What constitutes reasonable reserves?
For example, the Illinois Condominium Property Act states that to determine the amount of reserves appropriate for an association, the Board of Directors shall take into consideration the following: • Repair and replacement cost of the common elements • Estimated remaining useful life of the common elements • Current and anticipated return on investment of association funds • An independent professional reserve study • The financial impact on unit owners and the market value of the units • The ability to obtain financing or refinancing Because building inspection engineers have a vast amount of experience and knowledge of how building systems and components wear with time, many Board of Directors choose to contract with an engineering firm.
