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DelfinP (Illinois)
Posts: 4
Posted:
Our association is planning our 2009 budget, and we're looking into an engineering and reserve study for our building.

Our info:

33 units ($325k - 450k per unit)
Chicago
3 years old (rehabbed)

Total reserve - ~20k
Operating account - ~10k

We just found out in 3-5 years, we'll need to replace the roof, which will run around 100k, which is a bummer because developer claimed a new roof was installed during rehab. Obviously our attorneys are checking all that out, but we are now starting to plan for building up the reserve higher for emergencies, repairs, etc.

How effective have HOAs found engineering and/or reserve studies to be? What is the typical cost associated, and do you have any recommendations of firms that have done a great job?

Since most of us are first time buyers, we feel it probably makes sense to get a professional financial plan. Our management company put a budget together, but basically just reviewed expenses and did a percentage increase. We need something more detailed.

Thanks in advance!
SusanW1 (Michigan)
Posts: 5,202
Posted:
You are 3 years old and will need a new roof in 3 - 5 years?

That does not sound right. You should be getting 15 - 20 years on a roof. Be sure that you go over the manufacturer's waranty for the type of materials you used AND the installation warranty from the contractor. installer. (Our church had to sue to master contractor for installing warranteed roofing incorrectly)

In any case the Reserve Fund should be updated every 3 - 5 years.
PeterB1 (Florida)
Posts: 257
Posted:
We just had a Reserve study done. (100+ homes $500-1000k) This was the first ever study in the 20 years of the HOA. We were VERY please. Some areas our reserve amount were right on. Other areas we never thought to reserve. The results are now in our 2009 budget

The study cost us $3,000 and it was worth every penny. I don't know that we will update it for a couple of years - but surely in 5.

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