Saturday, March 12, 2011

Protecting Assets

We all have assets that we have invested in and cherish. That may be your home, your car, or even an ipod. Just like we all have our own assets, businesses have assets as well. A Homeowners Association is, in fact, a business. Those that are incorporated are non-profit Corporations.

Some of the assets in a Homeowners Association can be obvious, such as the chaise lounges at the pool, the computers in an on-site office, furniture in the clubhouse, etc. Most of us don't recognize the largest assets of the corporation, which are the components that are the most costly to replace. For example, we tend to personally take care of our largest investment, such as our homes or our cars, a lot better than a pair of sandals, right? So, what are some of the largest assets in a Homeowners Association? These could include the vertical plumbing lines in stacked condominium units, the roofs, roads (in planned unit developments), structural components (beams, posts, catwalks, decks), paint to protect wrought iron, stucco and wood, etc.


Let's think of relating to this idea like we would our cars. We have routine maintenance, like changing our oil regularly, to protect our engines. We monitor transmission fluids to protect the transmission (both are two of the more costly components in a car, so we try to prolong the need to replace them). The same goes for our components. In order to prolong the life of the roads, for example, preventative maintenance is necessary. Planned Unit Developments should plan to add a slurry coat to the roads once every three or so years. In doing this, you are adding a protective layer to the roads to prevent premature deterioration. When compacted properly, a new road can last up to 15 years, but the lack of proper car can require replacement as soon as 10 years after it is done. A lot of communities consider painting to be an aesthetic component and usually put off the painting to get other projects done. Painting actually adds a protective coating on elements. On wrought iron, properly applied paint will help prevent rust and corrosion. On wood, the paint prevent dry rot.

Many homeowners struggle with the concept of slight increases in dues to properly fund for these types of projects. Just as we each don't want to have to replace our engines or transmissions within 7 years of having a car, the components in a community can also be maintained properly to avoid larger expenses when things completely deteriorate.

If you have any questions, please feel free to email me at Nedafirouz@gmail.com.

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