If something’s broken, you fix it. If it’s worn out, you replace it. It sounds like a simple equation, but when it comes to capital improvements or renovation projects in cash-strapped times, it can be a case of easier said than done.
As many HOAs’ fiscal situations remain shaky, some boards and managers are looking at putting off scheduled maintenance projects until things are a little more stable. They are seeking to postpone that siding, roofing, decking, or paving project for a year or so, in the hope that their books will be a little further in the black.
“Deferred maintenance,” as it is known in the real estate industry, is not a strategy unique to this particular recession—even in the best of times, associations are sometimes forced to shuffle their priorities to better reflect their finances. But, since by definition deferring maintenance means not fixing something that needs it, it’s an approach that should be employed carefully, so that boards and managers don’t find themselves dealing with upset (possibly litigious) residents, declining property values, or safety hazards.
Also, the cost of some projects rises exponentially if not handled in a timely fashion. That’s why it is vital that boards and associations get an expert opinion (which usually does not mean the brother-in-law of a board member) on which projects can safely be postponed, and which need to be dealt with immediately—no matter how many zeroes are attached to the price tag.
This article will lay out some of the risks involved in putting off maintenance and improvement projects, as well as offering a few tips on how condominium associations can stretch their reserve fund dollars.