![]() ![]() Meanwhile, capital improvement expenses are taken from the HOA reserve fund. Expenses are funded by your HOA’s operating fund. ![]() HOA maintenance falls under Repairs & Maintenance in the operating budget. HOA maintenance fees are used to pay for electricity and other utility bills of common areas, maintenance and cleaning services, landscaping, and security, among others. Residents pay HOA fees each month, and the fees cover both capital improvement and HOA maintenance fees. The next question you might have is, “What are capital improvement fees?” and “What are HOA maintenance fees?” Capital Improvement: What Are the Fees Included? Now that you have a better understanding of the HOA maintenance and capital improvement definitions, it’s time to tackle the fees or expenses involved. Upgrades to an existing asset also fall under capital improvements. They can help reduce future operating costs for the HOA, as well. Capital improvements are also used to extend a component’s useful life by enhancing the quality of services. Associations have capital improvement projects when they want to boost an asset’s condition beyond its original or current state. Thus, maintenance expenses are necessary so that you can get ROI on your assets.Ĭapital improvements are expenses that increase the overall value of your assets. HOA maintenance protects assets so that they can reach their expected useful life (their intended lifespan). The purpose of preventive maintenance is to restore the asset’s original condition and/or operation to a specific standard that prevents any further deterioration. Maintenance costs are expenses for the regular repair or replacement of current assets. If you want to know the difference between capital improvements vs repairs and maintenance, it’s important to know the definition of each term. Capital Improvement: What Do These Terms Mean? Here’s an in-depth explanation that will help solve the HOA Maintenance vs. Knowing the difference between capital improvements and HOA maintenance is important - especially when allocating expenses in your annual budget. What are capital improvements, and how do they differ from HOA maintenance costs? Given that both terms deal with community assets, there seems to be some confusion between them. ![]()
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