GaryF2
Posts: 8
Posts: 8
Posted:
Our HOA said we need to have a Reserve Fund of $10,000.00 starting in 2008... under Florida Statutes 720...
Is this true?
Thank you, Gary
Is this true?
Thank you, Gary
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Reserve Funds
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DonnaS
Posts: 5,596
Posts: 5,596
Posted:
Gary,
Your HOA said that you need to have a Reserve Fund of $10,000? Did someone have a Reserve Study done or is this a number that they pulled out of a hat?
Yes, you should have a Reserve fund as this will save you a huge special assessment some day down the road when you need a capital improvement on association property and there might not be enough money in the funds.
Are you required by 720 to have one? NO! Below is for 720;303 where there are several paragraphs on Reserves and how to do them and how to care for them. I just copied the first 2.
b) In addition to annual operating expenses, the budget may include reserve accounts for capital expenditures and deferred maintenance for which the association is responsible to the extent that the governing documents do not limit increases in assessments, including reserves. If the budget of the association includes reserve accounts, such reserves shall be determined, maintained, and waived in the manner provided in this subsection. Once an association provides for reserve accounts in the budget, the association shall thereafter determine, maintain, and waive reserves in compliance with this subsection.
(c) If the budget of the association does not provide for reserve accounts governed by this subsection and the association is responsible for the repair and maintenance of capital improvements that may result in a special assessment if reserves are not provided, each financial report for the preceding fiscal year required by subsection (7) shall contain the following statement in conspicuous type: THE BUDGET OF THE ASSOCIATION DOES NOT PROVIDE FOR RESERVE ACCOUNTS FOR CAPITAL EXPENDITURES AND DEFERRED MAINTENANCE THAT MAY RESULT IN SPECIAL ASSESSMENTS. OWNERS MAY ELECT TO PROVIDE FOR RESERVE ACCOUNTS PURSUANT TO THE PROVISIONS OF SECTION 720.303(6), FLORIDA STATUTES, UPON THE APPROVAL OF NOT LESS THAN A MAJORITY OF THE TOTAL VOTING INTERESTS OF THE ASSOCIATION.
GeraldT4
Posts: 1,011
Posts: 1,011
Posted:
GaryF2 - How old is your association, and as DonnaS basically said how was the $10,000 figure determined? It sounds like an arbitrary and low amount and probably should be more, just depends on the elements your assoc. must replace over time, and a more detailed capital reserve replacement analysis performed by an engineering firm, or some such qualified expert.
RaymondC
Posts: 63
Posts: 63
Posted:
Unless your community has less than a few thousand dollars in community property, a reserve fund of only $10,000 is largely a joke. It wouldn't even be a down payment on a major repair. That's why the board should have a reserve study done, and base the size of hte reserve on the size of the pending expernses. I live in a 77 member condominuminum building, and our new roof cost $230,000 this year. Even with a $170,000 reserve fund, we needed a special assessment. Just something to think about.
GaryF2
Posts: 8
Posts: 8
Posted:
Thank you for the great info... Gary
GaryF2
Posts: 8
Posts: 8
Posted:
Thank you for the info... Gary
GeraldT4
Posts: 1,011
Posts: 1,011
Posted:
GaryF2 - How old is your association, how many dwellings, provide some detail of the elements the association must maintain (roofs, retaining walls, roadways, landscape, clubhouse, etc.)
BobS10
Posts: 39
Posts: 39
Posted:
Has anyone come across a benchmark for reserve fund dollars per unit? I realize this would be very general and approximate, Im just looking for a rough estimate, not something Im going to include in my docs or anything.
For example if the reserve fund is $140,000 and you have 100 units, is $1,400 a decent number to be at?
For example if the reserve fund is $140,000 and you have 100 units, is $1,400 a decent number to be at?
DonnaS
Posts: 5,596
Posts: 5,596
Posted:
Bob,
It all depends what the association is responsible for concerning repair and replacement. If roofs and building structures are association responsibility, then $140,000 is a drop in the bucket. Example, I have a rental villa where the Association pays for repair and replacement of the tiles roofs and all substructures holding up those roofs. We have 230 units and a "Roof Reserve" of $460,000 which in the event of a major event, that would not be anywhere near enough to replace them.
