As a homeowner, you want to ensure your property is well-maintained and secure. However, deferring maintenance of common areas could lead to increased expenses that cost your HOA thousands of dollars. In this article, we will explore the hidden costs that arise from deferred maintenance and provide practical tips on how to avoid them. From increased repair fees to legal expenses related to lawsuits, we will delve into the real-life consequences of delaying common area repairs. By the end of this article, you will have a clear understanding of why maintaining your common areas is crucial and how you can save your association from unnecessary expenses.
It’s no secret that the cost of labor, supplies, and materials necessary to repair and replace standard area components increase annually, thanks to inflation. Most reserve studies include a 1.5-3% inflation rate in the calculations. However, in real life, this rate fluctuates wildly and is often higher. For example, this U.S. inflation calculator shows that in 2021 inflation was 4.7%, and in 2022 it skyrocketed to 8%. 2023 is already at an average of 4.9%, with data only available through April.
Inflation means that in a stable economic climate, the proposed cost for inspection, repairs, and replacement of the association’s balconies rises by 1.5-3% every year the project is delayed. In times like the present, costs could increase by 5-8% in a single year, even if the damage magically does not get worse, which it will. So, it’s simple math that the sooner the work gets completed, the lower the total cost.
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