Capital improvements are an important part of ensuring that a condo/coop building remains structurally sound and comfortable for its residents. Common capital improvement projects include exterior work such as roof and window replacements or brick repointing; upgrading or replacing building systems such as plumbing, electrical wiring, HVAC, and elevators; adding or improving amenities such as fitness centers, swimming pools, parking lots; and installing or updating fire safety equipment.
In addition to these more obvious structural upgrades, capital improvements also encompass smaller maintenance projects that contribute to the building's overall value in the long-term. Examples of these types of improvement can include renovating common areas like lobbies and hallways, painting walls and ceilings, refinishing hardwood floors, caulking windows to reduce drafts or moisture damage, re-shingling the roofing system, and replacing aging (common area) appliances.
The most common way to identify and plan for capital improvements is through a reserve study. A reserve study is an engineering report that documents the condition of a building's common elements and major systems. It also includes estimates for the cost of repairing or replacing these items over a large span of time, usually around 30 years. This report is important for all owners, as it helps them understand the potential costs associated with maintaining their property. The Association uses the information in the reserve study to plan for future repairs and replacements, as well as to set aside money in a reserve fund to cover these costs.
If for some reason (I can't really think of a good one) a condo/coop board chooses not to conduct a reserve study, it should regularly consult with experienced professionals who can provide expertise on the best upgrades for their buildings. A certified engineer should inspect the building's systems and structure every few years, while a qualified contractor is necessary to handle any major reconstruction projects.
Boards should keep detailed records of all repairs, replacements, and renovations in order to track progress and be able to present this information to owners when necessary.
By performing regular maintenance, planning for larger capital improvements, and staying informed about building regulations, condo/coop boards can ensure that their buildings remain safe and comfortable for years to come.