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Is Painting a Capital Improvement for HOAs?
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Is Painting a Capital Improvement for HOAs?

Anytime it comes to upgrades or making changes on your HOA property, it’s important to know whether the project is a capital improvement, as most boards have allocations for “maintenance” costs versus “capital improvements.” And many times, the difference matters when it comes to financing your project.

Painting is one of those projects that can fall into a gray area. Some painting is necessary for general care, but if you wanted to completely repaint your community, would that be considered maintenance or a capital improvement?

Let’s take a closer look!

HOA Maintenance vs. Capital Improvements

Both terms deal with community assets, but the difference comes down to whether the project helps maintain the original condition of your community or increases its overall value.

Maintenance expenses help prevent further deterioration so you can get the most out of an asset’s expected useful lifespan. A good example would be HVAC tuneups – annual preventative work on your heating and cooling equipment helps keep it operating at peak performance for as long as possible.

Capital improvements, on the other hand, boost an asset’s condition beyond its original condition or state. Instead of tuning up that furnace in the previous scenario, you’re replacing it with a more efficient model that will reduce operating costs for the HOA. By doing so, you’d also increase your community’s overall value – that’s a capital improvement.

Examples of Capital Improvement Projects

Capital improvement projects will vary depending on the task completed, and some examples are:

  • Water heater installation
  • Building an addition
  • Installing new cabinetry
  • Adding a deck
  • Expansive landscaping projects

Some repairs may be considered a capital improvement, and just a few examples are:

  • Replacing a thermostat
  • Sanding or staining cabinets
  • Repairing walkways or broken steps
  • Roof replacements or significant roof repair work

When Is Painting Considered a Capital Improvement?

Painting is one of those projects that sounds like maintenance but can turn into a capital improvement. That’s because aesthetics matter greatly when it comes to property value.

For example, paint touch-ups in hallways or to your pool fencing keep those areas in good condition and don’t necessarily increase the property’s value. And keeping up with this maintenance helps you prolong a complete repainting for as long as possible.

However, if you took on a major interior or exterior painting project, that could be considered a capital improvement to the building structure.

Another time painting is considered a capital improvement is during construction or restoration. If you do some remodeling or fixing up after a storm and are painting an area for the first time, that would be considered a capital improvement.

The bottom line is that for the work to qualify as a capital improvement, it has to increase the property's value or extend its use. Painting often satisfies both, but it’s not always clear cut maintenance versus capital improvement.

HOA Capital Helps Keep It Uncomplicated

At HOA Capital, we specialize in providing exceptional HOA project assistance, specifically when it comes to determining capital improvements versus general maintenance in the eyes of HOA lenders.

Our custom HOA capital improvement plans offer the perfect strategy to secure proper financing for your projects while we work with the banks on your behalf. Contact us today to learn more!

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