Condo Association Management Blog

Review your condo docs. There could very well be reserve requirements detailed there. Otherwise, your state condominium law will usually spell out the reserve funding requirements. There are typically provisions allowing the waiver of reserve collections, but in most cases I have seen, they must be voted on by the whole association, not decided by the board. If you would like to discuss further, please feel free to call.  
 
813-363-288. 
 
Jay Finkwww.amgtb.com

don't panic so much, or try to micro-manage the board, by setting up all these individual accounts for select purposes. unless your docs or state law require it, savings (or 'reserves') can be lumped together. as long as you have a budget, approved by all owners, then you should be fine. $23,000 in income seems excessive, as far as adding to reserves for one year for 32 units, but I am unfamiliar with your association's needs. $1,000 per unit is a good minimum standard for a savings account balance, while I believe in this day, $1,500 may be more conservative and prepared. consider also, that a well-balanced and fair (to current and future owners) concept is to take 50% from savings, and charge 50% as an assessment, for large capital items/expenses, such as replacement of roof, gutters, etc. remember, being fiscally prepared doesn't mean the association should be acting like a bank by hoarding excessive funds.

I am the originator of this subject, if I may add something more. The board has had a landscaping plan drawn up and showed the "blueprint" at the annual meeting. They did not disclose the cost which I have heard by the grapevine is $46,000. (How stupid are we not to ask; however, we had a full agenda and one subject led to another. I have written to the board twice now since then to disclose the cost in their monthly meeting minutes which they post on our bulletin board. They have not done so.)  
 
There are six parts to it which can be done "in phases." One phase involves digging up our grassy common elements for 3 (three) "tenant gardens" that each measures 80 FEET by 10 FEET so that owners can plant whatever they want to. Can you imagine what a mess that would be with owners weeding or not weeding, watering or not watering, or not planting anything at all which would leave a LARGE rectangular shaped brown strip of dirt. Another phase involves installing a picnic/barbecue area in a kind of cloverleaf shape in the common elements complete with a cement base and sidewalk with 3 (three) shelter roofs over each "cloverleaf" and landscaping around all. (This area is now where we put our snow in the winter.) We owners were never asked if we wanted "tenant gardens" or a picnic/ barbecue area. We are allowed to have electric grills on our decks, and the majority of people do not even have them. My concern about not having designated reserve accounts is that I am afraid the board is going to take our savings and approve of these ridiculous landscaping plans. Seriously, what kind of reserve funds do other associations have set up - what are they for, what is the goal, how much is put in each month/year? How do you manage them? Thanks!

It seems like you have an interesting issue.  
 
 
 
One of the things that really stuck out to me was that there hasn't been a reserve study done since 1994!? Most of the associations we work with have them done at least every 5 years. With the reserve study, on item to pain attention to is whether the 5-7 year roof replacement schedule is accurate. If this number is from the reserve scheulde established in the original reserve study, it may or may not be a good reflection of the properties needs. The operation and maintenance of the roof may be much better or worse than the industry average, which is typically used to determine the replacement timeframe. 
 
 
 
Also, if there is a multi-phase landscape project in the early stages your condo board may wish to explore working with an A/E firm to procure and review the construction bids. This helps to ensure that the scope and nature of the bids are similar in nature and that the work is done in the best interest of the condo owners, not the construction companies. 
 
 
 
If we can help in anyway, please feel free to contact me. 
 
 
 
Brian Wielgus

A reserve fund study will typically recommend an annual contribution to reserve as part of a cash flow projection for 20-30 years ahead. That same spreadsheet will detail the year of replacment for the individual common area components. Our experience is that Boards do not earmark funds for specific components such as roof re-shingling. They might typically, when preparing the reserve portion of next year's budget,re-set priorities based upon the reserve study and their own current opinion of the condition of the individual components.Re roof shingles:If they were new in 1994 they would now be 14 years old. So 4 years hence for replacement sounds about right. We use a service life of 18 years for roof shingles which agrees with most insurance underwriters.