Our management company was referred to a property that had not performed regular preventative maintenance for at least a decade or more. We accepted the account. Unfortunately, they also had a board that has always partially funded the reserves (with owner’s consent, of course). Needless to say, this is a recipe for creating a large special assessment at some point (read: pay now; or pay more later).
Upon inspection of the community, a long action list began to develop. I segregated the items in to A, B or C categories. “A” listed items are an immediate repair or replacement, “B” listed items are short-to-mid term, and so on. As I matter-of-factly reported these items to the board, their eyes got larger, and they started moving around in their chairs. It was obvious to everyone, that they were uncomfortable with my list. I also attached a preliminary cost for the items listed, and this is when I got “the push-back.” They weren’t sure that all of the items listed needed to be done, and wanted to know if perhaps I was exaggerating a little. They wanted to know if was possible to just make some minor repairs, and work on the “big stuff later”. It became clear why their community was in the condition it’s in. I can’t wave a magic wand, and make their problems disappear. This is grown folks talk time.
I was determined to use this situation as an opportunity to educate this board about their fiduciary responsibility. I explained to them that it was not optional to make repairs and replacements. It is their duty to maintain the property in a proactive, disciplined and fiscally responsible way. By artificially maintaining their low monthly fees, they were setting themselves up for a special assessment. They had misled their residents into believing that it did not cost much to maintain their community, and they are going to have to re-educate the members about what it really costs to sustain the community. After they got over their shock and embarrassment, they began to ask questions about how to proceed. We are starting with safety matters first. The pretty will have to come much, much later.
Endeavor to persevere.
Tanoa Lynne Poirier is the Managing Principal at Poirier Enterprises Inc., specializing in the management of community associations, commercial and investment properties, and individual residences in South Florida.
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