Mind you, each unit owner has their own insurance for "Wind Damage", in other words, a hurricane would become an owners responsibility to replace the roof. Fire also falls under owner insurance so basically, if the roofs breakdown and need replaceing, then it is the associations job to redo them. Sounds complicated? You should come to one of their Board meetings. E gads!
GeraldT4
Posts: 1,011
Posts: 1,011
Posted:
BobS10 - Are you asking if the reserve fund balance is currently at $140,000, and there are 100 units, is $1,400 a decent number to be at? Or are you asking if the yearly amount transferred to reserves is $140,000 should each of the 100 unit's portion of contribution be $1,400?
GrahamO
Posts: 54
Posts: 54
Posted:
BobS10 has raised the question of "adequacy" in connection with reserve fund balances. In our book we go at this question in several ways. We have some rules-of-thumb and I'll quote from the chapter on this -- "a condo property should probably assess the funders a minimum of $80-to-$100 per unit per month. That’ll bring in $96,000-to-$120,000 per year in a 100-unit property. This figure reflects the dollars going towards the reserve fund only of course, and not the dollars going towards the operating budget.
Another one … a condo property should attempt to plan for annual closing balances that are never lower than $500 per unit. Thus a 100-unit building would see minimum closing balances of $50,000 over the span of its reserve fund projec-tions.
Interestingly, a townhouse will normally run with lower bal-ances and lower assessments than a high-rise condo, because it does not have many of the replaceable and repairable com-ponents that a high-rise does. (Elevators, for example)."
End of quote. Besides these rules-of-thumb we outline our Adequacy Ratios Method that takes any community's reserve plan and determines the specific adequacy target for it. BobS10 and others may find it useful to know that this kind of thing is available.
Another one … a condo property should attempt to plan for annual closing balances that are never lower than $500 per unit. Thus a 100-unit building would see minimum closing balances of $50,000 over the span of its reserve fund projec-tions.
Interestingly, a townhouse will normally run with lower bal-ances and lower assessments than a high-rise condo, because it does not have many of the replaceable and repairable com-ponents that a high-rise does. (Elevators, for example)."
End of quote. Besides these rules-of-thumb we outline our Adequacy Ratios Method that takes any community's reserve plan and determines the specific adequacy target for it. BobS10 and others may find it useful to know that this kind of thing is available.
GeraldT4
Posts: 1,011
Posts: 1,011
Posted:
GrahamO - Absent of a concrete contractor bid on, say a roof replacement project for example. Do you recommend building in the cost of removal of the element into to the estimated element replacement cost? In other words the cost of removal of the old shingles as well as the installation of the new ones?
GrahamO
Posts: 54
Posts: 54
Posted:
Answer to GeraldT4. The answer is an unequivocal "YES". Any cost of a major repair or replacement or any costs ASSOCIATED with the repair would be legitimate reserve fund expenditures. Even such costs, let's say, of temporary re-location of playgound equipment while the playground was being worked on. Hope that's helpful, Gerald. Thanks for asking!
Graham
Graham
GloriaL
Posts: 195
Posts: 195
Posted:
For the past two years, I have been trying to get the HOA to start a reserve fund. This year there was a vehicle accident which just missed damaging the stone wall and sign on the entrance to our very small community of 27 homes and only six years old. So at the Annual Meeting just held, I quoted the section in our CCR's that says that we are directed to have a reserve fund. We have no swim,tennis,playground, and no common elements other than the front entrance and signage which has stone columns, fence and landscaping. It was so hard to make the HomeOwners who attended the Meeting (which just made quorum including 3 proxy votes) understand that this is something that must be done.
Those in attendance just came up with an arbitrary figure of 20% of the overall budget of $8,100 which starts the reserve fund off with $1,620...that wouldn't even cover the cost of replacing ONE COLUMN! But I guess if we increase the Reserve fund by $1,620 each year, then somewhere down the road it will be fully funded. I only hope we have no unexpected expenses before we get to that point.
We are also trying to opt our HOA into the GAPOA to help facilitate collecting dues...another hard thing for others to understand that if just four HomeOwners don't pay, that is a large percentage out of our meager income...AND our dues are ONLY $300 PER YEAR.
I thought I had had enough being on the BOD after two years as Secretary and three years behind the scenes, but noone wants to do the work, so here I am again for another year.
I believe that the apathy of the HomeOwners is because the BOD is doing a good job and not angering anyone...yet.
