Condo Media - July 2021 - 21

will affect funding recommendations
and even create scenarios for what would
happen if one project was deferred a
year, another accelerated, and more.
Today's studies aren't the same as
they were fi ve or 10 years ago. Here are
some trends:
 Pandemic impacts
From a fi nancial standpoint, the
COVID-19 pandemic is likely being
felt in the annual operating budget for
costs associated with things such as
enhanced cleaning and extra staffi ng
at the fi tness center to enforce social
distancing, as well as slow-paying
owners or diffi culty selling units due
to possible contamination by infected
residents. But Mooney expects to see
more pandemic-related items being
added to reserve fund studies. For
example, a condominium may want to
upgrade its HVAC system to improve
air quality with enhanced fi ltration
systems that use MERV 13 fi lters and
UV light purifi ers. Others planning a
common area restroom renovation
may want to convert to " no touch "
soap dispensers, self-closing restroom
doors, and the like.
 Aging facilities and infrastructure
Communities that have been around
a while are having to dig deeper to
include things that might not normally
be part of a reserve fund study. Because
studies typically look as far as 30 years
in the future, a condominium built
in the 1970s needs to be concerned
with items projected to be 40 to more
than 70-years-old, such as storm drain
systems and underground piping that
may be deteriorating, as well as safety
issues with balconies and cantilevered
decking. " In downtown Boston, you've
got some real issues with piping corrosion, "
Mooney says.
 Innovation and energy
Reserve studies are a good time to
implement energy savings and technological
advances that can help the
community save money and potentially
comply with regulations.
For example, droughts in many
areas of the country have increased
governmental regulations on watering
and reducing turf, the Best Practices
report notes. Many communities
are interested in upgrading to LED
lighting because of state programs that
provide credits. " Owners also feel better
about it and like the fact that you're
being more 'green,' " Mooney notes.
WORKING TOGETHER
Lockhart says it's not uncommon to
fi nd out new clients are underfunded,
have an outdated reserve study, or have
not utilized the recommendations in
their current study.
In the end, Mooney stresses that
collaboration between the board and
Reserve Specialist is key, particularly
as the boards grow more involved in
community governance. Sure, there are
online sites that provide do-it-yourself
reserve study templates, but it's best to
go with an experienced professional.
" The most important thing is to have
a regularly updated, credible reserve
fund study that you use to fund your
reserve, " Mooney says. Then, the ball's
in your community's court. After all,
Mooney says, just like the Boston-area
condominium that got hit with special
assessments learned, " There's no point
going through all these great exercises
and giving all this great stuff to people
if they don't do anything with it. "
 PAMELA BABCOCK IS A FREELANCE
WRITER WHO WRITES
FREQUENTLY ABOUT REAL ESTATE,
PERSONAL FINANCE, LEGAL ISSUES
AND MORE.
Statutory
Requirements
IN ADDITION TO THE
NATIONAL STANDARDS,
a growing number of states
have laws requiring community
association reserve studies,
including Virginia, Ohio, Illinois,
California, Florida, Hawaii,
Washington, and Nevada,
according to the Best Practices
report. Similar legislation
is pending in other states.
Meanwhile, FHA, Fannie Mae,
and Freddie Mac have reserve
requirements for condominium
associations where they
provide homeowner fi nancing.
Currently, they require the
association to provide for
funding of replacement
reserves and deferred
maintenance in an account
" representing at least 10
percent of the budget " or have
in place a current - not more
than 24 months old - reserve
study prepared by " a qualifi ed,
independent professional
company, " according to the
Best Practices report.
BEST PRACTICES REPORTS
The Best Practices reports, published by the
Foundation for Community Association Research,
are available at www.caionline.org/shop and as a
free download at https://foundation.caionline.org.
July 2021 CONDOMEDIA 21
Condo Media - July 2021

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