Why A Reserve Study NJ Is Needed

1. Why A Reserve Study NJ Is Needed Brought to you by: http://www.lockatong.com/

2. A reserve study NJ is a very important tool for a homeowners association. It consists of a number of estimates and assumptions that are very important in determining the anticipated replacements as well as repairs to common area elements. It has a significant impact upon the required reserves. • For instance, if the previous reserve study indicated that the remaining life of the roof of the building in question is 10 years and as of now it is determined to be only five years, it means that there is very limited time to accumulate the required funds. The community association needs to figure out what will happen once the remaining useful life of the roof elapses. Why A Reserve Study NJ Is Needed www.lockatong.com

3. So why is it important to conduct a reserve study NJ? Well, the benefits that the reserve study provides are many. First of all, it helps to maintain the value and appearance of the building in question. As a building owner, you have the responsibility to make sure that the building remains in good condition if you want it to continue being on demand. • When you identify and budget for future capital improvements, the common elements of the property will continue looking attractive and well maintained, something that will add to the overall quality life of the community. Why A Reserve Study NJ Is Needed www.lockatong.com

4. Another reason why a reserve study NJ needs to be conducted is to fulfill the fiduciary responsibility of the community association’s board of directors. The members of the board have a legal responsibility to make sound judgment and guide the association in the right direction. They cannot ignore capital expenditures or just make them disappear from the budget. • When the reserve study is conducted, they will make it known to the association’s members their plans and what they intend to do to fulfill those plans. Why A Reserve Study NJ Is Needed www.lockatong.com

5. A NJ reserve study is also needed for establishing sound financial planning as well as budget direction. It will help to lay out the major repairs or replacements that need to be done to common property elements in future and the costs associated with them. • To make sure that the property owners have enough money in the reserve fund to cover the repairs and replacements, a funding plan that typically covers thirty years will need to be established. What this simply means is the reserve study is the blueprint for the future of the community association. Why A Reserve Study NJ Is Needed www.lockatong.com

6. Last but not least, a reserve study NJ can act as proof that the community association complies with state law. In the state of New Jersey, community associations are required to disclose reserves, accumulate reserves or conduct professional reserve studies. The studies usually include two parts, namely physical analysis and financial analysis. • Physical analysis mainly focuses on the common area elements of the property and includes things such as condition assessment, component inventory and valuation estimates. Financial analysis on the other hand recommends contributions to the reserve fund for capital expenditures for a period of thirty years. It generally includes the current status of the funds and the suggested funding plan. Why A Reserve Study NJ Is Needed www.lockatong.com

7. Go here for more reasons why reserves study NJ needs to be conducted, visit http://www.lockatong.com/ today. Why A Reserve Study NJ Is Needed www.lockatong.com

8. Why A Reserve Study NJ Is Needed Brought to you by: http://www.lockatong.com/