From Association Reserves- Does Interest Offset Inflation? Not even close!

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March | 2012 | Reserve Studies for Community Associations

Dear Bill,


Even after 25 years, the Community Association industry continues to fascinate me. There is something new around every corner. Read about a complicated situation a developer created for three associations in our Story of the Month. There are still some fundamental Reserve Study questions we're regularly asked, so our lead article answers the question: Why is accounting for interest and inflation (especially inflation!) important?


We've had some fun with our ongoing “Davis-Stirling CID Act” quiz. We've posted the answers to last month's three quiz question so you can keep track of how well informed you are about California's Reserve Study laws.


A continued emphasis on some basic principles led us to the new content of the free webinars we offer each month. Please know that if you miss the “live” version of the webinar, you can always watch a recorded (YouTube) version on demand.


All this is just part of our continued efforts to set you up for long-term success and financial stability at your Association!


Seal- CA- LA
Sincerely,Robert Nordlund
  RMN Signature

Robert Nordlund, PE, RS Founder/CEO
Association Reserves, Inc.

InflationWhy Is Accounting For Interest And Inflation (Especially Inflation!) Important?


Interest earnings bring income to the association, and inflation takes it away. Interest earnings are good, as they provide income to the association, supplementing owner contributions. Inflation means that your projected Reserve expenses get more and more expensive in future years. But do interest and inflation offset each other? No. Not even close!


Read more…

SOMStory of the Month 
Where Exactly Am I? 


We just finished working on a Reserve Study project involving three different Associations, built at different times along the growing edge of a major metropolitan area. Originally (40-50 years ago) the area was considered “horse country”, featuring rustic homes, stables, horse trailers, and plenty of open space. Anticipating the construction of a new freeway in that area, a resourceful Developer purchased large lots of land, imagining gorgeous planned neighborhoods of sprawling new homes.


                              Need a Bid?   

Just click on the regional office closest to you
to request a proposal online!

Sean Andersen

QuizDavis-Stirling CID Act Quiz


Think you know a lot about CA Civil Code Sections 1350 through 1378? Here's your chance to prove it! We'll pose 3 questions this month and provide the answers next month… along with more questions. To keep it interesting, there's a prize for Boardmembers or Managers who score 100%.

Here are the answers to last month's questions. Click on the link to see the percentage of our clients who answered correctly.


Question #1: 

Answer: No 


Question #2: 

Answer: $500


Question #3: 

Answer: (a), (b) and (c)


The three circumstances are: 

(a) The value of common area assets are <1/2 of Association's annual operating budget (excluding Reserve contributions)

(b) The property is strictly for industrial or commercial uses 

(c) There is no common area


This month's questions:


Question #4

Question #5

Question #6


Please keep track of your own score, as prizes are awarded on an honor system basis!

State of California     



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In This Issue
Featured Article
Story of the Month
Component Corner

An Important  

Timely Reminder

If your FY End is 

  Aug 31st
it is time* to begin

planning for your

Reserve Study Update 


*Six months in advance
of your
FY End


Call us today 



Civil Code 1365

CA Civil Code

3 Tips for Choosing the  

Right Reserve
Study Provider 


3 Tips for Choosing the Right Reserve Study Provider



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