CAI-NJ Dec.2017

D E C E M B E R , 2 0 1 7

aintaining an association’s common property is among the highest responsibilities of a board.

One way to obtain this objective is to implement a comprehensive long range plan to successfully

prepare for the necessary repairs or replacements of the association’s common

elements. Communities rely on capital reserve studies to provide a budgeting forecast

for the inevitable future repairs and replacements to the common elements. For some

boards, this process can become tedious and overwhelming, especially if they find

themselves on the short end of the “underfunded” stick. Here are some tips for

board members that are preparing for their next reserve study:

Don’t Wait

Boards of newer communities tend to put off preparing capital reserve

studies, claiming that their existing common elements are in such pristine

condition that their replacement and repair is not anticipated for many

years down the road. While that may be true, a reserve study provides

more than just a timeline of major upcoming projects. A capital

reserve study is first and foremost a budget planning tool. A

board does not want to find itself a few years

removed from a community-wide roof

replacement project, only to be signifi-

cantly (and unknowingly) underfunded.

The owners of the units at the

inception of a project have

as much obligation to

fund the reserve as

Best Practices of a

Well-Funded Association

By AJ Meola, FWH Associates, P.A.

CONT I NU E S ON PAGE 18