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Getting from Underfunding, Decay and Community Free-Fall to Funding, Repair and Care Free Condo Living

By Steven S. Weil, Esq.
Published: April 2018

Building age, decay grows; reserves don't. When the problem gets worse, the result can be large special assessments, property value decline, member discontent and political paralysis. Here are some ideas on addressing all these.

First adopt a goal; then focus on tactics,

Alone, or with the community, the Board should adopt goals: examples include improved property values, keeping buildings safe and water tight and minimizing insurance claims.

Then the focus should turn to tactics: what information and assistance is needed to decide on the best way to achieve the goals and who can assist in providing that information and assistance. It is unreasonable to expect volunteer directors to be able to decide on or implement tactics without professional help when the project costs or member discontent and suspicion are high or when the tasks are particularly complex. Management can help but its basic scope of work is for routine and not extraordinary services required to manage and finance with members' approval of a large rehabilitation project.

Who can help? What help should not be expected?

Ultimately, it is for the Board and membership to decide on community goals and how best to achieve them. Good professional consultants are valuable tools but no more than that. Consultants to consider are managers, attorneys, architects, engineers, construction managers and contractors, bank loan representatives, government building officials, product manufacturers, realtors and possibly others. In my experience, attorneys usually act as the quarterback (to the Board as owner) since many of the issues - voting procedures, construction contracts, bank loan requirements - are not just legal but need clear explanations to the members.

The one key thing a successful project must have and how to get it.

The membership must trust the Board for any project to succeed. Without that trust, every project will fail. This is achievable but takes work. Identify sensible, realistic repair goals and ways of paying for them (via special assessment, loans to the Association, membership payment plans); be candid; treat all members respectfully (even those who criticize the Board's plan, the directors' character or who never attend meetings); make and keep promises including timelines for presentations and distribution of information; offer financial alternatives whenever possible; consider CC&R amendments, even those that "sunset." And, of course, communicate regularly, clearly and candidly using every device and platform available for the community, including town hall style meetings, Q&A letters, PowerPoint presentations, website portals, newsletters, special project committees and others.

What not to do.

  • Ignore homeowners, even those who are mean: they may have important or excellent ideas.
  • Blame homeowners for failing to attend meetings. Just accept this as a reality.
  • Worry too much about those who are going to vote "no" even if doing so is against their self-interest.
  • [REMEMBER: these are the things NOT to do!]
  • Assume 'phasing' repairs is a good idea to save money. Votes will be lost from those whose buildings won't be fixed until "phase 2" and when the time comes to vote on phase 2, those whose units were repaired in phase 1 may not vote "yes." In any case, phasing is probably more expensive in the long run.
  • Be afraid to apologize. It may be that prior construction projects weren't handled well; or that current maintenance or Board or management responsiveness has been poor; or the website is bad or whatever. Acknowledging mistakes and keeping a promise to do better in the future can help the community focus on the important things and build trust at the same time.

There is more.

This article discusses the main principles that guide a successful project — one that begins frequently with the shocking news that deferred maintenance and hidden building decay will swallow budgets — but which can end with prudent, sensibly priced repairs, a new beautiful, safe and dry community and the confidence knowing that a good job has been done.

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