procedure Manual

6.

Pre-move-out process
Revised as of March 9, 2014

a)

Once the notice is received: (1) Contact resident and confirm reason for move out: explore potential resolution to retain Schedule pre move inspection Conduct pre move inspection: complete work order; project rehab needs, costs, etc. Review move out process and unit condition expectations with resident; schedule check out

(2) (3)

Policy Initiatives
Initiative Content development Additional explanation Requires additional content to create a detailed standard. Form being developed. This overlaps with the Gold Star Service. Assigned MD Reviewed 3/9/14

HOME MANAGEMENT

Revised as of March 9, 2014

Policy & Procedure Manual

9 - D | 11

7.

Normal turn – make ready
Revised as of March 11, 2014

a)

Basic policy: (1) Meet with resident to review condition and complete checkout: Look at the details; (a) Check to see if the appliances are working (b) Is there damage the resident should be charged for (c) Are any parts from the equipment missing (d) Is there pet odor (e) Complete deposit review process; Accept keys; (f) SECURE UNIT – this means lock ALL LOCKS on doors, lock windows, board up broken windows; do everything you can to deter unauthorized entry. (g) Rotate all 4 locks immediately and lock all 4 locks EVERY DAY. (h) Meet maintenance staff or contractor immediately after unit vacates and identify specific scope of work to initiate bid process, identifying exactly what work needs to be completed – review bid and negotiate or request additional bids if necessary (i) Schedule make ready and project time table-schedule all aspects i.e. cleaning contractor (establish expectations for maintenance or contractor) (j) Meet with maintenance staff or contractor and detail scope of work Schedule cleaning crew to complete make ready (k) Initiate marketing efforts; online ads; print ads; signs-yard and window; flyers; update POS in office and at entrance (l) At completion of rehab inspect work; follow up with maintenance or contractor as applicable (m) When cleaning is complete perform final inspection; check all details; light bulbs in all fixtures; blinds clean and adjusted to fit; windows clean; no dust in light fixtures; etc.: SECURE UNIT

Policy Initiatives
Initiative Content development Additional explanation Additional detail to the steps to be developed. This relates to the Gold Star Service. Additional content will be developed as the worker order module is implemented. Requires technical edit. Assigned DDB Reviewed 3/11/14

Editing

DDB

3/9/14

Revised as of March 11, 2014

HOME MANAGEMENT

9 - D | 12

Policy & Procedure Manual

8.

Capital refurbishment
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Used homes acquired often are in need of major refurbishment greater than $2,000. A home that requires more than $2,000, is considered a refurbishment, and a capital expense. This process requires further policy development. At this time, all approval of such work goes through the Vice President of Operations. Assigned DDB Reviewed 3/11/14

HOME MANAGEMENT

Revised as of March 11, 2014

Policy & Procedure Manual

9 - D | 13

9.

Abandoned homes
Revised as of March 11, 2014

a)

Definition: (1) An abandoned home is a home in which the resident who has title to the home has vacated the home without a third-party buyer.

b)

Policy: (1) (2) Every abandoned home must have the title transferred to Pelican Finance. Each abandoned home will be evaluated to determine if the home will be (1) refurbished and rented, (2) sold to an outside buyer and removed from the community, or (3) will demolished. An abandoned home can only be sold to another resident in cash for the full price with the authorization of the Vice President of Operations.

(3)

Policy Initiatives
Initiative Content development Additional explanation Detailed policy outlining the economic evaluation that must be completed to determine if an abandoned home will be demolished. Assigned DDB Reviewed 3/11/14

Revised as of March 11, 2014

HOME MANAGEMENT

Policy & Procedure Manual

10 - A | 1

10. PURCHASES AND DISBURSEMENTS
Revised as of March 11, 2014

A.

Overview
The purpose of this policy is to explain the procedures for documenting, recording and issuing payments for accounts payable transactions. Proper expenditure internal control policies and procedures ensure that only valid and authorized payables are recorded and paid, and that amounts recorded are accurate, appropriately coded to the general ledger, and paid timely.

Policy Initiatives
Initiative Editing Additional explanation Technical edit required. Assigned DDB Reviewed 3/11/14

Revised as of March 11, 2014

PURCHASES AND DISBURSEMENTS

Policy & Procedure Manual

10 - B | 1

B.

General Policies
Revised as of March 11, 2014

All disbursement transactions must be documented and separation of duties must be followed.
Policy Initiatives
Initiative Content development Additional explanation Additional key summary information to be added after editing for entire section complete. Assigned DDB Reviewed 3/11/14

Revised as of March 11, 2014

PURCHASES AND DISBURSEMENTS

10 - B | 2

Policy & Procedure Manual

1.

Documenting accounts payable and required vendor information
Revised as of March 11, 2014

a)

Policy: (1) Required vendor documentation (a) W-9 form from vendor for new vendors; (b) Proof of vendor insurance, where applicable; (c) Required vendor information (i.e., Name, Address, City, State, and Zip); (d) Packing slip with receiving report, if applicable; and (e) Vendor invoice

b)

Procedure: (1) The AP Supervisor will notify District and Community Managers of vendors who cannot be paid due to missing information on an as needed basis until all required information is received and the AP Supervisor submits vendor approval forms detailing W-9, proof of insurance, and relevant vendor information to the VP of Operations. If the vendor is not approved, the A/P Supervisor communicates to the Community and District Managers the disapproval and the vendor is logged in a spreadsheet to prevent future utilization. Once the accounting department has all of the above documents, the steps detailed in the following sub-section are performed to ensure proper authorization, validity of purchase, receipt of purchased items or services, and accuracy of amounts recorded.

(2)

Policy Initiatives
Initiative Editing Additional explanation Technical edit required. Assigned DDB Reviewed 3/11/14

PURCHASES AND DISBURSEMENTS

Revised as of March 11, 2014

Policy & Procedure Manual

10 - B | 3

2.

Disbursement approval amounts
Revised as of March 11, 2014

a)

Policy:

Figure 16: Disbursement Approval Amounts Authorization Role Category Capital Expenses – Via Capital Request Process District Manager VP of Operations President Executive Management Team Operational and Administrative Expenditures * District Manager VP of Operations President Home Acquisition Executive Management Team All spending at any dollar amount Yes Up to $2,000 Up to $10,000 Unlimited No Y- over $5,000 Y- over $5,000 Up to $2,000 Up to $10,000 Up to $25,000 In Excess of $25,000 No No Yes Yes Limit of Authority Two signatures

Policy Initiatives
Initiative Content development Additional explanation The authorization levels under review and possibly to be modified depending on findings. Additional information explaining reasoning to be added. Additional risk analysis needs to be completed to ensure appropriate control. Requires technical edit. Assigned DDB Reviewed 3/11/14

Accounting procedures Editing

EP DDB

3/11/14 3/11/14

Revised as of March 11, 2014

PURCHASES AND DISBURSEMENTS

10 - B | 4

Policy & Procedure Manual

3.

Payable responsibilities
Revised as of February 27, 2014

Figure 17: Payable Responsibilities Role Community Manager       Responsibilities Collects proof of insurance (where applicable), and W-9s from all vendors. Sends invoices to AP Supervisor. Provides description of charges and property codes for expenses. Provides final approval of invoices in PayScan as prescribed by the DOA. Provides final approval of invoices in PayScan as prescribed by the DOA. PayScan troubleshooting.

District Manager Technical Data Operations Manager AP Supervisor

      

Director of Accounting and Treasury Controller



Sets up new vendors in PayScan. Receives and scans all invoices into PayScan. Forwards appropriate utility bills to Yes Energy Management. Verifies receipt of W-9 and proof of insurance (where applicable) for each vendor. Notifies appropriate parties when missing. Coding and entering payables into the accounting system and ensuring that appropriate support and approvals are provided. Cuts checks from PayScan twice a week on Tuesdays and Thursdays. Cuts checks through Yardi for recurring payments, investor distributions, mortgages. Initiates wire transfers, ACH payments for recurring payables.



