Read the plan behind the reserve balance
Reserves accumulate funds for major repairs and replacements. The balance matters only in relation to building size, age, components, condition, and capital plan. Compare reserve studies with board minutes, engineering reports, completed work, and current bids; an old estimate may not reflect inflation or concealed conditions.
A special assessment is a financing decision
A special assessment is not automatically poor management. Evaluate why it is needed, professional support, allocation, payment schedule, delinquencies, and remaining work. Confirm how seller and buyer obligations are handled in the purchase contract.
- Identify the next large projects and their timing.
- Compare projected cash with anticipated work.
- Understand whether the plan uses regular assessments, a special assessment, or debt.
Understand association borrowing
Debt spreads costs but adds interest and future obligations. Review term, rate structure, prepayment, and whether owners can pay their share upfront. Association finances, insurance, litigation, and project status may also affect unit financing.
360 perspective
Judge condition, timing, capital plan, reserves, debt, and owner obligations as one connected funding system.
Frequently asked questions