Developments that have defined shared property/common areas and improvements have agreements including restrictions on the deed for the use of the property. This includes its repair, maintenance and replacement of these common areas. The association is responsible for these decisions and for the funds required to accomplish those responsibilities.
A reserve study provides an estimate of the costs of repairing and replacing major common area components (roofs, asphalt, siding, concrete, decks, etc.) over the long term. Ideally, all major repair and replacement costs will be covered by funds identified by the association as reserves. This then results in the funds being available when the replacement is necessary. A good reserve study examines the obligations of the association including the following items:
- Examination of the associations repair and replacement obligations;
- Determination of costs and the anticipated timing of replacement; and
- Determination of the necessary reserves (cash) for the related expense.
Usually the Association Board has a fiduciary responsibility to manage the funds and property. The reserve study is a vital management tool for the association as it balances and optimizes the long-term values and costs for the membership. Astute potential buyers will examine an association’s reserves and whether a reserve study has been performed. For association members, reserve planning assures property values by protecting against declining property values due to deferred maintenance and the lack of reserves to pay for the aging components.
Your association needs a reserve study and as a member of the association, you want the most value for your dollar to protect your asset. Many associations think they can perform this task on their own but this puts the Board Members at an undue risk to make these decisions. This is where Complete Building Solutions, LLC (“CBS”) can make a difference for your association.
CBS is an engineering and consulting firm located in the Twin Cities and has years of experience working with associations like yours. Our staff of experts includes experienced engineering, construction, financial and real estate experts to assist your association in closely examining the components listed above. We have a proven track record including uncovering every detail of your specific associations components and their related life expectancy. This determination can then be evaluated for expected replacement costs and necessary reserves needed. We have performed considerable construction defect work, solutions and cost analysis which gives us a real understanding of the issues at hand.
If your association needs a thorough and in-depth reserve study, please give CBS an opportunity to work for you. We recognize that your ownership within the association may be one of the largest assets you possess. Let CBS work with you to protect it. You can feel assured that we understand the dynamics of cost effective measures to keep your association fees in line with your budget.