Approves templates for Wire Transfers/ACH payments initiated by Director of Accounting and Treasury. Responsibilities

Role VP of Finance   

President

Approves payables and authorizes checks for expenditures as prescribed by the DOA. Approves capital spending. Approves payables and authorizes checks for expenditures as prescribed by the DOA.

PURCHASES AND DISBURSEMENTS

Revised as of February 27, 2014

Policy & Procedure Manual Figure 18: Flowchart: Accounts Payable Process

10 - B | 5

Revised as of February 27, 2014

PURCHASES AND DISBURSEMENTS

10 - B | 6

Policy & Procedure Manual

Policy Initiatives
Initiative Content development Accounting procedures Editing Additional explanation Figures included. Additional descriptive information to be added. Flowchart to be reviewed and updated in light of possible structural changes. Technical edit required. Assigned DDB EP DDB Reviewed 3/11/14 3/11/14 3/11/14

PURCHASES AND DISBURSEMENTS

Revised as of February 27, 2014

Policy & Procedure Manual

10 - C | 1

C.

Invoice Approval
Revised as of March 11, 2014

Once the accounts payable voucher package has been properly assembled and reviewed, the AP Supervisor scans all invoices in to the PayScan system and codes the invoices to the appropriate property and expense accounts within a holding batch. Based on the coding of the invoices, PayScan will notify the appropriate individuals based on workflows and the batch requires approval from the appropriate party(s) in the workflow. Invoice approval not only requires a review for accuracy of invoice amounts, but also includes a review of the invoice account coding. Once approval is obtained, the AP Supervisor will post the batch, which will then become available for payment.
Policy Initiatives
Initiative Content development Editing Additional explanation Summary to completed after detail sections completed. Technical edit required. Assigned DDB DDB Reviewed 3/11/14 3/11/14

Revised as of March 11, 2014

PURCHASES AND DISBURSEMENTS

10 - C | 2

Policy & Procedure Manual

1.

Operational expenses
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation The detailed steps to be provided. Evaluate the possibility of using the budget as the part of the authorization process reducing the number of routine approvals, so long as they are within budget. Requires more precise budgeting. The new accounts payable process with Yardi will lead to modifications to certain steps in this process. Develop specific flowchart and other accounting control steps. Assigned DDB Reviewed 3/11/14

Policy in transition Accounting procedures

EP EP

3/11/14 3/11/14

PURCHASES AND DISBURSEMENTS

Revised as of March 11, 2014

Policy & Procedure Manual

10 - C | 3

2.

Utility expenditures
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Third-party utility bills are currently processed through YES. The specific steps for review and approval need to be detailed. Steps of the year-end review process need to be developed. Develop flowchart of process and appropriate controls Assigned DDB Reviewed 3/11/1

Accounting procedures

EP

3/11/14

Revised as of March 11, 2014

PURCHASES AND DISBURSEMENTS

10 - C | 4

Policy & Procedure Manual

3.

Corporate credit card
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Currently, the AP Supervisor circulates the activity of the corporate credit card to the appropriate individuals, who review the charges and assign them to the appropriate account and provide receipts. Need to develop more thorough policy. This policy may change. Assigned DDB Reviewed 3/11/14

PURCHASES AND DISBURSEMENTS

Revised as of March 11, 2014

Policy & Procedure Manual

10 - C | 5

4.

Employee reimbursement
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Current policy can be found on the Ascentia Employee Portal. This policy needs to be reviewed and updated. Assigned EP Reviewed 3/11/14

Revised as of March 11, 2014

PURCHASES AND DISBURSEMENTS

10 - C | 6

Policy & Procedure Manual

5.

Home purchase and setup expenditures
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Tracking and recording accurately the costs associated with home purchase poses special problems. The bulk purchase process above addresses the management of these expenditures when related to a new home bulk purchase. Need additional policy on who can create an authorization for expenditure and the process for paying for costs. Assigned EP Reviewed 3/11/14

PURCHASES AND DISBURSEMENTS

Revised as of March 11, 2014

Policy & Procedure Manual

10 - C | 7

6.

Capital expenditures
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation The capital expenditure process in the investment section covers how to obtain authorization for a capital expenditure. This is intended to cover how that expenditure is paid and accurately recorded in the fixed assets. Assigned EP Reviewed 3/11/14

Revised as of March 11, 2014

PURCHASES AND DISBURSEMENTS

10 - C | 8

Policy & Procedure Manual

7.

Rushed payments
Revised as of March 11, 2014

Must go through the IR process All payables that circumvent the IR approval process must be counter signed by the CEO or President of the Company.
Policy Initiatives
Initiative Content development Additional explanation From time to time, a check needs to be cut immediately. This policy will provide the rules to go through that process and the limitations, especially if the same vendor repeatedly needs a rushed payment. Assigned EP Reviewed 3/11/14

PURCHASES AND DISBURSEMENTS

Revised as of March 11, 2014

Policy & Procedure Manual

10 - C | 9

8.

Resident purchases
Revised as of March 11, 2014

Payments for residents’ repairs debit R&M expense account and credit cash. By adding a charge to the resident ledger, the tenant receivable is debited and the R&M account will be credited.
Policy Initiatives
Initiative Content development Accounting procedure Additional explanation The precise steps to be taken in this situation need to be detailed. Document the accounts to be used and develop a flowchart. Assigned EP DDB Reviewed 3/11/14 3/11/14

Revised as of March 11, 2014

PURCHASES AND DISBURSEMENTS

10 - C | 10

Policy & Procedure Manual

9.

Petty cash
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Current policy on petty cash in Ascentia Employee Portal. Policy needs to updated and added to this section. Possible elimination of petty cash, replaced by a purchase card. Assigned EP Reviewed 3/11/14

PURCHASES AND DISBURSEMENTS

Revised as of March 11, 2014

Policy & Procedure Manual

10 - C | 11

10.

Out of office
Revised as of March 11, 2014

Rules to manage the steps when PTO is taken and who approves during PTO.

Policy Initiatives
Initiative Content development Additional explanation Payscan provides a process by which an employee can assign their payables approval responsibility to another appropriate person in the organization. This policy will detail the rules to manage this reature. Assigned DDB Reviewed 3/11/14

Revised as of March 11, 2014

PURCHASES AND DISBURSEMENTS

Policy & Procedure Manual

11 - A | 1

11. HUMAN RESOURCES
Revised as of February 27, 2014

A.

Overview

Policy Initiatives
Initiative Content development Additional explanation Summary to be completed after development of detailed sections. Assigned DDB Reviewed 3/11/14

Revised as of February 27, 2014

HUMAN RESOURCES

Policy & Procedure Manual

11 - B | 1

B.

Employee Regulations
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation There is a current employee handbook that covers most employee matters. This section is intended to cover the major policy areas and refer the employee to the manual for the more specific ones. Assigned DDB Reviewed 3/11/14

Revised as of March 11, 2014

HUMAN RESOURCES

11 - B | 2

Policy & Procedure Manual

1.

Employee recognition
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Develop employee recognition for key anniversaries, an update of the previous recognition program that has not been followed for the last several years. Assigned DDB Reviewed 3/11/14

HUMAN RESOURCES

Revised as of March 11, 2014

Policy & Procedure Manual

11 - B | 3

2.

Work from home (home office only)
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Develop long-term policy on work from home, updating the interim policy. Assigned DDB Reviewed 3/11/14

Revised as of March 11, 2014

HUMAN RESOURCES

Policy & Procedure Manual

12 - A | 1

12. ACCOUNTING AND FINANCE
Revised as of March 11, 2014

A.

