Sunday, February 22, 2009

Basic Building Maintenance

Who do you call when a water pipe breaks in a common area, or a light bulb burns out in your hall? Who pays your building's PGE bills, property tax bills, and insurance? Our TIC group has decided to manage all of these things in-house. One of our partners receives a stipend (about $250 per month) to manage basic maintenance and accounting on our 6-unit building. At the end of each fiscal year he sends all the TIC partners a simple spreadsheet via email.

The X axis column headings show:
(+) Total Dues Collected
(+) Interest Income
(-) PGE
(-) Plumbing
(-) Bank Fees
(-) Legal Fees
(-) Fire Alarms & Extinguishers
(-) Insurance
(-) Stairs, Locks & Misc. Repairs
(-) Gardening Supplies
(-) Cleaning
(-) Garbage
(-) Water
(-) Property Tax
(-) Management Fee

The Y axis rows are all the months of the calendar year, January through December, with a summary row totaling all the expenses for each month and for the entire year, including the balance we have left in the bank.

Each year we assess what we are putting into the house account through our dues versus what we are spending (on average) on these routine expenses. Our goal is always to have enough operating capital year over year to cover these essential items.

Our group does not keep a large amount of money in reserve - it's usually about $10,000. That is because if anyone decides to sell, reserve money stays with the house. So we base our dues on basic, ongoing expenses. If a major project comes up, like a roof replacement, everyone pays a special assessment.

This is just one way to manage TIC maintenance and accounting in-house. Every group might do things a bit differently. In my view, the three key elements are

1) a responsible, qualified partner who can manage basic home repairs, pay bills on time, manage the bank account and maintain a reporting spreadsheet.

2) a willingness on the part of the group to clearly define these duties and pay the partner who is doing the work a fair stipend.

3) an understanding that larger, more complex projects outside of the scope of day-to-day maintenance may require other partners to pitch in from time to time.


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