Reserve Study Books and Articles

Association “Internal” Financing

By: Gary Porter, CPA, RS, FMP

Facilities Advisors International

As a reserve preparer our company is dedicated to helping guide associations towards the goal of having sufficient funds to pay for their future major repairs and replacements – the reserve fund.  S...

The Fourth Wave – Condo Finances

Condominium living offers many benefits and has become a very popular form of housing.  Those choosing to become condominium owners understand that they will pay a monthly fee responsible for funding both day-to-day operating costs as well as future major repairs and replacements (known as a reserve fund...

Reserve Studies - The Complete Guide

 

Gary Porter and Pierre Del Rosario, the principals of Facilities Advisors International LLC, are the authors of "Reserve Studies - The Complete Guide."  This Guide, published in October 2015, is the most comprehensive analysis of the reserve study process ev...

While some reserve professionals place great reliance on the percent funded calulation as an indicator of the "strength" of the reserve fund, we believe that this approach is both too simplistic and based upon assumptions about how the percent funded calculation is made. 

"Pay me now or pay me more later."  I don't know who coined that phrase, but I’ve heard it repeated often. In my 30 years as a reserve professional I have seen the truth of that phrase demonstrated time and time again.

In many condominium developments, a few components are so large and account for such a significant portion of the reserve budget, that any remain...

Most of the reserve studies performed by our company occur in states that have adopted statutes establishing reserve study requirements. Since most Associations will try to comply with state statutes, it makes sense that more reserve studies are performed in states that have such statutes. However, acceptance of a reserve fund as being...

The reserve study consists of a number of estimates and assumptions. All of them are important, but one stands out as having significant impact upon the calculation of needed reserves - remaining life of components. As an example, if your previous reserve study indicated that the r...

Setting the scope of the reserve study is one of the most overlooked aspects of the reserve study process, and is one of the primary reasons that Associations may be dissatisfied with the end product reserve study that they receive. This article explores the reasons why you choose to have a reserve study, and how that affects the scope of the res...

Setting the scope of the reserve study is the first step in selecting a reserve study company. If you don’t know where you want to go, you probably aren’t going to get there. See attached article on setting the scope of the reserve study. After you have determined the scope, then write your RFP (Request For Proposal). This is important, because i...

We are right in the middle of the reserve study busy season and are again being asked by a number of our clients whether or not it is permissible for them to have contingencies within their reserve study.

By Gary Porter, RS, PRA and David McDermott, AIA

Three relatively similar services are frequently provided to communities within the homeowners’ association industry. Because there is still some confusion over what ...

Recognizing a Failed Reserve Funding Plan


By: Gary Porter, RS, PRA


We recently performed a reserve study for a 40-year old condominium association and discovered an all-too-familiar scenario we’ve seen in older projects.  The situation? Huge deferred maintenan...

Should Painting Be Included In The Reserve Study?

 

The question of including painting in reserves continues to arise, even 15 years after the matter should have been settled.  To understand why, you need to know that this issue first arose from tax considerations, not because o...

Consideration of Interest and Inflation In The Reserve Study

 

Both interest and inflation considerations are important to the calculation of your future reserve requirements.  Unless the association has made a conscious decision to transfer all interest earnings to th...

ARE RESERVE FUND ADDITIONS "CAPITAL CONTRIBUTIONS"  FOR TAX PURPOSES?

By: Gary Porter, RS, FMP, CPA

 

Most discussions about homeowner association income taxes begin and end with the single issue of filing Form 1120 or Form 1120-H.  This is usually d...

How Safe Are Your Reserve Funds?

By: Gary Porter

Many associations, more than half, according to CAI’s recent survey, file IRS Form 1120. We all know the reason; to take advantage of the 15% corporate tax rate versus the 30% homeowners association tax rate. But you have t...

ESTABLISHING RESERVE POLICIES

by Gary Porter

 

After all, what is a reserve study? And why do we need any policies to manage reserves?

First, the reserve study is a rather limited scope evaluation of the association’...

 

BORROWING FROM YOURSELF TO FUND RESERVES

By: Gary Porter

 

Virtually all Associations have a Replacement Funding Program. The methods of funding these programs, however, are diverse and varied. An Association may have a Lev...

CALCULATING RESERVES

By: Gary Porter

For some associations, their governing documents require that reserves be determined and/or funded. In other situations, state law, such as California's Civil Code Section 1365 or Florida's Administrative Code Section 718, requires tha...