Overview

Policy Initiatives
Initiative Content development Additional explanation Summary content to be completed once the detailed sections are complete. Assigned DDB Reviewed 3/11/14

Revised as of March 11, 2014

ACCOUNTING AND FINANCE

Policy & Procedure Manual

12 - B | 1

B.

General Accounting Policies
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Summary content to be completed once the detailed sections are complete. Assigned DDB Reviewed 3/11/14

Revised as of March 11, 2014

ACCOUNTING AND FINANCE

12 - B | 2

Policy & Procedure Manual

1.

Overview
Revised as of February 27, 2014

Policy Initiatives
Initiative Content development Additional explanation Summary content to be completed once the detailed sections are complete Assigned DDB Reviewed 3/11/14

ACCOUNTING AND FINANCE

Revised as of February 27, 2014

Policy & Procedure Manual

12 - B | 3

2.

Financial operations
Revised as of March 11, 2014

a)

Policy (1) The purpose of this section is to provide a brief description of roles and responsibilities of financial operations within Ascentia. The Vice President of Accounting and Finance oversees all financial, accounting and information technology services. Accounting and financial departments are covered here. Information technology services are covered in section [SECTION]. The Controller is responsible for daily options of the finance and accounting department, preparing monthly financial statements, and preparing the Company’s annual audited financial statements, which are certified by an independent Certified Public Accountant firm. The financial and accounting functions and responsibilities include: (a) General ledger accounting (b) Budgeting (c) Financial reporting (d) Audit (e) Cash and investment management (f) Accounts receivable (g) Accounts payable (h) Fixed assets (i) Capital projects (ii) Homes (i) Payroll (j) Human resources

(2)

(3)

(4)

Policy Initiatives
Initiative Content development Editing Additional explanation Organizational chart needs to be updated and included. Technical edit required. Assigned DDB Reviewed 3/11/14

Revised as of March 11, 2014

ACCOUNTING AND FINANCE

12 - B | 4

Policy & Procedure Manual

3.

General accounting policy
Revised as of March 11, 2014

a)

Policy (1) It is our policy that GAAP (Generally Accepted Accounting Principles) be utilized in the performance of daily accounting operations on a consistent basis. Corporate Accounting and Finance management is responsible for: (a) Determining the initial application and ongoing interpretation of GAAP; (b) Ensuring GAAP is interpreted and applied consistently, as appropriate, throughout the company; and (c) Authorizing any future changes to that interpretation or application. In instances where accounting application is unclear, proper due diligence in the interpretation of GAAP and other accounting guidance/pronouncements, as well as the formation of accounting conclusions, should always be exercised. Sources of guidance in this due diligence may include, but is not limited to: accounting literature published by FASB and AICPA, and periodic publications of independent accounting firms. Our Corporate Accounting and Finance management is responsible for the timely reporting of all material or complex accounting transactions that may require judgment in their interpretation or application to the appropriate functional Corporate Accounting and Finance manager. For technical accounting issues, an “accounting issue memo” should be written by the individual with primary financial reporting oversight (e.g., Corporate Controller or his/her designee), which details the issue addressed, the accounting pronouncements referenced, the interpretation of the pronouncements, its application to the issue, and the ultimate accounting treatment of the issue. The Controller and VP of Finance jointly have the final authority over decisions related to accounting policies and interpretation and application of GAAP.

(2)

(3)

Policy Initiatives
Initiative Editing Additional explanation Requires technical edit. Assigned DDB Reviewed 3/11/14

ACCOUNTING AND FINANCE

Revised as of March 11, 2014

Policy & Procedure Manual

12 - B | 5

4.

Financial reporting documentation
Revised as of March 11, 2014

a)

Policy (1) Once finalized, all accounting transactions and disclosures must be properly supported, documented, approved, organized and maintained in a secure environment. Segregation of duties is a widely accepted control designed to improve the quality of financial information, reduce the incidence of errors and deter the occurrence of fraud. This concept, as appropriate, should be applied to the design and operation of processes impacting our financial statements and disclosures.

(2)

Policy Initiatives
Initiative Editing Additional explanation Technical edit required. Assigned DDB Reviewed 3/11/14

Revised as of March 11, 2014

ACCOUNTING AND FINANCE

12 - B | 6

Policy & Procedure Manual

5.

Conflicts of interest
Revised as of March 11, 2014

a)

Policy (1) All employees and contractors shall maintain objectivity, integrity and shall be free of conflicts of interest. Our application and interpretation of GAAP shall remain unaffected by any pressure to meet thresholds maintained by internal or external stakeholders of the business. For example, other companies have been known to reduce or increase valuation accounts or to bring earnings in line with internal or external expectations, delay recording expenses to not exceed budgeted amounts, record revenue before it is actually earned to meet revenue budgets, capitalize costs which do not provide future benefit to the company to delay expense recognition, etc. Such financial data manipulation will not be tolerated and will lead to disciplinary actions up to and including employment termination. The recording of all financial transactions by our employees and contractors should follow GAAP and company-wide accounting policies despite outside or internal pressures.

Policy Initiatives
Initiative Editing Additional explanation Technical edit required. Assigned DDB Reviewed 3/11/14

ACCOUNTING AND FINANCE

Revised as of March 11, 2014

Policy & Procedure Manual

12 - B | 7

6.

Concerns of financial misstatements
Revised as of March 11, 2014

a)

Policy (1) If an employee or contractor concludes that our financial statements or records could be misstated, the employee or contractor is encouraged to discuss their concerns with their manager or another senior executive. The employee should be prepared to present all relevant facts and issues to ensure his/her concerns are accurate, completely understood and can be properly addressed. It is inappropriate to discuss these types of issues with outside parties without first communicating them internally.

Policy Initiatives
Initiative Editing Additional explanation Technical editing required Assigned DDB Reviewed 3/11/14

Revised as of March 11, 2014

ACCOUNTING AND FINANCE

Policy & Procedure Manual

12 - C | 1

C.

Delegation of Authority
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Summary to be completed once the detail sections are completed. Assigned DDB Reviewed 3/11/14

Revised as of March 11, 2014

ACCOUNTING AND FINANCE

12 - C | 2

Policy & Procedure Manual

1.

General policy statement
Revised as of March 11, 2014

The policy of Ascentia is to allow only those personnel who have been specifically designated approval authority to commit resources, make decisions or take actions that obligate or cause individuals to act on behalf of Ascentia. Ascentia’s policy is designed to ensure that all Ascentia employees with approval authority fully understand and accept their responsibilities as delegates. The Corporate VP of Finance is responsible for ensuring that the DOA, including changes and interpretations in their entirety, does not compromise the intended control environment. Lastly, the VP of Finance must ensure that this policy and its associated DOA matrices are timely maintained, and the Board of Directors should ensure that the DOA is effectively communicated throughout the organization.
Policy Initiatives
Initiative Editing Additional explanation Technical editing required. Assigned DDB Reviewed 3/11/14

ACCOUNTING AND FINANCE

Revised as of March 11, 2014

Policy & Procedure Manual

12 - C | 3

2.

Establishment of delegation of authority
Revised as of March 11, 2014

a)

Policy: (1) Corporate and Property DOA is the responsibility of the Corporate VP of Finance or the VP of Finance’s designee. The VP of Finance can issue written guidance establishing consistency standards, if required, among business units. It is the responsibility of the VP of Finance to ensure that the DOA, including related changes and interpretation, do not compromise the overall control environment of the Company.

Policy Initiatives
Initiative Editing Additional explanation Technical editing required. Assigned DDB Reviewed 3/11/14

Revised as of March 11, 2014

ACCOUNTING AND FINANCE

12 - C | 4

Policy & Procedure Manual

3.

Changes to delegation of authority (including communications)
Revised as of March 11, 2014

a)

Policy: (1) Any changes to the DOA Matrix or its footnotes must be authorized by the Board of Directors. Evidence of authorization should consist of a signature and signature date on each page containing a change. Changes to the DOA should be appropriately communicated to all impacted employees.

