Archive for the ‘Blog’ Category

Identifying Reserve Items

March 31st, 2014

Identifying all of the reserve items in an association can be difficult.  One of the most common budgeting mistakes that associations make is not getting all of the proper items on the reserve schedule.  For condominiums in Florida, Florida Statutes 718.112(2)(f)2, says that reserves must be established for capital expenditures and deferred maintenance of: Roofing Painting Pavement Resurfacing Items having a deferred maintenance expense or replacement cost more than $10,000. It should be noted that co-operatives have basically the same reserve requirements in Florida Statutes


Reserve Study Frequently Asked Questions Part 5 – Florida Specific

February 28th, 2014

Do I have to have a reserve study for my association in Florida?   No.  There is no part of statues 718, 719, 720 (condominiums, co-operatives, home owner associations, respectively) that mandates that associations get a reserve study.  Not only do these associations not need a reserve study, but they can choose to waive funding of reserves with a majority vote.  Clearly this is not the recommended route, but some older associations have never collected reserve funds–they just always issue a special assessment.   If


Reserve Study Resources

January 31st, 2014
Typical Reserve Itsms

Since reserve studies and reserve funding are a niche aspect of community association planning, finding information about their background and methodology can be difficult.  There is generally a lack of easily accessible information about reserve funding on the internet or in books.  The following list is some of the best information available on reserve studies (in addition to this website, of course): The most comprehensive one that I am aware of is Reserve Funds: How and Why Community Associations Invest Funds.  It gives a good overview


How to Make a Reserve Study Most Effective

December 31st, 2013

It has been discussed before that the best reserve studies are a team effort.  In order to make a reserve study most effective, it is important to thing of the different parts that go into them. One thing an association can do is to make a list of all reserve item components and give them to the reserve analyst.  Obviously, the reserve analyst can’t include items that he didn’t know were supposed to be included.  Additionally, at the beginning of the assignment, the reserve analyst


Reserve Study Checklist

November 30th, 2013

When making a decision on who is reasonable candidate to perform a reserve study for your association, here are a few things to keep in mind. Make sure the firm you select is truly in the business of providing reserve studies. Sometimes associations wind up contacting someone who can perform reserve studies, but does not specialize in them.  This is a setback because someone who only does reserve studies a fraction of the time, may not know the nuances of performing the assignment. Make sure


Understanding Your Reserve Study

October 31st, 2013
Reserve Study Reports

The first time you receive a reserve study, it can be a lot of information to take in.  Sometimes the client can be surprised at the suggested funding amounts.  This can be referred to as “sticker shock.”  However, it is important to remember that this is the recommended amount.  This recommended amount is not a mandate on the way the association will spend its money.  Rather, the association has the ultimate say in how their money is spent.  One important thing to note in the


Most Common Reserve Funding Mistakes

September 30th, 2013

  1.      Not getting the proper reserve items on the reserve schedule.  This is the most common mistake associations make when budgeting for reserves.   They unknowingly omit some items that should be on the schedule.  Most associations are aware of roofing, painting, and paving requirements, but some items that are not often thought about are the hidden or concealed items like water lines, sewer lines, storm drainage, perimeter fencing, lift stations, pumps, fire systems, exercise equipment, sea walls.   2.      Failing to fund reserves close


Reserve Study Frequently Asked Questions Part 4

August 31st, 2013
W Pool

  Where do the cost estimates come from? The cost estimates come from various sources.  However, Marshall Swift cost data services is generally thought to be the most comprehensive data service.  We also use the National Construction Estimator.  Additionally, if an association has a recent construction bid to perform a construction project, we will use that price quote.  Sometimes, we encounter an uncommon reserve item without a good published number.  In these cases, we try to research the reserve item and will sometimes have to


Reserves Budgeting: Do’s and Don’ts

July 31st, 2013
Reserve Budgeting

    With budget season approaching, here is a quick list of reserve budgeting dos and don’ts.     Dos: Look at your reserves yearly.  Some associations just reuse old numbers that are not realistic and are not based on proper data.   Try to get the proper reserve items on the reserve schedule.  One of the most common mistakes associations make when budgeting for reserves is that they unknowingly omit some items that should be on the schedule.   If you already have a


Should We Do Reserves In-House?

June 30th, 2013
Community Center

Now that budget season is approaching, many boards are considering what they should do for their reserve allocations in their budget.  There are a couple of options.  The first is to calculate reserves in-house by members of the board or the association.  The second option is to get a professional reserve study for the association.  The third option is to have a prior reserve study updated, assuming that the association had one to begin with. Doing reserves-in house certainly is possible, but it would only

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