Planning for the Worst Smart Strategies to Avoid or Delay Assessments

 Tsunamis, earthquakes, tornadoes—these are just a few of the devastating disasters that have made headlines  already in 2011 and created emergency situations that many never thought  possible.  

 As the past year’s calamitous snowstorms, earthquakes, and even dreaded bedbug infestations have  demonstrated, sometimes you just can’t plan for everything, and that’s especially true when you are living in a co-op or condo.  

 Any financially solvent co-op or condo association has both an operating budget  to cover day-to-day expenses associated with running the building and a reserve  fund that’s in place to pay for larger repairs and capital improvement projects. But what  would happen if something devastating were to happen?  

 Smart boards will prepare and plan financially for a worst-case scenario, say  the pros. Building some ‘wiggle room’ into a building’s budget can help fill the gaps between operating and capital expenses, and can  spare residents from huge assessments and/or maintenance increases.  

 “Capital projects are typically defined as replacement projects as opposed to a  maintenance project,” says William J Pyznar, PE, a principal with The Falcon Group, an engineering  firm headquartered in Bridgewater. “Capital [replacement] projects are typically funding via reserves and  maintenance projects are typically funded via operating funds.”  

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