Policy Initiatives
Initiative Editing Additional explanation Technical editing required. Assigned DDB Reviewed 3/11/14

ACCOUNTING AND FINANCE

Revised as of March 11, 2014

Policy & Procedure Manual

12 - C | 5

4.

Signing documents
Revised as of March 11, 2014

a)

Policy: (1) When signing documents committing company resources, the signatory is attesting that he/she: (a) Understands his/her intended authority levels under the DOA; (b) Has reviewed or performed appropriate due diligence for the transaction and its related documentation (If applicable); (c) Has ensured that no element of this transaction violates ethical business conduct, Company policy or any Federal, State or Local regulations; When approving an invoice or payment request, the signatory is attesting that he/she: (a) Understands his/her intended authority levels under the DOA; (b) Has verified that the Company is obligated to pay the approved amount; (c) Reviewed or performed appropriate due diligence for the transaction and its related documentation (If applicable); (d) Has verified that the goods or services have been received (if appropriate); (e) Has verified that the account coding (department code, project ID, etc.) is correct and complete to facilitate recording; and (f) Has verified that, in the case of an invoice supported by a contract, the invoice amount complies with the contract terms.

(2)

Policy Initiatives
Initiative Editing Additional explanation Technical edit required. Assigned DDB Reviewed 3/11/14

Revised as of March 11, 2014

ACCOUNTING AND FINANCE

12 - C | 6

Policy & Procedure Manual

5.

Temporary delegation of authority
Revised as of March 11, 2014

a)

Policy: (1) Certain authorities defined by the DOA may be temporarily delegated by the holder of that authority. The delegation must meet the following criteria: (a) Delegations shall be to individuals no more than one reporting level below the original holder of the authority where feasible (unless approved by the company president or the applicable functional officer). (b) Delegations must be given in written form originating from the original holder of the authority. The authorization should identify delegate(s) by name as well as stating the authority delegated to them. (c) The temporary DOA has the agreement of the appropriate VP of Finance or his designee. (d) Temporary delegations should specify the timeframe for their effectiveness for a period not to exceed one year. (e) The supervisor of any person to whom special authority has been granted is assumed to be authorized to act on his behalf in his absence unless the delegation specifically prohibits this. (f) A copy of the delegation should be attached to every invoice or document signed under the authority committing the company to $50,000 or more.

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6.

Policy exceptions
Revised as of March 11, 2014

a)

Policy: (1) Although the DOA provides for emergencies, there will be times when strict compliance with the DOA is clearly not in the best interest of the Company. In that circumstance, the following guidelines should be followed: (a) The highest ranking available person with appropriate expertise should authorize the transaction. (b) If possible, the VP of Finance or his designee should be notified before the fact that such a variance is required. (c) At the earliest practicable time, the circumstances should be documented by the unauthorized approver and sent to the VP of Finance and the person who should have approved. The documentation should describe the circumstances requiring the deviation from policy. The documentation describing the variance and its approval should be maintained with the transaction documents that gave rise to the request.

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7.

Delegation of authority matrix
Revised as of March 11, 2014

a)

Policy: (1) Below is a matrix of the delegation of authority categories, roles, and limits of authority.

Authorization Role Category Capital Expenses – Via Capital Request Process District Manager VP of Operations President Executive Management Team Operational and Administrative Expenditures * District Manager VP of Operations President Home Acquisition Executive Management Team

Limit of Authority

Two signatures

Up to $2,000 Up to $10,000 Up to $25,000 In Excess of $25,000

No No Yes Yes

Up to $2,000 Up to $10,000 Unlimited

No Y- over $5,000 Y- over $5,000

All spending at any dollar amount

Yes

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8.

Miscellaneous
Revised as of March 11, 2014

a)

Policy: (1) All signatures must either be readable by a person unfamiliar with it or must be accompanied by a printed name. All signatures must be accompanied by the date of signature. Signatures must be in ink. Approvals should be contemporaneous with or prior to the effectiveness of the document being executed (signatures may not be back-dated or pre-dated); however, for legitimate business or regulatory purposes, a document may be dated the current date, but have effect retroactive to a prior date. A signatory should never approve payments of any kind to himself / herself or enter into a transaction in which personal or real conflicts of interest exist or ethical business practices may be violated or otherwise compromised. Any questions regarding the interpretation of this policy or the application of the DOA matrices should be directed to the VP of Finance or his/her designee.

(2) (3) (4)

(5)

(6)

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D.

Compliance
Revised as of March 11, 2014

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1.

Overview
Revised as of March 11, 2014

(1)

To provide guidance and assist in the uniform administration of the processes, procedures, and techniques related to the following compliance areas.

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2.

Financial statement audit
Revised as of March 11, 2014

a)

Policy: (1) The Company is subject to annual audit procedures based on debt financial covenant terms requiring the attestation procedures. The independent accounting firm selected by Ascentia communicates on an as needed basis directly with the Board upon completion of the audit. In addition, members of the Board are authorized to initiate communication directly with the independent accounting firm. The Controller will be responsible for preparing or overseeing the preparation of as many of the schedules which the auditors will use as possible. The Controller will be available throughout the audit to facilitate the work of the independent accountants. Designees of the Controller (e.g., accounting and finance staff) are also available for any work which the Controller may delegate to them related to preparation for and questions resulting from audit procedures. Upon receipt of a draft of the audited financial statements of Ascentia from its independent auditor, the Controller will perform a detailed review of the report and any questions or errors noted as part of this review are communicated to the independent auditor in a timely manner. It will also be the responsibility of the Controller to review and respond in writing to all management letter or other internal control and compliance report findings and recommendations made by the independent auditor.

(2)

(3)

(4)

(5)

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3.

Financial covenants
Revised as of March 11, 2014

a)

Policy: (1) All debt covenants should be reviewed periodically, in accordance with the terms of the underlying debt agreement, to ascertain whether covenant restrictions have been met. If noncompliance with certain covenants is noted, proactive communications with the bank or other creditor should be initiated by the individual primarily responsible for the relationship (e.g. Vice President of Asset Management) and any other members of Executive Management deemed necessary, in order to appropriately negotiate appropriate end results, such as bank waivers.

(2)

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4.

Federal taxes
Revised as of March 11, 2014

a)

Policy: (1) The Controller shall be responsible for identifying all filing requirements and assuring that Ascentia is in compliance with all such requirements. Ascentia shall file complete and accurate returns with all authorities. Specific filings made by Ascentia are as follows: (a) Income tax: Ascentia will work together with the accounting firm engaged to prepare federal income tax returns to ensure that all returns are reported accurately and within prescribed timeframes. (b) 1099s: All non-employee compensation must be reported on Form 1099. These returns are due to independent contractors by January 31st and subsequently submitted to the federal government by February 28th. Cost benefit judgment may be utilized in deciding to forgo 1099 preparation when amounts are clearly immaterial to individuals and the Company.

(2)

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5.

State and local taxes
Revised as of March 11, 2014

a)

Policy: (1) The Controller is responsible for identifying State and Local municipality filing requirements and assuring that Ascentia is in compliance, accounting for materiality of transactional value, risks of not filing, and costs of maintaining compliance. The Controller is responsible for reviewing and approving all State and local tax filings prior to submission. Specific filings made by Ascentia are as follows: (a) Personal Property Tax Returns- These returns are to be filed in all states in which Ascentia conducts business, as prescribed by the individual states. (b) State specific filings- Depending on the State, different filing requirements may be required (e.g., Gross Receipts filings in Texas)

(2)

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6.

