One of the many difficult decisions facing strata condominium owners is how much to set aside for future maintenance and renewals. As part of our building envelope maintenance manual service we generally prepare what is called a reserve fund analysis, which indicates minimum recommended funds which should be set aside for building envelope needs for the first 25 years.
Reserve fund analysis has been largely set aside in some jurisdictions, apparently because it has become too complex to serve the needs of its audience. We take a blanced approach based on the premise that the rate of interest earned by funds deposited may or may not keep pace with construction inflation, so we will provide an analysis tool that adjusts requirements based on projected and actual returns and inflation.
A portion of a sample analysis is produced below:
