React, Outsource, or Prevent? Find Your Association’s Maintenance Style
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Maintenance makes up approximately 25% of your association’s overall expenditures, or more. That percentage includes maintenance of common areas like clubhouses and roofing, shared amenities and essential equipment like plumbing and HVAC, and it also includes natural disaster-related issues.
The good news is that by partnering with a proactive management company, you can ensure that maintenance is tackled on a consistent and ongoing basis.
The not-so-good news is that many boards and California HOA management companies decide to delay necessary repairs because they don’t have the expertise, bandwidth or resources needed to accomplish this. And in the long-run, this ends up costing much more than the initial maintenance. Delaying maintenance can cause small problems to become much larger down the road, which may require special assessments from residents. Want to learn more? Complete the form on this page to download our white paper, Pay Now or Pay (More) Later? Making the Most of Your Reserve Study and Maintenance Budget.
Most management companies and boards tackle maintenance according to one of three styles. They may react to maintenance needs on a problem-to-problem basis, rely on third parties to manage maintenance or have a solid preventative maintenance plan in place. Not sure which one characterizes your association? Read below to learn more about the three most common styles.
1. Reactive Maintenance
“Something’s broken. Let’s fix it.”Unfortunately, many HOAs address maintenance with a reactive style of management. This means the HOA property management company and board is focused on fixing equipment on an as-needed basis. Whether they want to save money temporarily or simply don’t have the expertise or bandwidth, this style of maintenance is not cost-effective in the long run. While it may save money on a short-term basis, you’ll end up paying more money in the long term because the problems will often be bigger and costlier to fix.
FirstService Residential’s Corporate Engineer Rodney Riepenhoff compared it to the way people take care of their health. “Reactive maintenance is like going into your doctor when you get sick versus getting an in-depth physical on a regular basis,” he said. “You may miss a critical (and potentially expensive) issue because your equipment is not being reviewed regularly.”
Why does this happen? We have found that many companies, and by extension community and general managers, fall into this category because of limited resources. This is especially true when community or general managers are weighed down because of too many accounts or they lack experts in engineering, finance and budgeting that can facilitate more proactive and cost-effective maintenance plans.
2. Third-Party Managed Maintenance
“I’m not worried about our maintenance plan. Our vendors have it covered.”Who is managing your common areas and roofing, amenities and equipment? If your board and HOA management services company are relying solely on vendors, it might be time to rethink your method of maintenance. Many management companies look to third-party vendors to fix equipment that’s broken and sustain existing facilities and equipment to prevent future issues. While partnering with trusted vendors is crucial for your association’s success, working only with vendors to solve maintenance issues has some inherent problems.
First, vendors are not exclusively dedicated to your community’s needs. They have other clients and will not be as in tune to your needs and vision as your board and management company should be. Also, when managing maintenance outside your association, you lose some of the control and are working with companies or individuals that may have different priorities. A third-party vendor will simply not have the same amount of investment in your community as a deeply invested management company will. Further, if multiple vendors are involved (depending on the equipment or amenity), who is coordinating the overall maintenance plan and ensuring it’s comprehensive?
3. Preventative Maintenance
“We’re investing in our equipment and facilities now to protect our assets down the road.”Ultimately, your HOA management company and board should have an in-depth preventative maintenance (PM) plan. By approaching maintenance proactively (before you face a significant problem), you’ll likely save money in the long run. Whether you’re on the board of a high-rise, a large master-planned community, a condo complex, or a single-family home community, it’s important to partner with a management company that addresses maintenance issues before they happen.
How do you determine whether your association has a comprehensive preventative maintenance plan? Before you evaluate your management company’s maintenance style, see how they respond to everything else. For instance, are resident requests falling through the cracks? How do they respond to communication from the board? Even if you’ve been lucky enough to escape regular maintenance problems now, that might not always be the case if your management company has a reactive approach. As Riepenhoff said, “Start by taking a look at your management company’s overall culture. Is their culture more proactive or reactive? A management company with a reactive culture will only respond to problems as they happen, which saves money upfront, but will ultimately cost you more in the long-run.”
A true preventative maintenance plan involves ongoing monitoring and regular inspections of your buildings, amenities, facilities and equipment by a trained professional. That’s why it’s important to work with an experienced management company that has in-house experts and a network of valuable resources and partnerships with expert engineers and dependable vendors. Depending on the size of your community and the scale of your maintenance projects, your board and management company may need to utilize a part-time or full-time project manager. While this may sound like a big undertaking, a solid maintenance plan sets you up for better financial stability and greater predictability. By taking care of the “what-ifs” well in advance, it also gives you the freedom to implement additional money-savers like green building initiatives and more energy-efficient equipment.
What’s My HOA’s Maintenance Style?By this point, you’ve likely figured out what your management company’s maintenance style is (or isn’t). Still, if you aren’t sure whether you have a true preventative maintenance plan or if it’s thorough enough for your community’s unique needs, start with a discussion.
In part two of our series on HOA maintenance styles, we’ll provide a list of essential questions that you can ask your current or prospective management company. These questions will help you determine whether your management company is taking a reactive or proactive approach to maintenance and what that means for your association. The transition from reactive to proactive maintenance can be difficult, but it’s an important step you need to take to help maximize cost savings and minimize unexpected projects.
Want to learn more about this important topic and how it relates to your reserve study? Complete the form below to download a complimentary white paper: Pay Now or Pay (More) Later? Making the Most of Your Reserve Study and Maintenance Budget.
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