Interesting question, with an answer that is not obvious. Most associations deal with the problem of replacing components too late, resulting in deferred maintenance and related costs that make the project much more expensive than if it was done on time (think of the cost of replacing siding or trim that could have been avoided if the building was painted on time, or the water damage that could have been avoided if the roof was replaced on time).
Good question! There are two ways to answer a question regarding the appropriate use of Reserve Funds, depending on how it is asked. Boardmembers and managers of condos, HOAs and other forms of community associations are often confronted with a major repair or replace expenditure they think should be a Reserve expense, but can not find it on the Reserve Component List (a good first place to look).
In the middle of a major drought, many of our California clients are asking this question as they try to be both “good citizens” and financially responsible. The answer is yes, but… Landscape renovations can be classified as a Reserve Project if they meet the National Reserve Study Standard four-part test:
In a word, “yes”. There is no minimum (or maximum) Useful Life stipulated in National Reserve Study Standards.
Great question! A reader asked this yesterday, describing their association as a residential association with many private homes along a common street, with little other common area assets (a gate system and a tot lot).
Today a well-intentioned Boardmember called, asking why he should tell his homeowners that the expensive roof they installed two years ago,