Condominium reserves: The real challenge

The real question related with creating condominium reserves is at what rate a reserve fund should be accumulated. This is a matter of debate as community association managers are not technicians that can predict the life cycle of the various design components of their buildings. Board managers rely on the findings of design engineers to determine the age of various building components and the expected cost required for replacing the aging components in near future. The building engineers are specialists but many engineering companies use computer graphics instead of field inspection to assess the age of building components. Ideally a building should be inspected physically to assess the condition of its design components.

It is mandatory for a community association to maintain condominium reserves so that they don’t look for funds for replacing the aging building components. Everything whether it is a brick or a nail has a lifecycle beyond which it becomes useless. A condo complex has numerous design components that need to be evaluated separately. The condo managers should take help of the building engineering company that has a credible record of conducting reserve studies. The engineers should collect the data after inspecting the site and not by scrolling the graphic design of the building.

Community managers create condominium reserves to meet the expected expenditure in near future but they don’t want to burden the homeowners by overcharging. Reserve study is a serious subject because it forms the basis for determining a reserve fund. Property managers can’t trust the findings of any engineering company. They need to call experts that have years of experience in reserve study. If your engineers wrongly calculate the age of building components then you may not collect reserve fund. It can be said that collection of reserve fund starts with reserve studies. Property managers should be careful when selecting an engineering company for doing reserve studies on their properties.

Maintaining condominium reserves is a challenge for community association managers as they have to set aside appropriate fund for unseen expenditure. They just can’t ask the homeowners to pay any amount for reserve fund. They need just reasons to charge a fix amount from homeowners. The physical inspection of the property gives board members an insight into the health of their property. Building engineers can tell the clearly how long a specific design component will work and what will be the cost of replacing that component in future.