Out of Money

The most important details in this text are that condo boards tend to view financial planning for upcoming projects as prioritizing specific items that are in a reserve fund study and visible. This is why many reserve fund studies omit major ticket items that can deplete the bank balances of what owners perceive to be a financially sound condominium corporation. An example of this is a building with a problem in their plumbing infrastructure, where pipe risers were not included in the corporation's prior reserve fund studies. The financial burden of this single project would be devastating to unit owners, negatively impacting their resale value. A fourth option is inadvisable, as it could cause the building structure to weaken and increase repair costs.

Reserve fund studies should be prepared by independent professionals, and condominium directors can help by scrutinizing studies and inquiring about items that appear to be missing or misvalued. Adhering to an accurate reserve fund study is essential for good management.