HOAleader.com - Tip of the Week - January 14, 2022
Published: Fri, 01/14/22
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HOAleader.com - Tip of the Week - January 14, 2022
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The cost of doing business at condos and HOAs nationwide is, indeed, going up, according to industry insiders. In this week's tip, we explain the scope of the problem and offer ideas to help you fight back.
"That's happening, especially with respect to maintenance and construction costs," states Matthew W. Heron, a member at Hirzel Law in Farmington, Mich., which represents hundreds of community associations throughout Michigan. "Those are the areas I've seen it the most. That began with COVID-19 and has continued."
That's also true in Florida. "I'm seeing quite a bit of it because of work-shortage issues and inflationary pressures," notes Matthew Zifrony, who advises homeowners and condo associations at Tripp Scott, a Ft. Lauderdale law firm, and who has also served as the president of a 3,000-home association. "It's a big complaint I'm hearing from just about every association I represent. Another driver is the increased cost of insurance. In some associations, that's the largest item on the budget."
Zifrony was speaking broadly, but the summer 2021 condo collapse in Surfside, Fla., has added to the challenges. "There are a few cities that have become ultra, ultra conservative in sending out additional inspectors and requiring more maintenance and inspection work," he says. "Before, they may have been quicker to turn a blind eye to those issues. So that's also part of the drive for increases in assessments when it comes to high-rise condos. I'm seeing that quite a bit more in oceanside condos."
In California, costs are rising everyday operations and construction projects. "I think across the board prices are going up," says Alex Noland, CCAL, founder of Noland Law in San Francisco, which represents 200-plus community associations throughout California. "That's because of inflation and supply-chain issues with COVID.
"There's a lot of construction work being done, too, and I've seen construction projects that have gotten delayed in part because of a shortage of construction materials," he adds. "Then it gets to: How do you budget if you don't have a set start date for your project? Contractors are unwilling to agree to fixed prices if the project isn't going to start for a few months or even weeks because prices are so volatile.
"Also, for services like landscaping, window washing, and cleaning, my clients typically see an increase every year," notes Noland. "But many are seeing a 3, 4, 5 percent increase. The overall base fees being charged are going up more than in the past."
But what can you do? Check out our new article, How You Can Ease the Pain of Condo/HOA Budget Increases, https://www.hoaleader.com/members/4447.cfm, to find out five tips you can implement today to keep costs in check.
Best regards,
Matt Humphrey
President
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