Deferred Maintenance: Another Consequence Of The Great Recession

By David Swedelson, California Condo Attorney and HOA Lawyer, Partner SwedelsonGottlieb, Community Association Attorneys

Many community associations continue to suffer from delinquent assessments; many owners are still living in their units or homes not having paid their lender/bank or their association assessments for 2 to 3 years. Many associations are not doing enough to collect those delinquent assessments and are leaving money on the table. At many associations, the senior foreclosed, and the associations have taken no action to collect believing that such efforts would be futile. Maybe yes, maybe no. We spoke about this new community association paradigm here.

There is another consequence of the Great Recession that will likely impact many California community associations in the future; many of these associations are deferring maintenance because they don’t have enough income to pay for the regular expenses, much less for extraordinary expenses such as painting. And many are not funding reserves!

While California community associations are slowly crawling out of the recession, we already know that this deferred maintenance is going to cause many associations to have to expend more money to repair the consequences of this failure to maintain.

I will never forget the night I was watching the 11:00 PM news and saw one of our clients, specifically the president of the association, being interviewed on a television news program about how the association could not afford the cost of repairing a large crater hole in the parking area because of the lack of financial resources as a result of unpaid assessments. We of course quickly advised that board of the potential liability the association was exposing itself to for not making repairs to obvious trip hazards, etc.

I was reminded about this issue, one that we have been thinking about for some time, when I read the April “Tip of the Month” from PrimeCo Painting (see below). As PrimeCo indicates, “there are some things about your buildings and their need for attention that just scream out to you.” They conclude by stating “watch for things that might be caught early and avoid greater costs down the road.”

Is your association deferring maintenance? Is it leaving money on the table? Have questions or comments? David Swedelson can be reached via email: dcs@sghoalaw.com