7 Steps to Creating An Amazingly THRIVING Community Association
How To Avoid A Community Association Winter Nightmare
Best Ways to BLOW Your 2017 Condo Association Budget
Are you serving on the board of directors of a community association?
Do you spend more time than you care to admit volunteering for the board? Do you even realize that you should have already approved your 2017 budget or should have a budget approval meeting coming up within the next few weeks? Well let me share some CRAZY but TRUE tips for you so that you can triple the amount of time that you will spend next year dealing with financial headaches.
- Do NOT pass a 2017 budget. This one is the easiest. You will ensure that you will piss off a lot of people when they go to sell their condos. It goes something like this. The buyer’s attorney will ask for the 2017 budget. Then the management company will inform the buyer’s attorney that it is not available. Then the buyer will get pissed off and then the seller will call and YELL at the management company. The management company will inform the board of this situation and then the board will blame the management company for not having an approved budget. In the end, (if you are bold enough and you are the board treasurer) you can be the one to say that you didn’t bother passing one because you were not getting paid enough.
- Pretend that you DON’T have capital expenses. Don’t plan ahead. It is easier to wait until there is a crises on hand. In fact, it is better to wait until the roof is leaking in multiple locations rather than planning ahead and replacing the roof before there are multiple leaks. The justification is that the board president lives on the first floor so no need to worry about the roof.
- Do NOT raise assessments. So what if you have not raised assessments for 10 years. You are planning on moving next month and you have put in your time as the board president. Besides, you couldn’t afford to increase assessments since you lost your job 2 years ago.
- Pass a budget with a deficit. This is one of my favorite ways to mess things up. The way around this one is to pass a special assessment so the budget actually looks like there is going to be a surplus.
- Blame the management company. (If something goes wrong with the budget at ANYTIME) This is laziness at its best. Whenever something goes wrong or if the information is not directly in front of you on a silver platter, simply blame the manager or the management company. And then if they don’t respond in the way you expected, fire them and hire a new “lacky” management company. You will certainly get better results.
- Cut back on legal expenses. Besides, you are running the association perfectly from YOUR perspective and there won’t be any lawsuits this year. This is because everyone is going to do everything you say every time and not question it.
- Hire a CHEAPER management company. They don’t do much of anything anyway. Your current management company charges extra for EVERYTHING. Your new one will say that “EVERYTHING” is included. This will certainly turn out for the better.
- Contract with a gas supplier. And bet that gas prices will go down this winter by 25%. This is a great way to gamble with the association’s money. And who knows, the prices might actually go up 25% and you can blow up your 2017 budget within the first quarter of 2017.
- Hire a snow removal company on a per incident basis. (with only 1 pickup truck, 1 snow shoveling crew and 20 snow removal accounts).This is a great way to piss off your homeowners as the snow removal company will probably show up about 24 hours after each snow fall stops. And it is a great way to blow your budget especially if it snows heavily this winter to make up for the mild winter we had in Chicago last winter.
- Hold off on that major tuckpointing project. You are better off waiting another 3 years and paying triple the amount that it would cost you this year. Besides, you can’t afford it. Yet, three years from now, you will somehow afford a cost of 3x the quoted amount of the same project today.
SUMMARY
Are you going to fall into the trap that so many other communities and board members fall into around the US? Or are you going to actually exercise your fiduciary responsibilities as a board of director and learn from these real world examples. It is really up to you to decide the approach you want to take.
AUTHOR
Salvatore J. Sciacca aka “Condoboss” is one of the nation’s leading experts in the community property management industry and is also recognized for his stress relieving blogs and insight on personal and organizational transformation.
Salvatore has also traveled extensively around the world and has meditated with Buddhist monks in Nepal and met the world’s happiest man, Matthieu Ricard. He’s passions include cooking, traveling, meditating and hiking. He is also the founder and executive director of the Chicagoland Italian American Professionals organization and an amateur chef.
Salvatore can be reached at: 312.455.0107 x102 or at ssciacca@chicagopropertyservices.com.
