Friday, January 22, 2010

Neda Firouz - Dealing with Deferred Maintenance

Many of the Associations I manage are currently faced with deferred maintenance issues. It's a difficult decision to make, as the economic climate attributes to avoiding special assessments to deal with capital improvements. What's important to consider is that while our homeowners may not be able to afford special assessments right now, labor costs are also at an all-time low.

My Association's are currently working on projects such as painting, roof replacement, road replacement, etc. These are all very costly projects, but we are finding that the proposals we are obtaining are significantly lower in comparison to proposals we received for the same scope of work from last year. Therefore, if you do have deferred maintenance, it may be a good time to consider a balance between special assessments and spending the funds for the much needed projects.

Keep in mind that in the long-run, deferring maintenance may save the Association from passing a special assessment today, but the cost of addressing the deffered maintenance and dealing with the residual damage as a result of not replacing your components timely will be significantly more.

Budgeting your operating AND reserve expenses are important to help stay organized. While we don't like to recommend changing vendors around frequently, it is a good idea to shop the services for your regular vendors to make sure that their services are comparable to today's current market value. If you find your vendors to be out of range, you can always negotiate the pricing to a mutually beneficial rate. The more you save from your operating budget, the more you will have to put away in your reserves.