We talked last week about preparing the HOA budget and funds that should be set aside to pay for high dollar capital improvements such as paving or roofs. In homeowner associations, in Florida, there is not a statutory requirement to fund these reserves. For condominiums though, its a whole different story.
In the State of Florida, condominium associations are required by law to set aside funds for painting, paving and roofs. As was suggested is the last post, there are other significant capital expenditures that should be addressed, but are not required. As with all the other topics we discuss here, check your associations documents for more specifics.
For a condominium, beyond the painting, paving and roofs, there are other maintenance items that should be accounted for as well but are not required by law One that comes off the top of my head is elevators. As much as we’d wish it were so, elevators do not have an indefinite life span. Motors and pumps burn up, wear and tear occurs and some associations can spend upwards of $10000 for elevator maintenance and upkeep each year. If your condominium is over 4 stories in height, boost pumps (pumps that are pumping water under pressure to higher floors) also require constant upkeep, maintenance and periodically, replacement. A high quality pump is not cheap and the sediment content of Florida water can create endless maintenance issues month to month.
An important consideration for the Board of Directors of any condominium association, especially high-rise buildings, is to engage in preventative maintenance. Staying current with all of your maintenance issues can help to prolong the life of your high maintenance items. Securing the services of reputable companies to perform your preventative maintenance can save the association money in the long run. Some condominiums employ maintenance personnel to perform the day-to-day tasks of inspection and minor repair and notification of decision makers regarding issues that develop. These maintenance personnel replace light bulbs, paint doors, and address common area issues that may arise that do not necessarily require the approval of a majority of the Board of Directors. By doing so, maintenance items are addressed in a timely manner instead of being allowed to languish. The maintenance plan, and financial expenditures associated with it, can be addressed before hand by the Board but to effectively facilitate repairs, it is sometimes better to take the approach of “just get it done”.
Each condominium is unique in the extra items it chooses to budget for. But by addressing possible failure after a number of years (15-20 years), the financial impact can be less than would be with a significant special assessment. “Pay me now or pay me later” applies here.