Condo Media - June 2018 - 50
Insights from local
experts and executives
The Region
this issue:
[50] Massachusetts [52] Maine [54] New Hampshire [56] Rhode Island
MASSACHUSETTS
Planning for the Future
Reserves, Special Assessments, and Loans
[by Dean T. Lennon, Esq.]
In many conversations over
the years, I have heard trustees
remark about their pride over not
having raised the monthly condo
fee during their long tenure on the
board. While I understand this
sentiment, a flat monthly fee over a
long period of time is almost always
a mistake and it is a mistake that
the ownership could pay a large
price for in the future.
Over time, the cost of pretty much
everything increases. Are you paying
the same price for electricity that
you were in 2010? How about that
plowing contract? My guess is that
the price keeps going up and up.
I recently read that the floods in
Houston and Florida, disasters in
50
CONDOMEDIA
Puerto Rico and Massachusetts, as
well as the wildfires in California
have resulted in damages of over
$300 billion. It doesn't take much
imagination to predict that insurance companies will make up for
losses by raising premiums. As
costs rise, so should the monthly fee
because if your fee is not rising, that
means your association is putting
less into reserves.
BUDGETING AND RESERVES
Let's take a step back. The annual budget for every association
should include all costs paid by the
condominium. Such items include
master insurance, management
fees, common utilities, landscaping,
snow removal, and general maintenance. The annual budget should
also include a line item for reserves.
Generally speaking, reserves
should be about 10 percent of the
annual budget. Reserves are the
condominium's savings account for
when capital repairs and replacement are needed.
For ABC Condominium Trust and
its flat monthly fee, I suspect their
reserve account, if any, is paltry at
best. What happens when the roof
needs replacement? What happens
when it's time to tear up the potholeladen parking lot and re-pave? If
the money is not available in your
reserve account, the simple answer
is that the owners are going to get
Condo Media - June 2018
Table of Contents for the Digital Edition of Condo Media - June 2018
Contents
Condo Media - June 2018 - Cover1
Condo Media - June 2018 - Cover2
Condo Media - June 2018 - Contents
Condo Media - June 2018 - 2
Condo Media - June 2018 - 3
Condo Media - June 2018 - 4
Condo Media - June 2018 - 5
Condo Media - June 2018 - 6
Condo Media - June 2018 - 7
Condo Media - June 2018 - 8
Condo Media - June 2018 - 9
Condo Media - June 2018 - 10
Condo Media - June 2018 - 11
Condo Media - June 2018 - 12
Condo Media - June 2018 - 13
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Condo Media - June 2018 - 15
Condo Media - June 2018 - 16
Condo Media - June 2018 - 17
Condo Media - June 2018 - 18
Condo Media - June 2018 - 19
Condo Media - June 2018 - 20
Condo Media - June 2018 - 21
Condo Media - June 2018 - 22
Condo Media - June 2018 - 23
Condo Media - June 2018 - 24
Condo Media - June 2018 - 25
Condo Media - June 2018 - 26
Condo Media - June 2018 - 27
Condo Media - June 2018 - 28
Condo Media - June 2018 - 29
Condo Media - June 2018 - 30
Condo Media - June 2018 - 31
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Condo Media - June 2018 - 33
Condo Media - June 2018 - 34
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Condo Media - June 2018 - 36
Condo Media - June 2018 - 37
Condo Media - June 2018 - 38
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Condo Media - June 2018 - 40
Condo Media - June 2018 - 41
Condo Media - June 2018 - 42
Condo Media - June 2018 - 43
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Condo Media - June 2018 - 49
Condo Media - June 2018 - 50
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Condo Media - June 2018 - 53
Condo Media - June 2018 - 54
Condo Media - June 2018 - 55
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Condo Media - June 2018 - 57
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Condo Media - June 2018 - Cover3
Condo Media - June 2018 - Cover4
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