Gloria
Those in attendance just came up with an arbitrary figure of 20% of the overall budget of $8,100 which starts the reserve fund off with $1,620...that wouldn't even cover the cost of replacing ONE COLUMN! But I guess if we increase the Reserve fund by $1,620 each year, then somewhere down the road it will be fully funded. I only hope we have no unexpected expenses before we get to that point.
We are also trying to opt our HOA into the GAPOA to help facilitate collecting dues...another hard thing for others to understand that if just four HomeOwners don't pay, that is a large percentage out of our meager income...AND our dues are ONLY $300 PER YEAR.
I thought I had had enough being on the BOD after two years as Secretary and three years behind the scenes, but noone wants to do the work, so here I am again for another year.
I believe that the apathy of the HomeOwners is because the BOD is doing a good job and not angering anyone...yet.
Gloria
GeraldT4
Posts: 1,011
Posts: 1,011
Posted:
GrahamO - Thank you so much for the info. I received your book yesterday by the way and am reading through it. Very good so far. I've been through several reserve studies, the most recent quite extensive. But it's always good to see what others have to say on the matter. Always things that can be overlooked or not considered.
GeraldT4
Posts: 1,011
Posts: 1,011
Posted:
GloriaL - Quick comment, an insurance claim would be the appropriate way to first try to cover the cost of damage to a common element due to a motor accident. If the amount collected was less than the cost of replacement due to depreciation, than perhaps the Reserve Fund would be tapped. If there's nothing in the Reserve Fund, or operation budget to cover the difference due to depreciation than a special assessment to cover the replacement would be necessary. Good job on pressing your association to comply with your CC&R's in establishing a Reserve Fund. How silly of them not to. Hopefully you will succeed. Somewhere down the road you may or may not have an adequate amount in the Reserve Fund to cover the cost of replacement of the elements. Depends on the cost of element replacement, the remaining expected life-cycle, and the balance in the reserve fund at that time. Grandma always said to save for a rainy day.
GloriaL
Posts: 195
Posts: 195
Posted:
Gerald,
We have NO INSURANCE other than liability for the BOD. Our front entrance columns, fence and signage is on landed owned by the HomeOwners of those two lots. We don't own the land, so the thought was that we cannot obtain insurance on land we don't own. Is that true???
If something were to happen to the structures, our CCR's directs us to "repair, replace and maintain" the front entrance. But if we have no insurance covering those structures, the funds would have to come from the "Reserve Fund" as meager as it is, or a Special Assessment.
Does anyone else have experience with obtaining insurance on structures on land the HOA doesn't own?
I'd appreciate any input to direct us how to go.
Thanks,
Gloria
We have NO INSURANCE other than liability for the BOD. Our front entrance columns, fence and signage is on landed owned by the HomeOwners of those two lots. We don't own the land, so the thought was that we cannot obtain insurance on land we don't own. Is that true???
If something were to happen to the structures, our CCR's directs us to "repair, replace and maintain" the front entrance. But if we have no insurance covering those structures, the funds would have to come from the "Reserve Fund" as meager as it is, or a Special Assessment.
Does anyone else have experience with obtaining insurance on structures on land the HOA doesn't own?
I'd appreciate any input to direct us how to go.
Thanks,
Gloria
GeraldT4
Posts: 1,011
Posts: 1,011
Posted:
GloriaL - Unless I'm entirely mistaken you can't insure something not on your property. Seems like some sort of easement needs to be granted from the owners, and not sure if that may clear the way to insure the elements in the event of a loss. Your Board should get contractor bids on the replacement of the stone pillars and structures and try to get a professional estimate on the lifespan. I'd recommend buying Graham's book Reserve Fund Essentials, read it, and educate your HOA BOD on the need for a Reserve Fund. Doesn't sound like you have a lot to replace but even the smallest amount of items can set an association back if they don't prepare for the future. Basically you need to get a current cost of replacement and removal of the element, and an expected useful life cycle. Say the pillars will cost $10,000 to remove and replace and they are expected to last 15 years from 2008, in other words by 2023. That means in 2008, 2009, and 2010 $667 needs to be set aside. If the study is updated at the end of 2010 and the cost becomes $15,000 you'll need to revise the amount being set aside to adjust accordingly. $667 x 3 years = $2,001.00 set aside. $15,000 - $2,001.00 = $12,999.00 to be set aside by the end 2023. Therefore in 2011, 2012, and 2013 $1,084 needs to be set aside because $12,999.00 is divided by 12 years remaining. The cost of inflation should already included if you update the study, every 3 years or more frequently. The above scenario doesn't factor premature element failure, or the existing balance in the reserve account. There are many facets to reserve funding, I've been through 2 studies and am coming back to the basics myself to learn as well.
