Page 9 - New England Condominium July 2019

NEWENGLANDCONDO.COM NEW ENGLAND CONDOMINIUM -JULY 2019 9 Newsletters, monthly open meetings with dodging this inevitability is sure to back- a clear agenda, and proper notice will all fire. It’s important to thoroughly show the without a fee increase, and then you come they’re letting those things atrophy, then help get owners on board with these deci- sions.” “Nobody can punch holes in some- thing that’s properly prepared and un- assailable,” adds Eberhardt. “Accurate operating financials are key, because you cannot ar- gue with numbers—although people will tentially argue about everything else. It’s a deli- cate balancing act. Raising maintenance nance charges, or charges and communicating that a por- tion will go to the reserves generally helps to not raise owners’ hackles.” Consequences of Inaction If it comes as any comfort to boards them. “If a board worrying that increasing maintenance with some extra charges might stoke the ire of the resi- dents, the alternative may be much percent increase, worse—and in some cases, could actually they might only sink the association. “Refusing to raise fees when an in- crease is needed will leave an association high and dry when it is time for a major operating money that they’d not allocated the reserve study,” Jordan continues. “The pitchforks. maintenance project,” says Stark. “Boards to their reserves,” says Jordan. “They’ll be reserve study takes for granted that the don’t always want to increase because of burning free cash, but I don’t recommend association is doing preventative mainte- the pushback from the community, but doing that for a particularly long period of nance on a regular basis and fixing any- community at annual meetings how the in and hit them with what is basically the by the time they get around to fixing their budget works, and why increases are nec- essary.” A board with some excess cash in its 1 percent per year over five years—less the long-term planning.” ac- count can po- defer raising mainte- increase them at a lesser rate, but this too can come back to bite money needs a 10 adapt a 5 percent uptick, instead opting to use that time. I’ve seen communities go for years thing wrong sooner rather than later. If same increase it would have been before, equipment, they won’t necessarily have say 5 percent. But what would have been the money to do so, and that messes with than inflation—at 5 percent is a lot more in time’ remains true here: the association jarring. It’s easier to that makes the necessary decisions—even wrap heads around unpopular financial ones —when the sit- a minor routine in- crease than a larger survives over the long term. Most own- sudden one. There’s a ers, begrudgingly or not, understand that psychological factor. “Also, if the asso- ciation doesn’t main- tain its equipment, responsibility to explain that to them. It’s then the useful life when a board avoids implementing a re- of that equipment quired increase for whatever reason, only is reduced, which then to disclose after several years that in turn increases its the association will be underwater if they maintenance sched- ule and throws off that the residents are likely to grab their In the end, the old adage about a ‘stitch uation demands it is the association that a slight increase in maintenance charges from year to year is the cost of doing busi- ness—and if they do not, it is the board’s don’t drastically increase maintenance, n Mike Odenthal is a staff writer/reporter for New England Condominium. “Every association should have a nominal increase to common charges and maintenance on a yearly basis, just to keep up with the cost of living.” — Mark Liberman