SOLUTIONS ORIENTED APPROACH
Published November 9, 2022
The next few years will be very interesting for
condominiums with limited or no reserves. While I'm sure many Boards
are aware of what's to come, many need help understanding the
severity or cost associated. As I mentioned last week, many Boards
are still taking the wait-and-see approach, and they will soon be
surprised that this was not a good decision.
Rates and costs have not let up, and we are in
the midst of a recession. The culmination of all these factors will
most likely converge together and create some hard times. As a
community leader, you must have the foresight and stamina to
understand what's coming to prepare your community and communicate
Don't let this Budget or Annual Meeting season
pass without having a town hall or communication sent to all the
residents. Transparency always wins the game, but this year, you
need to over-communicate what's coming and its impacts on your
community. Owners must know so they can make the best decision, and
if they cannot manage what's to come, they can decide to sell now
before things get worse.
You will likely find many more terminations
coming to our market, which is not necessarily bad. I've witnessed
five terminations in my career, and each one of those associations
came out winning. However, four years ago, those were different
times with prime locations, but if an association can't repair its
building, alternatives must step in. The last thing anyone wants is
If you are a board member and you are still
determining if your owners can afford what's to come, you need to
start conversations with your members about a possible termination.
A committee could be put together to do some due diligence and
understand what can and can't be done with your building. Some
consultants can assist you with this process to better understand
your property's actual value. In business, getting ahead of things
is always better for making the most educated decision. If you don't
do it this way, you will most likely be on the wrong side and not
receive what you even though you may have a great location, zoning,
rentability in the area, etc.
I'm a big believer that if you understand your
challenges or limitations and don't focus on the negative but
instead focus on finding solutions, you will have a higher
probability of ending up in a much better place.