Imagine this scenario:

Your small condo association has been cited by the City of Chicago for various code violations. The City has given the association eight months to resolve the violations or face fines. The total cost of the repairs? $53,000.

The association has not raised assessments for several years due to push back from unit owners. As a result, the association has had to dip into its savings to cover increasing operating expenses. The association's savings have dwindled below $5,000.

A Special Assessment of about $6,625 per owner is necessary to remedy the violations and avoid fines. 

Considering that nearly 1 in 4 Americans have no emergency savings, how likely is it that your association will be able to collect the needed funds from all owners in time?

If your association is not regularly increasing assessments and including a reasonable contribution toward reserves each year, when an emergency hits your owners may not be able to pony up. This could then lead to increased repair costs and/or the need for collection action against non-paying owners, which costs everyone even more.

It's a lot easier to ask owners to pay a little bit more each month to allocate to savings than to ask for a $6,625 lump sum payment. Keep this in mind when planning your 2019 budget. 

 

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