Preventative Maintenance in Community Associations

For property owners, condominium associations, and homeowner associations (HOAs), the longevity of components on their property is incredibly important. Maximizing the useful life of components can significantly impact capital planning. While it can be easy to fall into the habit of avoiding preventative maintenance, unexpected issues can cost much more than the necessary maintenance activities. In fact, reactive maintenance costs three to nine times more over time than using a preventative approach. In this article, we’ll discuss what preventative maintenance is and how it impacts communities.

What is Preventative Maintenance?

Preventive maintenance is a type of HOA or condominium association maintenance plan that focuses on proactive repair and replacement of components. Under this plan, components under the community’s responsibility are routinely maintained. Doing so lowers the likelihood of components breaking or failing. It also allows us to catch issues before they become more serious.

Preventative maintenance can be put into place in two ways:

1. Time-based: maintaining components on a weekly, monthly, or annual basis – for example, inspecting and maintaining weight room equipment every Sunday.
2. Usage cycle-based: maintaining components after a certain amount of use – for example, completing mileage-based oil changes on association-owned maintenance equipment.

Why is Preventative Maintenance Important?

Neglecting preventative maintenance activities almost always results in reduced component useful lives and/or unexpected, expensive repairs. For major components like HVAC equipment and common roofs, maintenance is key. Without it, owners can expect premature failure and costly repairs. In comparison, preventative maintenance can catch issues before they arise. With proper preventative maintenance, your community will achieve the maximum useful life of common components.

Of course, there is a cost associated with preventative maintenance. Common costs include paying employees to perform the maintenance work, the cost of materials, or the expense of hiring a contractor to perform the work. However, the small cost of completing preventative maintenance saves associations money in the long run. This happens in two ways:

1. Reduction in annual cost of ownership: If a component costs $20,000 and has an expected life of 10 years, that component has an annual cost of ownership of $2,000. If preventative maintenance activities can extend the component’s useful life by 30%, to 13 years, the annual cost of ownership is $1,538.
2. Avoiding early or unexpected replacement: HVAC systems that are properly maintained should last 12 to 15 years. Failing to replace filters, clean the evaporator coils and condensers, and clear clogs (among many other preventative maintenance activities) may lead to larger problems. These issues can snowball, and might require replacing the HVAC system earlier than anticipated – thus needing reserve funds much sooner than planned.

How Preventative Maintenance Impacts Communities

Since preventative maintenance directly affects a component’s useful life, it significantly impacts another area of the association’s business: capital planning. With a proper maintenance plan in place, associations can:

• Budget easily and realistically
• Be confident in anticipating maintenance needs
• Project reserve fund needs according to the expected useful life of each component
• Lower operating expenses

Types of Maintenance Plans

Several other types of maintenance plans go hand in hand with preventative maintenance. They include:

1. Predictive maintenance: Similar to preventative maintenance in that it’s proactive, predictive maintenance aims to use warning signs of failure as a way to detect and address issues. By regularly inspecting components and watching for warning signs, associations can detect minor issues and repair them before they become larger problems.
2. Seasonal maintenance: Seasonal maintenance should be part of any preventative maintenance plan. These plans address tasks that are needed only during specific seasons, such as gutter and downspout cleaning in the spring.
3. Deferred maintenance: A deferred maintenance plan is when an association backlogs maintenance tasks for financial reasons. While not ideal, finances are a key player in maintenance, and this type of maintenance plan might be the only viable option. It’s best to limit deferred maintenance to non-essential tasks, such as maintenance of components that don’t affect the community’s health and safety.
4. Emergency maintenance: Condominium associations and HOAs must be ready in the event of an emergency. Emergency maintenance is anything that must be corrected immediately. These emergencies will take precedence over planned maintenance tasks and can exhaust resources. Although you can’t have a maintenance plan for emergencies, you can be financially prepared.

Reserve Studies and Planning Preventative Maintenance

Getting started is the most important, and sometimes hardest, step to take. To streamline the process, get a reserve study. Reserve studies guide associations through maintenance and replacement needs for common components. Reserve Advisors specializes in creating comprehensive reserve studies for community associations. Each study includes a 30-year schedule of anticipated replacements for each common component. The firm also includes recommended maintenance activities that maximize the useful life of each component.

A funding plan is included with the reserve study, providing guidance on how much an association needs to save annually to offset future capital expenses as they arise. Reserve Advisors assess the condition of each individual component and review the community’s current preventative maintenance activities. Armed with this information, the firm creates a customized schedule of the anticipated replacement of each component. This tool allows associations to take charge, execute preventative maintenance and eventual replacement, and plan financially.

Creating a Preventative Maintenance Plan

With the reserve study in hand, you’re ready to create a preventative maintenance plan using the following steps:

• Develop a maintenance schedule based on the findings in the study. Decide which components need maintenance on a time-based schedule and which on a usage-based schedule.
• In addition to the reserve study, you should also consider any warranty-required maintenance tasks and owner manual maintenance recommendations.
• Identify and outline the exact maintenance activities needed for each component.
• Using all of the above information, put together a master schedule for preventative maintenance measures and set expectations for the people in charge.