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HOA & Condo Management, Property Maintenance, Property Management, Real Estate Insights

The Impact of In-Unit Modifications

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Most condominium Unit Owners feel that what they do within the walls of their unit is nobody’s business but their own, and to an extent, they are correct.  The Association, however, is responsible for maintaining the common elements within the community, which can often be affected by “in-unit” work. 

The Illusion of Independence

Condominium owners often mistakenly believe that their unit is entirely their own, similar to the concept that a single-family home is controlled by the owner.  While this is partially true in that they own their specific unit, they are also beholden to the rules and bylaws of the condo association, often referred to as the HOA. 

Under these rules and guidelines, there are both rights and limitations, including the ability to make alterations or modifications within their unit. Living as part of a community means that some actions, improvements, and changes, while they may be part of your unit, are off limits. For instance, common areas that are part of the community, such as a pool, gym, hallways, trash collection areas, exterior walls, and stairwells, are not specifically part of an individual unit and are controlled by the condo association. Likewise goes for the connected and shared components of the condo such as electrical wires, plumbing, and HVAC systems. Making changes to your individual unit systems may impact the community and need to be approved by the association to avoid repercussions that could result from making changes. 

Potential Consequences of Condo Renovations

Relatively speaking, improvements at a condominium community are a good thing and can mean positive changes, but without proper approval there could be negative repercussions.

Should a contractor, service provider or vendor hired to do work in or around your unit make an error, there could be damage that impacts not just your unit but surrounding unit owners as well. For instance, a plumber who damages a shared water line could inadvertently flood adjoining units. Or the incident could cause a building-wide shutdown of water service, thus impacting all residents. In the case of a professional contractor doing work, the condo association may require certain vendors be used or the terms and scope of the work be approved in advance to avoid these types of unintended outcomes.

Even smaller projects such as interior painting of a unit could result in damage should the hired painters spill paint or damage walls with the scaffolding/ladders in the common hallways or stairwells. These types of incidents need to be avoided and can often be managed through a property management company who will keep a watchful eye on the improvements as they get underway.

The Importance of Proactive Communication

Communication is critical to completing in-unit modifications smoothly. As a rule of thumb, it is always a good idea to communicate your plans in advance to the property management team and discuss the role that the team may be able to play in ensuring that other unit owners are not impacted and that the improvements are in compliance with the community policies and standards. Check with your HOA to determine the proper protocols should you want to start making changes or improvements to your unit.

Hiring Qualified and Insured Contractors

As with any home improvement project, it is critical to ensure that the service provider, whether a painter, electrician, plumber, or designer, has proper insurance and qualifications before commencing the project. This protects both the unit owner and the community from potential liabilities or damages. HOAs often have a list of vetted and approved contractors with a history and proven track record of working within the community.

Fostering a Cooperative Living Environment

Maintaining a stress-free community living space, like a condo association, is a shared responsibility between unit owners and the management company or HOA. It is critical to be transparent about changes being made as well as how the community at large could be impacted by the modifications, such as noise from contractors, a timeline of work hours and days, and/or specific ways that surrounding units may be impacted such as extra service cars in the shared driveway. Respecting your fellow community members in your mission to update or modify your unit should be a top priority. Should you need assistance with the property management of your community, consider Crowninshield Management.

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Financial Management, Real Estate Insights

When It’s Budget Time!

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If your community’s fiscal year ends on December 31st, it should come as no surprise that soon your Community Manager and Board Trustees will begin planning for next year’s budget.

The preparation of an association’s budget is a detailed and lengthy process. They have a lot of work ahead of them.  Over the next few months, managers will be tackling the process outlined below:

  1. Analyze each current expenditure line item to determine the correct level of funding. This process must consider fixed expenses such as multi year service contracts; variable expenses such as increased master insurance premiums, increases in utility costs, and so forth.  This can be a time-consuming process which entails communicating with various municipalities, vendors, and contracts to determine if any cost increases are to be expected.
  2. Determine the appropriate Reserve Funding expense. A recent reserve study is an invaluable tool to help your community determine this expense and stay on track with the appropriate level of funding for future capital expense needs.
  3. Determine income level to fund expenses. Association fees, special assessments, late fee income, income from late fees, storage fees, parking fees, and laundry room income are all examples of income for communities.  Your community may use any, some or all these methods to collect income, but which should be “budgeted”?

Association fees and assessments are legally protected and should be included as should any other fees provided for within the governing documents.  Fees such as late fees, fines and laundry room income should not be included as income in a budget as funds generated from these fees may never be realized.

  1. Determine the difference between the budgeted income and budgeted expense. If the total expenses exceed anticipated income, adjustments will need to be made.
  2. Establish a balanced budget. This may be achieved by either raising the income level (this can be done through an increase in assessments, establishment of a special assessment to meet funding needs, or a combination of both to achieve the amount required) or re-assess expenditure line items to determine if some items may be reduced or eliminated from the budget.

As you can see, the process for creating a thorough and detailed budget can be complicated and should simply rely upon a percentage increase across the board.  If your current Management Company is not providing this detail for you, perhaps it’s time for you to give us a call.

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