As a military tactic, the surprise may be the way to success, but as a property manager, it is the last thing you want when it comes to dealing with special assessments for needed repairs or replacement of deteriorating building systems.
It is a rare and fortunate homeowners association that has never had to deal with a special assessment. The first rule of operation for Chicago property managers and HOA boards is to prepare and anticipate problems that may occur by performing preventive maintenance. Even under the best of circumstances, however, there may be occasions when a special assessment becomes necessary.
We have written before about the advisability of completing a Reserve Study and setting aside adequate funding for planned rehabilitation as well as emergency repairs. But, things happen. An unusually cold winter that prompts the need for parking lot and roof repairs, a particularly high fuel surcharge or an unexpected electrical problem, deteriorating plumbing lines — all can wreak havoc with even well-funded reserve accounts.
When it becomes your responsibility to “sell” your owners on the idea of a special assessment, are you up to the task? Often, homeowners are receptive to paying now for something that will save money over the long term. Here are some ideas to consider:
- As a part of your ongoing systems assessments and projections, investigate alternative rehab methods and put a pencil to the cost differences. This is part of your ongoing monitoring and forecasting duty. NuFlow Midwest saved a property over $1 million dollars when they voted to repair pipes with innovation pipe restoration instead of pipe replacement.
- Ask for a moderate special assessment for study purposes, prior to the need. Sometimes, with an HOA board’s blessing, some costs can be covered through budgetary reallocation. Funding a study to confirm a need might be preferable to using reserve funds that have been set aside for true emergencies.
- Never allow a small problem to grow into a crisis. If a special assessment is needed, explain the reality. If the amount for an individual owner is large, try to make payment terms available. Your owners may grumble, but they will appreciate the honesty and the full disclosure.
- Remember that levying a special assessment must be predicated on provable need, and all pertinent HOA procedures must be followed, including the proper notifications and approvals. It is incumbent on the property manager and the board to ensure that special assessments do not become the norm, that they are the last option considered, and that the amount assessed is sufficient to cover all anticipated costs.
While no one likes having to dig deep for preventable expenses, there are few residents who will object to paying for preventive action to forestall an emergency breakdown of services.
If failing pipes happen to be part of our special assessment, we invite you to contact NuFlow Midwest. The NuFlow System can simplify correction of leaky pipe problems and very possibly save you money as well. If you have questions about our innovative plumbing solutions, please contact us.