By Ginny Campbell, CAI-RMC Editorial Committee
We all know it’s not so fun to spend money on those pesky community projects that don’t have a big wow-factor. The pretty projects are fun, but predictive maintenance is often the most valuable. It can be much less stressful for leadership to avoid maintenance topics that create tension among your community members. It might even be popular to side with a frugal board and defer larger repair needs. But as good stewards of association funds, is it always best for managers and board leaders to put off repairs, in hopes of keeping the peace?
One HOA board president thinks it is ot. For this article, we will call her “Jane.” Jane is the president of her community’s association, and she has seen what happens when delayed routine maintenance becomes a million-dollar+ emergency in a matter of years. The problem was their 443 elevated decks, staircases, and walkways in her community. Many of these were shared spaces between units. Water intrusion and general wear were ignored for years, finally amounting to a massive effort to coordinate the repairs with urgency.
Prevention would have been simple enough: Route downspouts to avoid water intrusion, perform deck repairs early on, tackle the appropriate coating and caulking maintenance yearly. When finally a realtor posed a lawsuit threat due to injury while onsite, the community took note and responded.
“The general mood about the deck repairs was negative,” Jane says. “People did not want to pay for repairs. We heard quite a few owners say that they could fix their deck in an hour, or knew someone who could. After hours dissecting community by-laws and declarations, it was decided that homeowners did not have the right to hire anyone to work on limited common elements without board approval.
Jane explains the process almost like five stages of denial (and finger-pointing) before real progress was made. The community did not trust the board to handle such a large project, and asked that they form a committee of non-board homeowners. This new deck committee ended up being key in convincing the owners that repairs were needed, and MUCH sooner than later. Multiple unbiased vendor bids and observation reports were vital in educating the homeowners.
Multiple payment options were entertained, including a second monthly assessment. This was rejected due to the time it would take for funds to accumulate. A large loan option was suggested, and in the end, thatwas the best way to finance the project.
Due to the amount of shared community spaces, it was decided for everyone to share costs evenly, as opposed to individual homeowners paying very different amounts per household. Almost a year into the project, Jane says, “People have accepted the project, but we do have those who still believe that ‘their deck was fine.’ The decks throughout the community were in many different stages of disrepair, but every one of them needed work.”
Financing gave owners two options: 1) pay one lump sum of roughly $5,600 per household with no interest, or 2) finance over 5 years, adding $110/month to their regular monthly dues. “Out of 254 units, we had approximately 80 pay up front. Those who paid up front actually helped those who financed, because we ultimately borrowed less money, lowering the interest owed.”
If she knew then what she knows now, Jane would have done things a little differently:
“First step, get non-boardmember homeowners involved immediately. When a board starts to think about a big project, this is the time to engage homeowners and understand community bylaws. This gives people more confidence that the board does not have an ulterior motive.”
“Next, make sure you have a management company capable of handling multiple bids and financing. We did not have good management for the first two years of the project, which delayed progress and ballooned the scope.” Underqualified management puts too much responsibility on the volunteer board members, and impacts the mood and opinions of owners. “Think about it like this: if your management company can't handle small work orders, they surely cannot handle the massive projects.”
Finally, be transparent. Negativity spreads like wildfire. Jane tells us that even one small indication that information is being withheld is enough to create discord. “Not every single thing needs to be disclosed, but keeping everyone abreast will help a lot.”
She also suggests that when homeowners say they know a company that can do a project cheaper, don't immediately say no. Have their referral contact the management company directly to determine if the project fits their insurance and manpower abilities. “Some companies never reached out to our management at all. This was a very small thing that spoke volumes.”
This is a common tale among communities like this. Band-aiding the problem is often the easy way to go, but having a predictive mindset can save your association hundreds of thousands of dollars in just a matter of years. Imagine how far those extra funds can go when a great leadership team helps align the community with the bigger picture! Strategic planning, predictive maintenance, and investing in repairs early will always amount to a better use of the association’s budget, allowing you all kinds of wow-factor opportunities down the road.
Ginny brings a broad background in multifamily services to her role at Denver Commercial Property Services, building relationships between homeowners and contractor partners. She stays busy outside of community association work with her three kiddos, a passion for live music and outdoor fun.
