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Category Archives: Reserves

Condominium Associations

If you’re thinking about investing in a condominium there are many terms and policies, which may be very unfamiliar to you, one of the big ones is the condo association. A condo association, sometimes referred to as a homeowner?s association, is a legal entity that oversees development?s laws and...
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Reserve Loans and Interest Deductions

Reserve loan interest could become deductible under the right circumstances. In recent years, loans have become more popular with homeowners’ associations as a means of smoothing out reserve funding plans for several reasons: (1) they avoid a huge, one-time special assessment that many members may not be able to afford; (2) they allow the Association to...
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“Excuses, Excuses”

An excuse has been defined as “the skin of a reason stuffed with a lie”. There are two Boardmember sentiments we hear most frequently expressed: “We can’t afford the Reserve Funding Plan” and “We’ll worry about that next year”.  But no matter how many times a Boardmember may repeat these sentences, it doesn’t mean they’re true and it doesn’t mean they’re wise. After we look beneath the skin of these two reasons, it may surprise you how differently you feel about these excuses!

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Reserve Funds

 

One of the primary business duties of community associations is maintaining and preserving property values of homes and the common property.  To do this properly, associations must develop funding plans for future repair or replacement of major common area components, such as roofs, boilers, elevators, swimming pools, balconies, asphalt surfaces and decks.

An association has several funding options, including periodic assessments over the life of assets, special assessments at the time of replacement, borrowing funds when needed, a combination of the above or the most common method – and in many states the only lawful alternative: setting aside funds in a special category commonly called reserve funds.

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* These articles and related content on this website are provided without warranty of any kind and in no way consitute or provide legal advice. You are advised to contact an attorney specializing in Association Management for legal advice related to your specific issue and community. Some articles are provided by thrid parties and online services. Display of these articles does in no way endorse the products or services of Community Association Management by the author(s).