We are all familiar with all of many reasons why we establish and maintain a Reserve Fund. It is, after all, one of the keystones of protecting our property values. None of us want to see the value of our home slashed and our home equity vanish. But that’s exactly what happens when a foreclosure results in a below-market sale of a home in our community. When lackadaisical budgeting practices ignore the need for Reserve Funding and those precipitous Assessment increases begin, or that dreaded Special Assessment occurs, property values suffer! And Reserve planning is so simple when done at the appropriate time. Just like everything else, the appropriate time to plan for Reserves is before you need them!
There is another aspect of Reserve planning that is both surprising and troubling. How many of us really look at the Reserve Study and try to understand it. It is your Reserve Study; it should reflect the plans and aspirations of your community and its members! If you have a three-year plan, or five-year plan, or some other committee generated list of goals, give it to your Reserve Specialist! And then ask them to explain just how that document is reflected in the Reserve Study. If you don’t totally understand the Reserve Study, ask them to explain it, either in a conference call, video call, or meeting. The reason you are on the Board or the committee is not because you know everything! It’s because you are willing to ask the questions and find out! If you have any questions about Reserves, I can be contacted at (615) 339-6039.
Analyst’s Credentials. Larry D. Ellis holds a Professional Community Association Manager (PCAM) Certification from the Community Associations Institute (CAI). He has extensive experience at portfolio management and has also managed large-scale properties, including both condominium and HOA. Larry has worked as a Regional Director for a large management company responsible for over a 100 properties and their employees. Larry has been a Reserve Specialist for Miller – Dodson Associates since 2008.
More information about Reserves can be found on our website: MillerDodson.com. Larry can be reached at (615) 339-6039.