At every condominium community it happens every hour; every day. Coffee gets spilled, mud gets tracked, windows get smeared. When residents move, errant table legs and oversized sofas can scrape black marks, and even divots, into painted walls. Property managers know that keeping things clean is one of the uppermost duties of any association caretaker.
But cleaning staff are like the late, great Rodney Dangerfield in that they have every right to complain, “I don’t get no respect.” How important, really, is a professional cleaning crew?
Consultants who have studied the success of Walt Disney World have surveyed thousands of guests about what they like best about their experience at a Disney resort. Is it the rides, entertainment, food, shopping, hob-nobbing with Mickey? No, the number one thing they like about the themed amusement park is, “It’s so clean.”
Not only is cleanliness a top priority in a community’s long-term planning, it must be included with other contingencies that make up a manager’s “emergency” list, along with the plumbers, electricians and others who can respond immediately if a pipe bursts or lightning strikes. If someone gets sick in the fitness room on Saturday evening, no one wants to wait until Monday morning to see it cleaned up.
The methods used by community associations for keeping things clean can vary as much as the communities themselves. While the very smallest — a two or three-unit building— may rely on volunteer cooperation of its two or three owners, the vast majority of community associations hire professionals for regular maintenance as well as emergency clean-ups. The range of duties can vary widely.
A typical punch list includes vacuuming carpets in hallways and other common areas; cleaning and checking the equipment in laundry rooms as well as fitness centers, bathrooms, function rooms and even outdoor areas.
“We will roll out the trash bins and pick up litter for our larger properties,” states one property manager. “We also handle some of the more heavy-duty jobs on a community’s common buildings and exteriors, such as power-washing… and we can do window cleaning up to three floors high.”
Carpet cleaning is important to the appearance of any property, and most associations schedule it at least once or twice a year — or more often if they can afford it.
Of course, the level of perfection that associations demand can vary from one property or community to the next. One community may be satisfied with the level of cleaning provided by a resident as a “side job,” while another association looks to professionals and expects perfection.
-Article in Condo Magazine
Showing posts with label Condo Management. Show all posts
Showing posts with label Condo Management. Show all posts
Thursday, January 22, 2009
Monday, January 12, 2009
Condominium Furnace Maintenance
Many people choose condo living for the ease of maintenance. There is a management company that takes care of most of the community maintenance needs and is a source of reference when something inside the unit needs attention.
This is very handy, but at times, causes us to forget that certain items in the unit need routine maintenance. One of the most often overlooked maintenance tasks is the heating/cooling unit. Most new modern buildings use either an electric furnace or a water based heat pump system. These systems need to have their filters replaced twice each year. It's like changing oil in the car - if you don't do it routinely, serious problems can result.
Additionally, these units should receive a minor tuneup every year or two. This is done by a service technician. Because newer buildings use sophisticated systems, make sure you contact a firm that is factory trained and certified to maintain the unit. This comes in handy if the work needed is covered under a warranty. It's not hard to locate such a technician. Just note the manufacturer of the unit, contact their customer service phone (or web page) and ask for a list of certified repair people.
This is very handy, but at times, causes us to forget that certain items in the unit need routine maintenance. One of the most often overlooked maintenance tasks is the heating/cooling unit. Most new modern buildings use either an electric furnace or a water based heat pump system. These systems need to have their filters replaced twice each year. It's like changing oil in the car - if you don't do it routinely, serious problems can result.
Additionally, these units should receive a minor tuneup every year or two. This is done by a service technician. Because newer buildings use sophisticated systems, make sure you contact a firm that is factory trained and certified to maintain the unit. This comes in handy if the work needed is covered under a warranty. It's not hard to locate such a technician. Just note the manufacturer of the unit, contact their customer service phone (or web page) and ask for a list of certified repair people.
Wednesday, December 17, 2008
Planning the Budget for a Successful HOA
I came across an article on HOA budgets in one of our real estate related newsletters. Since I work on the finance committee of a local HOA, it caught my eye. Here is an edited version:
Every homeowner association needs a well crafted annual budget to calculate the fees to be paid by the members. A review and revision should happen each year without exception because costs change every year. Failure to revise (read "increase") each year will put the HOA deeper and deeper in the hole. There are number of areas that every budget review should include:
Historical Operating Expenses. Examine the most recent 12 months' expenses to determine your base for each expense line item.
Anticipated Increases. Utility costs typically increase every year. Contract services also are subject to increase.
Contingency. HOAs often experience unforeseen expenses and/or revenue shortfall. Add 5-10% of the total budget to cover this.
Reserve Funds. Every HOA should set aside funds for future common element repairs and replacements. Both Fannie Mae and Freddie Mac (the entities that underwrite most home mortgages) require at least 10% of the condominium annual revenues be dedicated to reserves. For HOAs with little common area or few common elements, 10% may suffice but condominiums often need 25% or more of the annual budget dedicated to this purpose.
