Tag: Reserve Fund

Is the title overdramatic? Perhaps, but inflation is the reason many communities are in such dire financial straits, it’s silent, invisible and hits your pocket book right when you least expect it. The community that has been saving for a roof replacement for twenty four years but doesn’t tackle this silent assassin will find out they only have half the amount needed to replace the roof – slice…inflation… ​ What is Inflation? Inflation is the reduction in your purchasing power over time which causes prices to increase. It’s the main reason why your house is worth more, the car you drive is more expensive and a candy bar is double… Read More

Making the appropriate decisions to adequately fund a reserve account is one of the most basic responsibilities of a Board. Reserve funds are utilized to pay for projected common area expenses like roof replacement, paint or asphalt overlays. Unfortunately for most condominium communities this basic community need is not being met as the majority of communities are severely underfunded, where reliance on special assessments and loans is highest. We have seen that the communities which have lower funding levels (ie. their reserve fund balance is significantly lower than an ideal amount) also have issues with financing units for sales/refinance, have marketability issues with Brokers & Buyers and are typically impacted… Read More

Without a doubt installation of fire sprinklers and earthquake retrofits make buildings safer and could save lives when and if they should ever be needed. Some municipalities have passed rules for installation/upgrading/modernization of these systems but most have chosen to forego putting anything into law as the cost to the owner(s) of the building can be very high. The question we are tackling from our perspective is; should the installation of these systems be paid for from the Reserve Account? Most often we advise that these system installations projects should not be budgeted for and paid from the Reserve Account as they are not current components; the past/current members have… Read More