Reserve Study

Written on 01/18/2017
Jennifer Nevins


Dear Jen,

Our community is fairly new (about 5 years old) and we are funding our reserve fund based on a reserve study that was included in our 2009 governing documents.  A few of the board members are concerned that we would incur cost for nothing if we get a new reserve study and they state "we are fine"! They also believe that updating the reserve study may unnecessarily require the community to raise their maintenance fee. We really don't need an increase right now. What reason would you provide for following the advice of our community manager and updating the reserve study?

Lisa


Dear Lisa, 

Please consider the following:

Reserve studies included in the governing documents are completed before your community was built so it may be a couple years older than the community making it now 7 years old and may not have included all the necessary replaceable components since there may have been changes to the community during construction and the pricing is old.

Of course, its easier to do nothing and delay increases now, with the board stating they have plenty of time. The reality is when a common element reaches the end of its useful life, money is required to replace it. If the money is not adequately set aside each year a bank loan or special assessment may be required to maintain property values and quality of life. 

Gene Kazmier, RS

Project Manager/Construction Inspector 

Reserve Specialist

 

*Disclaimer - this content is for educational purposes only and not for  site-specific construction or reliance.  If you have a site-specific concern, just call us and at no charge, we will meet you to review and discuss.