CAI-NJ Dec.2017

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

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Subject to credit approval.

ICS

and CDARS

are registered service marks of Promontory Interfinancial Network, LLC.

owners of units in the years leading up to major projects.

Establishing and following an adequate funding plan from

the early stages of a community will prevent underfunding

and ensure that all owners pay their “fair share.”

Document, Document, Document

There are several pieces of information a reserve spe-

cialist requires to prepare a reserve analysis: the starting

reserve fund balance, current funding levels, scheduled

projects, etc. One of the more important pieces of informa-

WELL FUNDED...

from page 17.

tion a board should provide is history of capital expenses.

Keeping records of reserve fund expenditures, including

project proposals, invoices, and maintenance records, is

imperative. Documenting when projects are performed, the

scope of work performed, and project costs will allow for

a more accurate and complete reserve study.

An Apple a Day Keeps the Doctor Away

Or how about — “A reserve study every three to five

years keeps away the tears?” It is recommended by the

Community Associations Institute that updates to reserve

studies are prepared every three to five years. Many

changes can occur within a community during that time;

roads can be resurfaced, sidewalks can be repaired, roofs

can be replaced. Influences beyond the community’s con-

trol can also significantly affect funding practices; Inflation,

new construction technology, and new products are a few

of these factors. An older association with a significant

amount of repair and replacement activity may need to

update its study annually.

CONT I NU E S ON PAGE 20

"It is recommended

by the Community

Associations Institute that

updates to reserve studies are

prepared every three to five years."