Payroll taxes
Revised as of March 11, 2014

a)

Policy: (1) The following payroll forms must be filed periodically in accordance with Federal and State regulations: (a) Form 940: Annual federal unemployment tax returns will be filed by third party payroll provider by January 31st. (b) Form 941: Quarterly payroll tax returns will be filed with the IRS by a third party payroll provider by the end of each month following the quarter. (c) State Payroll Tax Returns: Depending on the State, payroll tax filing may or may not be required. It is the responsibility of the third party payroll provider to file these returns in accordance with State requirements. (d) Local Payroll Tax Returns: Depending on the locality of the Mobile Home Community, payroll tax filing may or may not be required. It is the responsibility of the third party payroll provider to file these returns in accordance with local requirements.

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E.

Internal Controls
Revised as of March 11, 2014

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1.

Overview
Revised as of March 11, 2014

Internal Controls are an integral part of Ascentia’s financial and business policies and procedures. Internal controls consist of all the measures taken by the organization for the purpose of; (1) protecting its resources against waste, fraud, and inefficiency; (2) ensuring accuracy and reliability in accounting and operating data; (3) securing compliance with the policies of the organization; and (4) evaluating the level of performance in all organizational units of the organization. Internal controls are simply good business practices. Internal control systems operate at different levels of effectiveness. Determining whether a particular internal control system is effective is a judgment resulting from an assessment of whether the five components - Control Environment, Risk Assessment, Control Activities, Information and Communication, and Monitoring - are present and functioning. Effective controls provide reasonable assurance regarding the accomplishment of established objectives. The control environment, as established by the organization's administration, sets the tone of an organization and influences the control consciousness of its people. Leaders of each department, area or activity establish a local control environment. This is the foundation for all other components of internal control, providing discipline and structure. Control environment factors include:     Integrity and ethical values; The commitment to competence; Leadership philosophy and operating style; and The way management assigns authority and responsibility, and organizes and develops its people.

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2.

Policies and procedures
Revised as of March 11, 2014

a)

Policy: (1) Every entity faces a variety of risks from external and internal sources that must be assessed. A precondition to risk assessment is establishment of objectives. Objectives are established by the Controller with approval from the VP of Operations. The objectives are linked at different levels and internally consistent. Risk assessment is the identification and analysis of relevant risks to achievement of the objectives, forming a basis for determining how the risks should be managed. Because economics, regulatory and operating conditions will continue to change, mechanisms are needed to identify and deal with the special risks associated with change. Objectives must be established before administrators can identify and take necessary steps to manage risks. Operations objectives relate to effectiveness and efficiency of the operations, including performance and financial goals and safeguarding resources against loss. Financial reporting objectives pertain to the preparation of reliable published financial statements, including prevention of fraudulent financial reporting. Compliance objectives pertain to laws and regulations which establish minimum standards of behavior.

(2)

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3.

Risk assessment
Revised as of March 11, 2014

a)

Policy: (1) The process of identifying, analyzing, and prioritizing issues, conflicts, and other matters is an ongoing process and is a critical component of an effective internal control system. Attention must be focused on risks at all levels and necessary actions must be taken to manage. Risks can pertain to internal and external factors. The assessment will include a review of the processes surrounding identified risk areas, such as policies, procedures and business practices to identify and to eliminate or to mitigate any gaps or weakness in these processes. Once risks are identified, management considers the significance, the likelihood of occurrence, and how they should be managed. Management may initiate plans, programs, or actions to address specific risks. Ascentia is aware that risks can arise or change due to circumstances such as entering into a new line of business or learning of a recent legal or regulatory action against a similarly situated company. The risk review will consist of operational, strategic, financial, and compliance factors, and it will be performed at least annually, commencing after financial statement audit issuance, with primary preparation responsibility being that of the Controllers with the subsequent approval of the VP of Finance. Managing change requires a constant assessment of risk and the impact on internal controls. Economic, industry and regulatory environments change and entities' activities evolve. Below is a matrix containing specific examples of risks and suggested controls to mitigate the potential for them:

(2)

(3)

Objective Vendors Management should determine and communicate guidelines for vendor selection. Vendor acceptance and review policies are developed in accordance with overall procurement strategy.

Potential Risk

Suggested Controls to Mitigate the Potential Risk

Purchases may be made from unacceptable vendors: this could result in the manufacture of unsalable goods because quality standards are not met, and could result in unreliable sources of supply.

The company's policy with regard to conflicts of interest (relating to vendor
ACCOUNTING AND FINANCE

Purchases may be made from vendors whose salesmen offer kickbacks or gifts to customers, or from vendors

Maintain updated vendor information and suppliers list. Vendor selection process should be documented and adhered too. Company procedures provide guidelines to procurement personnel on the requirements for the qualification and/or disqualification of suppliers. The Code of Ethics policy requires that all employees act in accordance with all
Revised as of March 11, 2014

Policy & Procedure Manual selection) is established, documented and distributed. There is a mechanism in place to promote ethical supplier relationships. who request that payment be made in an illegal manner. This could result in undetected sensitive payments, and, in effect, purchases at higher prices.

12 - E | 5 laws and also in the best interest of the company. Improper business dealings including favoritism, nepotism, and bribery are strictly disallowed. Employees and vendors will sign a document stating that they have read the procedure and will abide by the contents of the procedure. Purchasing policy states that ethical and procedural requirements must be met when evaluating vendors. Buyers will not show favoritism, whether due to nepotism or personal benefit. Buyers will not accept gifts in any form from suppliers.

Request for Bids Procedures are in place that specify the criteria for determining when request for bids should be used. Competitive quotations are obtained where practicable. Purchase Orders Work is not performed / goods are not received before the generation of a Purchase Requisition and / or Purchase Order Work is performed / goods are received before the generation of a Purchase Requisition or Purchase Order thus circumventing control. ("confirming orders") Invoices for which a Purchase Order or receiving report does not exist are not approved by management. Management should review, follow up and take corrective action on exception reports indicating invoices captured before or without a Purchase Requisition, Purchase Order being generated. The vendor selection process with regard to request for bids is not defined or is not adhered to. Competitive bids are to be solicited for all purchases over a stated amount, and the lowest bid will be accepted providing the vendor can meet specified terms and quality standards.

Service Entry and Acceptance Service acceptance and entry is only performed for services actually rendered. (validity) Payments (Disbursements) Payments are prepared on the basis of approved purchase documentation.
Revised as of March 11, 2014

Fictitious receipts of services may be recorded. Invalid services may be recorded. Payments may be made for fictitious services.

Service entries are created with reference to a Purchase Order.

Payments may be made for the wrong amount. Payments may be made to the wrong person (or entity).

Disbursement data is based on information provided during invoice entry.
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Policy & Procedure Manual Payments may be made to unauthorized or non-existent vendors. Sensitive payments and related party transactions may occur. Payments are made for goods & services that were not received (or in advance of receipt). Misappropriation of funds may result by way of having improper check or EFT requests accepted and processed. Authorized signatories to review remittance / requisition / other supporting documentation before approving payments. Comparison of payment amounts and recipients with source documents such as vendor invoices, Purchase Orders, tax returns or other appropriate documentation, verify accuracy of supporting documents. Signatories to sign as evidence of such scrutiny before signing the check / releasing the EFT.

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4.

Control activities
Revised as of March 11, 2014

a)

Policy: (1) Control activities are the policies and procedures that help ensure management directives are carried out. They help ensure that necessary actions are taken to address risks to achievement of the entity's objectives. Control activities occur throughout the organization, at all levels, and in all functions. They include a range of activities as diverse as approvals, authorizations, verifications, reconciliations, reviews of operating performance, security of assets and segregation of duties. Control activities usually involve two elements: a policy establishing what should be done and procedures to effect the policy. All policies must be implemented thoughtfully, conscientiously and consistently. Changes to or implementation of control activities should occur at the direction and oversight of the Controller and VP of Finance.

(2)

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Policy & Procedure Manual

5.

