A capital project is a specific plan for making improvements or adding new features to common areas in your HOA. The decision to proceed with a large project is a commitment to the extra time and funds required to get the job done. For board members, tackling a large-scale project is often a daunting task. By conducting research, outlining the process, and setting goals, your board can start to improve the association for everyone.
Identify the Project
Your HOA may dream of an on-site spa, however, a new parking lot is usually a more urgent need. A capital project in an HOA is a major undertaking that makes choosing the right project imperative for not wasting time and financial resources.
Once you identify the project, estimates from companies specializing in the work you need can help guide your funding decision. Tapping into the association's reserve fund or taking out a loan may require approval from the membership.
HOA boards must review the association's bylaws and state regulations before putting any project to a vote. Ensuring that the board is proceeding in the correct manner can save everyone time and frustration later.
Establishing a Budget
Saving for a rainy day is always a good idea for associations, however, most reserves aren't enough to fund capital projects. Proactive budgeting for capital projects is a smart way for associations to not get blindsided when an emergency develops.
The best time to plan for capital improvement projects is during the budget planning process. Prioritizing projects and how to pay for them is a strategy that boards can use to prevent future stress. The major decisions are in place so that when the time comes to start the project, everyone is ready.
Speaking of everyone, finding and scheduling the right person for the job takes time. You may need a year to prepare for the project and to interview contractors. Depending upon their availability, getting them to commit to a time frame can ease your mind that the project is on a schedule.
Soliciting bids and interviewing contractors also allow board members to learn more about project costs. For especially large projects, seeking the services of a financial advisor may help the board to better understand their funding options.
Capital improvement projects are just that—projects that improve and contribute to the value of a property. When it comes to HOAs, capital improvement projects are inevitable, which is why planning for them makes good sense.
Starting a capital improvement project is a daunting experience for a volunteer board. Ensuring board members follow the correct process when it comes to member approval and state regulations is essential. Getting started is a positive step to improving your HOA community, whether it is a new playground or a larger parking lot.
At GrandManors, we specialize in on-site community management for all types of lifestyle communities. Our professional staff serves communities such as:
- High rise condominiums
- Master-planned communities
- Mixed-use communities
- Golf and country clubs
- Active adult
We understand what it takes to develop and to maintain communities. Let us help guide your HOA board through the complex challenges of such issues like those of a capital improvement project.
The professional property management services of GrandManors can take your community to the next level of engagement and success. To learn more about GrandManors and what we offer, contact us today.
In order to accomplish great things, a board must take action and membership must trust the leadership. The end result is a project everyone can enjoy with pride. Take your first step by reaching out to GrandManors today.