In the world of condominiums, a few elite community associations are the equivalent of those Olympic athletes: solid reserves, responsible and engaged homeowners, an active and forward-looking board, great management, a well-constructed and well-maintained physical plant, etc. Those associations can clear almost any hurdle because they’ve been training for years. Most associations are like the rest of us: some strengths, some weaknesses, and aspiring to be better. It is a manager’s job to play the coach, helping each association achieve the highest level of fitness of which it is capable. That doesn’t mean every association will be an Olympic athlete, but with the right coaching and some self-discipline, most can clear some hurdles and stay in the race.
Once upon a time, one 34-unit association in Albany Park was on the verge of “dropping out.” The assessments delinquency rate was over 50%; some units had not paid assessments in years. The association had about $6,000 in the bank. The board had removed the fuse from the electrical panel to cut the power off for much of the common area, because the association couldn’t afford the winter heating bills. A portion of the roof had been left unfinished by the developer, so water was penetrating the walls every time it rained. The janitorial service was irregular, many light bulbs were out, and many emergency light batteries were drained. The building had been mismanaged for so long that many of the association members had lost hope that things could ever improve.
Together, a few dedicated board members worked with new management to pull the association back from the brink. The first priority was bringing in some additional revenue. The association contracted with a law firm to collect past- due assessments from the delinquent units, focusing first on those units where collection was most feasible, and using the additional revenue to pursue the other delinquent units. Once the delinquency rate came down, the association repaired the roof, turned on the heat in the common areas, and started to build up the bank account for additional capital improvements. A new janitor was hired and given a comprehensive list of tasks and a regular schedule. As the situation in the building improved, so too did the attitude and outlook of many association members.
That little association still had a long way to run. When you start out that far behind, it takes more than a couple of years to catch up. Down the road, the association put $30,000 in the bank, but about 20% of the units were still delinquent. Some structural and legal problems persisted, legacies from an unscrupulous developer that were hard to shed. By clearing those first few hurdles and developing some momentum, the association got itself back in the race.
So how can an association that has spent too much time eating potato chips and lying on the couch turn it around? What does the path to fitness look like? Just like training, it requires hard work, patience, and persistence.
10 | COMMON INTEREST®
Here are a few key steps to take your association from back-of-the pack to out-in-front:
Walking
1. Shore up the money. No improvement is possible if an association is broke. For associations with high delinquency rates and large past-due homeowner balances, every ounce of energy should go into pursuing the delinquent units. But this can take far longer than it should and can depend upon some factors that are beyond the control of the association. So special assessments are the disciplined association’s fallback option.
2. Make sure the building envelope is sound. It’s hard to meet big challenges when water is dripping on your head. Worse, structural damage is expensive, and makes other improvements irrelevant or impossible. So the roof, walls, foundation, and supports take priority over everything else.
3. Put together an emergency response plan. One nice part about this step is it requires little or no money; a motivated board member or two can do it for free. What’s an emergency response plan? A document that lists all emergency contacts and key vendor contacts, utility shut- off locations and instructions, unit access procedures, and key equipment locations. This document, if well-composed and shared among building residents, can save huge amounts of time, money, and frustration if a pipe leaks or a toilet overflows.
Jogging
4. Hold and document regular Board and Association meetings. Lots of boards (especially boards of smaller associations) fall into a “meeting rut,” in which they neglect to hold and document quarterly meetings. Some will even go for years without a proper Association meeting and election. It’s easy to think it doesn’t matter because there are no immediate consequences. But it often catches up to you when someone is selling their unit. Experienced buyers (or buyers with experienced real estate brokers) know to ask for 12 or 24 months of meeting minutes, and if board meetings are irregular or poorly documented, that can negatively impact their assessment of the property.
5. Spiff up your building’s interior. It’s hard work to stay on top of the little things that keep a building looking nice and feeling fresh. One thing that helps is a well-defined task list for your building janitor or maintenance service; the list should include tasks that are performed during every visit, as well as tasks that are performed monthly, every few months, or even less frequently. It’s also a good idea to keep some paint that matches the common area colors in the supply closet for occasional touch-ups.
6. Get control of the administration of the Association. Associations are non-profit corporations, and as such, they have many of the same administrative requirements as other businesses. Some administrative items that need to be checked regularly:
• Summer 2024 • A Publication of CAI-Illinois Chapter
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