A reserve study was recently performed at a Homeowners Association that is 26 years old. During the observation, the following immediate concerns were noted.
A PVC roof system was used throughout the community. These roofs are 26 years old, and have exceeded their useful life. The seams had begun to fail, which can permit water to enter through the roof and potentially cause damage.
Repair: Replace roof, including underlayment and relevant flashings.
Estimated cost: $400,000.
The asphalt conditions throughout the community were also observed. Roads and driveways were experiencing distress, and needed to be replaced.
Repair: Remove asphalt, recondition the subsoils and to place a new asphalt system down
Estimated cost: $650,000.
The façades throughout the community are board and batten siding. The siding has become warped from moisture and needs to be replaced in order to continue providing a weatherproof exterior.
Repair: Remove board and batten siding, install new weather-resistive barrier, install new flashings and install new siding.
Estimated cost: $750,000.
Unfortunately, the association has roughly $500,000 in reserves and cannot cover these immediate needs. What are the Association’s options?
Option 1 – Defer the asphalt and siding projects and do the roof project.
Option 2 – Special assess the homeowners $1,200,000 at around $6,500 each and perform all of the necessary projects.
Option 3 – Pay for the roof project and have the association get a loan to cover the $1,200,000 needed for asphalt and siding project.
Option 4 (recommended) – Based on a risk analysis of the consequences associated with deferring any of these projects, the roof and the siding projects are necessary immediately. Moisture is penetrating into the buildings through the failed seams in the roof and areas of the façade. This is causing ongoing and progressive damage, as well as creating potential health risks.
Therefore, SBSA recommended replacing the roof using the available funds, special assessing each homeowner $3,700—which is much more manageable—for the siding replacement, and deferring the asphalt until the funds are built back up to afford the asphalt.
SBSA’s Construction & Property Analysis department can help associations determine the importance of various repairs and the potential risks associated with deferring certain repair needs. We take into consideration the available funding of the Association, and balance that with the existing conditions of the property.
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