Deferred Maintenance = Increased Risk

We’ve never understood the trend in deferred maintenance that appears so popular with some Homeowner Associations, their boards, and even their management companies (shame!). Property Managers certified by the California Association of Community Managers must agree by their code of ethics to recommend, as part of their due professional care, that their clients “establish and implement a preventive maintenance program.” And even the most inexperienced managers and board members should know that maintaining property values is paramount, and the only way to do this is by protecting – i.e.: maintaining – the client’s investment: the property and its buildings and grounds. So despite this knowledge and probable clear direction from their property manager’s, why do so many HOA boards defer critical maintenance of their properties?

The answer is money, and the lack of a true understanding of a board’s fiduciary responsibility to its community (possibly due to ignorance, but often due to indifference). But it may also stem from a mistrust of the professionals hired to manage and maintain the HOA. And a tendency to dumb down, or worse, to cheapen the quality of the services needed to maintain the property. Penny wise and (surely) pound foolish as the cost of repairs increases exponentially (along with increased damages) for every year that repairs are deferred.

As we have recently seen with Katrina and other natural disasters, unmaintained properties fair worse than maintained ones. And who would like to have been on the board of that HOA in SF where years ago party revelers fell to their death due to an unmaintained deck riddled with dry rot? Human fatalities aside (heaven forbid!), the years of legal wrangling (and years of legal expenses) alone should be a huge deterrent to deferred maintenance. And as many board members may not be aware (and which any good condo insurance specialist will attest), a Directors and Officers policy may not cover board members if their decision not to repair those rotting cantilevered decks (or leaking roof, failing foundation, molding siding, etc.) was made in bad faith. And God protect them if it doesn’t because they can be sued personally – even if they’ve sold their units and moved far, far away).

If an HOA board can get past the money issue by more fully appreciating the value of spending it to maintain their property (thus maintaining – or even increasing – property values, which can in turn put more money into everyone’s pockets by increasing unit values), and if they can then quickly grasp the importance of their fiduciary role in limiting risk - both for the HOA and themselves personally – by ensuring the property is well maintained, then it’s an easy next step to understand the critical importance of sourcing and hiring qualified (experienced, licensed, bonded, insured) professionals to direct, design, oversee, and conduct top notch repairs. Until this happens, boards will continue straddling the razor’s edge between deferred maintenance and increased risk...and end up spending more in money, time, and lost equity than need be.