Continually maintaining and improving your property is crucial if you want to protect your condominium corporation’s financial health. To ensure that these important responsibilities are well managed requires a long-term plan and a means of effectively handling day-to-day projects. Here’s how you can make that happen.
Inspect the property every day.
Your onsite maintenance or facility manager needs to take responsibility for conducting property inspections every day and creating work orders for any issues. These new work orders, along with any outstanding ones, should then be divided into three categories according to their urgency:
According to Community Manager Angie Beka of FirstService Residential in Alberta, “Prioritizing should be based on the effect if the work is delayed and on whether it impacts just one owner or residents as a whole.” Ask yourself:
Authorize your maintenance manager to resolve smaller issues.
Phil Sobkow, another Alberta-based community manager at FirstService Residential, recommends empowering your property maintenance manager to take care of smaller issues without seeking the board’s approval. Providing a budget with a spending limit will make it easier for the manager to address these issues without burdening the board. “A good condo management company will set up systems so the board doesn’t even notice the small stuff and only needs to focus on the bigger-picture items like capital replacement projects,” he says.
Match your preventative maintenance to your reserve fund study.
The quality of your preventative maintenance program has far-reaching consequences, which is why it’s so important to make sure it matches your reserve fund study. If it doesn’t, you could wind up needing to spend money on capital projects before your reserves are adequately funded. The engineer or project manager you rely on can make a big difference. “We always encourage our boards to hire vendors that have a strong reputation for preventative maintenance,” Sobkow notes. “A good engineer or project manager will offer the best solution for the condo, taking into account your current financial status and a plan for longevity.”
In both Alberta and Ontario, condominium corporations are required by law to conduct a reserve fund study and to adequately fund their reserves. However, what constitutes “adequate” does not always cover all the necessary repairs. “Most reserve fund studies will present various levels of funding, and boards tend to go with the lower end,” explains Sobkow. “It’s essentially a form of gambling on the future replacement costs. But if a condo corporation can afford it, I always encourage them to go with a higher level of funding as it correlates to property value. If a fund has 10% more money than the study suggests, it helps provide a buffer to the owners to prevent a possible special assessment.”
This extra funding can help you avoid substandard products or services. Sobkow points out that in the case of something like window and door replacements, “Some boards fall victim to cheaper bids, but the quality is lower and it ends up costing them more money in the long run. Again, this is why having a strong relationship with an engineer or project manager is vital.”
Additional funding can also offset unforeseen expenses, such as roofing projects, which are the kind of large, unexpected expenses that Beka often sees being a major challenge. “If damage is sustained due to weather, the cost of repairs can be extensive for a corporation,” she says.
Do a yearly review of your reserve fund study.
Sobkow says that it’s a good practice for boards to review their corporation’s reserve fund study every year immediately following the election of new board members at the annual general meeting. “The study needs to be reviewed well in advance to ensure the board understands the scope and has enough money saved up for the various repairs coming due,” he explains.
Regular inspections and maintenance are easy ways to be proactive. Beka says that it’s especially important to conduct inspections of your building’s roof, foundation and heating and plumbing systems. “Sure the inspections may cost a bit,” she says, “but these can be repaired before becoming more major.” And that will save your association a lot more money in the long run.
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