Saving Dollars for Homeowner Associations

Property Managers and Board Members should consider the following:

  • Increasing the association's insurance deductible to reduce the premiums paid while amending the CC&Rs to require that individual homeowners pay the deductible for any claim related to their unit.
  • Eliminating trip, fall and other hazards in order to reduce insurance claims. This will help minimize the association's insurance premiums in the long term.
  • Amend the association's CC&Rs in order to minimize the number of rentals. Fewer renters mean fewer move-ins and move-outs which translates to less wear and tear on the common areas. This equates to lower maintenance costs.
  • Engaging in an active program of preventive maintenance, making the elimination of water intrusion from all sources the top priority. Water intrusion related repairs can easily become the largest expense in an association's repair budget. Water intrusion can also result in the non-renewal of a competitively priced, high quality insurance policy, driving up the cost of insurance coverage in some cases by 300% in a single year. Thus, roof inspections, cleaning drains and other preventive maintenance are important.
  • Treating for termites as soon as damage has been detected in order to prevent further, more expensive damage. Spot treatments are far less expensive than tenting and can be used effectively if treatment is not delayed.
  • Replacing ordinary incandescent light bulbs with energy saving lights. The break-even point is usually only a few years and the savings can be considerable.
  • Reviewing all insurance coverages annually with your insurance broker or agent to make certain the association has all of the coverage needed and that all insurance coverage amounts are adequate but not excessive. Transferring risk of loss to the insurance company when possible is usually cost effective.
  • Avoid late fees by paying invoices on time. This means having sufficient assessment income with an allowance for bad debts.
  • Hiring a qualified construction manager for large maintenance and/or repair projects. The cost is far less than the cost of a mistake.
  • Obtaining necessary legal advice prior to making large decisions in order to avoid mistakes and / or disputes. Generally, spending a small amount to obtain legal advice will prevent the expenditure of large legal fees later to correct or respond to a problem.


HOA Financial Management Services