MYTH: IT’S BEST TO LIVE IN AN ASSOCIATION WITH THE LOWEST ASSESSMENTS.
Another area of effective governance includes setting realistic budgets and funding the reserves. While no one likes
making the unpopular decision of raising the assessments, as a board member you are elected to make the tough decisions to promote, maintain, and enhance the community. The last thing anyone wants is a dreaded special assessment. These can be avoided through proper planning.
As your community ages you need to set realistic repairs and maintenance budgets to take care of the little things as they break down. By doing proactive maintenance such as caulking and roof inspections you will be able to catch problems when they are small before they turn into water damage inside a home. If this area is neglected it leads to deferred maintenance and more costly repairs.
FACT: THE ASSOCIATION THAT BUDGETS PROPERLY WILL AVOID COSTLY AND MORALE-KILLING SPECIAL ASSESSMENTS.
For major components you need to set proper reserves. The best thing to do is get a professional reserve study. These companies specialize in forecasting the cost of repairs and estimated life spans of the reserve items. By getting this study and funding appropriately to the recommendations of the study you will have the best chance of having the necessary funds available when major replacements or repairs are needed.
Thank you to our Corporate Partner Associa, Inc. for providing this educational article. Associa is North America’s largest community management firm. To access Associa’s free tips to help you bond with your fellow board members, click here.