WHY YOUR CONDO ASSOCIATION SHOULD GET A RESERVE STUDY OR BUILDING ASSESSMENT
The topics covered in this article are relevant to both larger building associations with professional management in place and smaller self-managed associations. Both types of associations have similar needs and outlooks for the most part. There are however some significant differences as well. A small, self-managed association often suffers from not having the knowledge base that a professional management company tends to provide. Often times in self-managed associations, a group of people with little to no building management experience is brought together and are expected to figure it out. Some times this goes well; other times it doesn’t go well at all. A professional management company acting on behalf of the association is presumed to know what they are doing and provide certain benefits that come with that professional experience.
There are several primary issues to consider relative to a condo reserve study or building assessment. These are consistent regardless of building size or type. The important factor is that the association obtains an assessment periodically. This service allows the association to make plans for the future of the property and maintain owner equity outside of market conditions. A condo reserve study provides valuable information such as:
- Gaining an understanding of building conditions
- Establishing maintenance and repair needs
- Formulating a plan and budget to deal with building needs
- Obtaining reliable information from professionals in advance
Depending on the level of professional management, the management company may provide answers to building issues or recommend hiring an outside inspector. In-house recommendations vary in scope. A well-run professional management company will often provide unit owners with information and do the leg work to get things done. Owners typically need to only discuss, approve or not approve and pay for maintenance requirements.
When self managed, association members often don’t know what they should be addressing, how to address concerns or who to call to get answers. One of the great hurdles that small associations face is the notion that “I bought a Condo because I didn’t want to deal with repairs like a house needs”. Often times it can be a struggle for members to get other members to participate or understand that even though it is a Condo building, maintenance and repair issues need to be discussed and budgeted. Having a neutral 3rd party provide such information can reduce conflict.
With the rise of smaller self-managed Condo buildings in the last decade, new and unknown issues have evolved for unit owners. Many of these self-managed associations are in new construction buildings. This tends to make newer owners, and especially 1st time homeowners, think there isn’t anything to do. Whether it is new construction or vintage, every building needs periodic maintenance.
There are significant differences in what type of maintenance vintage buildings and new construction buildings need. Each has different deterioration factors based on construction type. Knowing and understanding those differences is one of the experience-based services that we provide for clients.
AIC can provide either a thorough building assessment report or a complete condo reserve study. A newer building that has never conducted its own reserve study would likely greatly benefit from a complete study. A building assessment can be sufficient for a property with an established and well functioning association.
Please feel free to call or email to discuss details for what type of study would be best suited for your building.
Note: This article is based on your Condo building having a functional association. If there is no functional association, there are other factors to deal with first. Those issues are addressed in another article on this website.