Capital Improvement Planning for Condominium Associations

 

Capital improvement planning is one of the most important things condominium board members should do.  Capital improvement planning benefits the association by:

 

  1. Reducing the risk of special assessments or unplanned or unnecessarily dramatic assessment increases.
  2. Helping board members keep the big picture in mind, and thus:
    1. Prioritizing the jobs that need to be done.
    2. Making sure important improvements are not forgotten or ignored.
  3. Saving money:
    1. Getting jobs done in quantity, and thus more efficiently.  For example, instead of doing three cement jobs at different times, with good planning all might be done at the same time to save money.
    2. Getting many repairs done on a scheduled basis, thus eliminating the high costs of emergency repairs.
  4. Focusing on the priorities and future of the association.

 

Capital Improvement Planning Process

 

Capital improvement planning, in many instances, is related to the budgeting process.  In a condominium association, it typically starts with questions

 

1.     What will need to be repaired or replaced in the coming year, or in the next 5, 10, or 20 years.

2.     What new projects does the association wish have done.

 

Sometimes a condominium association will hire an engineer to conduct a reserve study to determine the useful life expectancy of the assets of the association.  The purpose of the reserve study is to help the association plan for, and provide sufficient funds in its reserve account, to minimize the risk of having unforeseen emergencies.

 

This paper was prepared by Enlan Condominium Management Company, providing property providing management services based on the principle of stewardship.    www.enlan.com

 

See:

Accounting For Condominium Associations

www.property-management-companies-chicago.com

Value from Property Management Companies

www.360degreevalue.com

Great Chairs for Condominiums

www.naturalounge.com