“Do we Reserve for Domestic Water Lines in the Ground?”

The four-part test for determining if a component is appropriate for Reserve Funding is as follows:
1) Is it a common area maintenance responsibility?
2) Is it life limited?
3) Does it have a predictable Remaining Useful Life?
4) Is it above a minimum threshold cost (under which is more appropriately handled through the operational budget)?

So the question is not just "is the association responsible for the component?", the question expands to finding out if you assemble $ and life factors for the item. If you cannot establish reasonable estimates for replacement cost and timing, when these expenses occur they are true maintenance emergencies that could not have been anticipated.

For many (most?) associations, the Water Lines and other utilities (drainage systems, etc.) are "life of the property" items, so they fail test #2 and are not appropriate for Reserve funding.

If we have some reason to believe the item is life-limited, the next question to ask is if we can identify or predict when and how much the expense will be. It is appropriate in some circumstances to make a reasonable estimate that can be updated/adjusted in future years as more is learned about deterioration rates and repair/replace costs. You don’t have to know all the answers now!

Another successful way of handling an unknown item like this is to create an "allowance" for repairs, $X every other year or every 5 years or so. This is what we call “bookmarking” a project (getting it in the budget with some $ set aside towards its periodic repair).

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