Some things just get better with age. Wine or cheese, for example, may actually improve as they get older. The same cannot be said for the common elements of a condominium or community association. From the moment the first unit is built, the battle to maintain, protect, and enhance the building components begins. A well thought out Reserve Study is the proper guide to win this war. It can be the difference between success and failure in the struggle to keep the community’s common elements in great shape as it battles the process of maturation of the building components. HOALendingXchange always recommends association’s keep their Reserve Study current and active.
One way to assure that your community association is properly prepared is to hire a Reserve Specialist to review or prepare your community’s Reserve Study. Reserve Specialists have a unique set of skills that combine engineering (typically construction management, architecture, or civil) with financial planning. This allows them to not only summarize a community association’s current state of affairs but to also offer advice on how best to plan and save for future projects. While no Reserve Specialist can guarantee your community’s success by following the Reserve Study guidelines, it is far more likely that your community will thrive under its guidance.
Speak with a qualified Reserve Engineer. The Community Associations Institute (CAI) offers the Reserve Specialist (RS) designation to qualified professionals who have prepared at least 30 Reserve Studies within the past 3 years. They require the RS candidate to hold a bachelor’s degree in construction management, architecture, or engineering (or equivalent experience and education). Some states actually require common interest communities to conduct proper Reserve Studies and to adhere to their guidance in developing common fee schedules and contributions to the Reserve Fund. Finally, designated Reserve Specialists must adhere to the Professional Reserve Specialist Code of Ethics.
Reserve Studies cannot completely predict when building components will fail but they can provide solid financial advice on how those components can be paid for once they fail within a specified timeframe. Just as insurance is there in case Mother Nature deals your community a blow, a Reserve Study will help you prepare for Father Time’s visit. It is not a question as to “if” but rather “when” with regards to repair and replacement of building components in your community association. Without a Reserve Study, your community is relying on luck and gut feel of the Board to make financial decisions that will have a major impact on all members of the association. If your community association doesn’t have a proper Reserve Study, there is no better time to start one than now. And if your community association finds itself in need of an HOA loan to pay for revitalization or replacement of aging common elements, we’ve made it easy to seek the funds for the project. Simply fill out our inquiry form and our HOA loan experts will get busy preparing their very best HOA loan concepts for your consideration.