Information and communications
Revised as of March 11, 2014

a)

Policy: (1) Pertinent information must be identified, captured and communicated in a form and time frame that enables people to carry out their responsibilities. Effective communication must occur in a broad sense, flowing down, across and up the organization. All personnel must receive a clear message from top management that control responsibilities must be taken seriously. They must understand their own role in the internal control system, as well as how individual activities relate to the work of others. They must have a means of communicating significant information upstream. Communication should flow through the hierarchical department structure. Hotlines or whistleblower mechanisms should be instituted so pervasive ethical and moral issues can be communication confidentially without fear of retribution.

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6.

Monitoring
Revised as of March 11, 2014

a)

Policy: (1) Internal control systems need to be monitored - a process that assesses the quality of the system's performance over time. Ongoing monitoring occurs in the ordinary course of operations, and includes regular management and supervisory activities, and other actions personnel take in performing their duties that assess the quality of internal control system performance. The scope and frequency of separate evaluations depend primarily on an assessment of risks and the effectiveness of ongoing monitoring procedures. Internal control deficiencies should be reported upstream, with serious matters reported immediately to top administration and governing boards. Internal control systems change over time. The way controls are applied may evolve. Historically effective procedures are impacted by the arrival of new personnel, varying effectiveness of training and supervision, time and resources constraints, or additional pressures. Furthermore, circumstances for which the internal control system was originally designed also may change. Because of changing conditions, management needs to determine whether the internal control system continues to be relevant and able to address new risks during the annual risk assessment, in addition to evaluation on an as needed basis as transactional errors are discovered and business lines expand or change.

(2)

(3)

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7.

Components of the control activity
Revised as of March 11, 2014

a)

Policy: (1) Internal controls rely on the principle of checks and balances in the workplace. The following components focus on the control activity: (a) Personnel need to be competent and trustworthy, with clearly established lines of authority and responsibility documented in written job descriptions and procedures manuals. Organizational charts provide a visual presentation of lines of authority and periodic updates of job descriptions ensures that employees are aware of the duties they are expected to perform. (b) Authorization procedures need to include a thorough review of supporting information to verify the propriety and validity of transactions. Approval authority is to be commensurate with the nature and significance of the transactions and in compliance with company policy. (c) Physical restrictions are the most important type of protective measures for safeguarding assets, processes and data. (d) Monitoring operations is essential to verify that controls are operating properly. Reconciliations, confirmations, and exception reports can provide this type of information.

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8.

Record retention
Revised as of March 11, 2014

a)

Policy: (1) Documentation and record retention is to provide reasonable assurance that all information and transactions of value are accurately recorded and retained. Records are to be maintained and controlled in accordance with the established retention period and properly disposed of in accordance with established procedures.

Area Accounting Records

Examples Accounts Payable Accounts Receivable Audit Reports Chart of Accounts Depreciation Schedules Expense Records Financial Statements (Annual) Fixed Asset purchases General Ledger Inventory Records Loan Payment Schedules Purchase Orders (1 copy) Sales Records Tax Return Bank reconciliations Bank statements Canceled checks Electronic payment records Board minutes Bylaws Business licenses Contracts - major Contracts - minor Insurance policies Leases/mortgages Patents/trademarks Shareholder records Stock registers Stock transactions Benefit plans Employee files (ex-employees) Employment applications Employment taxes Payroll records Pension/profit sharing plans Construction records

Bank Records

Corporate Records

Suggested Retention Period 7 years 7 years Permanent Permanent Permanent 7 years Permanent Permanent Permanent 7 years 7 years 7 years 7 years Permanent 2 years 7 years 7 years 7 years Permanent Permanent Permanent Life + 4 years Life + 3 years Permanent Permanent Permanent Permanent Permanent Permanent 7 years 3 years 7 years 7 years Permanent
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Employee Records

Real Property
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Policy & Procedure Manual Leasehold improvements Lease payment records Real estate purchases Permanent Life + 4 years Permanent

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9.

Internal control limitations
Revised as of March 11, 2014

a)

Policy: (1) There is no such thing as a perfect control system. Staff size limitations may obstruct efforts to properly segregate duties, which requires the implementation of compensating controls to ensure that objectives are achieved. A limited inherent in any system is the element of human error, misunderstandings, fatigue and stress. Employees are to be encouraged to take earned vacation time in order to improve operations through cross-training while enabling employees to overcome or avoid stress and fatigue. The cost of implementing a specific control should not exceed the expected benefit of the control. Sometimes there are no out-of-pocket costs to establish an adequate control. A realignment of duty assignments may be all that is necessary to accomplish the objective. In analyzing the pertinent costs and benefits, managers also need to consider the possible ramifications for the Company at large and attempt to identify and weigh the intangible as well as the tangible consequences. Internal controls should reduce the risks associated with undetected errors or irregularities, but designing and establishing effective internal controls is not always a simple task and cannot always be accomplished through a short set of quick fixes

(2)

(3)

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F.

Segregation of Duties
Revised as of March 11, 2014

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1.

Overview
Revised as of March 11, 2014

It is company policy that an appropriate segregation of duties shall be maintained in accordance with the principles set forth in this document. The company shall identify, remediate, and maintain a separation of incompatible business functions. In permissible instances where business functions cannot be fully and appropriately segregated due to specific circumstances, management shall implement mitigating controls to compensate for such situations. As changes occur in the organizational, functional, and technological environments, assessments shall be performed to address the impact on the segregation of duties resulting from such changes. Senior management shall review, revise, and enforce this policy as significant developments occur with respect to the segregation of duties. Segregation of duties reduce the likelihood of errors and irregularities. An individual is not to have responsibility for more than one of the three transaction components: authorization, custody, and record keeping whenever possible. Where not possible, underlying risks must be assessed, and mitigating control activities identified and/or implemented where considered necessary (see subsequent internal controls limitations section). When the work of one employee is checked by another, and when the responsibility for custody for assets is separate from the responsibility for maintaining the records relating to those assets, there is appropriate segregation of duties. This helps to detect errors in a timely manner and deter improper activities; and at the same time, it should be devised to prompt operational efficiency and allow for effective communications. Adequate segregation of duties reduces the likelihood that errors (intentional or unintentional) will remain undetected by providing for separate processing by different individuals at various stages of a transaction and for independent reviews of the work performed. The segregation of duties provides four primary benefits: 1) the risk of a deliberate fraud is mitigated as the collusion of two or more persons would be required in order to circumvent controls; 2) the risk of legitimate errors is mitigated as the likelihood of detection is increased; 3) the cost of corrective actions is mitigated as errors are generally detected relatively earlier in their lifecycle; and 4) the organization’s reputation for integrity and quality is enhanced through a system of checks and balances. Segregation of duties is a basic, key internal control and one of the most difficult to accomplish. In essence, there is greater assurance that internal control responsibilities will be fully deployed when there is increased dispersion of such responsibilities among multiple individuals and work groups.
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G.

General Ledger and Chart of Accounts
Revised as of March 11, 2014

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1.

Overview
Revised as of March 11, 2014

The purpose of this policy is to provide guidance for the structure and maintenance of the Chart of Accounts to ensure the assembly of meaningful financial data. To facilitate the record keeping process for accounting, all ledger accounts will be assigned a descriptive account title and account number. The Chart of Accounts provides the organization a method for assignment and maintenance of the Company’s general ledger accounts to provide meaningful financial data for the Company. Ascentia’s chart of accounts is monitored and controlled by the Controller. Responsibilities include the handling of all account maintenance, such as additions and deletions. Any additions or deletions of accounts should be approved by the Controller, who ensures that the chart of accounts is consistent with the organizational structure of Ascentia and meets the needs of each division and department.
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2.

Account code structure
Revised as of March 11, 2014

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3.

