Condo Media - January 2021 - 16

Out of Pocket
While the importance
of building and
maintaining a strong
reserve fund is no mystery,
raising fees or special
assessments is often a
sensitive subject with
homeowners. Every
association needs
a long-term planning
tool, and a reserve fund
study provides a schedule
and budget for funding
those non-annual,
predictable expenses.

FIDUCIARY RESPONSIBILITY
One of the primary business duties
of community associations is maintaining and preserving property
values of the associations' common
property. To do this properly, associations must develop funding plans
for future repair or replacement of
major common-area components.
A reserve study is a budget planning tool that identifies
the current status of
the reserve fund and
establishes a stable and
equitable funding plan
to offset the anticipated
future major commonarea expenditures. Being
prepared for non-annual
expenses allows your
association to change
the unexpected to
the expected.
Reserve fund studies
are one of the best tools
for financial and physical
health available to an
association. Having
a reserve fund study
prepared by an independent, qualified consultant
also demonstrates a good
faith effort by the board
to respond to their
fiduciary responsibility.
For accuracy and credibility (and defendability),
a reserve fund study should
be updated (with a site visit)
every three or four years.
Each state has different requirements regarding the
frequency of full studies
and updates.

It is our belief that fundamental
to meeting that challenge is two
basic premises: communication and
relationships. Communication is
multi-faceted - between the board and
the owners, between the board (and/
or subcommittee) and the consultant,
and between the consultant and the
owners. To ignore these opportunities for effective communication will

The board should
maintain open
communications with
the association members.
With Zoom meetings
and the internet, ongoing
communication is
easier than ever.

COMMUNICATION
AND RELATIONSHIPS
Reserve fund studies may
discover that additional
funds are needed to offset
projected future expense.
That's when the board's ability
to deliver that information effectively can be challenging.

16

CONDOMEDIA January 2021

result in diluting the effectiveness
and ultimate success of the implementation of any reserve fund study for
your association.
Relationships nurture trust and
confidence. Through effective
communication, greater trust and
confidence can be developed between
the various parties involved. As a
result, it is more likely (although
certainly not guaranteed) that the
recommendations of a reserve fund
study can be effectively implemented.
The board should maintain open
communications with the association
members. With Zoom meetings and
the internet, ongoing communication
is easier than ever. And CAI provides
good information about the purpose
and best practices for a reserve fund
study. Helping owners understand a
reserve fund is important.



Condo Media - January 2021

Table of Contents for the Digital Edition of Condo Media - January 2021

Contents
Condo Media - January 2021 - Cover1
Condo Media - January 2021 - Cover2
Condo Media - January 2021 - Contents
Condo Media - January 2021 - 2
Condo Media - January 2021 - 3
Condo Media - January 2021 - 4
Condo Media - January 2021 - 5
Condo Media - January 2021 - 6
Condo Media - January 2021 - 7
Condo Media - January 2021 - 8
Condo Media - January 2021 - 9
Condo Media - January 2021 - 10
Condo Media - January 2021 - 11
Condo Media - January 2021 - 12
Condo Media - January 2021 - 13
Condo Media - January 2021 - 14
Condo Media - January 2021 - 15
Condo Media - January 2021 - 16
Condo Media - January 2021 - 17
Condo Media - January 2021 - 18
Condo Media - January 2021 - 19
Condo Media - January 2021 - 20
Condo Media - January 2021 - 21
Condo Media - January 2021 - 22
Condo Media - January 2021 - 23
Condo Media - January 2021 - 24
Condo Media - January 2021 - 25
Condo Media - January 2021 - 26
Condo Media - January 2021 - 27
Condo Media - January 2021 - 28
Condo Media - January 2021 - 29
Condo Media - January 2021 - 30
Condo Media - January 2021 - 31
Condo Media - January 2021 - 32
Condo Media - January 2021 - 33
Condo Media - January 2021 - 34
Condo Media - January 2021 - 35
Condo Media - January 2021 - 36
Condo Media - January 2021 - 37
Condo Media - January 2021 - 38
Condo Media - January 2021 - 39
Condo Media - January 2021 - 40
Condo Media - January 2021 - 41
Condo Media - January 2021 - 42
Condo Media - January 2021 - 43
Condo Media - January 2021 - 44
Condo Media - January 2021 - 45
Condo Media - January 2021 - 46
Condo Media - January 2021 - 47
Condo Media - January 2021 - 48
Condo Media - January 2021 - Cover3
Condo Media - January 2021 - Cover4
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