11/08/13 – Someday, the brick siding on The Vaux will need repair. Someday, the roof will need replacing. Someday, the wooden sash on our beautiful windows will rot away. And someday, The Vaux's major mechanical systems will be ready for the junkyard. To understand when these terrible moments may arrive, the Reserve Study all condo associations must prepare sets forth the likely time-frame and costs. Expensive events are predicted to occur here in 2041 and 2043 to the tune of $5.2 million. That's a chunk of change.
The Board of Directors, mindful of its fiduciary responsibilities, prudently sets aside money every year against impending repairs, but not enough to cover them all. That means, 30 years from now each owner will likely face, on average, a special assessment of something like $15,000.
Why not put away enough money to completely cover these anticipated expenses? There are several reasons. First, doing so would require a hefty increase in association fees. Next, many owners will not be here in 30 years, and it is arguably unfair to charge them for repairs others will face. Finally, condo associations can only invest in government-backed securities, currently paying almost nothing. Taking money from owners who could earn much higher returns on their own seems unreasonable. So get ready. Individually investing $1500 now may well cover the assessment coming 30 years or so into a very hazy future.
• Residents can review the reserve study here ...