Independence in the Reserve Study process means freedom from control or influence. Independence means the Reserve Study professional is able to provide their complete findings and recommendations without interference.
So you’ve received your Reserve Study. You notice that the asphalt seal coat project, which the association just paid $30,000 to have done, shows a $20,000 estimated (current) cost in your Reserve Study.
In some areas of the country, specifically California where it is required by State Law, at least every few years a Reserve Study needs to be prepared on the basis of a “diligent visual site inspection”. But what does that mean?
Some Governing Documents (or jurisdictions) require that a Reserve Funding Plan not be based on a special assessment. But some communities wiggle around that requirement by just “temporarily increasing the monthly assessments”, not levying a one-time special assessment. What is the difference?
I wish the answer was as simple as the question. Since associations come in all different types and sizes, and in that variety there are significant differences in the common areas maintained by the association and the Operational Budget expenses, the answer is “no”.
In this busy “budget time” of year, when so many associations (those with a 12/31 Fiscal Year End) are working on their budgets, it is a good time to remind my readers why Reserve Contributions are important. And it’s not just me. A prominent Southern California attorney , Mr. Robert DeNichilo, just wrote a nice summary on his “HOA Brief” blog (to see the article, click here). In addition, as Mr. DeNichilo notes, the California Department of Real Estate has just issued a consumer warning about the dangers of underfunded community associations (to see the warning, click here).
