Although many articles are written about the subject of protecting an association’s common elements through the proper funding of association reserves, most are read and relegated to the proverbial “File 13.”
But as most of us know, pre-planning for anything can save money, worry, time and, yes,even lives. And, it is the lack of planning on the part of condominium associations that can and does create major problems for everyone involved.
The common elements of a condominium development are described in the development’s condo documents, which create the legal entity under which the property operates. These legal documents are a constant, and they bind each owner.
These documents describe who is responsible for the maintenance, upkeep, repair and replacement of the various elements of the property. Additionally, there may be limited common elements associated with an individual piece of property that is for the exclusive use of the owners of the attached piece of property, yet the association may have the responsibility for the maintenance, repair and/or replacement of these elements. Knowing what is each one’s responsibility is very important.
In my opinion, adequate reserves are critical to the financial viability of any common interest property. Some states require reserves on the surface, but give owners an easy method of opting out of reserves by a simple vote at an owner's meeting.
In instances where individuals have bought into an investment type property where the units are typically rented out, there is a general reluctance to maintain adequate reserves, because these owners are going to turn the property over fairly quickly and want the maintenance fees as low as possible.
But remember, a vote not to reserve is a vote for a special assessmentin the future.
Those seeking a property to live in now or in the immediate future and who want the protection of adequate reserves, proper maintenanceof the property and future financial and physical viability of the property, must do their homework by asking the following questions: