Condominium association board members are responsible for managing the upkeep and maintenance of their shared association properties to ensure they remain safe, functional, and attractive for all residents. Two essential components of this responsibility are maintenance and capital improvements. While both are critical for ensuring the ongoing value and satisfaction of the property, there are significant differences between the two.
Below we’ll discuss the differences between condo association maintenance and capital improvements, including what they are, how they are funded, and how they contribute to the overall well-being of your association community.
Understanding the Differences Between Condo Association Maintenance and Capital Improvements
Condo association maintenance and capital improvements are both essential components of property management, but they differ in several ways.
● Maintenance – This refers to the ongoing upkeep of the property to prevent or fix issues as they arise. Routine tasks such as cleaning common areas, replacing light bulbs, and maintaining landscaping should be part of your condo association maintenance plan. Maintenance items are generally considered to be regular expenses that are budgeted for and paid out of the association’s operating budget.
● Capital improvements – These, on the other hand, are larger projects that involve significant investments of time and money. Capital projects are intended to improve the value, function, or appearance of the property and require significant planning. Capital improvements are typically considered to be long-term investments. They may involve major repairs, renovations, or upgrades to the property, such as replacing a roof, repaving a parking lot, or installing new elevators. Capital improvement projects are often funded through reserves, special assessments or financing and are not typically considered part of the association’s regular operating budget.
When planning for the future of your condo association, board members must consider both ongoing maintenance needs as well as long-term capital improvements. Adequately funding both areas through annual budget planning is an important part of keeping your financial management in good health and the overall well-being of your shared community property looking its best.
For help navigating the myriad responsibilities of serving on your Chicago condo board, turn to us at First Community Management for help.