Funding resources for condo association

I have just been elected to the board of directors back in Oct 2007 as treasurer and I was curious on how an association can obtain funding for needed repairs. I live in a 190 unit condo which was built in the mid 1960's and with many buildings of this age are in need in some repairs. Our parking lot has numerous potholes and cracking of the pavement as well as some retaining walls which are leaning, just to name a few. At our last meeting I proposed the possibility of researching getting a HELOC (Home Equity Line of Credit) as a funding vehicle to get some projects underway. Unfortunately, it was not greeted with open arms because they are leery of opening up a loan. On our reserve report it was stated that these projects are not due for replacing for at least another 5 years which I dont think these issues can wait another five years before replacing. What other avenues should we seek to get funding to get these projects underway?

Does your property have a reserve account?

If so in what amount?

What are the monthly common charges?

Total yearly income from CC?

What are your costs for ordinary maintenance?

Do you end up in the red or black for the year after subtracting costs from income?

You can raise the CCs.
You can have a special assessment.
You can make an effort to collect debts owed.
You can implement some money saving actions to help even in small ways the assets of your property.

Review your yearly costs and expenses for any area in which you might save money.

Depending on the cost of the repairs you deem necessary your actions might be more drastic or less drastic as required.

I agree with Susan, very good arguement for Reserve Studies. I would argue every 3 years... and have argued that here. Nevada has a requirement of every 5 years. When the price of oil when up from $40 to $100 per barrel over the past 3 years, it blew our reserve budget). But also give great discussion to the funding method that the Board approves for the reserve study. cash - threshold or straightline funding.

It sounds as though your board has a tough problem ahead. Work through a reserve study in tandem with the plans to do the repairs with experts who can provide guidance in the long term.

Avoid loans when ever possible, as you will soon find that many banks will want the board members to sign a personal assurance that the loan will be paid back.

If you have to have a special assessment take a look at the long term (30 years)and do all you can to spread the special assessment over 2 to 3 years.

Some of the best advice I got as a board member was from the asphalt companies who told me to do the crack sealing in the late fall when the cracks expand and then in the spring quarter of the budget do the asphalt sealing... They worked it into the same price, but our budget wasn't taking such a big hit all at once.

Good luck.

MJ3: Was your Capital Reserve Fund adequately funded over the past 40 yrs. to assist with the present costs? Have you investigated with professional contractor companies on exactly what needs to be done now (as opposed to what's nice to be done)?

The only avenues open to an association are: 1) a loan with designated payments over #-years; 2) special assessment/s; 3) increased assessment fees.

Sure I would like a copy of that article from the asphalt company. Are you able to e-mail or fax to me. If so you can e-mail to me at [email protected] my (work) fax is 202-776-4104. Thanks Jan