GlenL
Posts: 5,429
Posts: 5,429
Posted:
Donna I like the warning in 720;303 C - here is what Ohio did:
Adopt and amend budgets for revenues, expenditures, and reserves in an amount adequate to repair and replace major capital items in the normal course of operations without the necessity of special assessments, provided that the amount set aside annually for reserves shall not be less than ten per cent (10%) of the budget for that year unless the reserve requirement is waived annually by the unit owners exercising not less than a majority of the voting power of the unit owners association
Adopt and amend budgets for revenues, expenditures, and reserves in an amount adequate to repair and replace major capital items in the normal course of operations without the necessity of special assessments, provided that the amount set aside annually for reserves shall not be less than ten per cent (10%) of the budget for that year unless the reserve requirement is waived annually by the unit owners exercising not less than a majority of the voting power of the unit owners association
DonnaS
Posts: 5,596
Posts: 5,596
Posted:
Glen,
It's nice to see that Ohio is on top of the Reserve situation. I think that Florida needs to get a bit more specific as to amounts like Ohio did. Geeeeze, something else for me to work on.
GloriaL
Posts: 195
Posts: 195
Posted:
Gerald,
Thanks for the info about our pitiful reserve. Our CCR's grant the Association an easement for the Common Area, which is the signage, fence and columns. I am going to download your reply to present to the BOD at our next Meeting in a few weeks.
In the meantime, I will get in touch with our Attorney to ask advice about whether the Association can obtain insurance for the structures since we don't own the land and are just granted access. I know that the Association spent nearly $9,000 two years ago just to add six stone columns. There are several more columns plus a tiered stone wall with signage, lights and landscaping. Therefore, (off the top of my head) the replacement cost could total $30,000 - $40,000. It seems to me that my insistence to start a Reserve Fund is absolutely warranted, a bit late, and sorely underfunded.
Your reply is quite an eye opener to the necessity of a Reserve Fund. It may be a struggle to have the HomeOwners understand what is necessary from their pocketbooks and the need to start beefing up the Reserve Fund very quickly.
Does anyone else have any experience with insuring Common element structures on land not owned by the Association which is just granted easement??
Thanks,
Gloria
Thanks for the info about our pitiful reserve. Our CCR's grant the Association an easement for the Common Area, which is the signage, fence and columns. I am going to download your reply to present to the BOD at our next Meeting in a few weeks.
In the meantime, I will get in touch with our Attorney to ask advice about whether the Association can obtain insurance for the structures since we don't own the land and are just granted access. I know that the Association spent nearly $9,000 two years ago just to add six stone columns. There are several more columns plus a tiered stone wall with signage, lights and landscaping. Therefore, (off the top of my head) the replacement cost could total $30,000 - $40,000. It seems to me that my insistence to start a Reserve Fund is absolutely warranted, a bit late, and sorely underfunded.
Your reply is quite an eye opener to the necessity of a Reserve Fund. It may be a struggle to have the HomeOwners understand what is necessary from their pocketbooks and the need to start beefing up the Reserve Fund very quickly.
Does anyone else have any experience with insuring Common element structures on land not owned by the Association which is just granted easement??
Thanks,
Gloria
GeraldT4
Posts: 1,011
Posts: 1,011
Posted:
GloriaL - A pitiful reserve fund is better than none. : ) If all you achieve is some amount set aside, it's a start and will progress over time. Sounds like you are well on your way, good job!! Small steps, small steps. Absent of getting a reserve reference guide such as Graham's book, or a full blown reserve study, my association's reserve analysis has many tables, and I can offer you info from that. What you do is create a spreadsheet with the elements being replaced in the left-hand column (going down), and the years in the top row (going across). What goes in each box/cell in the spreadsheet is the most current expense at that particular time. At the bottom is the sum of the expenses in any given year. Take the reserve balance plus any interest earned and subtract the expenses at any given point in time. If you wind up with a negative balance you need to know how to budget and adjust. The purpose is to avoid special assessments. It's always best to get the replacement cost figures from an independent professional engineering firm which can always be compared to a current and competitive contractor bid. If you update the study often inflation will be included in the amount you project to be needed at any given time.
