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This is often one of the first questions a board asks when they are presented with the topic of reserve studies. As boards begin to engage with reserve study providers, odds are that most receive, at a minimum, three bids to conduct a reserve study, all of which present a different cost for a variety of reasons.
When your association decides to commission a reserve study, you may be wondering what components will and will not be included in the capital plan, or, if certain elements can be included. Landscaping and irrigation are both important parts of any community, but are they included in a reserve study?
By now, if you have buildings of 3 or more stories, your condominium association or co-op has hopefully begun the process of fulfilling Florida’s structural integrity reserve study (SIRS) requirements and, if applicable, milestone inspection requirements. Because these laws are new, it can be understandably stressful or conflicting to choose a firm to conduct your SIRS or milestone inspection. Every community has different needs, so what route is best for your association?
In March of 2022, a task force of fourteen community association industry experts gathered to begin the process of revising Community Association Institute’s Reserve Study Standards. Originally published in 1998, the Standards provide a consistent framework for reserve studies. Since then, both the community association and reserve study industries have grown, and the Standards have been revised to reflect the current climate. Here’s what you need to know!
Inflation. We’ve all heard the word, and frankly, we’re all probably sick of hearing it. The reality is that many associations may feel the impact of this current inflationary period, regardless of when it lets up, for years to come. Part of what makes this particular period of inflation so impactful is that prior to March 2020, we experienced a fairly unprecedented level of inflationary stability ranging from 3-5% each year.
When conducting a reserve study, one of the first steps your consultant will take is evaluating the inventory of your community’s components and classifying them into groups, with reserve studies focusing most prominently on reserve components. However, long-lived assets are equally as important to keep an eye on.
Since Surfside, condominiums throughout the nation have been evacuated as a result of safety concerns. Horizon West (Waukesha, WI), Port Royale (Miami Beach, FL), Renaissance Tower (Myrtle Beach, SC), and Camelback Village (Olney, MD) to name a few. Many states, and in some cases, counties, have taken action to address the issue of aging infrastructure.
As you know, dues and special assessments come with the territory of residing in any type of community association. Understandably, it can be confusing for boards and residents to navigate exactly what both of these payments are used for, when they should be used, and how they affect the association as a whole.
As we all know by now, inflation has moved into our lives and isn’t estimated to move out for about a year or more. While some industries are already seeing some relief, this is not and will not be the case for many other industries for the foreseeable future, including those that community associations rely on for capital projects.
As awareness regarding reserve studies continues to grow, many associations that have not yet commissioned one are asking When you commission a reserve study, you’re commissioning an overall health check of your community, much like an annual physical exam with your primary care provider. However, when there is an issue with a specific organ or body part, a specialist in that particular area will join your list of physicians to uncover the root of the issue and formulate a remedy.
As awareness regarding reserve studies continues to grow, many associations that have not yet commissioned one are asking themselves, “do we need one?” While this question is easy to answer in states such as Florida and Maryland who recently put into place legislation requiring reserve studies, in states without a legal requirement, the question remains.
Introduced and signed into law in 2022, Florida Senate Bill 4-D establishes requirements for structural integrity reserve studies and funding for condominiums and cooperatives.
Introduced and signed into law in 2022, Maryland House Bill 107 establishes statewide reserve study and funding requirements for condominium associations, cooperatives, and homeowners associations. Here are answers to the most common questions we receive about this new legislation!
Boards and managers who want to ensure adequate funds and avoid shortfalls (or at least get into a better financial position) should familiarize themselves with common reserve funding goals and the strategies to achieve them. As outlined in the National Reserve Study Standards (NRSS), four accepted funding goals are available to community associations.
With the budget season fast approaching, it’s time to seriously consider your association’s near and long-term financial needs, goals, and ultimately, its future. Capital planning is no easy feat, but having a continuous blueprint for the future is the key to a thriving community.