Experts advise not comparing the fees of one association too closely to that of another association. The financial fingerprint of each HOA is unique...no two are alike. The budget needs to be based on the specific services required to maintain the operation and reserves, not what the Joneses are doing. The Joneses may be headed for disaster. Even similar HOAs can have very different financial requirements. Some have higher insurance premiums due to prior claims. Some have funded their reserves appropriately, some are catching up, and some haven't even started yet. Some take care of repairs on a pro-active basis and some have deferred maintenance. Some have earthquake insurance, cable TV and Internet access and some don't. In other words, the "HOA fee" doesn't include the same costs in all complexes so comparing the bottom line without knowing what created it is meaningless. Your HOA fees should be based on specific needs, not the neighbor's.
What about cost cutting? Most HOA expenses are not discretionary but there are some areas with great potential for savings, such as:
Insurance. Increasing the insurance deductible lowers the premium. However, if this is done, there should be an Insurance Deductible reserve spread over, say, three years to cover at least one claim. If no claims are filed during the three years, the money is saved.
Landscaping Renovation. Older HOAs often have vast turf areas which are very expensive to maintain. Replacing turf areas with planting beds filled with drought resistant plants and bushes can dramatically reduce costs.
Lighting. Compact fluorescent bulbs use 70% less energy and last years longer than traditional incandescent bulbs. They usually work with existing fixtures and the brighter light they cast enhances security.
Heating & Air Conditioning. If the HOA provides central heating and air conditioning, it is often worth installing new energy efficient equipment. Your utility company usually can provide you a cost/benefit analysis. The older your existing equipment, the faster the payback.
Hot Water Heating System. The same cost/benefit approach applies to central hot water systems. Investing in new equipment can often pay back in only a few years with the energy costs savings.
In the final analysis, the board is charged with running business in the best interest of all members. Sometimes that means ruffling a few feathers. But the board has the fiduciary duty to set the HOA fees at a level that is adequate to cover realistic operating and reserve expenses. Budgeting for success means planning, leadership and execution.
Every homeowner association needs a well crafted annual budget to calculate the fees to be paid by the members. A review and revision should happen each year without exception because costs change every year. Failure to revise (read "increase") each year will put the HOA deeper and deeper in the hole. There are number of areas that every budget review should include:
Historical Operating Expenses. Examine the most recent 12 months' expenses to determine your base for each expense line item.
Anticipated Increases. Utility costs typically increase every year. Contract services also are subject to increase.
Contingency. HOAs often experience unforeseen expenses and/or revenue shortfall. Add 5-10% of the total budget to cover this.
Reserve Funds. Every HOA should set aside funds for future common element repairs and replacements. Both Fannie Mae and Freddie Mac (the entities that underwrite most home mortgages) require at least 10% of the condominium annual revenues be dedicated to reserves. For HOAs with little common area or few common elements, 10% may suffice but condominiums often need 25% or more of the annual budget dedicated to this purpose.
Experts advise not comparing the fees of one association too closely to that of another association. The financial fingerprint of each HOA is unique...no two are alike. The budget needs to be based on the specific services required to maintain the operation and reserves, not what the Joneses are doing. The Joneses may be headed for disaster. Even similar HOAs can have very different financial requirements. Some have higher insurance premiums due to prior claims. Some have funded their reserves appropriately, some are catching up, and some haven't even started yet. Some take care of repairs on a pro-active basis and some have deferred maintenance. Some have earthquake insurance, cable TV and Internet access and some don't. In other words, the "HOA fee" doesn't include the same costs in all complexes so comparing the bottom line without knowing what created it is meaningless. Your HOA fees should be based on specific needs, not the neighbor's.
What about cost cutting? Most HOA expenses are not discretionary but there are some areas with great potential for savings, such as:
Insurance. Increasing the insurance deductible lowers the premium. However, if this is done, there should be an Insurance Deductible reserve spread over, say, three years to cover at least one claim. If no claims are filed during the three years, the money is saved.
Landscaping Renovation. Older HOAs often have vast turf areas which are very expensive to maintain. Replacing turf areas with planting beds filled with drought resistant plants and bushes can dramatically reduce costs.
Lighting. Compact fluorescent bulbs use 70% less energy and last years longer than traditional incandescent bulbs. They usually work with existing fixtures and the brighter light they cast enhances security.
Heating & Air Conditioning. If the HOA provides central heating and air conditioning, it is often worth installing new energy efficient equipment. Your utility company usually can provide you a cost/benefit analysis. The older your existing equipment, the faster the payback.
Hot Water Heating System. The same cost/benefit approach applies to central hot water systems. Investing in new equipment can often pay back in only a few years with the energy costs savings.
In the final analysis, the board is charged with running business in the best interest of all members. Sometimes that means ruffling a few feathers. But the board has the fiduciary duty to set the HOA fees at a level that is adequate to cover realistic operating and reserve expenses. Budgeting for success means planning, leadership and execution.
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