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  • Blog

Why are there often Multiple Components for Paint Projects?

After last week's webinar on selecting Reserve components (click here for the recording), one attendee asked why they often see many "painting" components... one for stucco, one for wood trim, one for the ironwork around the pool, one for balcony railings, etc.
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  • Blog

Is there a “Standard” % of Budget that should go towards Reserves?

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".
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  • Blog

If RUL=0, do we Have to do the Project?

An attendee at one of our webinars earlier this week (click here) asked if it was ok to defer a project with a Remaining Useful Life (RUL) of 0 until the following year, and how that should be communicated in the Reserve Study. Deferring a project can be done, but it is a decision made by the Board, and something the Board communicates in a document separate from the Reserve Study. The Reserve Study is where the association communicates to the members the status of the physical components, the preparedness of the Reserve Fund to deal with those projects, and the ongoing contributions to the Reserve Fund necessary to offset that ongoing deterioration.
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  • Blog

Why Make Reserve Contributions?

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).
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  • Blog

Reserve Studies – it’s Not about Preparing for the Future

The standard comment we get from clients, prospects, and other industry professionals is that Reserve contributions are about "preparing for the future". Well, they're not. Most of us have a mortgage. Some of those mortgages have a "balloon" payment at a future point in time. That is a future expense. Some of us with small kids in the house are anxious about college bills. That is a future expense. But physical deterioration goes on every day. One day a roof is new, the next day it's not.
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  • Blog

Is “Scope of Work” a Required Reserve Study Disclosure?

Good question. Often when a client challenges our replacement cost estimate because "it is way off", we look into why their actual cost is out of line with what we expected. Typically we find it has to do with scope of work differences. One that comes to mind is a roof that was three times more expensive than we expected it would cost, which turned out to be because the association was reconfiguring a flat (low-slope) roof into a sloped, shingle roof.
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