Condo Media - July 2013 - 29

Reserve studies that are prepared in
accordance with National Reserve
Study Standards contain a calculation
of reserve fund strength (a ratio called
percent funded) that measures how
well the reserves on hand have kept
pace with the deterioration that has
already taken place. One of the values
of performing this calculation is how
directly it correlates to the risk of a
special assessment, as represented on
the chart pictured to the right:
0-30 percent funded is the “weak”
range, where special assessments are
common
30-70 percent funded is the “fair”
range, where most associations reside
70-130 percent funded represents the
“strong” range, where special assessments are rare
The size of your reserve contributions will cause percent funded to trend
up or down over the years, representing
either a strengthening or weakening of
your reserve fund position. If your association is gradually under-reserving,
percent funded will decline, resulting
in increased risk of a special assessment.
If the association is strengthening its
financial position, percent funded will
increase, lowering the risk of a special
assessment.
Finally, a current-year reserve study
provides the board and homeowners with the scope and schedule of
anticipated reserve projects. Because
each project has a predictable schedule
(determined by useful lives and remaining useful lives) and scope (determined
by replacement cost), there is no need
to wonder when the buildings will be
repainted, or when the pool furniture
is slated to be replaced. A regularly updated reserve study eliminates mysteries
and surprises.
Living in a community association involves being part of a “community” of
other owners, with whom you share expenses. Each year, take the time to look
at your updated reserve study. There is

Risk of Special Assessment
51%

0%
40%

10%
29%

20%
18%

30%
10%

40%
5%

50%
60%

2%

70%

1%

80%

<1%

90%

<1%

100%

<1%

Percent
Funded

Data Provided by Association Reserves, Inc.
www.reservestudy.com

valuable information there for managers, board members, homeowners, and
prospective homeowners alike! CM
Robert M. Nordlund, PE, RS is the CEO
and founder of Association Reserves,

Inc. As a registered professional engineer and reserve study pioneer, he was
involved in creating the 1998 National
Reserve Study Standards and has greatly
influenced the community association
industry.

Condo Media • July 2013

29



http://www.reservestudy.com

Condo Media - July 2013

Table of Contents for the Digital Edition of Condo Media - July 2013

Condo Media - July 2013
Contents
From the CED’s Desk
President’s Message
CAI News
CAI Regional News
Asked & Answered
Homeowner’s Corner
Reserves
Volunteer Spotlight
Vendor Spotlight
Finance
Banking
Operations
2013 CAI-NE Financial-Reserves Directory
Classified Service Directory
Advertisers Index
Condo Media - July 2013 - Condo Media - July 2013
Condo Media - July 2013 - Cover2
Condo Media - July 2013 - Contents
Condo Media - July 2013 - From the CED’s Desk
Condo Media - July 2013 - 3
Condo Media - July 2013 - President’s Message
Condo Media - July 2013 - 5
Condo Media - July 2013 - CAI News
Condo Media - July 2013 - 7
Condo Media - July 2013 - 8
Condo Media - July 2013 - 9
Condo Media - July 2013 - 10
Condo Media - July 2013 - 11
Condo Media - July 2013 - 12
Condo Media - July 2013 - 13
Condo Media - July 2013 - 14
Condo Media - July 2013 - 15
Condo Media - July 2013 - 16
Condo Media - July 2013 - 17
Condo Media - July 2013 - CAI Regional News
Condo Media - July 2013 - 19
Condo Media - July 2013 - 20
Condo Media - July 2013 - 21
Condo Media - July 2013 - Asked & Answered
Condo Media - July 2013 - 23
Condo Media - July 2013 - Homeowner’s Corner
Condo Media - July 2013 - 25
Condo Media - July 2013 - Reserves
Condo Media - July 2013 - 27
Condo Media - July 2013 - 28
Condo Media - July 2013 - 29
Condo Media - July 2013 - Volunteer Spotlight
Condo Media - July 2013 - 31
Condo Media - July 2013 - 32
Condo Media - July 2013 - 33
Condo Media - July 2013 - 34
Condo Media - July 2013 - 35
Condo Media - July 2013 - 36
Condo Media - July 2013 - 37
Condo Media - July 2013 - 38
Condo Media - July 2013 - 39
Condo Media - July 2013 - Vendor Spotlight
Condo Media - July 2013 - 41
Condo Media - July 2013 - Finance
Condo Media - July 2013 - 43
Condo Media - July 2013 - 44
Condo Media - July 2013 - 45
Condo Media - July 2013 - Banking
Condo Media - July 2013 - 47
Condo Media - July 2013 - Operations
Condo Media - July 2013 - 49
Condo Media - July 2013 - 2013 CAI-NE Financial-Reserves Directory
Condo Media - July 2013 - 51
Condo Media - July 2013 - 52
Condo Media - July 2013 - 53
Condo Media - July 2013 - 54
Condo Media - July 2013 - 55
Condo Media - July 2013 - 56
Condo Media - July 2013 - 57
Condo Media - July 2013 - Classified Service Directory
Condo Media - July 2013 - Advertisers Index
Condo Media - July 2013 - 60
Condo Media - July 2013 - 61
Condo Media - July 2013 - 62
Condo Media - July 2013 - 63
Condo Media - July 2013 - 64
Condo Media - July 2013 - Cover3
Condo Media - July 2013 - Cover4
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