Cash-Strapped? Managers' Guidance Helps Boost Reserves

True story: a condominium community’s board of directors spent almost $50,000 in legal fees and court costs to evict a corpulent canine that exceeded the weight limit for residents’ dogs...by three whole pounds.

In another community, the aging stucco on the building's exterior developed hairline cracks that needed sealing. To save money, the board postponed repairs for several years. The board thought they were giving residents a break on fees, but meanwhile the cracks proliferated, turning a relatively small expense into a major capital outlay.

Both situations illustrate how community association boards can go astray by spending—or opting not to spend—money without considering the full ramifications of their financial decisions. Indeed, property managers say one of their biggest challenges is encouraging board members to make reasoned judgments.

Effective managers guide their boards in financial matters in several ways, says Steven Cohen, vice president for operations at A&N Management, Inc. in Boca Raton.

Such guidance includes:

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