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

HOA 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. 

Effective communication is essential for maintaining a healthy relationship with residents. When a board and management company do not provide transparent updates about significant expenses like capital improvement projects, residents can feel blindsided and may question the necessity of the expenditure. Clearly explaining the reasons behind a project can help in gaining resident acceptance and support. Furthermore, distributing surveys to gather resident feedback on which projects they prioritize shows that the board values their opinions and fosters a sense of community involvement. 

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 planning a specific capital improvement project, weigh the pros and cons of different strategies. Partnering with an association management company can offer valuable insights; their managed properties may showcase similar completed projects, helping you discover cost-effective solutions or identify premium options that yield greater benefits. Set your project start date by determining the desired completion time and working backward. Factor in seasonal weather, holidays, and periods of high or low occupancy. Remember to build in time for delays caused by any of these factors, too. 

Hiring a project manager. 

By offering comprehensive construction management services from concept to completion, project managers greatly alleviate the workload for your board and property manager. Their specialized expertise allows them to oversee capital improvements while maximizing project value through effective value engineering. Acting as advocates for the association, project managers work to minimize both the total project duration and costs. They achieve this by utilizing their established resources and relationships to source goods and services at reduced prices. Additionally, they ensure that projects run smoothly, adhering to quality standards and code compliance throughout the process. 

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 property manager play crucial roles in identifying reliable vendors and contractors. Furthermore, boards from other properties managed by the company can recommend providers they trust. An effective property manager simplifies soliciting bids by interviewing and negotiating with engineers and contractors on your behalf. FirstService Residential's extensive network of managed properties and strong local presence ensure that managers can leverage vetted vendor relationships to guide boards in selecting the best vendors 

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. 


Crafting a robust capital improvement plan is essential for sustaining the vitality and financial health of your community or building. By effectively prioritizing projects, promoting transparent communication with association members, and utilizing comprehensive plans overseen by professionals, you not only boost your property's health and reputation but also protect homeowners' finances. Ensuring transparency and proactive involvement throughout the process keeps residents informed and engaged, cultivating 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