Find part one of our two-part Capital Improvements series here.

Capital improvements not only affect your community or building’s health and reputation, but also homeowners’ wallets. That’s why you need to have an effective capital improvement plan in place and communicate with association members from the beginning. It’s also crucial to have a project management professional overseeing the project. They will create a plan of action prior to starting each capital improvement project and communicate with residents about the project’s status as work progresses. 

Communicating with residents.

One of the keys to a healthy relationship with residents is transparent communication. When a board and management company fail to communicate adequately about something as costly as a capital improvement project, residents may feel blindsided, or they may question the necessity of the expense. Even if a project is necessary, clearly explaining the reasons may be all it takes to gain residents’ acceptance. Additionally, sending out surveys to get resident feedback about what projects are important to them demonstrates that the board values their opinions. 

Keep residents informed about the board’s capital improvement plans by discussing them in meetings and using any other communication channels available: emails, your association website, newsletters, flyers, and mass communication tools. Getting buy-in from residents helps projects proceed more smoothly. 

Regular, relevant, and timely communications are also important during capital improvement projects so homeowners are aware of work that’s in progress, how it might impact them individually or as a community, and when it’s likely to be completed. This helps manage expectations and boost morale when they know there’s an end in sight. Most importantly, always communicate the benefits and purpose of the project itself. For instance, share why a new pool will improve the resident experience or the external additions to your clubhouse will enhance curb appeal and increase property values. 

Prioritizing projects.

Your components’ remaining useful life usually determines the timing of your capital improvement projects. For instance, a component that is coming to the end of its expected useful life next year will probably need to be replaced before one that is expected to last another five years. But what if several components are reaching the end of their useful life simultaneously or you also have several enhancement projects you want to do? 

Start by prioritizing structural work over those projects that are simply aesthetic or nice to have. Consider delaying “wish list” items that might be desirable but aren’t necessary for the safety of your association and residents. “Sometimes you may even need to shift priorities when a ‘must-have’ repair comes to light during enhancements or upgrades,” said Christopher L. Pappas, senior vice president at FirstService Residential. “For example, while it may be a priority to update your hallways from an aesthetic angle, if you don’t evaluate what is behind the walls (like electrical, plumbing, or other code upgrade requirements), you may end up facing expensive repairs or even safety risks.” While they may not be as exciting as amenity upgrades or aesthetic enhancements, must-have repairs and replacements should always be prioritized over “nice-to-have” projects. 

Pappas added, “Along the same vein, when prioritizing capital improvements, consider how each project may impact another. It’s important to do projects in the proper sequence rather than arbitrarily picking one project over another. Residents may want to see the landscaping around your clubhouse upgraded in the current year, but if you’re planning on painting the building in the following year (which can damage landscaping), it may not be a wise investment.” 

Lastly, whenever possible, you should give residents a voice in how you’ll prioritize projects. Your board may think that repaving your parking lots should take precedence because you’ve heard some residents complain about cracks and potholes. A survey might reveal that, in fact, outdoor lighting upgrades are a higher priority for residents because they are more concerned about safety. Your board wouldn’t know this without surveying the entire community or building. 

Defining a project’s scope and timeframe.

When you’re ready to start planning a specific capital improvement project, consider the advantages and disadvantages of various approaches. If you work with an association management company, you may be able to visit other properties the company manages where similar work has been performed. This could reveal that there’s a lower-cost way to do the project, or you may realize that investing a little more money provides an option with significantly greater benefits. Decide when to start the project by working backward from when you want it completed. Be sure to consider the weather, holidays, and times when occupancy might be high or low. Remember to build in time for delays caused by any of these factors, too. 

Hiring a project manager.

By providing construction management services from concept to completion, project managers significantly reduce the burden on your board and property manager. Their expertise enables them not only to oversee capital improvements, but also to optimize the value of your projects (value engineer). Their job is to advocate on behalf of the association to decrease total project time and cost, in part by leveraging their existing resources and relationships to purchase goods and services at a lower price. They are also responsible for keeping the project running smoothly and ensuring that work meets quality standards and code. 

Project managers are usually engineers or other construction professionals with years of experience in capital improvements. It’s important that you not make the mistake of assuming your property manager can act as the project manager – property managers don’t have the specialized expertise to manage capital projects, nor are they licensed to do so. Property managers will assist in the administration of the project, but they must focus on operating the community, paying the bills and leading the staff. 

Our Project Management Services team has proven track records of completing complex projects on time and on budget by leveraging FirstService Residential’s size, relationships, and buying power to create significant cost savings for our clients. 

Soliciting bids.

Both your project manager and your property manager can help identify reliable vendors and contractors. In addition, the boards of other properties the company manages may be able to recommend providers they have used. A good property manager will also be able to minimize the complexities of soliciting bids by taking on the job of interviewing and negotiating costs with engineers and contractors. Because FirstService Residential has a wide network of managed properties as well as a strong local presence and vetted vendor relationships, managers can help guide boards with their vendor selection. 

Make sure that all vendors and contractors have the necessary licenses, certifications, and insurance coverage and that they offer warranties for their components and the work they perform. You should also check with your association’s attorney about potential liability you may face during the project and determine whether you need to obtain additional insurance during the work. For example, your association could be liable for theft or damage to tools, supplies, and other items a contractor stores on-site while work is ongoing. 

Updating your reserve study.

Once the project is over, you’ll need to engage your reserve specialist to update your reserve study. The existing study will have become out of date because you’ll have depleted some (or all) of the money in your reserve fund and completed one of the projects listed in the study. 


Having a good capital improvement plan is integral to maintaining the vitality and financial well-being of your community or building. By prioritizing projects, fostering open communication with association members, and implementing comprehensive plans managed by professionals, you not only enhance the health and reputation of your property but also safeguard homeowners' wallets. Transparency and proactive engagement throughout the process ensures that residents are informed and involved every step of the way, fostering a sense of unity and trust within the community. 

Disclaimer: This article is provided for information purposes only and does not constitute legal advice.
Friday May 24, 2024