The Mayfair Proves They Can Fund Needed Repairs Without Special Assessments

When a condo is first built and still controlled by the developer, HOA dues are kept low to not scare off buyers. Once the developer is gone, those payments have to be reassessed to ensure they meet the needs of the ongoing repair and maintenance of the building. (Hint, they’re not.) The Mayfair, neighboring Lee Oak Lawn Park, is 18 years old, and like all buildings, various maintenance requirements need to be met. 

Soon after the Mayfair gained independence, they began conducting reserve studies that detailed the condition  of their infrastructure, its life expectancy, and estimated costs to repair or replace.  As you know, I’m big on HOAs doing reserve studies to avoid surprises that typically equate to a special assessment and/or the sudden failure of a critical element of a building (That noise you heard? Surprise! The A/C will be out for the month of August).

The Mayfair’s exterior consists of four levels of cast stone with an EIFS exterior on the rest of the 24-story tower.  The four-story, low-rise wing is also clad in cast stone. After 18 years, it’s time for the exterior to be refinished and repaired not only for aesthetics, but to continue being waterproof.  At a cost of about $2 million, most condos would have to scrape together a special assessment.  Roughly speaking, the Mayfair’s 142 units would have to immediately cough up $14,000 for their portion.  Sure, the Mayfair is a pricey building and residents would likely be able to easily afford to write that check, but why?

Left of the turret has been cleaned, brightening the façade even before recoating

With proper planning resulting from those reserve studies, the HOA dues were adjusted over the years to ensure these kinds of known expenses would be accounted for via their normal dues.  As Mayfair Manager Anne Fay of Worth Ross said, “It was Starbucks money per month” versus a large special assessment.

HOA President Michael Leger noted that when they looked at the dues structures and special assessment frequency of other high-rises, they found that some seemed to operate on a slim dues, regular special assessments schedule.  “Some seemed to have a special assessment every year or two.”

Mayfair decided on a no-surprises philosophy that I wholeheartedly agree with.  I’ve seen special assessments ranging from a few hundred dollars to $150,000 per unit.  One pricey, 10-year-old Uptown tower recently hit residents for $40,000 each for exterior rust that looked like mascara running down the building, so don’t think it’s just older buildings.

Special assessments for a few hundred dollars are insane to me. The HOA accounts don’t have enough to pay for something that minor? That’s too fiscally close to the cliff for me.  At the opposite end, large assessments are just poor planning with the potential of upending some residents’ lives.

Mayfair’s exterior is divided into 18 sections. Work begins on the building’s rear

But anyway, we’re talking about how Mayfair didn’t need to drop a special assessment bomb on their owners as they undertake this project that will last a pinch under two years.  The project divides the building’s exterior into 18 segments (think of them as top-to-bottom stripes) where workers will wash, repair and recoat (twice) the exterior before moving on to the next section.  Each “stripe” or drop will take about a month to complete before moving on.

One thing the Mayfair noticed was that the rear of the building that faces Lemmon Avenue is a lot dirtier than the front.  Traffic exhaust spattered the building with particulate that stuck.  Because of this, they’re finding the back needs to be washed twice in some places.  The building is angled so the edges that are more in line with Lemmon are noticeably dirtier.  In the photo above, if you look at the lintel, you see what looks like a blackness growing upward. It’s all part of how air moves and dirt settles.

As this project continues, there will be more tidbits uncovered and lessons learned. I will have to return when it’s complete and get that story …

For prospective buyers, the swing stages (window washer platforms) making their way around the building should be a comfort, not a concern.  Even before entering the top-notch lobby (also renovated), you can see that Mayfair is not only keeping up with maintenance, but that they didn’t have to pick owners’ pockets unexpectedly to do it.  There is no substitute for good planning.

Condo owners, how well are you planning for the future?

Remember:  High-rises, HOAs and renovation are my beat. But I also appreciate modern and historical architecture balanced against the YIMBY movement.  If you’re interested in hosting a Candysdirt.com Staff Meeting event, I’m your guy. In 2016 and 2017, the National Association of Real Estate Editors has recognized my writing with two Bronze (2016, 2017) and two Silver (2016, 2017) awards.  Have a story to tell or a marriage proposal to make?  Shoot me an email sharewithjon@candysdirt.com.

 

9 Comment

  • Nice article. Very informative. Thank you

  • Good for the Mayfair, its board and management. Nice to read a high-rise story where the planning was proactive.

  • Anne Fay is one savvy manager. But I am prejudiced.
    Carolyn Fay

  • As a 10+ year resident, I am very happy our management saw fit to educate residents in the need for healthy reserves. I want to credit our outstanding board of Directors over the years for carrying the banner. Without these dedicated residents, management can make recommendations but acceptance and implementation requires tough, not always popular decision making. Thank you Mayfair HOA Board for exemplary committment and tenacity.

  • Thanks for the nice story Jon! They are parking that platform outside my kitchen terrace on the pool deck….I’m glad the backside of my home was the first drop and almost finished! The front of my home will be drop 18 and less noticeable since they will park the platform on the first floor instead of the pool deck. It’s nice to live in a well funded building….we have always planned ahead.

  • Bravo Mayfair! As Anne Fay once stated, “The Mayfair is the crown jewel of Turtle Creek.”

  • I’m a condo owner. I’m struggling with a philosophy for capital reserves. For example, saving ahead for future expenses makes sense. But should I pay for something now that may not require replacing while I live in the building? When I owned a home, I took my unused savings for future replacement with me when I sold. I can’t do that with the condo reserves I pay for. How can I balance what’s prudent with what’s good business?

    In other words, there’s a lot to think about. Where can I get help?

    • mm

      When you move into a condo there are assumed to be reserves already accrued. The owner you purchased from didn’t take their contributions and leave, right? You had a head-start.
      .
      Think of reserves not as saving for future repairs, but as paying for the use of that item today.
      .
      For example, today’s Mayfair sellers didn’t pay for the resurfacing for buyers, they paid for their “use” of the exterior while they lived there. That use caused today’s need for repair.
      .
      Sure, with a home, you can take the money you were saving to paint the exterior when you sell. But you likely got a lower price for the home than if it had been freshly painted. If Mayfair was a leaky, dirty building, owners would get less money when they sold. Maintaining a building is maintaining your investment.
      .
      To answer your last question, I’m not sure what help you need? A Realtor versed in condos would be a place to start.

    • mm

      Great question. It may just be that’s what you deal with when you own a condo but I have my feelers out…