GrahamO
Posts: 54
Posts: 54
Posted:
To GeraldT4 and to GloriaL. First, Gerald, great reply to Gloria. Couldn't have handled it any better myself! And this, to Gloria ... want to offer any help you may need. We are part way through writing an article "How to Create a Reserve Fund". If you'd like a copy I could hurry it along and get one to you. (You'd have to let me have your e-mail). Mine is below if you weant to get in touch.
Graham
Graham
AlexL1
Posts: 303
Posts: 303
Posted:
What can one expect to pay for a reserve analysis? Where is the best place to look for someone to do it? and... what type of firm/individiual does that sort fo thing?
GrahamO
Posts: 54
Posts: 54
Posted:
The cost of a reserve fund study will vary enormously from one community to another for a very long list of reasons. So it's impossible to state a meaninful dollar-cost. I have 2 suggestions.
(1) The CAI has lists of reserve fund specialists. Go to caionline.org.
(2) For local people who CAI might not list, why not speak to some neighboring properties' boards and ask them for suggestions.
By the way AlexL1 ... you asked for our e-mail to obtain a chapter of our book (free) on updating your reserve plance. I replied but did not hear from you. Try us at [email protected] please.
(1) The CAI has lists of reserve fund specialists. Go to caionline.org.
(2) For local people who CAI might not list, why not speak to some neighboring properties' boards and ask them for suggestions.
By the way AlexL1 ... you asked for our e-mail to obtain a chapter of our book (free) on updating your reserve plance. I replied but did not hear from you. Try us at [email protected] please.
KM1
Posts: 62
Posts: 62
Posted:
I have 2 suggestions.
(1) The CAI has lists of reserve fund specialists. Go to caionline.org.
(2) For local people who CAI might not list, why not speak to some neighboring properties' boards and ask them for suggestions.
I am President of our Townhome Association, also looking to do a reserve analysis. What are the advantages/disadvantages of having a national company versus local perform the study? I do find a local service provider convienient, especially if problems should crop up. I would like to address those in person! From what I have researched, it appears key information would include the CCRs and a list of common property. Do reserve analysts typically perform a walk-through of the property, or is this preferred?
Thanks!
(1) The CAI has lists of reserve fund specialists. Go to caionline.org.
(2) For local people who CAI might not list, why not speak to some neighboring properties' boards and ask them for suggestions.
I am President of our Townhome Association, also looking to do a reserve analysis. What are the advantages/disadvantages of having a national company versus local perform the study? I do find a local service provider convienient, especially if problems should crop up. I would like to address those in person! From what I have researched, it appears key information would include the CCRs and a list of common property. Do reserve analysts typically perform a walk-through of the property, or is this preferred?
Thanks!
GrahamO
Posts: 54
Posts: 54
Posted:
To KM1. Great questions. It's a holiday today and with a few things on my agenda I'll have to put together my reply to you tomorrow. Please stay tuned. I think it will be worth it!
Regards ... Graham
Regards ... Graham
GeraldT4
Posts: 1,011
Posts: 1,011
Posted:
KM1 -
Easy question first. A reserve study should included as comprehensive (as can be afforded) of an analysis of the elements the association must maintain and replace.
Now my comments on your more complex question. National trends in construction costs are beneficial. However, current local contractor costs/bids for removal and replacement of the association elements are more germane.
Easy question first. A reserve study should included as comprehensive (as can be afforded) of an analysis of the elements the association must maintain and replace.
Now my comments on your more complex question. National trends in construction costs are beneficial. However, current local contractor costs/bids for removal and replacement of the association elements are more germane.
GrahamO
Posts: 54
Posts: 54
Posted:
First GeraldT4, as usual, has addressed a couple of matters very well.
This messag to KM1, as promised, is my reply to your posting that included two issues. One was ... "What are the advantages/disadvantages of having a national company versus local perform the study?
The answer ... there's no right-or-wrong answer! Nationals have depth, probably deliver reports with more "horns and whistles" features (that may or may not be useful) and if unusual wrinkles crop up will have colleagues to help with them. Locals know the community, they're familiar with costs in the area, can recommend specific poeple to carry out repairs (but you'd be advised to also look around on your own), and they can hop on over if soemthing crops up. Look at both nationals and locals. Get feedback from other similar properties in your locality. The more info you have the better your choice will be.
