How HOAs Can Avoid Budget Creep and Keep Projects on Track
.png)
.png)
Subscribe: The Board Brief
Quarterly, practical guidance for HOA boards & PMs. No fluff—just field-tested insights.
Budgets don’t explode—they drift. HOA project budgets rarely blow up in one day. More often, they drift — a few small oversights here, a “while we’re here” repair there — and before long, the board is staring at a bottom line that doesn’t match the plan. The good news? With the right controls in place, boards can stop budget creep before it starts.
7 controls that actually work
1) Tight scope + photos
Define exactly what’s in (and out) of scope. Attach site photos, mark problem areas, and eliminate vague language.
2) Unit pricing for unknowns
For risks like dry rot, require unit pricing up front. Instead of “T&M as needed,” you’ll know the cost per LF or SF before the work starts.
3) Alternates, not ambiguity
When you want to price upgrades or optional work, don’t bury them in the base bid. List them as Alternates so bids come back comparable.
4) Risk register + contingency
Identify where creep is most likely (dry rot, hidden leaks, utility conflicts). Assign contingencies for each risk and track them separately.
5) Early submittals & long-leads
Require material submittals and confirm long-lead items early. Waiting on approvals is one of the fastest ways projects drift past both schedule and budget.
6) Weekly cost-to-complete review
Don’t wait for month-end. A simple weekly report comparing “work completed vs. dollars spent” flags creep early enough to correct course.
7) Clear approval thresholds
Define in writing who can approve change orders, and under what conditions. Without thresholds, costs sit idle waiting for signatures—or worse, get approved without oversight.
Sample policy language boards can use
“Board authorizes the property manager to approve change orders up to $X per occurrence and $Y aggregate when: (a) unit prices are used, (b) schedule impact is documented, and (c) budget forecast remains within approved contingency.”
This keeps approvals moving while ensuring costs are transparent and controlled.
Paul’s perspective: Dry rot and pre-planning
“If you’re doing projects that may uncover dry rot, you’re going to have change orders. That can’t be avoided. The best thing you can do is plan ahead and already have the answers:
- If we find dry rot, who approves what needs to be done?
- Who signs the change order, and how long will that take?
- Who reports to the board—and how often?”
– Paul Reeves
On small projects, one person may cover all three roles. On large projects, you may need separate people for approvals, documentation, and reporting. The key is clarity before the first wall is opened.
3 common causes of budget creep (and how to stop them)
- Undefined scope of work. Fix by clearly stating inclusions and exclusions.
- Uninformed approvers. Fix by briefing anyone with authority on what the scope covers.
- No scheduled reporting. Fix by requiring a standing agenda item to track change orders submitted, dollar amounts approved vs. pending, and overall impact on the budget forecast.
We’re here to help
Book a budget accuracy review
We’ll review your current project budgets, scopes, and approval process to make sure your 2026 projects stay on time and on budget.
Book a call with PaulCheck Out More
"The Board Brief" Blog
%20(1).png)
.png)
.png)
