Financial
Capital Improvement
A long-life addition or upgrade to the community — adding a new amenity, replacing a major system, building a clubhouse.
Also called: capital project · major improvement · betterment
What it means
A capital improvement is a project that adds new value or substantially extends the life of a major asset, as distinct from routine maintenance or repair. Adding a pickleball court is a capital improvement; resurfacing the existing tennis court is a repair (and typically a reserve item). The distinction matters because most Declarations and state statutes require a member vote for capital improvements above a stated threshold, and because capital improvements typically affect the dues structure long-term — once you have it, you have to maintain it forever.
Why it matters
Boards sometimes try to push capital improvements through as 'maintenance' to avoid a member vote. Doing so almost always blows up later, because the records show the project as new value rather than restoration of existing value, which can void the funding mechanism on challenge.
Example
A board wants to convert a grass area into a dog park with fencing, water station, and waste stations. The Declaration requires member approval for capital improvements above $50,000. The board prepares a member vote rather than try to fund the $75,000 project from operating reserves.
This definition is general orientation, not legal advice. Specific questions about your association should be routed to your attorney or a state-statute resource.
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