"We see a wide range of reactions" when association board members and owners are presented with the cost of repairs, Fernandes says.
"Most associations don't have the money on hand," says Stephen DiNocco, CMCA, AMS, principal of Affinity Realty & Property Management, LLC in Boston. But, he adds, "Your first obligation is to maintain the property."
Save for a Rainy Day
That leaves associations and owners with a limited array of choices when reality strikes. In addition to using therainy day fund that should be waiting for such an event, associations can impose special assessments—often running well into five figures per unit —or borrow the money and raise monthly condo fees to repay the loan.
"The fairest approach is to save money in advance, or do a supplemental assessment at the time you do the work," DiNocco feels. "The people that used (the component) up should pay for it."
But with escalating costs, few associations have enough funds tucked away for even the most anticipated of projects, Fernandes says. "Material costs alone have increased by 40 percent just in the last few years," he says. "Rising costs of petroleum affect everything, not just material costs, butalso contractors' costs and supplies. It's a snowball effect."