We live in a community. All of us must take part in it and share in the financial responsibilities of the upkeep and long-term maintenance of our commonly held property.
To assist the Board in determining the future needs of Kenthill Townhomes, in 2006 the Board commissioned a Reserve Study to be performed for Kenthill Townhomes.
A Reserve Study is the art and science of anticipating, and preparing for, major common area repair and replacement expenses. A Reserve Study allows the Board and Management to offset the ongoing deterioration of the common areas with Funds to ensure the timely repair or replacement of those common areas. When properly done, irregular Reserve expenses are offset by ongoing, regular Reserve contributions. Special assessments are then left for true emergencies, not expenses which could have been anticipated.
Homeowners have expressed concern about certain statements which were included in the Executive Summary [from the Reserve Study] which was sent in a letter to all homeowners. One statement read in part as follows:
“Based on this starting point, your anticipated future expenses, and your historical Reserve contribution rate, we are forced to recommend a Special Assessment of $205,000 in 2006 and a Special Assessment of $225,000 in 2007. Additionally, our recommendation is to increase your monthly Reserve contributions to $4,830 [presently they are $2,778 per month], with annual inflation offsetting increases thereafter”.
The Reserve Study is a very large document. Preparing it took many months and many hours of interaction, feedback, studying, and information gathering on the part of the vendor, countless contractors, and question and answer sessions with Board members. Having said that, the Reserve Study is only a guide. It is a very useful guide, but only a guide. It does not dictate, nor will it dictate, future actions and decisions. It came with useful tools which can be used to manipulate data to produce various current and future outcomes. The Board has spent many hours reviewing the document. It has proved to be very helpful in the short time that it has been implemented in assisting with composing a rough draft of future projects and issues which will need to be considered in the short term future and the long term future.
