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Funding Maintenance Proactively

04/01/2022 8:32 AM | Anonymous member (Administrator)

By Chris Marion, 3.0 Management

It is common knowledge that community associations often struggle to adequately fund property maintenance and upkeep. The unfortunate outcome is something that no manager, board member, or HOA resident wants, yet it continues to happen year over year. At best, the property appears unkept and unsightly. At worst, the property may experience serious hazards or safety concerns due to deferred maintenance. 

Board members and community managers alike always speak to the importance of being proactive, rather than reactive when it comes to property maintenance. Being a responsive manager is undoubtedly important in this proactive endeavor. Work orders need to be received and issued in a timely manner. Vendors need to be scheduled and given the right amount of information to complete the work successfully. However, the deferred maintenance scenario is not always a result of poor management. Rather, many times, an association’s lack of financial planning is the true cause.

In this article, let’s look at five ways to adequately plan for property maintenance from a financial standpoint:

  1. Understand the difference between maintenance and capital expenses.
    Capital expenses are larger construction projects that require major renovation, repair, or complete replacement of a common element. Maintenance on the other hand, refers to scheduled and unscheduled activities to maintain the common elements, but does not require a comprehensive repair. Maintenance expenses are typically funded by an association’s annual operating budget, whereas capital expenses are almost always funded through association reserves, or a custom financing scheme.

It is important to acknowledge the difference between these two categories and to understand when good money is being thrown at bad. A quick sealcoat might enhance the appearance of a parking lot for example, but if the asphalt needs a more comprehensive repair like a mill and overlay, the maintenance money would be better appropriated towards the larger capital improvement project.

  1. Analyze previous year’s financials.
    Board members and managers should aim to utilize all available information when it comes to budgeting. Studying previous years’ financial statements are a great place to start. Try to get a feel for noteworthy maintenance expenses on the property. Is the association historically overbudget in one category of expenses or another? Are there any obvious explanations? Don’t forget to look for extraordinary events that caused overspending like a large supply-line leak that damaged several units, for example.
  2. Evaluate frequency of work orders.
    Evaluating work order reports should increase the understanding of maintenance expenses on the property. Let’s say a multi-building townhome complex is overbudget on plumbing expenses every year. By scanning the work order history, we find that a particular building on the south side of the property is the main offender, with an average of two sewer backups every month. A sewer scope finds the drainpipe to be fractured in a few places, allowing debris and tree roots to constrict the pipe diameter. The full repair is expensive, but it also greatly reduces the frequency of sewer backup events, which keeps the association back within budget on an annual basis.
  3. Identify opportunities for contracted work.
    Evaluating work orders can also highlight other maintenance trends that could be addressed more efficiently. Instead of paying for a trip charge, time, and materials for a lightbulb change for example, an association may choose to utilize an onsite or day-porter service a few times a week to complete the same task at a better cost.  Maintenance issues that need to be completed on a recurring or seasonal basis, are always great candidates for planned, contracted work. 
  4. Develop a preventative maintenance program.
    The goal of a preventative maintenance program is to organize each of these moving parts into a unified effort. By doing so, a level of predictability can be achieved where maintenance costs are anticipated and planned for ahead of time. A good program is typically built around skilled onsite staff, partnerships with construction firms, tasks that are actionable, and outcomes that can be measured and evaluated on a monthly or annual basis. 

Maintenance issues are not going anywhere in the community association industry. It is an issue that we will continually learn to solve in creative ways.  Many communities are realizing the benefits of diligent analysis and the ability to look at community comprehensively. By investing time and effort into these types of planning activities, we’re seeing greater levels of predictability and confidence in HOA maintenance spending. 


Chris Marion is the Chief Strategy Officer and founder of 3.0 Management. Chris is continually motivated to help HOAs develop comprehensive plans that enable communities to thrive both today and for many years into the future.   

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