Property Maintenance, Risk Management, and Reserves
Maintenance types
Distinguish routine, preventive, corrective, emergency, and deferred maintenance. A maintenance calendar and regular inspections move work from emergency to planned, which controls cost. Trap: questions blur "deferred maintenance" (work postponed and now overdue) with "preventive maintenance" (scheduled work that prevents failure).
Reserve studies
A reserve study has a physical analysis (components, quantities, useful life, remaining life, replacement cost) and a financial analysis (fund status and funding plan). It is a planning tool, not the reserve fund itself. Funding methods include baseline, threshold, and full funding.
Insurance and risk
Know the master property policy versus an owner's HO-6 policy, general liability, directors and officers, fidelity/crime coverage for anyone handling money, umbrella, flood, and workers' compensation. Require certificates of insurance naming the association as additional insured and verify licenses. Risk is treated by avoiding, reducing, transferring, or retaining it.
Rule of thumb: when evaluating a component, annual straight-line contribution ≈ replacement cost ÷ remaining useful life; the reserve study spreads funding across the component's full life, so the two figures often differ.
Worked example: A roof with five years of remaining life and a $300,000 replacement cost implies roughly $60,000 per year if fully funded over that remaining period with no interest. The board should compare that to the study's recommended contribution and current funding level before setting assessments.