Accounting transactions
Revised as of February 11, 2014

a)

Policy for journal entries: (1) All general ledgers entries that do not originate from a subsidiary ledger shall be supported by journal vouchers or other documentation, which shall include a reasonable explanation of each such entry. Examples of such journal entries include: (a) Recording of non-cash transactions; (b) Corrections of posting errors; and (c) Non-recurring accruals of income and expenses. Specific documentation requirements related to the journal entries are: (a) Documentation must include sufficient detail to allow a person to retrace the amount of the journal entry back to the initial source of data used. (b) If the journal entry includes an estimated amount, then support of all assumptions and estimates must accompany the journal entry. In situations in which it is common knowledge that the support is maintained on a regular and consistent basis, then a reference to that source is adequate. (c) If the accounting treatment used to record the journal entry is complex or unusual, then documentation outlining the rationale for the accounting treatment should be included with the journal entry. There may be an exception to this documentation requirement if the supporting documentation is “privileged and confidential” or an “Attorney/Client work product” (as in cases of legal issues, human resource issues, tax issues, etc). (d) The request to process a journal entry without documentation must be authorized by an employee with appropriate approval for the transaction, and the documentation must be maintained by the appropriate department. Certain journal entries, referred to as recurring journal entries, may occur in every accounting period, quarterly, or annually. These entries may include, but are not limited to: (a) Depreciation of fixed assets; (b) Amortization of prepaid expenses; and (c) Accruals of recurring expenses.

(2)

(3)

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Journal entries may not be reviewed by the person preparing or entering the journal entry. The reviewing party should have the commensurate level of experience to perform the duties of “reviewer.” For non-standard journal entries, it is recommended that the reviewer be a manager or consultant (or above), although judgment needs to be exercised based on the nature of the specific journal entry being evaluated. The reviewers are responsible for validating the classification of all lines, verifying that the period recorded is correct, verifying whether or not the journal entry should be reversed, validating the accounting treatment, re-computing amounts where required, ensuring that the journal entry name and description provided are adequate and accurate and ensuring that the documentation is complete and substantiates all source data used in any computations in the preparation of the journal entry. Finally, the reviewers are responsible for signing/initialing and dating the journal entry to provide evidence of review (whether physically or electronically). Reviewing and approving a journal entry is considered authorization for marking the journal for posting in the general ledger system. The person reviewing the journal can mark to post the journal in the system and post or forward the journal to the designated individual(s) for marking to post and posting of the journal. The person marking a journal entry to post cannot be the person who entered the journal entry. All journal entries must be appropriately approved before they are marked to post.

(5)

b) c)

Policy for receipts: Policy for payables:

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Revised as of February 11, 2014

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4.

Accounting estimates
Revised as of March 11, 2014

a)

Policy: (1) Ascentia utilizes numerous estimates in the preparation of its interim and annual financial statements. Some of those estimates include: (a) Useful lives of property and equipment; (b) Adequacy of receivables; (c) Fair market values of investments; (d) Allocations of certain indirect costs; and (e) Allocations of time/salaries. It is Ascentia’s policy that all such estimates shall be reassessed, reviewed, and approved by the Controller on a quarterly basis. Documentation shall be maintained supporting all key conclusions, bases, and other elements associated with each accounting estimate. All material estimates, and changes in estimates from one year to the next, shall be disclosed to the external audit firm. Below is a table of cost center codes to be used when booking property specific expenditures.

(2)

(3)

Policy Initiatives
Initiative Editing Additional explanation Requires technical edit. Assigned DDB Reviewed 3/11/14

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H.

Cash, Treasury Management, and Bank Reconciliations
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Policies and procedures with the new lock box and online payments are partially covered in the collections section above. Need to evaluate combining that section with this one. Assigned DDB Reviewed 3/11/14

Revised as of March 11, 2014

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1.

General policy on handling cash
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Prior cash handling policy can be found on the employee portal. This needs to be developed and or combined with the section in collections. Assigned DDB Reviewed 3/11/14

ACCOUNTING AND FINANCE

Revised as of March 11, 2014

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2.

Bank account structure
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Policies governing the use of different bank accounts within Ascentia Holdings, in particular in relationship to our bank covenenants. Assigned DDB Reviewed 3/11/14

Revised as of March 11, 2014

ACCOUNTING AND FINANCE

12 - H | 4

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3.

Bank account reconciliation
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Develop policy and procedure steps and in particular rules for what do to when items cannot be reconciled. Assigned DDB Reviewed 3/11/14

ACCOUNTING AND FINANCE

Revised as of March 11, 2014

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12 - I | 1

I.

Accounting for Assets
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation This section will cover the administrative and accounting steps to record expenditures that are capitalized. Assigned DDB Reviewed 3/11/14

Revised as of March 11, 2014

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1.

Capitalization policy
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Rules defining what constitute capital expenditures. This is covered above in the investment section, but this section would include the additional accounting and administrative steps. Possible combine the sections. Assigned DDB Reviewed 3/11/14

ACCOUNTING AND FINANCE

Revised as of March 11, 2014

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2.

Depreciation and useful life
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Current GAAP depreciation rules to be documented. Assigned EP Reviewed 3/11/14

Revised as of March 11, 2014

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12 - I | 4

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3.

Prepaids and other assets
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Administrative and accounting rules governing the recording and reconciling for prepaid and other assets, which will be defined. Assigned EP Reviewed 3/11/14

ACCOUNTING AND FINANCE

Revised as of March 11, 2014

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12 - J | 1

J.

Accounting for Liabilities, Debt, and Partners’ Capital
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Detailed accounting and administrative rules that govern the record keeping of debt and partners’ capital. Assigned EP Reviewed 3/11/14

Revised as of March 11, 2014

ACCOUNTING AND FINANCE

12 - J | 2

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1.

Accrued liabilities
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Develop detailed administrative and accounting rules to record, control and reconcile accrued liabilities. Assigned EP Reviewed 3/11/14

ACCOUNTING AND FINANCE

Revised as of March 11, 2014

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12 - J | 3

2.

Debt
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Develop detailed administrative and accounting rules to record, control and reconcile debt. Assigned EP Reviewed 3/11/14

Revised as of March 11, 2014

ACCOUNTING AND FINANCE

12 - J | 4

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3.

Partners’ capital
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Develop detailed administrative and accounting rules to record, control and reconcile partners’ capital. Assigned EP Reviewed 3/11/14

ACCOUNTING AND FINANCE

Revised as of March 11, 2014

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K.

Financial Reporting
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Develop a calendar of reports that are published with an explanation for their use. Alternatively, this could be blended into the individual sections a Assigned DDB Reviewed 3/11/14

Revised as of March 11, 2014

ACCOUNTING AND FINANCE

12 - K | 2

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1.

Scheduled reports
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Develop a calendar of reports that are published with an explanation for their use. Alternatively, this could be blended into the individual sections a Assigned DDB Reviewed 3/11/14

ACCOUNTING AND FINANCE

Revised as of March 11, 2014

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2.

Ad hoc system reports
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Develop process to submit and evaluate requests for new system reports. Assigned AM Reviewed 3/11/14

Revised as of March 11, 2014

ACCOUNTING AND FINANCE

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12 - L | 1

L.

General Administrative Policies
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation The section is intended to develop policies and procedures that govern the general administrative activities in the company. Assigned DDB Reviewed 3/11/14

Revised as of March 11, 2014

ACCOUNTING AND FINANCE

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1.

Overview
Revised as of March 11, 2014

At Ascentia we strive to be the best and do our best in every situation and that is particularly important when we produce official documents for large audiences internally or externally (letters, memos, etc.) It is imperative that we make a good impression and produce documents correctly formatted and error-free to convey a positive message to the reader and a good image of our organization. This type of message reflects to others a strong attention to detail and pride in our work which creates a long lasting impression.
Policy Initiatives
Initiative Content development Additional explanation Complete when detailed sections are complete. Assigned DDB Reviewed 3/11/14

ACCOUNTING AND FINANCE

Revised as of March 11, 2014

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12 - L | 3

2.

