Does Your HOA React, Outsource, or Prevent? Find Your Maintenance Style

Posted on Thursday April 26, 2018

Want to learn how to optimize your maintenance budget? Complete the form at the bottom of this page to download our complimentary white paper, Pay Now or Pay (More) Later? Making the Most of Your Reserve Study and Maintenance Budget.


What makes up at least 25% of your association’s total expenses? If you answered maintenance, you guessed correctly. At a minimum, a full quarter of your HOA budget will go toward maintenance of common spaces like clubhouses and roofing, amenities like pools and sports facilities, as well as critical equipment like plumbing and HVAC. If that doesn’t sound like enough, you can also add in repairs that result from unexpected natural disasters.

Because so many things can and will go wrong when it comes to maintenance, it’s critical to partner with a proactive management company that tackles maintenance on a consistent and ongoing basis.

Many HOA boards and community management companies delay (or avoid) regular maintenance because they don’t have the bandwidth, resources or expertise to handle it in the moment. While this tactic may initially appear more cost-effective, it ends up costing much more than the original maintenance. Your “small” problems will only become larger down the road, which may lead to a need to collect special assessments from residents. To learn more, complete the form on this page to download our complimentary white paper, Pay Now or Pay (More) Later? Making the Most of Your Reserve Study and Maintenance Budget.

HOA management companies and boards typically adhere to one of three maintenance styles. They may have a reactive approach where they respond to repairs on an as-needed basis, they may only rely on third parties or vendors to manage maintenance or they may have a solid preventative maintenance plan in place. What’s your association’s maintenance style? Read below to learn more.
 

1. Reactive Maintenance

“If something breaks, we’ll fix it. It’s as simple as that. Right?”

Many HOAs have a reactive approach to maintenance. This means the management company and board focus on making equipment and facility repairs when they break (instead of maintaining assets while they are working efficiently). HOA property management companies and boards often choose this maintenance style to save money in the moment or because they don’t have the expertise or bandwidth to take on a more robust maintenance plan. And while it may save money temporarily, your HOA will need to pay more money in the long term because the problems often become bigger and costlier to fix.

Rodney Riepenhoff, corporate engineer at FirstService Residential, compared it to the way people take care of their health issues and how frequently they see their doctors. “Reactive maintenance is like seeing your doctor only when you get sick versus getting an in-depth physical on a regular basis,” he said. “Associations may miss a critical (and potentially expensive) issue if their equipment is not being reviewed regularly.”

Many HOA management services companies (and by extension, community managers and general managers) end up with this kind of maintenance approach because they are working with limited resources and are stretched too thin. This often happens when community or general managers are weighed down with too many accounts and don’t have an in-house network of resources that they can reach out to for support. That’s why it’s particularly important that the management company provide in-house experts in engineering, finance and budgeting to help facilitate a proactive and cost-effective maintenance plan.
 

2. Third-Party Managed (Outsourced) Maintenance

“Managing maintenance isn’t my job. I know our vendors will take care of it all.”

Many management companies depend on third-party vendors to not only fix equipment that’s broken, but also maintain existing facilities and equipment on a regular basis. Of course, partnering with trusted and reliable vendors is a must when it comes to your association’s success. But if your management company and board are solely relying on vendors to manage maintenance of all of your facilities and assets, it may be time for a new course of action.
Working exclusively with vendors to manage maintenance has some inherent problems.

First of all, vendors are not only dedicated to your community’s needs. They have other clients and partners and will be keeping their own interests in the forefront as well. This isn’t a bad thing for them; it simply means that they may not be as in tune to your needs and vision as your own board and management company should be. Additionally, giving the management “reins” to a company or individual outside of your association can result in some mismatched priorities or simply a loss of some of the control on your own side. A third-party vendor will simply not have the same amount of interest in your community’s growth as a deeply invested management company. Lastly, challenges will also arise if you are working on a maintenance project with multiple vendors. In this case, it’s difficult to determine which vendor should coordinate the project and whether it’s comprehensive enough for your community’s unique needs.
 

3. Preventative Maintenance

“Making smart maintenance choices now will protect us later.”

The most ideal maintenance style for your association is a preventative maintenance approach. Your management company should have a documented preventative maintenance plan in place. By addressing maintenance proactively (before you need a major repair), you’ll likely save money in the long run. That’s why it’s especially important to partner with a management company that addresses maintenance issues before they happen. How can you determine if your association has an in-depth preventative maintenance plan for your community? Start with an evaluation of your management company’s overall approach to customer care and responsiveness. Do they typically respond quickly to resident or board requests? What’s their follow-through like? Your association may not be experiencing maintenance issues now, but if the management company’s culture is generally unresponsive, they will likely happen in the future. As Riepenhoff said, “Start by looking 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.”

Management companies that have a true preventative maintenance plan will often enlist the help of a trained professional to perform ongoing monitoring and regular inspections of the community’s buildings, amenities, facilities and equipment. An experienced homeowners association management company will have a strong network of valuable resources and partnerships with engineers and vendors. Based on the size of your community and the maintenance projects needed, your board and management company may also require help from a part-time or full-time project manager. This may sound like a big undertaking, but a solid maintenance plan improves financial stability, provides greater predictability and gives you the freedom to implement additional money-saving initiatives like energy-efficient equipment and green building upgrades.


Find Your HOA’s Maintenance Style

At this point, you probably know what your management company’s maintenance style is (or conversely, what it isn’t). But if you’re unclear if you have a preventative maintenance plan, or if you aren’t sure if the one in place is right for your community’s unique needs, it may be time for a conversation.

For part two of our HOA maintenance styles series, we’ll provide some helpful questions that you can ask your current (or prospective) management company. These questions should help you discover what your management company’s approach to maintenance is and what that means for your association. It can be challenging to transition from reactive to proactive maintenance, but it’s an important step that can help maximize cost savings and minimize unexpected projects.

Want to learn more about maintenance 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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