There are a number of benefits to a Community when conducting and maintaining a professional Reserve Study or Maintenance plan. We are exploring some of these benefits in the "Benefits of a Reserve Study and Maintenance Plan Series" as part of our Reserve Study Food for Thought emailers.

BENEFIT: Reduce the chance of special levies for unforeseen expenditure.

In our previous post we highlighted the Four Reserve Rules, namely: 1) Expenses are inevitable, 2) The Board is responsible, 3) Delays usually gets expensive & 4) Homeowners always gets stuck paying the bills.

Rules 1, 3 & 4 basically states that common area maintenance expenses does not go away by not attending to it, in fact it usually gets more expensive if it is not dealt with and at the end there is really only one source of funding, namely member contributions.

A professional reserve study identifies the planned common area maintenance expenses for the next 30 years and provides a plan how this can be funded in a pro-active manner. This typically results in smaller and evenly spread reserve fund contributions by members, in contrast to a large “surprise” special levy that needs to be paid with little to no notice over a small period of time to cover a most likely inflated expense.