Reserve Analysis

AlexL1 - A comprehensive reserve analysis should be done once by the owner controlled association board. The analysis should be UPDATED every 2 to 3 years, or more often if possible. Updates will include the current cost of replacement so inflation should therefore be factored in. Anytime there is a new capital improvement where a new element is installed that the association must maintain than that element must be added to the reserve analysis and the replacement funding must commence. The replacement cost of each element the association must maintain should include the cost of removal of the old element. I always recommend the board get contractor bids on the high ticket items such as roadways, condo and clubhouse roofs, pool aprons) to compare the reserve study figures to what local contractors bid on the project. I have differences between the two in excess of 1/3rd more. When it comes to budgeting for the reality replacement, that difference can be very costly and may result in an assessment, bad word in the HOA world.

When you get to the next sentence I know for certain that many forum members will find it incredible; fair warning. But we're recommending that rserve figures be updated quarterly. Yes, QUARTERLY. We're not talking about doing an "inspection" quarterly, or doing a wholesale job of re-planning. We mean that every quarter you gather the REAL expenditures together for the previous 3 months, and replace the PLAN figures by the new ones. The REAL exopenditures do not ONLY make the updated plan more realistic. They also signal that future planned expenditures for the same kind of repairs should be examined as well.

Enough detail. For anyone who'd like the chapter from our book e-mailed to them please contact us. It's our most requested chapter by the way. It's "no-charge" of course. This chapter spells out how to do it, step-by-step.

By the way GeraldT4's reply, as usual, hits on several of the other must-do things very well, also.
Cheers ... Graham

To AlexL1. Good question. The best way is to click on the blue "Learn more ..." line in my I.D. below. That way you can explore the More Free Things we offer. To e-mail us, on the same page, click on the "E-mail anytime" link in the lower right green box. We'll look forward to your message, Alex!
Graham