Example #2: How to throw away your community association money

burn away moneyOverspending Example #2:

A 15 unit condo association is proactively advised by the management company to take on a $5,000 tuckpointing project in order to address some tuckpointing areas that have deteriorated. The suggestion is made by management to proactively maintain the building and minimize the possibility of water intrusion.

The board ignores the recommendation of the management company¬†for several more years saying that they don’t have the money.

Three years later the board decides to take on the tuckpointing project and the project ends up costing $25,000 as the scope of work and the areas needing tuckpointing increased significantly.

In this example, the board literally threw away $20,000 by ignoring the recommendations of the management company and choosing to live in fear of spending money. The excuse that the association doesn’t have money to make repairs is usually not a very sound reason especially when exterior tuckpointing is needed as this usually worsens exponentially.

In the end, their poor choice caused the association to overspend significantly on a project that should have cost significantly less.

If you are on the board of directors, you are agreeing to take on the fiduciary duty to properly maintain the community association. It is your responsibility to take action as necessary to maintain the property in a cost effective manner. Inaction can cost the association significantly more money.

Leave a Reply

Your email address will not be published. Required fields are marked *