After 15 years working side by side with homeowners associations throughout Utah, I’ve spent a lot of time considering the idea of “the perfect HOA.” It may sound like a pipe dream, but it’s a very real goal to strive for–one that would increase property value, simplify the home-selling process, reduce board member workload, minimize frivolous lawsuits, and provide a level of peace to your community. In this series of articles, I talk about what an HOA needs to be perfect both on paper and in practice so that all of these results can be seen in your community.
When it comes to perfection in a homeowners association, there’s one area in which almost all communities typically fail: emergency preparedness & maintenance planning. Okay, yes, that’s two things technically, but they rely largely on the same information to accomplish, and they are very closely related, so they’re typically bundled into one neat package. Community maintenance and emergency preparation both require forethought and strategic planning.
You Are Not Prepared
Don’t worry, you’re not alone. For as long as community associations have existed, they have struggled with adequate funding and long-term planning–this tends to happen when the trustees responsible for handling these jobs are overworked, unpaid, and constantly changing. Not to mention they often feel like they must choose between appropriately increasing assessment prices and being re-elected. All of this compounds into what is potentially the most dangerous problem facing the HOA industry: deferred maintenance.
With new restrictions from Fannie Mae and Freddie Mac, as well as new legislation cropping up in other states, it’s more important than ever to have well-documented action plans in place for your community’s components. Here are five critical planning pieces the perfect HOA will have in place to handle community maintenance and emergency preparedness:
The Perfect HOA Has a Reserve Study (and A Plan of Action!)
A reserve study is arguably the most comprehensive tool a board will ever utilize. They analyze every single component of a community association to determine current status/health, expected remaining life, and the anticipated costs of maintaining (and eventually replacing) the piece. In theory, this is the lynchpin document a community would really need to accurately and sufficiently plan for the future…but we all know it isn’t that easy.
Many in the HOA industry agree that the final product of a reserve study is generally unhelpful long-term. Much like rolling a new car off the lot, these documents lose their value the moment they’re published because statistical evaluations and assumptions can only get you so far in reality. Plans can change at a moment’s notice–accidental damage and sudden unplanned failures are very common and cannot be reflected in a reserve study. Inflation is reaching Mt. Everest heights today, so financial projections are quickly going stale. The truth is that a reserve study, while a critical recommendation (and legal requirement in several states, including Utah, where they must be conducted every 6 years), is not enough to truly manage community maintenance planning or emergency preparedness.
That means that community trustees need to actively take the next step and channel that information into a long-term strategy for the future. Instead of relying on the numbers and metrics outlined in the document, create a detailed plan of action and implement benchmarks and checkpoints (like Annual Physical Inspections) to generate ongoing health stats for your community. This will help prepare you and your board for unexpected failures and expenses, and avoid dangerous maintenance deferment.
The Perfect HOA Has a Maintenance Calendar
A preventive maintenance calendar is another crucial tool in maintaining community health. As an added bonus, it can easily be a component of your strategic community maintenance plan.
Using your reserve study findings and recommendations from various vendor partners that you work with, you can and should build a plan of action for community maintenance. Everything that needs to be maintained, from the low-tier weekly lawn trimming to changing filters to the annual physical inspections, should be included on this calendar. It also helps to scope out a longer-term calendar to project maintenance that occurs on a multi-year basis rather than in an annual timeframe.
Updating this calendar will be an important task in the event of major changes to community components. For example, if an HVAC unit is slated to be checked and maintained every other month but unexpectedly needs replacement, that timetable that was previously put onto the calendar will need to be checked and updated if needed.
The Perfect HOA Has a Maintenance Responsibility Matrix
This document is a great addition to any community maintenance preparation. The maintenance responsibility matrix is an easy-to-read chart that lists all of the components in your community and where the responsibility for maintenance or replacement lies. For example, in a condo community, a major component like the roof of the building is to be maintained and replaced at the expense of the community using the appropriate community funds. In that same community building, the interior walls of a unit are the financial responsibility of the homeowner. And any limited common elements that exist, such as exterior balconies, could potentially fall on either side and will be dictated by the community’s governing documents. Having this information broken down succinctly in a simple table is a great way to avoid confusion for everyone in the community, and is another document that should be easily available for your residents to refer to for their own use.
The Perfect HOA Has Clear Community Maps
One of the easiest ways to fail in an emergency situation (and the simplest to correct) is knowing where to physically go in the community to do what needs to be done. That means more than just properly marking exits. A good community map tells staff where to find the emergency shut-off valves for water and irrigation, power, and more. It’s shocking (perhaps literally) how quickly things can fall apart if nobody knows where to go to stop the situation from getting worst.
The Perfect HOA Has a Business Continuity Plan
This plan is the crux of emergency preparedness. Basically, this plan of action explains how your community will continue to function in various emergency situations. That can range from something as small as a temporary but unexpected loss of power to something as catastrophic as a natural disaster or terrorist threat. When the worst happens, your community will need a plan that is both actionable and achievable, and it should account for at least the following things:
- Establishing communication: if an earthquake knocks out power or cell tower coverage long-term, determining how boards will communicate with their residents to keep them informed and safe is critical. This should also include important information like local emergency shelters if an evacuation is required.
- Resource allocation: When things go wrong, tensions run high, and people can act on emotion. Irrational decisions are often made in the heat of the moment, compounding on an already difficult situation. Determine ahead of time what action items belong to which board member by role. This way, you avoid the potential for task duplication or important action items getting missed.
- Emergency budgeting: This is something you’ll want to do for both the before and after of an emergency. Laying out a budget and purchase timeline for pre-purchasable emergency prep items (batteries, backup generators, etc) is just as important as setting a budget for post-event. Deciding how much your community can feasibly spend in the wake of an emergency will help keep the community finances safe from those emotionally-charged irrational decisions we mentioned previously.
Additionally, your plan should be available to everyone, not just board members or other community trustees. Your residents should all have access so that they know where to go and whom to contact.
Building Blocks for Success
The perfect HOA isn’t just wishful thinking. HOA Strategies has 15 years of experience guiding and supporting community associations to help them achieve success. If your community needs assistance creating community maintenance and emergency preparedness documentation, contact us today for a free strategic evaluation. We’re ready to help you achieve perfection.