By Arthur Beisner, RowCal
Many homeowners association boards shy away from addressing day-to-day maintenance needs and may be unwilling to spend assessment funds for preventative maintenance. That apprehension is often motivated by a genuine desire to keep HOA dues low or simply due to indecision from a good faith desire to make only the right decisions. Whatever the motivation, failure to address a community’s maintenance needs has long term consequences for the community, consequences which inevitably are more costly.
In an effort to keep HOA dues low and to save a nominal monthly sum, a community will experience first devolving aesthetics, leading to heightened frustration lessening the sense of community, and ultimately decreased property values—and, if left unchecked, more severe structural or infrastructural problems will not be uncovered until an emergency repair costs more in a day than years’ worth of preventative maintenance would have cost. A few dollars saved today may be a few thousand dollars spent tomorrow.
A lack of carefully planned preventative maintenance increases the need for regular, day-to-day maintenance, and failure to address regular maintenance needs results in deferred maintenance, which becomes increasingly more costly the longer it is left unaddressed. To make matters worse, as maintenance gets consistently deferred, the community’s needs snowball until identifying clear priorities and funding becomes a challenge.
The challenging decisions boards face is understandable: how do you keep HOA assessments cost-effective in the present for your neighbors when both the cost of maintenance and age of the community are increasing every year?
Ultimately, boards as volunteers will often rely on professionals to guide them through these challenges. Just as board members have a fiduciary responsibility to their communities, professionals in management have a duty to offer responsible and thoughtful guidance. While the easy road is to nod in agreement when the consensus is to keep assessments low, professionalism requires arguing for unpopular opinions, and painting a clear picture of what years of deferred maintenance becomes.
Fortunately, there are a few strategies up front that HOA boards can use to lessen the impact of paying for and taking care of proper maintenance, however they all require consistency:
- Yearly budget increases that mirror (at a minimum) the inflation rate will lessen the likelihood of large increases every several years to play catch up.
- Obtaining a reserve study (and funding reserves accordingly) every few years will lessen the likelihood of large special assessments when entropy has run its course on a given capital component.
- Preparing, budgeting for, and following a preventative maintenance plan will put the community in a cash-positive position to ensure upkeep is done from touching up paint to maintaining an old boiler system. Proper preventative maintenance extends the life of a property and stretches reserves dollars.
Of course, these tools are only as good as the consistency with which they’re used—a reserve study, for example, is just another expense as long as the association refuses to fund reserves. As professionals in management, recommending and following through with the use of these strategies can make all the difference.
But what should a manager do if a board pushes back against funding and performing necessary maintenance for the community?
At the risk of sounding too reductive, the answer is simple: be honest.
The popular answer might keep the smiles and good vibes going in the board meeting. Agreeing that the siding that’s starting to fade or even rot can wait till next year so the budget won’t go up may make board members feel good. Convenience may call for just painting over some of those old ugly water stains that won’t go away. But applying band aids where surgery is required is disastrous in the long run. As professionals, we know this to be true and taking the neutral position of order-takers for the board does a disservice to the communities we serve.
So, be honest. Be honest and share anecdotes gained by every-day experience. Share the real-life stories of astronomical special assessments, 2 A.M. emergency mitigation calls, denied insurance claims due to preexisting damage, and even receiverships. We see the consequences every day of bad decisions made a decade ago, and we have a responsibility to guide the communities we serve to make decisions that will bring success over the next decades.
It doesn’t feel good to raise assessments 5, 10, or 20%. But it’s worse to keep dues artificially low. As professionals, we should be offering strong guidance to our communities. And when board members push back, whether from cost-concerns or otherwise, argue with conviction and don’t be shy to remind them that they’re paying a professional with experience for a reason. It’s not always easy, but it’s always right. It’s either pay a little now or pay a lot later.
As the old saying goes, an ounce of prevention is worth a pound of cure.
RowCal is an HOA Management Company that delivers full-service management and maintenance solutions, through empowering Community Managers who are supported by a team of subject matter experts. At RowCal, we assist boards in preparing and following preventative maintenance plans and our efficient monthly maintenance programs keep communities ahead of maintenance issues.
Arthur Beisner began his career in the HOA industry managing a high-rise condominium building in Miami Beach, Florida, and has been with RowCal in Colorado since December, 2020.
