The Long Term Effects of Under Funding Community Reserves
At ASG, LLC we understand how important long term planning is to your community. Whether you’re an individual owner, Board member, or a property manager, you share a common fiduciary duty to your community to fully understand the components that must be maintained, how to maintain them, and when to plan to repair or replace them.
While every community varies as to what is maintained by the Board, the useful life of individual components is fairly consistent throughout the United States. For example, a buildings HVAC system should be planned to be replaced every 8-10 years, but the system could run as long as 20 years! A TPO roof typically lasts 20-30 years but it could start to deteriorate after 10 years due to weather damage, or items not covered under the warranty. An up-to-date reserve study will help you understand the useful life of all of your communities components, what the cost to repair or replace them is, and it will show you a clear path of how to get there financially.
Since 2013 we have performed countless reserve studies and often find that most communities are underfunded. Sometimes it is because of unexpected repair projects and other times it is due to inadequate reserve contributions in the annual budget over a long period of time. Regardless of the reason, we can help you plan a path towards properly funding your community’s reserve funds.
Our goal is to provide at least two paths to achieve your community’s reserve needs and individual goals. We understand that reserve contributions come directly from the individuals that live or work there, and that often times the cost of projects catches owners off guard financially. It is always our goal to offer the Board of Directors, or property manager, the ability to be as transparent with the Council of Unit Owners as possible. The more you know, the better you can plan.
Speaking of planning, when you’re ready to complete or update a reserve study, or if you’re ready to begin a repair/replacement project be sure to contact us! We offer a full range of design, development, and construction contract management services and would be more than happy to assist you. Contact us at ASGAdmin@asgidd.com today!
Here are some links to learn more about reserve studies – Thank you for reading!