Condo Media - July 2012 - (Page 46)

LEGISLATIVE UPDATE by Nena Groskind Lost in Translation Statutes Allow Community Associations to Set their Own Reserve Requirements — or Not ondominium statutes in New England vary in their scope and detail, but they have at least one feature in common: They provide little, if any, guidance about the reserves community associations should maintain. The Vermont, Rhode Island and Maine laws authorize community associations to establish reserves, but don’t require them to do so. Vermont and Rhode Island also require condominium sellers to disclose some financial information to buyers, including whether the association maintains reserves, but these disclosures don’t have to specify how much is currently in those accounts or how they are funded. Buyers are free to request more detailed information, but industry professionals will tell you few condominium purchasers scrutinize association finances as carefully as they should before they buy. C “It probably means something more than zero and something less than the amount required to replace every component that is subject to wearing out,” Stephen Marcus, a partner in Marcus, Errico, Emmer & Brooks, P.C., suggests. The statutory definition, he believes, would acknowledge the existence of other resources — special An “Adequate” Definition The Massachusetts condominium statute actually requires associations to maintain reserves, but it doesn’t specify at what level, saying only that a community’s reserves must be “adequate,” which means ... “If I could answer that question, I’d be able to retire,” Ellen Shapiro, a partner in the Massachusetts law firm Goodman, Shapiro, & Lombardi, LLC, says. “No one knows what it means.” assessments and bank loans — that could supplement a community’s reserves. “If the reserve study indicates that reserves should total $1 million, and the community has $500,000,” that will probably be viewed as “adequate,” Marcus says, at least for pur- poses of meeting Massachusetts’ statutory requirement. In theory, the lack of specificity in the condominium statutes allows associations to determine for themselves the reserve policies most appropriate for their communities. In practice, it means that some communities (probably not a majority of them) fully fund their reserves and others don’t fund them at all, leaving most somewhere in the middle, with some reserves better than none but nowhere near the amount needed to finance major capital projects when they arise without turning to the alternatives (special assessments and loans) that Marcus noted. The best practice for boards, industry professionals agree, is to commission a reserve study estimating the useful life of buildings and their component parts, update the study periodically and use it as a benchmark for gauging and meeting their reserve funding requirements. But many boards respond to that advice like most of us respond to the suggestion that we eat a healthy diet and exercise regularly: We know that regimen would be good for us, but it often takes some other motivating force — a heart attack, for example, or the threat of one — to make us follow it. Secondary Requirements For many community associations, the motivating force for establishing a reserve policy comes from the sec- 46 CONDO MEDIA • JULY 2012

Table of Contents for the Digital Edition of Condo Media - July 2012

Condo Media - July 2012
Contents
From the CED’s Desk
President’s Message
CAI News
CAI Regional News
Asked & Answered
Homeowner’s Corner
Financial Questions
CertaPro Painters How a Multinational Corporation Keeps it Local for Clients
Protecting Your Association’s Assets Oversight and Due Diligence
Community Association Data Released
Your Condo’s Future Planning for the Expected — and the Unexpected
Lost in Translation Statutes Allow Community Associations to Set their Own Reserve Requirements — or Not
CertaPro Painters How a Multinational Corporation Keeps it Local for Clients
Advertisers Index
Classified Service Directory

Condo Media - July 2012

https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202012
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202011
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202010
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202009
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202008
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202007
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202006
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202005
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202004
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202003
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202002
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202001
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201912
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201911
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201911_v2
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201910
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201909
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201908
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201907
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201906
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201905
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201904
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201903
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201902
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201901
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201812
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201811
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201810
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201809
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201808
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201807
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201806
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201805
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201804
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201803
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201802
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201801
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201712
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201711
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201710
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201709
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201708
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201707
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201706
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201705
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201704
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201703
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201702
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201701
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201612
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201611
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201610
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201609
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201608
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201607
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201606
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201605
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201604
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201603
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201602
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201601
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201512
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201511
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201510
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201509
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201508
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201507
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201506
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201505
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201504
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201503
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201502
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201501
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201412
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201411
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201410
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201409
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201408
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201407
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201406
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201405
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201404
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201403
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201402
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201401
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201312
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201311
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201310
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201309
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201308
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201307
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201306
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201305
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201304
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201303
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201302
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201301
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201212
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201211
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201210
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201209
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201208
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201207
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201206
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201205
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201204
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201203
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201202
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201201
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201112
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201111
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201110
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201109
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201108
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201107
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201106
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201105
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201104
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201103
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201102
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201101
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201012
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201011
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201010
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201009
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201008
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201007
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201006
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201005
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_200904
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201003
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201002
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201001
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_200912
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_200911
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_200910
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_200909
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_200908
https://www.nxtbookmedia.com