Reserve Fund Study?

[joylewis.livejournal.com]

Hello all--my Google queries have been fruitless so I'm hoping someone here has a recommendation. My condo association would like to do a reserve fund study. Has anyone here done this that could provide experience or references? 

Thanks! 

Comments

[laryu.livejournal.com]

I sort of went down that road seven years ago, when I was trustee of a condo association that had just formed. Unfortunately, I don't have a cut-and-dry answer for you, but here are a couple things we considered:
* Benchmarking reserves against comparable condos. It helps here to be working with a management company. You can benchmark relative to combined condo value or as a % of your annual budget.
* Looking at the cost of replacement of major systems and amortize over their expected life. So, for example, roof replacement of $10k over expected life of 20 years. Boiler replacement of $20k over expected life of 25 years. Etc. Total it up, and that's one way you can estimate a set-aside for reserves. But you'll need to know something about renovation cost estimation to do this.

We started going down both paths but ultimately we didn't do anything as formal, for several reasons. First, we basically had no reserves and not set-aside, so we didn't need to know the final reserve figure to know we had to raise fees and start putting something aside. Second, in the absence of substantial reserves, it's not uncommon to either take a loan or make an assessment to deal with the actual replacement of one of those systems. A few years later, that's indeed what we did, twice, for a lobby renovation and when our boiler sprung a leak.

Hope that helps.

Reserve Fund Study

[sponja2000.livejournal.com]

The act will require condominium corporations with more than 10 units to have or complete a reserve fund study. This study will define the reserve fund required for that corporation, and help determine the budget for current and future maintenance or repairs to the buildings. As well, these corporations must submit annual financial statements to the director of condominiums at Service New Brunswick, ensuring that every condominium owner is kept appraised of its corporation’s financial status. Reserve Fund Study (http://www.ben-engineering.com)