Re: Reserve Studies
From: R Philip Dowds (rpdowdscomcast.net)
Date: Fri, 30 Dec 2011 06:13:39 -0800 (PST)
I'm not convinced that industry standards will close out the question.  The 
industry is, in fact, enormous and complex, and has a wide range of standards.  
But even if the industry were consistent in agreement, it doesn't mean that 
individual owners must sign up.  I know of at least one condo association that 
paints its exterior on a four year rotational.  I had the Church of Latter Day 
Saints for a client once, and was told that their official policy is to 
re-paint their interiors every other year; I imagine that eventually the paint 
on the walls is so thick no one can get in any more.  Harvard has one standard, 
the Boston Housing Authority, another.

The dryer vent thing is a little different, since dryer vents clogged with fuzz 
are a fire hazard, and no professional in his/her right mind is going to tell 
you, OK, skimp on cleaning these vents.

I fully agree with your point that condo associations are smart to see the 
reserve as a "sinking fund" which compensates for consumption of value and 
systems depreciation over time.  But my point was, not everyone sees things 
this way, or wants to pre-pay according to this standard.  After all, how many 
of us are currently socking away money to buy our next car (rather than 
expecting to take out a four- or five-year auto loan at the time of purchase)?

RPD

On Dec 30, 2011, at 8:20 AM, Sharon Villines wrote:

> 
> 
> On 30 Dec 2011, at 5:52 AM, R Philip Dowds wrote:
> 
>> If you have a wood floor, how often do you refinish it?  Every five years?  
>> Ten?  Twenty?  In other words, what's the community's standard of excellence 
>> — or standard of tolerance — for finish conditions?
> 
> The reserve study specialist signs the study and uses industry standards in 
> making recommendations. When the reserve  study specialist signs the report, 
> they also sign off on the condition of various assets. They have to be honest 
> about their recommendations and upcoming expenses. For example, our 
> specialist wanted us to clean the dryer vents every year. We protested and 
> wanted to do it every three years. He said he couldn't do that. He did agree 
> to two. If we didn't have the cleaning done as recommended and there was a 
> fire as a result, the association would be liable.
> 
> One use of the reserve study is for potential homeowners to judge the value 
> of the investment they are about to make. Along with other financial 
> documents, they should read it carefully and show it to their lawyer. 
> Homeowners, new or old, who find that the Board has not been following 
> accepted practice in doing maintenance and repairs, can sue the Association.
> 
> Industry standards would prevail unless the Association could present other 
> standards that were acceptable.
> 
>> But some households have a tough time picturing themselves enjoying new 
>> siding in 2030 or 2040, and aren't sure they want to pony up now for a 
>> re-siding that is decades away.  Instead, they want to see the members of 
>> the future carry more of the cost burden for the siding of the future.
> 
> The purpose of saving is so the costs are borne equally by all generations of 
> owners. 50 years of use should be paid for in each of the 50 years. If not, 
> the value of the investment will predictably decline. If a unit is sold 
> without telling the new owner that there is an impending assessment for a new 
> roof, there are legal consequences.
> 
> Sharon
> ----
> Sharon Villines
> Takoma Village Cohousing, Washington DC
> http://www.takomavillage.org
> 
> 
> 
> 
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