New scoring system for condo and homeowner associations


Various scoring systems impact the housing market, particularly FICO scores which provide a homebuyer’s credit rating and can mean the difference between approval or rejection of a mortgage and influence the mortgage rate offered to borrowers.

Shoppers may also be familiar with the Walk Score, which measures a neighborhood’s walkability, the Bike Score, which provides insight into how easily it is possible to get around on two wheels, and the Transit Score, which evaluates access to public transport.

Now, a new score, called “FiPHO”, has been introduced to help buyers and owners assess a condo, co-op or homeowners association. FiPHO, which stands for Financial, Physical and Operational Health, is a rating from 1 to 100 that provides insight into the association and its work. The higher the score, the stronger the association.

The score, developed by Association Reserves, an organization established in 1986 that has provided more than 70,000 reserve studies for associations, is part of a new database called Association Insights & Marketplace (AIM). The database has identified more than 400,000 associations.

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The boards of these associations can upload the financial, physical and operational details of their associations to generate a FiPHO score. The financial health score is based on a review of documents to assess whether the association’s finances are sound. Additional records are needed to generate a physical health score, which reflects the quality of community maintenance, and an operational health score, which focuses on how well the association is functioning.

The board of an association must complete its profile on the AIM website (free of charge) to have a FiPHO score generated. Ideally, associations will want to be transparent with owners and potential buyers. While the FiPHO score and AIM reports are free until Labor Day, buyers eventually have to pay $49.99 for an in-depth report. The cost of the report is revenue for the board, which incentivizes associations to participate.

Buyers of condominiums, cooperatives and homeowners’ associations must receive the association documents free of charge after the acceptance of their offer to purchase. However, some buyers may want to review the documents and discuss them with their lender, real estate agent and lawyer before making an offer.

The idea for the FiPHO score began with the collapse of the Champlain Towers South condo in Surfside, Florida in 2021, which highlighted the potential danger of condo associations mismanaging funds and delaying maintenance.

“The tragic collapse of Champlain Towers South Condominium in Surfside, Florida last year is the most extreme example of what can happen when deferred maintenance is combined with an underfunded reserve account, and that the board and owners are working against the grain,” Robert Nordlund, co-founder of AIM and founder and CEO of Association Reserves, said in a statement.

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