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Pay Now or Pay (MORE) Later: Making the Most of Your Reserve Study and Maintenance Budget
Handling day-to-day property maintenance and making necessary improvements are critical responsibilities for any community association. And when you serve on your association’s board of directors, they can quickly become overwhelming if you don’t have a good system in place to manage them. So how do you make sure that your maintenance staff is able to handle that long list of tasks that need to get done so that your community runs smoothly and retains its appeal?
Not to worry! In this article, our experts offer a step-by-step process for helping your property maintenance staff stay on top of their to-do list. Follow their recommendations and you’ll soon be able to rest easy knowing that all of your community’s maintenance and improvement tasks are getting addressed in a timely way. 

1.     Take a walk.

According to Omar Mont-Louis, regional director of facilities management for FirstService Residential in Texas, it’s important for your maintenance team to walk around the property at the start of each day. “You want them to learn to see things the same way that the homeowners do,” he explains. “If they notice anything that a resident would think isn’t quite right, they should create a work order.”

2.     Determine the order of importance.

After your maintenance staff has inspected the property and created work orders, have them categorize both new and existing work orders into one of three groups:
  • Priority work orders. These include obvious items that affect the health, safety or comfort of residents in the community. Does the problem disrupt the association’s business? Are lights out in a common area that could lead to a slip-and-fall incident? Is an air conditioning unit not working? 
  • Day-to-day work orders. These work orders include minor repairs, such as replacing amenity parts, as well as aesthetic concerns. “Residents don’t want to see weeds, a scratch on the wall or dirty carpets,” Mont-Louis says. “So you want your maintenance staff to address these fairly quickly."
  • Preventive property maintenance work orders. Preventive maintenance tasks are those that are designed to extend the life of major systems and equipment. These work orders should be created based on the schedule specified in your reserve study or per your community’s operation manual.

3.     Follow the reserve study.

Your reserve study ensures that your HOA is budgeting enough money for long-term capital improvements, major repairs and costly replacements. This is done by conducting a condition assessment of your equipment to determine the remaining life expectancy. However, this determination assumes that your association is following the recommended preventive maintenance schedule.

“If you don’t follow the maintenance schedule, your reserve study will quickly become a misleading document that results in a special assessment to fund equipment replacement,” says Mont-Louis, who has conducted numerous HOA condition assessments. “But if you do, things will last longer and your association will save money.”
Mont-Louis also explains that a reserve study isn’t something that an association does once. “Your HOA should update its reserve study about every five years,” he notes. “This can verify if the expected life is still accurate and whether you need additional reserve funds.”

Underestimating the remaining life of your roof or the cost to replace it is one mistake that many condominium and co-op communities make. “Often, this is a direct result of not following the preventive maintenance schedule,” says Mont-Louis.

Mont-Louis recommends bringing in a certified roofing company every year to make spot inspections and any necessary repairs. “Ideally, this should be the company that originally installed it,” he says. “This not only extends the life of your roof, but it also maintains the validity of any warranties.”

4.     Prioritize your improvement projects.

Budget season is a good time to put together a list of the high-cost improvement projects you will need to make in the following year. To help you plan the needed work, prioritize the items on the list according to whether the project:
  • Prevents a potential safety or security issue
  • Is part of an association obligation
  • Impacts a significant number of residents
  • Averts further damage or problems that will result in additional costs
  • Was anticipated in the reserve study
  • Requires funding from a special assessment or a loan
  • Requires consideration and comment from homeowners

Properly maintaining your community, scheduling improvements and prioritizing your projects is a huge part of keeping it vibrant and attractive to both current and future residents. Following a preventive property maintenance plan that is aligned with your reserve study can help you get the most life from your equipment and components and avoid large, unexpected costs.
For more information about how a professional management company can help your community meet its maintenance needs, contact FirstService Residential, the leading HOA management company in Texas. 
Monday June 12, 2017