Condo Media - July 2014 - 31

eliminating any tasks that require a
licensed electrician or anything more
than very basic plumbing work.
While handling in-unit maintenance
tasks for owners can keep the maintenance group busy, Hugh Shaffer says,
"it can sometimes keep them busier
than they need to be," potentially
distracting them from their primary
common area maintenance duties.
"It's a balancing act."
Brawley shares that concern. If
they're spending half their time or
more working for owners and common
area maintenance and repairs suffer as
a result, she says, "is that a net positive
or a negative for your budget and for
the condition of your property?" She
sees other concerns as well:
* Liability. If an association employee
steals an owner's property or is accused of doing so.
* The "lifespan" of the work. Owners
sometimes assume the equivalent of
a lifetime guarantee, Brawley says.
If a problem recurs or a part that
was installed wears out, "they forget
you did the work 10 years ago, not
yesterday."
* Owners aren't always satisfied with
the results. And that dissatisfaction,
justified or not, can morph into
general dissatisfaction with the board
specifically and with the community
generally. And there are the personalities involved. "There are some owners
you know won't be satisfied with
anything you do," Brawley says. "Can
you refuse to do work for them?"
To take the association out of the
mix and the line of fire, some boards
allow maintenance staff to work for
owners on their own time. This may
have the added advantage of allowing the association to pay workers less,
because they can augment their income
with after-hours work.
But that arrangement creates some of
the same problems for the association
as providing the services directly. Given

the opportunity to earn money on the
side, some workers may neglect their
association duties.
Whether provided directly or in-

the money-collection process, but it
requires a designated phone line.
Brawley doesn't see many disadvantages for associations in owning laun-

Leasing rooftop space for cell tower installations is
hands down the least troublesome and most profitable
option available to community associations.
directly, handyman services have to
be monitored carefully, Brawley says,
adding another administrative task and
potential headaches for the board, the
association manager, or both.

Laundry Machines

The revenue generated by on-site
laundry facilities doesn't come close to
the income from cell tower leases, but
it can be equally hands-free for boards.
Associations typically lease laundry
equipment from a vendor, who does
all the work involved: maintaining the
machines, replacing them when necessary, collecting the money from the
coin-operated equipment, and sharing
part of the proceeds with the association. However, the revenue potential
from these contracts is limited, Hugh
Shaffer says.
For that reason, some boards opt to
purchase the machines themselves. This
eliminates the middleman, but it also
puts the maintenance and management
burden on the board. Collecting the
coins has been a particular headache.
Because pocketing loose coins is
so easy and potentially tempting, the
collection job usually falls on board
members, Hugh Shaffer says. "Smart
cards" have made the collection process
easier, though. Residents can deposit
money in a cash machine and load it
onto a card, which they swipe instead
of depositing coins in the washers and
dryers.
"Someone still has to collect the
money from the cash machine," Shaffer
says, "but at least it's dollar bills rather
than bags of quarters." Credit card
authorization is another way to avoid

dry equipment rather than leasing it,
but there are costs involved that boards
need to recognize, including:
* The cost of purchasing the equipment
* The cost of maintaining and repairing it
* The collection headaches (which
Hugh Shaffer mentioned)
* The utility costs related to operating
the machines, for which vendors are
typically responsible under a leasing
agreement
* The cost of replacing the machines
when they wear out, which boards
should include in their reserve planning but don't always.
On the other hand, leasing is much
simpler for the board, she says, and it is
almost pure income.

Rental Income

Some associations own units (usually
purchased at foreclosure sales) that
they rent to tenants and/or hold for
investment purposes. This isn't common (most communities lack the cash
required to acquire the units, Brawley
notes), but it has worked out quite well
for some associations - not so well for
others, she adds.
In the latter category, one community acquired a unit and rented it to a
long-time tenant, enjoying the revenue
stream it generated for several years.
But the tenant encountered financial
problems, fell months behind in his
rent, and ultimately had to be evicted.
The lost rent combined with the
legal costs and the cost of renovating
Condo Media * July 2014

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Condo Media - July 2014

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