The 2021 Budget Season is quickly approaching. For most property managers budget season can feel overwhelming, but with the right preparations, it can become very manageable, and give you a great opportunity to learn more about your association. Here are a few of our best tips for property managers on how to prepare for budget season.
Review Your Insurance
Insurance is one of the most important expenses in an annual budget, and on top of that, the insurance industry is changing constantly. It is especially important to review your association’s insurance each year with a licensed agent. Make sure your agent is aware of any additions, extra liabilities, or claims that have occurred during the year. Your agent should also be asking you these questions. If your agent does not review the association’s insurance each year, it might be time to consider a new agent.
Over the next year we are expecting to see insurance rates continue to increase due to multiple reasons:
1. Ongoing fraudulent litigation of First Party Claims against property insurance companies. There are on average 348 property insurance lawsuits filed in FL per day. The other 49 states in the Union average 2 per day.
2. Continued increase in claims due to hurricanes. As of today, we are already at our 8th named storm for 2021, and peak hurricane season begins mid-August through October.
3. We are beginning to see insurance carriers increase rates because of the catastrophic collapse of Surfside condominium in South Florida.
Each Association due to their unique risk characteristics should contact their agent to discuss how the market will impact them.
Get Started Early
One of the best tips for budget season is to get started early. That means starting in mid-summer instead of mid-fall. By starting early, you give yourself more time to handle unexpected issues and distractions that may arise with your association. It’s much more manageable to handle a budget crisis when you have 3 months, rather than 3 weeks to prepare for it. You also allow yourself more time to look at the small details of a budget that would otherwise get missed.
Conduct a Maintenance Review & Property Walk
Life is busy, and sometimes you just do not have the time to leave the office. A great place to start budget season is by conducting a detailed property walk. Keep a lookout for any current or upcoming maintenance issues that will need to be accounted for in the new year’s budget. A property walk also gives you a chance to talk with unit owners to see if they have any concerns regarding the association that may otherwise be overlooked.
Review Vendor Contracts
Many condominiums have standing contracts with vendors for services such as lawn care, plumbing, cleaning, etc. It’s important to review these contracts each year and see if you can negotiate better pricing or see if there is another vendor offering the same quality service at a more competitive price.
We hope these tips help make the 2021 budget season a little more manageable for you, and if you have questions regarding the insurance for your association, please give us a call at 727-360-8190.