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Four Reserve Rules
There are four rules of reserves that associations should know. Our company has pioneered foundational concepts & principles and provided extensive educational materials to the industry for over 35 years, but all can be distilled down to the rules below as the heart of planning for reserve projects at your association. Fundamental education is key to all of our success, as board members and professionals come and go over time.
Four Reserve Rules:
 Expenses Are Inevitable
The large expenses you will see in a reserve study – think roof, paint, decks, roadway – are very real and predictable, deteriorating in plain sight every day and therefore should never be a surprise.
 The Board Is Responsible
Boards have a legal duty to act in good faith, in the best interests of the association, proceeding with reasonable inquiry. Owners, which include board members of course, have a vested interest in achieving both maximum resale value and community harmony.
 Delays Usually Get Expensive
When projects are deferred or ignored it usually winds up costing a lot more due to additional scope of work and / or emergency related costs.
 Homeowners Always Get Stuck Paying The Bills
At the end of the day when these inevitable expenses arise, and the bills need to be paid, it is the owners that are responsible to pay the bills. There is no rich uncle or bailout. If not planned well, there is often significant additional costs related to borrowing, and administration of a Special Assessment.
What To Expect From Your Reserve Study?
These three results, regardless of the provider:
RS Three (3) Key Results
It’s All About Measuring Risk & Creating A Plan…
We appear to be in for some challenging financial times ahead.. See last month’s blog post for key inflation data relating to your reserve planning.
If you’re new to the industry, an association board or simply brushing up on foundational information and skills, see HERE for our 2022 Reserve Study Basics webinar. This 35 minute webinar will provide an excellent foundational overview of reserve planning and the various roles within it.
By Association Reserves WA
Chapter Happenings Sponsor, May 2022
Written By Jim Talaga, R.S.
Visit us online: www.reservestudy.com
Call: (253) 661-5437