Official notices
Revised as of March 11, 2014

a)

Definition: (1) An official notice is a document of legal nature disseminated to the entire company internally; or one of a legal, PR, or Ascentia branded nature for broad distribution externally. Broad distribution is defined as being sent to ten or more recipients outside of the company with the intent that the document is not explicitly confidential.

(2)

b)

Policy: (1) Any document of a legal nature that is disseminated to the entire company internally or a document for Broad Distribution outside of the company must be reviewed by more than one person in a position of authority. This will work to protect and enhance the professionalism of documents produced by Ascentia as well as to keep the integrity of the Ascentia brand inside and outside the organization. Each document will be reviewed for: (1) grammar and spelling, (2) proper formatting, and (3) correct, legal entity name use. In addition, if any documents reference entity names and tax ID numbers, those documents must be reviewed by Bev Wood or the then current Compliance Manager. An official notice must be reviewed by one or more of the following positions: (1) Chief Executive Officer, (2) President, (3) one of the Vice Presidents, (4) Controller, or (5) the President’s Executive Administrative Assistant. The author of the official note has full responsibility for the content.

(2)

(3)

(4)

(5)
Policy Initiatives
Initiative Content development

Additional explanation Continue development of this policy and others that help to govern the management and dissemination of official communication.

Assigned DDB

Reviewed 3/11/14

Revised as of March 11, 2014

ACCOUNTING AND FINANCE

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13. TECHNOLOGY AND INFORMATION SYSTEMS
Revised as of March 11, 2014

A.

Overview

Policy Initiatives
Initiative Content development Additional explanation Introductory information to be added once detailed sections are complete. Assigned AM Reviewed 3/11/14

Revised as of March 11, 2014

TECHNOLOGY AND INFORMATION SYSTEMS

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13 - B | 1

B.

Information Technology Controls
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Introductory information to be added once detailed sections are complete. Assigned DDB Reviewed 3/11/14

Revised as of March 11, 2014

TECHNOLOGY AND INFORMATION SYSTEMS

13 - B | 2

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1.

Access controls
Revised as of March 11, 2014

a)

Policy: (1) All individuals who require access to Ascentia’s information resources containing protected data must be appropriately authorized prior to such access being granted. The authorization will be approved on a need-to-know basis by the relevant manager. Access to information systems must be restricted to authorized personnel in order to prevent and detect unauthorized access or abuse. To maintain effective security it is vital for the company to ensure that data can only be accessed and processed by authorized personnel. System Administrators must strictly control access to information resources under their direction or ownership. When approving access rights, the respective manager must ensure the following requirements are considered and evaluated prior to approving such access and before forwarding the request to the system administrator or data custodian: (a) User’s need for access; (b) Potential conflict with segregation of duties; (c) Any regulatory requirements; (d) Level of access required (read, update, delete); and (e) Access duration.

(2)

Policy Initiatives
Initiative Edit Additional explanation Requires technical edit Assigned DDB Reviewed 3/11/14

TECHNOLOGY AND INFORMATION SYSTEMS

Revised as of March 11, 2014

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13 - B | 3

2.

User account management
Revised as of March 11, 2014

a)

Policy: (1) The following requirements regarding User account management must be implemented: (a) All users must be assigned their own unique user login with only the privileges needed to perform their jobs. (b) There must be a formal registration and de-registration procedure for providing an employee with a company login requiring authorization from appropriate management, or an authorized delegate. (c) User creation, updates, disabling, suspending, resetting, and re-enabling must be a defined process. All such account activity should be logged in a secure audit trail. (d) Every unique user ID must correspond to an individual unless there is an operational need to allocate a generic user ID, in which case the appropriate justification must be presented in writing to the system administrator to determine if adequate compensating controls may be implemented to track and monitor use of the user account. (e) User accounts must be automatically disabled upon separation from the company. (f) Users are responsible for maintaining the confidentiality of their account.

Policy Initiatives
Initiative Editing Additional explanation Requires technical edit. Assigned DDB Reviewed 3/11/14

Revised as of March 11, 2014

TECHNOLOGY AND INFORMATION SYSTEMS

13 - B | 4

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3.

Passwords
Revised as of March 11, 2014

a)

Policy: (1) It is Ascentia’s policy to secure access to the company’s information resources by implementing a strong password management program. (a) Passwords must be at least 8 characters long and consist of upper and lowercase letters and at least one number. (b) Passwords must be changed every 90 days. (c) User accounts must be locked after 3 failed password attempts, until manually reset by an administrator. (d) New passwords cannot be the same as any of the last 5 passwords used. (e) Password change must require the user to enter the previous password. (f) Computers must be locked out after 15 minutes of inactivity. Nothing in this policy precludes users from establishing even shorter lockout periods. To preserve password security, the following practices must be adopted: (a) During new user orientation, employees must be advised as to how to choose a good password (e.g., must not be a spouse, child, or pet name, etc.). (b) Passwords must not be written down. (c) Passwords must not be communicated to or shared with others. (d) Passwords must be changed immediately upon: (i) Learning a password has been compromised; (ii) A security breach is suspected; (iii) Learning a password has been shared with another individual; or (iv) User no longer requires access to the system.

(2)

Policy Initiatives
Initiative Editing Additional explanation Requires technical editing. Assigned DDB Reviewed 3/11/14

TECHNOLOGY AND INFORMATION SYSTEMS

Revised as of March 11, 2014

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13 - B | 5

4.

Disaster recovery backup
Revised as of March 11, 2014

a)

Policy: (1) Per our agreements with Yardi, they provide a disaster recovery backup for the data managed and processed in the Voyager and related systems. MTT provides disaster recovery backup for working files saved on the shared access drive. Local storage of working files without backup is discouraged. Users should use either the provided shared access drive or cloud based file management solution, such as Google Drive or Dropbox.

(2)

(3)

Policy Initiatives
Initiative Editing Additional explanation Requires technical editing Assigned DDB Reviewed 3/11/14

Revised as of March 11, 2014

TECHNOLOGY AND INFORMATION SYSTEMS

13 - B | 6

Policy & Procedure Manual

5.

Change management
Revised as of March 11, 2014

a)

Policy: (1) Information technology systems are subject to formal change control processes. Such processes provide a managed and orderly method by which changes are requested, tested, approved, communicated prior to implementation (if possible), and logged. Attributes of a formal change control process/procedure include: (a) Assignment of a technical change manager or change control team. (b) Written change requests submitted for all changes, both scheduled and unscheduled. (c) Change requests receive formal approval before proceeding with the change. (d) A testing plan is required to include IT and business representatives where appropriate. (e) Customer notification is completed for each scheduled or unscheduled change. (f) A post change review is completed for each change, whether scheduled or unscheduled, and whether successful or not. (i) A change log is maintained for all changes. The log should contain, but is not limited to: (ii) Date of submission and date of change; (iii) Owner and custodian contact information; (iv) Nature of the change; and (v) Indication of success or failure. Change control procedures for patches may require resources and processes very different from application change control, where for example a formal change control board may be required. Departments should develop procedures and documentation that are appropriate to the change, level of risk, organizational structure and audit requirements.

(2)

Policy Initiatives
Initiative Editing Additional explanation Requires technical edit. Assigned DDB Reviewed 3/11/14

TECHNOLOGY AND INFORMATION SYSTEMS

Revised as of March 11, 2014

Policy & Procedure Manual

1

14. GLOSSARY
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Full glossary to be developed after the technical edit of the policy and procedure manual is complete. Assigned DDB Reviewed 3/11/14

Revised as of March 11, 2014

GLOSSARY

Policy & Procedure Manual

1

15. APPENDIX
Revised as of March 11, 2014

Policy Initiatives
Initiative Content development Additional explanation Full glossary to be developed after the technical edit of the policy and procedure manual is complete. Assigned DDB Reviewed 3/11/14

Revised as of March 11, 2014

APPENDIX