CAI-NJ June 2018 (w)

PITFALLS... from page 24.

Experience Resources Excellence

• Unexpected weather phenomena dam- aging common element components not covered by insurance. • The deferment of common element replacement to save money in the short term. • Failing to update the community’s reserve study regularly. • Unanticipated common element replacement that may have been over- looked in past reserve studies, which were unable to be accounted for through visual site inspections (e.g., water service lines, plumbing, etc.). • Inadequate transition settlements that have been impacted by accumulating expert fees and legal fees. • Updated code compliance regula- tions that were not yet implemented or required during the community’s inception (e.g., unacceptable fire-rated sheathing under roof shingles) leading to unanticipated and costly expenses. The list can go on and on. No matter the reasoning as to how a community finds themselves in a financial pitfall, the board has a limited amount of options to address this type of concern. The first option would be to increase reserve contributions drastically. This is typically an unlikely scenario, being that many residents may not have the financial resources to easily pay a higher than anticipated fee each month, especially if it is without advanced notice. Dramatically increasing the reserve contributions could lead to disgruntled residents and overall financial insecurity amongst the community and prospective buyers. Equitability is also at stake if the community has been under-

The Service

You Deserve

Taylor Management Company has been managing community associations for decades. We have been recognized by the Community Associations Institute (CAI) as an Accredited Association Management Company (AAMC) and by the Institute of Real Estate Management (IREM) as an Accredited Management Organization (AMO). These designations are accorded for the highest level of ethics and professional management in the industry.

Leaders in Professional Community Management Since 1992!

80 South Jefferson Road, 2nd Floor, Whippany, NJ | Tel. 973.267.9000 100 Franklin Square Drive, Suite 203, Somerset, NJ | 732.764.1001

TaylorMgt.com

ATTENTION ALL CAI-NJ SEMINAR ATTENDEES: Please remember to keep your seminar completion certificates in a safe place.

These certificates are distributed at the end of each CAI-NJ seminar. This is proof that you attended and completed the seminar. You may need to reference the certificate in the future and CAI-NJ does not keep track of each member’s attendance record. Community man- agers will definitely need the certificates to obtain credit for continuing education towards their designations.

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