Inflation is something we’ve not paid much attention to for many years. Since the 1980s, inflation has averaged almost negligible amounts in most years. Furthermore, we’ve grown used to making investments that approximate or at least keep us ahead of inflation based on our rate of return.
One of the primary business duties of Community Associations is maintaining and preserving property values of the Association’s common property. To do this properly, Associations must develop funding plans for future repair or replacement of major commonarea components. A reserve study is a budget planning tool that identifies the current status of the reserve fund and establishes a stable and equitable funding plan to offset the anticipated future major common-area expenditures.