THE LONG VIEW: EMBRACING RESERVES
Published November 15, 2023
In the wake of the
Champlain Towers tragedy in Surfside, Florida, the conversation
around condominium safety and financial management has taken a
critical turn. While the incident was a stark reminder of the
fragility of life and the structures we inhabit, it also served as a
catalyst for legislative change.
The importance of
adequately funding reserves is a subject that has long been debated
within the realms of condominium management. While low maintenance
fees may be attractive to residents in the short term, they can lead
to severe underfunding for essential repairs and maintenance,
jeopardizing the integrity and safety of a property. It's a
management perspective that has been overshadowed by the immediate
satisfaction of cost savings but is now being brought to the
forefront of our industry.
The new laws
mandating safety inspections and reserve funding in Florida are not
just legal requisites; they represent a fundamental shift towards
transparency and long-term planning. While this shift may present
financial challenges initially, it is a necessary step to ensure the
safety and durability of our living spaces.
For board members,
the presence of fully funded reserves transforms decision-making. No
longer must they grapple with the shortfalls of underfunding when
facing significant repairs or improvements. Instead, they can act
confidently, knowing the resources are available to address issues
proactively rather than reactively.
It is crucial to
acknowledge that these legislative changes, while challenging, are
ultimately beneficial. They compel us to face the real costs of
managing a condominium association and to plan accordingly. This
foresight not only safeguards the physical structure of our
communities but also fortifies the financial stability of the
associations that oversee them.
We understand that
the transition to fully funded reserves will be a process, one that
will require adjustments and a reevaluation of what has been
considered standard practice. Yet, it is a process that is vital.
The path to proper financial stewardship of our associations is
through education, understanding, and the willingness to embrace
these changes for the safety and security they bring.
This is more than
compliance; it's about adopting a mindset that values preparation
and safety. Let us take this opportunity to recalibrate, understand
the true cost of managing our communities effectively, and take
pride in the fact that we are setting a standard for properties to
be well maintained and ensuring the residents who call condos home
can do so with pride and confidence.