Community Communication Corner
by Bob Gourley, MyEZCondo Founder, Member of CAI CT Board of Directors

Telling the Story of Capital Reserves
What happens when you have to tell your residents a story that may not be particularly easy to understand or even all that interesting at first glance? If it is a story with little action or glamour, will you be able to keep their interest? I have found that telling the story of building a healthy capital reserve is one of the most challenging areas of community communications.

For many of us, explaining capital reserves is an arduous chore. For residents of a homeowners association, it is often an unpleasant reality that many see as hitting them in the pocketbook today for the benefit of someone else in the future. To complicate the matter, there is little "action" in the story to draw the reader in to your message. And yet, time has proven that a community that fails to build a healthy reserve is doomed to fail. You should take advantage of your community's communication vehicles to tell the story of the importance of building a strong reserve so that your community remains successful and viable in the future.

Somewhere between the language of the technical engineer and the statistical accountant lies the vocabulary and interest level of your typical resident. You won't win them over with detailed descriptions of the suggested life expectancy of the new roof shingles or the inflation-adjusted cost of the new parking lot in the year 2020. They are looking for tangible benefits and that should be your guide in telling the story of the community reserve.

Quite simply, the monies spent on a well-funded reserve today are peace of mind that residents won't be asked to foot an unfair portion of the bill in the future. The benefit they receive is tangible - one less thing to worry about. Stewardship, the act of leaving behind a place in as good a condition as when you moved in, is a community responsibility. Aside from the obvious benefit of making the community a better place to live, it is what will keep home values maximized within the community. This is a primary mission of the Board of Directors at any HOA.

Avoiding the subject is not a good strategy. How many communities have needed to "defer maintenance" on necessary repairs due to a lack of funding? How many times have we heard of hefty assessments on homeowners due to a lack of funds for repairs that were completely foreseeable by a reserve specialist? Is there any HOA meeting more unpleasant than when the common fees are raised or the special assessments are discussed? Lack of information leads to anger and unrest among community members. Keeping them informed is your best bet to avoid bigger problems.

Floods, fires, and other disasters are unusual occurrences and are usually covered by insurance. The necessity of a strong capital reserve is predictable and the story of how those monies will be used needs to be told as well. Association members need education in this area, as it is seldom a selling point for moving into a HOA community. By using your newsletter, community website, or any other communication vehicles you have available to you, you can effectively tell the story to residents and be rewarded with a more vibrant community.

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