Is it Time for a New Reserve Study?
Well-maintained facilities like community pools, gyms, and parks enable homeowners to have a place for leisure without needing to travel far or pay for expensive membership or entrance fees elsewhere. Additionally, the upkeep of common areas in the neighborhood ensures residents’ safety when visiting these places.
Homeowners Associations (HOAs) in New Jersey are responsible for safeguarding, maintaining, and improving these common areas. With a New Jersey reserve study, HOAs will be able to do the job in a financially sound and efficient manner.
A reserve study is an analysis of a physical property’s condition and the status of the capital reserve fund that will be used to pay for major capital improvements or replacement of various structural elements. It is performed by having a structural engineer conduct a property condition assessment in NJ to obtain important information about the site’s current state. Consequently, they will provide a comprehensive description of the structure to calculate how much the HOA should save regularly to cover the expenses over the study’s period.
It is also crucial for a reserve study to be evaluated, updated, or renewed periodically or when needed. An outdated reserve study might result in special assessments. They are fees to be paid by residents when the present funds are not enough to cover the repairs or replacements of common assets. When special assessments arise, it often denotes poor budgeting and handling from the HOA, which might lead to mismanagement claims.
Furthermore, HOAs might also miss the opportunity to implement new technologies and money-saving practices that were not available during the previous study.
Getting a reserve study brings numerous benefits for HOAs and residents. For more information on when to conduct a new reserves study, an infographic from Lockatong Engineering is provided below.