Second question ... "Do reserve analysts typically perform a walk-through of the property, or is this preferred?". There are full reserve studies and there are updates. For a full study (or any initial study) a complete and thorough property inpection is a MUST. After that, at intervals you can bring your actual figures into the plan as they occur, to replace planned figures.
Just so you know it exists, our book goes into both of these issues in some detail.
Graham
This messag to KM1, as promised, is my reply to your posting that included two issues. One was ... "What are the advantages/disadvantages of having a national company versus local perform the study?
The answer ... there's no right-or-wrong answer! Nationals have depth, probably deliver reports with more "horns and whistles" features (that may or may not be useful) and if unusual wrinkles crop up will have colleagues to help with them. Locals know the community, they're familiar with costs in the area, can recommend specific poeple to carry out repairs (but you'd be advised to also look around on your own), and they can hop on over if soemthing crops up. Look at both nationals and locals. Get feedback from other similar properties in your locality. The more info you have the better your choice will be.
Second question ... "Do reserve analysts typically perform a walk-through of the property, or is this preferred?". There are full reserve studies and there are updates. For a full study (or any initial study) a complete and thorough property inpection is a MUST. After that, at intervals you can bring your actual figures into the plan as they occur, to replace planned figures.
Just so you know it exists, our book goes into both of these issues in some detail.
Graham
AlexL1
Posts: 303
Posts: 303
Posted:
I keep hearing/seeing the letters CAI but have no idea what that(they) are referring to...Please let me know as we are facing a similar problem
GeraldT4
Posts: 1,011
Posts: 1,011
Posted:
Quote:
Posted By AlexL1 on 03/28/2008 8:18 AM
I keep hearing/seeing the letters CAI but have no idea what that(they) are referring to...Please let me know as we are facing a similar problem
I keep hearing/seeing the letters CAI but have no idea what that(they) are referring to...Please let me know as we are facing a similar problem
AlexL1 - CAI stands for Community Associations Institute. Google it. : )
CharlesW1
Posts: 817
Posts: 817
Posted:
Quote:
Posted By AlexL1 on 03/28/2008 8:18 AM
I keep hearing/seeing the letters CAI but have no idea what that(they) are referring to...Please let me know as we are facing a similar problem
I keep hearing/seeing the letters CAI but have no idea what that(they) are referring to...Please let me know as we are facing a similar problem
AlexL1
Here is a link http://www.acronymfinder.com/ that will provide you with the many acronyms that are used.
I found this site to be very helpful. Obviously the acronym will go with the context ,of which it is written in, general associated with association living.
Best of luck.
Chuck W.
GeraldT4
Posts: 1,011
Posts: 1,011
Posted:
Quote:
Posted By CharlesW1 on 03/28/2008 8:34 AM
Posted By AlexL1 on 03/28/2008 8:18 AM
I keep hearing/seeing the letters CAI but have no idea what that(they) are referring to...Please let me know as we are facing a similar problem
I keep hearing/seeing the letters CAI but have no idea what that(they) are referring to...Please let me know as we are facing a similar problem
AlexL1
Here is a link http://www.acronymfinder.com/ that will provide you with the many acronyms that are used.
I found this site to be very helpful. Obviously the acronym will go with the context ,of which it is written in, general associated with association living.
Best of luck.
Chuck W.
ChuckW - Helpful site you've provided. However when typing in CAI it resulted in 58 abbreviation possibilities. How is anyone supposed to know which abbreviation belongs to what acronym someone uses when there are more than 1 possibility for acronym meaning? : )
AlexL1 was looking for the meaning of CAI, which is Community Associations Institute. Yes, it was one of the 58 possibilities but so were 57 other abbreviations.
AlexL1
Posts: 303
Posts: 303
Posted:
Got it.... Thanks !!!
KM1
Posts: 62
Posts: 62
Posted:
Thanks for the responses, GeraldT4 and GrahamO! I'm waiting on an estimate from a local company, and have been researching the national links too. I have a few people suggesting to save the money and do the legwork ourselves. One reasonable opinion was concern we spend the money for professional report, only for a newly elected board in the future to disregard the resulting info. I do feel it necessary, however, as I don't think the $100/month the developer calulated for the original budget is enough for replacement in the long run for roofs, etc.!!
Thanks again! I have a bevy of issues so will "see" you all around more frequently!
