Condonundrums - Why are my HOA fees going up?

During the early days of the association, in experienced board members, the housing crash, and a conservative faction in the community and on the board prevented a reserve study, and lowered condo fees, which resulted in under funding the reserve. This video illustrates why modest increases over time are more cost effective and less painful than large increases or special assessments later one.  

Condonundrums - What's in a Name?

A conundrum is a tough or difficult problem, and for folks coming from single home ownership, living in a condominium complex and dealing with the rules and procedures can be unique sources of confusion and stress that I have dubbed, Condonundrums.

Every condo association is unique.  The problems of a three unit condo association are considerably different than one that has thousands of units.  Country condos are different from urban high-rise condos. The stories and advice given in this blog are based on a decade of life in a condo association of 80 homes (40 duplex units), a size that I refer to as too big to be small and too small to be big.  That presents some very unique problems, which will be a topic for another day.

I served on the board most of my 10+ years here, serving as a member at large, secretary, and president. I created our original website, which is now just a historical archive, and a number of blogs besides this one, including the My Sherwood Glen blog and the Sherwood Beavers blog. , along with about a dozen other personal blogs on various topics from diet to educational reform and other states of the human condition that relate to my work as an educator and concerned community member of 70+ years.

If you live in a condo, I hope Condonundrums will help build a bridge between residents, board members, and association management. Of course, if you live in a high-rise in Chicago or have an on-site management company, you will get less from it than our residents or those of similar association.  

In this first post, I'd like to talk about the microscopic view vs the macroscopic view. As home owners we tend to focused on the condition and appearance of our home and our land. I remember when we lived in NJ and owned our own home.  We did what we wanted to do when we wanted to do it. That's not the case in a condo association, because when it comes to our home and our land, the definition of "our" is different. 

When I lived in NJ, if a plant in the yard died it was replaced on my time table with the plant I wanted.  OK, I'll correct that.  It was replaced on Jill's time table with the plant she wanted.  However, in a condo association, there is no such thing as our yard.  The yard is owned by 80 owners and is maintained on a time table set by the board. 

If my view is just microscopic.  I see what is in front of me and don't look at what is happening in the other 79 units. That's, shall we say, a bit short sighted. The board has to develop a different view.  Because of their fiduciary responsibility, they must look at things macroscopically. They have to see the big picture and they have to see it at least ten years into the future.

When a request comes in to make a repair or change, the board has to consider safety and cost in determining when and how to do the work.  Doing the work as soon as it is requested, is the best way to make everyone happy with the appearance of the community, but doing work as soon as it is requested, is also the best way to deplete the treasury, raise the condo fees, and cause problems within the community.

A good sample of the outcome of the macroscopic view is taking place as I write this.  Over the years, there have been requests for repairs on decks. In some cases, there were safety issues that were addressed, in other cases there were cosmetic issues that were not addressed, because they had no impact on value and were not in a condition where the board felt repair was necessary at that time. 

The current board has been working hard to put together a plan to address the needs of the association and to get repairs and maintenance on a schedule that is fiscally responsible and that meets the needs of the community as a whole. That is what's taking place right now.  

During our walk-through in April the board assessed the maintenance needs of the association. One of the first items addressed were safety issues represented by loose boards on porch steps. The next consideration was decks.  Many of them are near their end of life and need replacement.  Others are in need of repair. In some cases, repairs could be made, but it was determined the decks would need replacement not long after repairs would be made and repairs would be money ill-spent. 

In order to be fiscally responsible, the board had determined what repairs and replacements will take us into the future with the most bang for our bucks. One look at the material and the replacements being made, should make it clear that purchasing in bulk and doing the work in one cycle is considerably cheaper than if it had been done piecemeal. 

Another part of that macroscopic view used by the board and not obvious to residents is the permitting and inspection process. Pulling the permits at the same time and arranging for inspections to be done in groups is also a considerable cost savings. The microscopic view would be to think that it doesn't cost anymore for 10 permits and inspections individually, than it does for 10 at one time, but that would be wrong, because time is money. 

If I go to the town to get a permit, I don't charge myself for the time, but if I hire someone to do it, you bet that I'll be paying for it.  Not only that, in our town there is only one building inspector. He is only in the office a few hours a week and is out in the field most of the time. Needless to say, it's easier to schedule once, rather than ten times. 

This is just one example of microscopic vs macroscopic views. The same mechanism applies to landscaping, snow plowing, and many other area of board responsibility. It's cheaper to replace 10 plants at the end or beginning of the season, than to replace them one at a time during the season, and anyone thinking every plow damage requires immediate attention needs a reality check. 

A cosmetic chip in siding might take 10 minutes to fix, but when someone has to be hired to do it, it's going to cost money, which includes travel time. And in the business world, work time is almost always rounded up.  It makes more sense to have a half dozen such repairs done at one time. 

Wait, you say. If the landscaper damages siding with a weed whacker, doesn't the landscaper have to do the repair?  Yes, they do, but if you don't think you will be paying for it, I have a bridge I would like to sell you.  Put yourself in the place of a landscaper who has two associations.  In association 1, every time there is a chip, the board makes them fix it right away. In association 2, whenever there is a chip, it is reported and evaluated. Anything that is significant, such as a damaged corner molding, it repaired or replaced right away.  If it is weed whacker damage on the side of the unit it may be dealt with when there are a few more such repairs to be made. 

Building trust and good will with vendors is hardly insignificant. It pays off as contracts are negotiated. If the relationship is one that seeks to take in the needs of the vendor, that should translate to dollars and cents when it comes to pricing.  It also shows up in the quality of work being done and timeliness of response to requests.

The bottom line here is that when it comes to reporting issues, requesting repairs, or making modifications, you should make them as you see fit, but consider the fact the board has 80 units and 55 acres of land that they must maintain. 

When I first announced Condonundrums to my association, I said I would be saying things I might not have said as a board member, up to this point there is nothing I have said that I wouldn't say as a board member. What I have to say next may not sit well with some.

Here's a fill in the blank for you.  There is something called the 80-20 rule. It has been applied many ways. In most communities, there are 20% that do most of the __________ and 80% that sit back and don't.  What word did you use? Did you say "work"? Did you say "complaining"? Did you say something else?  Whatever you said, you are probably right.  

Keep in mind that reporting problems is NOT complaining. Board and management want to know when things are not right or need to be fixed. I could write a seriously long post about complaints, but I won't I will just say this.  As a board member or as an association manager, we hear all the complaints. In an association as small as ours, board members and property manages get to know some residents very well, while they may never know many others.

I have many residents in my phone book. If you aren't in my phone, you have probably never contacted me with a problem or a complaint. When I get a call, I answer everyone, but when I see the number identified, I know immediately whether it is coming from someone in the 20% that does the work, or from the 20% who complains. The same is true for association management.  Over time, they get to see it all and hear it all. They are only human and will act accordingly.

Right now, we have a new management company and as time progresses, they will know the 20% who do the work, the 20% who do the complaining, and the 80% who do their part as condo owners. When your name comes up on a board member's or association manger's phone, what will be going through their mind?

“Empathy is seeing with the eyes of another, listening with the ears of another, and feeling with the heart of another.” – Alfred Adler