By Aileen McGinnis, Westward360
With the significant increases in the price of insurance the past few years and costs for vendors and capital projects rising, auditing your Association’s expenses is an imperative action every Community Manager and Board of Directors should take. Regular audits not only tighten budgets but also help protect reserves and reduce the need for special assessments. Here’s a practical approach to auditing for savings, based on strategies I’ve used successfully over the years.
1. Start with Preventive Maintenance
It may seem counterintuitive, but spending money early can save more in the long run. Preventive maintenance—like routine roof inspections or sealing cracks in pavement—can significantly reduce emergency repairs and extend the useful life of major assets. Emergencies are almost always more expensive due to rush fees, lack of multiple bids and damage escalation.
Associations that schedule regular maintenance inspections for roofs, boilers, irrigation systems and other infrastructure consistently report lower annual maintenance costs over time.
2. Seasonalized Budgeting
Many associations use a flat monthly budget that doesn’t reflect seasonal realities. For instance, water use spikes in the summer, while heating bills increase in the winter. Instead, segment your utility, landscaping and snow removal budgets by season. This helps boards identify and plan for peak usage periods and makes monthly cash flow easier to manage.
3. Go Out to Bid, Renegotiate Contracts and Review Terms
It is a best business practice to solicit competitive bids for all contracts, even if the Association is satisfied with current service providers. Although the Board of Directors may be happy with the company they are working with, the potential for significant cost savings through vendor evaluation warrants a formal bidding process, which could realize substantial annual reductions in expenditures. Vendors often raise prices incrementally each year, banking on boards not to push back. Don’t let inertia cost you. I recommend reviewing all contracts annually and renegotiating long-term agreements when possible. I’ve found that oftentimes, vendors are willing to negotiate on pricing when there is potential for them losing the work entirely.
Always ask if routine maintenance is included. Elevator maintenance, for example, can be very costly. An elevator maintenance contract that includes free service calls during business hours will cost you far less than one that doesn’t.
If you have a good payment history and consistent business with a vendor, use that as leverage to ask for a discount or improved terms. Consider bundling services or asking for multi-year pricing locks.
4. Embrace Technology for Efficiency
Simple upgrades like rain sensors on irrigation systems can prevent thousands of gallons of wasted water and remote irrigation controllers can eliminate unnecessary trips to the community. Similarly, switching to LED lighting in common areas—especially parking lots and hallways—can cut electricity bills significantly.
Take it a step further by applying for rebates. Many utility companies offer incentives for switching to energy-efficient systems. Landscaping grants may also be available through local water agencies to support drought-tolerant landscaping, which reduces long-term irrigation costs.
5. Insurance: Look Beyond the Premium
Insurance is one of the largest fixed costs for many HOAs. Yet, I often see associations overlooking possible incentives that could lower their premiums. Installing security cameras, upgrading roofs with impact and fire-resistant materials, or adding fire-suppression systems may qualify you for discounts.
Work with a broker who specializes in HOA insurance. They’ll often know which underwriters offer the best pricing for specific community types and may even provide a free audit of your current policy.
6. Track Water Usage and Watch for Leaks
Unexplained spikes in water bills are usually a sign of hidden leaks or inefficient systems. Request monthly water usage reports from your utility provider and compare them to previous years. If you see a jump, investigate. You may reveal an underground leak or failed wax ring on a toilet causing water loss.
7. Create a Finance Committee
It’s hard for board members alone to keep an eye on everything. A dedicated finance committee of detail-oriented homeowners can help review invoices, analyze trends, and propose efficiencies. Often, they’ll catch inconsistencies or waste that others miss.
8. Negotiate Legal Retainers and Explore Prepay Discounts
Legal advice is essential—but costly. Instead of paying hourly, consider negotiating a monthly retainer with your legal counsel for routine questions and document reviews.
Similarly, some vendors offer discounts for upfront or annual payments. If your cash flow allows, check in with your vendors to see if there is any incentive offered for an upfront payment.
9. Optimize Vendor Visits
Lastly, make your vendors’ trips more efficient. For example, instead of calling a vendor every time a lightbulb goes out, schedule monthly bulb replacement visits. Consolidating service calls saves money on trip fees and minimizes interruptions.
There’s no one silver bullet for curtailing HOA expenses—but with a structured approach, you can achieve meaningful savings. The key is to be proactive, not reactive. Regular audits, smart upgrades, and better contract management are all tools that have served my Associations well over the past 15 years.
Managing an Association is a balancing act between fiscal responsibility and community service. But when you can cut costs without cutting corners, everyone wins.
Aileen McGinnis is a Senior Community Association Manager with Westward360 and has 15 years of experience in the industry ranging from portfolio management to onsite luxury highrise management. She places great importance on demonstrating integrity, respect and building strong relationships with both the communities she manages and her colleagues.
