Our blog has discussed over the years the value of having a Reserve Study. It is, after all, one of the best practices an association can take to protect property values. None of us want to see the value of our home slashed and our home equity vanish. But that’s exactly what happens when maintenance is deferred and the common areas show deterioration. This results in lowering the resale value of a home. Future buyers in Washington State also get a disclosure which states if the association has or will have that dreaded Special Assessment. If you were looking at two association and one has a history of special assessment and the other does not, which would you chose?There is another aspect of Reserve planning that is both surprising and troubling. How many owners really look at the Reserve Study and try to understand it. As an owner it is your Reserve Study; it should reflect the plans and aspirations of your community and its members! A well functioning board should be looking at the near term, 3 years, 5 years and beyond goals of the association. The board should share those goals with there reserve study provider. During the next reserve update compare the goals to the reserve study. Ask the reserve analyst to explain just how the goals are supported in the Reserve Study. If you don’t totally understand the Reserve Study, ask them to explain it, either in a conference call, video call, or meeting. For our customers this is a normal practice as the numbers and the graphs can be confusing. Most owners do not understand asset lifespans and question why we have certain assets included and some assets excluded.
