CAI-NJ July 2022

How to Plan a Successful CAPITAL IMPROVEMENT PROJECT Best Practices for a Strong Start By Eric Lecky, SageWater

How to Know When it’s Time Chances are good that you will know when a building issue in your community requires action. If you have any doubts, look to the two best sources for confirmation. Homeowners. They will frequently discuss issues with and communi cate their concerns or frustration to management, board members, and their fellow homeowners. Increasingly, they post their displeasures in online community forums. Your building. Aged and faulty building components can cause you to shut down systems or restrict building and amenity access to do repairs. This can cause you to face higher insurance rates due to increased claims, and incur more costs for losses, damages, floods, etc. Experts can conduct tests and inspections to determine an issue’s severity or confirm when a building com ponent has reached the end of its useful life. Clearly, work required to remedy an active safety risk, such as loose balcony railings or falling concrete, will require imme diate attention. Outside of that, the general rule of thumb is: replace a system when the annual cost of repairs exceeds the annual cost to replace it altogether. Setting Up for Success: Seven Phases of Pre-Construction Benjamin Franklin once said that by failing to prepare, you are preparing to fail. While Ben never managed a community association, his wisdom remains relevant. “Replace a system when the annual cost of repairs exceeds the annual cost to replace it altogether.” R oofs leak. Pipes age. Cement facades spall. It’s inevitable for every community. How you approach your capital improvement projects makes all the difference in minimizing risks and maximizing ROI —crucial considerations for helping to protect and enhance homeowner value and quality of life. So, where do you start? How do you choose between competing priorities? How do you keep homeowners happy? And how can you pay for it all? To help answer these questions and more, it is vital to use a disciplined, step-by-step process for planning and launching a capital improvement project.

Common Capital Improvement Projects REPLACING: • Windows • Roof • Elevator • Plumbing System UPGRADING: • Electrical System • Lighting • Building Façade • Pool • Fire/alarm/ suppression system • HVAC equipment • Security system • Lobby/ common areas

CONT I NU E S ON PAGE 28

Gustavo Muñoz Soriano/ iStock / Getty Images Plus

26

J U L Y 2 0 2 2