and the future bright, members basked in the glow of their own ignorance. The developer kept the homeowner fees low and, heck, why shouldn’t they be? It doesn’t cost anything to maintain something that’s new. Let’s worry about that when the time comes. Well, the time is now, the pot is empty, the assets worn out and finger pointing abounds. A $3000 special assessment! Who’s responsible for this? Why wasn’t money being socked away years ago? I can’t pay it! I won’t pay it! Where’s my lawyer?
It’s at times like these that outside professionals are called for. The board is authorized to hire the expertise it needs to run HOA business. HOA consultants like managers, lawyers, architects and engineers can assist the board in making its case to the members. In the case of deferred maintenance and inadequate reserves, the board should hire a PRA (Professional Reserve Analyst) to perform a reserve study. (See www.apra-usa.com for a list of credentialed members.) A reserve study will consider all the repair and replacement issues, not just the urgent ones. A reserve study looks thirty years down the road and charts a course to
proactively deal with these issues. The reserve study will identify priorities which the Board can further prioritize according to funding.
Hiring a knowledgeable consultant to supervise a project is a real bonus. For example, roofing projects should have a roofing consultant who can detail the scope of work, draft a contract, gather proposals from qualified contractors, ensure that the project is done to proper specifications and lien waivers executed. Consultant oversight ensures that the material warranty is not voided because of faulty installation. The cost of a consultant is typically only 1-2% of the total project cost. Clearly, this is an investment worth making. The same principle applies to other major projects like structural repairs and painting.
Playing catch up on major repairs costs a lot of money over a short time period. In an effort to soften the blow to the members, the tendency may be to piecemeal the repairs over a number of years and break large costs into more manageable chunks. But, piecemealing causes the costs to go up! The bigger the project, the cheaper the cost per unit. Piecemealing also creates an imbalance in member asset values. If
Building A gets new paint this year, Building A units are more attractive and valuable from a buyer’s perspective than those in unpainted Buildings B, C and D. This inequity will lead to resentment among the members that didn’t get the benefit of the repairs.
To avoid these costly traps, the board should strive for complete projects. If painting is needed, do all buildings at the same time. Same for roofing. Do it all at once, minimize disruption, get it over with and save a bundle.
If your HOA is suffering from deferred maintenance, consider raising the money to do multiple projects the same year. If siding needs to be replaced, replace those old leaky windows as well. This is a great investment. And just consider the advantages to ending the bickering, debate and back biting. The sooner completed, the sooner the HOA chest will swell with pride and past resentment forgotten.
So, recognize your HOA’s pernicious contradiction when it raises it’s ugly head. This is one monster that’s best dealt with directly and quickly. The harmony of your HOA hangs in the balance. APRA