A discussion on how condo associations should structure reserves

Staffing costs are a known number. Associations have to cover the cost of security personnel, cleaning or maintenance crew, and anyone who is at a reception desk. The larger the property, the more staff that is needed. Other annual costs include building management; utilities, water and garbage; regular maintenance for various common elements, such as elevators, lobbies, HVAC equipment, and recreational facilities, like a swimming pool, workout room, wine room, playroom, and other areas where residents and their guests can congregate or recreate; garage and/or parking area, gardens, playlot, tennis courts, and other common areas.

Irregular costs could include painting, tuckpointing, building chimney repair, boiler replacement or elevator repair or replacement. If windows are a common element, cleaning them annually might be an expected cost, but every 30 years you might need to replace them. And then you might have roof replacements and building facade repairs.

When it comes to deciding how much cash a building will need over a 10-year period, we can imagine vastly different numbers coming from the homeowner association and property management company. The former keeps in mind that homeowners are usually reluctant to see their assessments go up and pay more for living in a condominium building, while the latter knows if property is mismanaged, small issues can quickly become expensive fixes that are annoying to residents.