Helping you understand community association business with industry leading insight.
Inflation and Capital Planning: 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.
Long-Lived Assets: The Bottom Line
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.
Legislation Regarding Structural Integrity and Condo Safety
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.
Dues, Special Assessments, and Reserves – What’s The Deal?
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.
Inflation and Reserves: The Implications on Capital Planning
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.
Expert Collaboration for the Betterment of Your Community
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.
Reserve Studies – Does Your HOA Need One?
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.
Florida Structural Integrity Reserve Study and Funding Requirements: Frequently Asked Questions
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.
Maryland Reserve Study Legislation: Frequently Asked Questions
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!
Reserve Funding Strategies
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.
Using Your Reserve Study As A Budget Tool
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.
The Evolution of Reserve Studies
In 1960 in Salt Lake City, the first condo buildings in the U.S. were built. But it was prior to this, in 1947, that the concept of reserve funds was first born. First referred to as the Fire and Tornado Fund by insurance companies, early reserve funds were meant primarily for emergencies and disasters. However, it wasn’t until the late 1990s that uniform standards for reserve studies were established by the Community Associations Institute.
How Much Money Should Our HOA Have In Reserve Funds?
When it comes to reserve funds, a common question we hear is “how much money should our HOA have in reserves?” The truth of the matter is, it depends. Each association is unique in a variety of ways, so the answer to this question varies widely depending on the community, its components, and its wants and needs.
Electric Charging Stations in Community Associations
Is your community association considering going electric? In 2021, electric vehicles (EVs) accounted for only 3% of car sales worldwide. By 2040, it’s predicted that EVs will account for a whopping 58% of global passenger vehicle sales. As more Americans trade in gas-operated vehicles for electric vehicles, infrastructure needs are rapidly changing.
Inflation’s Effects On Community Associations
While inflation affects us all, it affects community associations and those who live there in unique ways. From something as little as a homeowner’s grocery bill to something as intensive as the cost of a roof replacement, the effects of inflation can be felt far and wide in association living.