Reserve Studies

LA Times response March 8, 2009

Sunday’s “ASSOCIATIONS” article regarding Reserve Studies contained inaccurate information, and failed to properly address the homeowner’s question.

As for the question regarding guidance; the homeowner asserts “no one warned me” of the financial condition of the homeowners association they purchased in. California law requires homeowners associations to provide very detailed financial information to its members on an annual basis, including a summary of the Reserve Study, a copy of the Funding Plan adopted by the Board, and the Assessment and Reserve Funding Disclosure Summary. Real estate transfer disclosure laws require that information be provided by a seller to a buyer in a purchase transaction. Therefore, it appears one of three possibilities may have occurred. 1) The homeowners association has not complied with the law. 2) The seller has not complied with the law – both of which may be remedied through the civil justice system – or 3) The owner, and/or their advisor(s), failed to carefully read the documentation they received during the transaction process.

Additionally, the author stated “any report or study prepared…..without visiting the grounds at the time of writing the report is only a guess and should not be relied upon”. California Civil Code § 1365 requires an on-site Reserve Study every three years. Prudent management dictates that information as important as reserves and funding plans, as well as the annual budgeting and disclosure documents derived from them, be updated annually, versus every three years. Therefore, thousands of homeowners associations across California (and the country) have non-site visit Reserve Studies conducted. The preparer utilizes the previous on-site study component inventory, and adjusts remaining life down a year (unless informed of replacements). The components and financial analyses are then recalculated at today’s market rates, with updated account balances and contributions rates. The practice is recognized by Community Associations Institute and the Association of Professional Reserve Analysts as a cost effective way to maintain current financial reporting. Guessing is what is done on a game show - in the financial world it’s called projecting costs.



Scott Clements, RS, PRA, CMI
Reserve Studies Inc.
Phone 800.485.8056
Facsimile 800.485.8057
www.ReserveStudiesInc.com
Scott@ReserveStudiesInc.com

Swimming Pool Safety- Home Inspector

Pacific West Home Inspections Warns Consumers to Inspect and Maintain Swimming Pool Barriers

Tag: ASHI, CREIA, Pool Barriers, Pool Fences, pool drain entrapment, Granada Hills, Home inspection, Home Inspector,
Each year, about 260 children under age 5 drown in swimming pools. In addition, the suction from drains in swimming pools and spas, under certain conditions, can entrap swimmers underwater. To help protect your family, be sure to take the following steps. Place barriers completely around the pool, closely supervise young children, and be prepared in case of emergency.
Install physical barriers around the pool to limit access. Fences and walls should be at least 4-feet high and installed completely around the pool. Gates should be self-closing, self-latching, and swing away from the pool area. The latch should be out of reach of small children. If your house forms one side of the barrier for the pool, doors leading from the house to the pool should be protected with alarms that sound when the doors are unexpectedly opened. Or, use a power safety cover, a motor-powered barrier placed over the water area, to prevent access by young children. For above-ground pools, steps and ladders to the pool should be secured or removed when the pool is not in use.
Never use a pool or spa with a missing or broken drain cover. Be sure a newer, safer drain cover is in place. The new “anti-vortex” type drain covers are usually domed-shaped, with smaller openings – instead of the old flat drain covers. Consider installing a Safety Vacuum Release System (SVRS), a device that will automatically shut off a pump if a blockage is detected. Plainly mark the location of the electrical cut-off switch for the pool or spa pump. If someone is entrapped against a drain, cut off the pump immediately. Instead of trying to pull the person away from the powerful suction - pry a hand between the drain and the person’s body to break the seal. Have a professional regularly inspect your pool or spa for proper safety barriers, and entrapment or entanglement hazards
Greg Noyes
Pacific West Home Inspection
818-362-5578
greg@ehomeinspector.com
www.ehomeinspector.com