A Homeowners Association which obtains a loan for common area projects should not be including that repayment amount in the reserve study as a common area component expense. Doing so reduces the clarity and credibility of the reserve study and the allocation rate to the account.
A common component that is overlooked in many reserve studies is a fire system upgrade. As technology advances, codes are revised and safety concerns change this component is a important and often costly component.
The recipe for a successful reserve study is pretty simple and really does not take much of a Property Managers or Board Members time. Follow this simple recipe will result in a great outcome.
The cost and time needed to complete a reserve study are impacted by the amount of work the reserve study company will need to put into the assignment. There are ways a Property Manager can help to reduce the amount of time needed as this article goes into.
Determining what is and what is not a common area can be confusing to Board members, community members and Reserve Analysts. How do we tackle this issue?
