Day-to-day operations keep most boards busy, and it is easy to go years without stepping back to ask how the association is really doing. A yearly health check gives the board and its manager a clear picture of the community's finances, physical condition, and relationship with owners, and it turns that picture into a plan.
Board members are responsible for protecting and preserving the community. The manager coordinates the services that keep it running and brings experience in operations and governance. A health check works best when both work on it together. Findings can be tracked in a simple spreadsheet so they can be turned into a plan and shared with owners.
This article is general information and is not legal or accounting advice. The association's attorney and accountant should be consulted.
1. Property Values and Sales
Owners want to know that their homes are holding their value. Recent sales in the community can be compared with sales in similar nearby neighborhoods. A local real estate agent can often provide this information. Values are affected by many outside forces, so they should be treated as one sign among several, not as a full measure of the association's health.
Questions from buyers and lenders are also worth noting. If buyers are asking about special assessments, reserves, or pending repairs, those subjects may need attention.
2. Curb Appeal and Condition
The physical condition of the community can be judged at a glance. A walk-through should be scheduled with the manager to look at entrances, landscaping, lighting, paint, pavement, sidewalks, pools, and amenities. Items should be listed by urgency and by whose responsibility they are. More on common area upkeep can be found in
HOA practices for common areas.
If many homes are out of compliance with the rules, reminders in newsletters may help, followed by consistent violation notices where needed.
3. Budget and Collections
The budget is the foundation of the association's finances. Warning signs include sharp assessment increases with no clear explanation, repeated operating shortfalls, and reserve money being used to cover operating costs. A rising delinquency rate is another red flag, because unpaid assessments leave the association without money it planned to spend.
The budget should be built from realistic cost estimates and current contracts, not from a target assessment amount. Year-end financial reports should be reviewed with the manager and accountant.
4. Reserve Funding
Reserves pay for major repairs and replacements, such as roofs, paving, and painting. When reserves are short, owners usually face a special assessment or a loan when those items come due.
The reserve study should be reviewed to see each component's remaining useful life and how well it is funded. For example, if a roof with a 20-year life is 15 years old, about 75 percent of its replacement cost should be set aside under a straight-line approach.
Florida law sets specific rules. Condominium reserve requirements are found in section 718.112(2)(f) and (g), including the structural integrity reserve study required at least every 10 years for buildings three habitable stories or higher. Homeowners association reserve rules are found in section 720.303(6). A reserve specialist or engineer should be used to prepare or update the study. More on this subject is covered in
understanding the importance of reserves for your condo or HOA.
5. Community Culture and Communication
The board should consider whether owners hear from the association only when something is wrong. Regular newsletters, an up-to-date website or portal, and clear meeting notices help owners feel informed. Communication should run both ways, with an easy way for owners to ask questions and receive answers.
Social events such as potlucks, seasonal gatherings, and volunteer appreciation events help neighbors connect with one another and with the board.
6. A Written Assessment and Follow-Up
Findings from the first five steps should be gathered into a short written report. Each issue should be assigned a priority, a responsible person, a cost estimate, and a target date. Quick wins, such as minor repairs and communication improvements, can be handled first, while larger projects such as reserve funding changes are planned over a longer period.
A plan only helps if it is followed. Progress should be reviewed at board meetings on a set schedule, such as quarterly, and summarized for owners. The health check should then be repeated each year so that new issues are caught early.
7. Bring in Professional Support
Healthy associations share three traits: informed board members, an experienced manager, and engaged owners. Management support for each of these is available from Condominium Associates. To schedule a conversation about your community,
contact us.
