SBP reserve fund.

[sungandjudy]

I just received 2012 MF for SBP 2 bedroom lock-off.
It states that reserve fund is $492.35.
Is this because of renovations that is supposed to end on May of next year.
Can I assume that 2012 fee would be substantially lower once the reno is finished?

Thanks,

Peter

 

[scootr5]

I don't have my bills in front of me, but some of that is for the refurbishments and some for mandatory changes to comply with the ADA act, so it should be gone from our 2013 bills.

The newsletter has a pretty decent explanation of it.

 

[cruzad3r]

is this the norm that you veteran owners have seen, if not then i don't expect to see a much lower MF bill in 2012 for 2013. IF history taught us anything, it's the MF is going to increase yearly.

 

[scootr5]

While I'm no veteran owner, SBP did a refurbishment by increasing the reserve fund for three years, rather than a special assessment like at SVR. MF will almost certainly go up every year, but 2013 should be significantly lower than 2012 without those large refurb reserves.

 

[RLG]

Yes, I expect a big reduction in maintenance in 2013 as I discussed here:

http://www.tugbbs.com/forums/showthread.php?t=158378

If SVO ever explained why management allowed reserves to be underfunded in the first place, I haven't seen it. I also don't know why they decided to "catch up" the reserve underfunding over 3 years instead of having a special assessment. I think it would have had less impact on SBP valuation and delinquencies if people understood how much of this was a one time charge rather than a permanent increase in cost.

Fortunately, next year, we should be done with the renovation and reserve catch up. SBP weeks might even start selling for positive amounts on Ebay instead of being available free in bargain deals.

 

[jarta]

RLG, ... "If SVO ever explained why management allowed reserves to be underfunded in the first place, I haven't seen it. I also don't know why they decided to "catch up" the reserve underfunding over 3 years instead of having a special assessment."

Management has no final say-so over the funding of the reserves. The HOA votes on reserve funding as part of the adoption of the annual budget.

Management can only recommend a reserve figure. If the HOA board reduces it to keep current annual assessments low, there is nothing management can do. Of course, no owners at SBP complained that the reserve is underfunded. For the most part, they paid the lower assessments back then but relatively high numbers didn't pay and dumped when the reserve assessment was increased to where it is now. And, the current owners now pay more for the unfunded liability.

I have no idea if management made a recommendation for a higher assessment for reserves. In the end and over time, the reserve amounts are what they are when they are expended. It's pretty hydraulic and more a cash flow timing problem than anything else. The bills have to be paid and it all evens out - except for those who sold earlier in the game and passed the unfunded liability down the people who purchased from them.

Whether 2013 will go down (and how much) is pure speculation and dependant on a lot of factors - especially the percentage of 2012 owners who pay their 2012 assessments promptly. ... eom