Thanks again! I have a bevy of issues so will "see" you all around more frequently!
GrahamO
Posts: 54
Posts: 54
Posted:
AlexL1--
"CAI" is the Community Associations Institute". They are defintely the largest organization in existence that addresses the issues of community associations. That means "co-owned" properties of every type ... condos, HOAs, gated communities. I recommend you familiarize yourself with what they do and the fact that they have chapters in all states that meet regularly and discuss the needs of their members. Go to www.caionline.org to tap into a wealth of information.
Hope this helps.
Graham
"CAI" is the Community Associations Institute". They are defintely the largest organization in existence that addresses the issues of community associations. That means "co-owned" properties of every type ... condos, HOAs, gated communities. I recommend you familiarize yourself with what they do and the fact that they have chapters in all states that meet regularly and discuss the needs of their members. Go to www.caionline.org to tap into a wealth of information.
Hope this helps.
Graham
GeraldT4
Posts: 1,011
Posts: 1,011
Posted:
KM1 - Who are these "few people" that are suggesting you save the money and do the legwork yourselves. Buy 2 copies of GrahamO's book Reserve Fund Essentials, keep one and make the other copy available for any owner to sign out, return, and read. The scope, and importance of an engineering firm perform the studies is monumental. A transition or reserve study committee is a good idea. There's a lot of work that the owners can do since they more than anyone will know the deficiencies. A good idea would be for the Board and committee to develop an owner survey to list all kinds of deficiencies. This will show trends in construction defects and who knows what else. We developed one, combined it with our Transition Engineering's questions and sent it to each owner in our community. It turned up some doozies.
AlexL1
Posts: 303
Posts: 303
Posted:
How does an HOA REALLY know if the company they MIGHT consider hiring for the Reserve Analytical study REALLY know what they are doing? What are the areas that such a study look at? I cannot find this info in the archives HERE on this site.
GrahamO
Posts: 54
Posts: 54
Posted:
AlexL1 ... good questions. I simply have to say that most of the answers to your questions are in our book ... I have suggested, earlier, that you get a copy. If this sounds like a "sell" it really is NOT. The sale of one more book is not going to matter to me. It's to tell you that chapters on "Choosing a Planner", and "What to Look Out For" (different title in the book), and a list of property components, and more, are all in there. Go to oliver-group.com/rfund and see it all for yourself. For under twenty-five dollars you will have your answers. I really hate to sound like a salesman but I do guarantee you'll be happy with the material. (Or, as they say. your money back).
I really want to help you.
Cheers ... Graham
I really want to help you.
Cheers ... Graham
GlenL
Posts: 5,429
Posts: 5,429
Posted:
Quote:
Posted By AlexL1 on 04/01/2008 7:59 AM
How does an HOA REALLY know if the company they MIGHT consider hiring for the Reserve Analytical study REALLY know what they are doing? What are the areas that such a study look at? I cannot find this info in the archives HERE on this site.
How does an HOA REALLY know if the company they MIGHT consider hiring for the Reserve Analytical study REALLY know what they are doing? What are the areas that such a study look at? I cannot find this info in the archives HERE on this site.
Alex check out the APRA (Association of Professional Reserve Analysts) standards at: http://www.apra-usa.com/pdf/APRA%20Standards.pdf
Also make sure they are licensed to do business in your state/locality and have some type of D&O insurance to protect you if they screw up. I.E. telling you the roof has X# of years before it needs to be replaced and you need to set aside X# of dollars for it and it fails next year because they were negligent.
GeraldT4
Posts: 1,011
Posts: 1,011
Posted:
AlexL1 - To me your question represents the most basic challenge and conundrum of Association volunteers. How do I learn what I don't know I'm supposed to know? The reason I say this is that if I was hiring our Transition Engineering Firm with the knowledge I gained during the process I'd vote in favor of hiring the same firm, but expand and clarify their scope of work. During the Board interview process each Transition Engineering Firm or Reserve Specialist will provide a presentation and bid on the job. At that time questions are asked and the Board looks at the best candidate and that's that. However the studies need to be updated as often as possible, some believe as much as every quarter. So there's opportunity over time to improve upon the initial study. I really suggest that everyone buy GrahamO's book Reserve Fund Essentials 3rd edition. I say this because I did recently well after our initial study has been done and found it to be extremely useful and eye-opening. It will tell you more than enough to ask all the relevant questions and expand your level of consciousness.
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