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Dealing with D&O
Enforcing House Rules
Pool Closing
Snow - How to plan for the inevitable
What is a Management Company?
What Your Manager Should Know
Self-Management: Risky Scheme?
Why Bother to Budget?
Review Your Record Keeping
What Are You Getting for Your Management Dollars?
Article: Snow - How to plan for the inevitable
By: Alvin Wasserman
From Habitat Magazine
Alvin Wasserman is director of Fairfield Property Services in Commack, N.Y.
For children, the prospect of snow is exciting and inviting. For adults and homeowners snow is often regarded with trepidation. Condominiums and cooperatives on Long Island prepare in the autumn of each year for the possibility of snow. There are several ways to address this subject that will be examined in this article.
Snow contracts are popular amongst many Associations. Contracts can be written in many different ways. A contract that includes all eventualities will be the most expensive. A snow contract is like an insurance policy. If it is all-inclusive the contractor must be prepared to meet the worst possible conditions. He also is in business to earn a profit that will be added on to the cost of a worst case scenario. The advantage to the homeowners with this type of contract is they know how their budget will be effected irrespective of weather conditions. The disadvantage is there will be years when they overpay for this kind of protection.
As an example, in 1995 one property paid $4,000 for snow removal on a per diem basis. The winter was mild with minimal snowfall. The year before we had numerous storms. The Board decided to purchase a snow contract for 1996 that cost over $20,000. With a severe winter the owners come out ahead, in a mild winter the snow contract will be like an insurance policy with only minor claims placed against it. (1996 turned out to be one of the worst winters of all time.)
Many contractors raised their prices after the winter of 1994 due to the losses they incurred under snow contracts. What they do not take into account is the years with minimal snowfall and large profits. Boards responded to the winter of 1994 by playing musical chairs with their snow contractors. Many contractors were not renewed by the properties they serviced in 1994 only to be rehired by a different set of properties in 1995. Very few contractors were commended for the job they did in 1994. The snowfalls were numerous and often fell upon layers of ice. Contractors were taxed beyond their capabilities. The power of nature will overcome human efforts in these circumstances. Homeowners on Long Island have high expectations even in the face of natural forces.
Another option for snow contracts is to write them with limited protection for a specified number of storms or inches of snow. Beyond the specified limit, additional charges are added. This type of contract is less expensive and provides financial protection for owners up to a limit. If a property decides to purchase a snow contract, this form is the most affordable.
Another option is to work with a contractor on a per diem basis. Most contractors would prefer to not work in this way since it only provides cash flow in the event it snows. If a contractor has clients under contract, he will most likely service them first. Per diem clients will not get priority. There is an exception to this rule if your management company has an extensive portfolio with significant buying power. In this instance, due to the volume of business involved, a snow contractor may be flexible and be willing to work with property owners per diem.
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