Category Archives: Finance

Qualifications and Documents for Comprehensive Reserve Fund Studies

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As of May 5, 2001, the Condominium Act 1998 requires all existing and new condominium corporations to have a “Reserve Fund Study” undertaken. This article outlines some of the key aspects of Reserve Funds and the Studies.

Duane Tilden‘s insight:

>[…]The regulations to the Condominium Act stipulate the minimum liability insurance requirements; $1,000,000.

6. What Information Does The Corporation Need To Provide?

Once you have hired a consultant, he/she will require information about the condominium corporation. This will include the following:

  • As-built drawings and specifications.
  • The Declaration and Description.
  • Reciprocal cost sharing agreements.
  • Previous reserve fund studies.
  • The most recent audited financial statements.
  • What the current annual contribution to the Reserve Fund is.
  • Repairs or replacements to the common elements that have already been completed and when.
  • Similarly, scheduled future work needs to be accounted for.
  • A summary of problems being encountered by the Corporation that should be reviewed.
  • As an example, water penetration concerns.

7. What Is The Process?

The process is as follows:

  • The consultant is provided the above information. One of the most important are the drawings. They will be reviewed prior to visiting the site in order for the consultant to become familiar with the overall design and construction schemes.
  • Site inspection. In order to have an understanding on the current condition of the common elements, visual inspections are undertaken. Problem areas noted above can be reviewed. After the first study, the next study update can be completed without a site inspection. The next update must include a site inspection.
  • The report is then prepared (see next question). The drawings are used to “take-off” quantities such as roofing, exterior wall cladding, asphalt, hallway finishes etc that will assist in preparing the replacement/repair cost budgets. It is recommended that a draft report should be submitted in order for the Board and Property Manager to review it prior to it being finalized. The consultant should be available to attend a meeting to review the report.
  • Upon receiving direction from the Board of Directors, the Reserve Fund Study is finalized and submitted. […] 

See on www.maytower.ca

DIY Reserve Study Site Launched

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CALABASAS, Calif., Oct. 24, 2013 /PRNewswire-iReach/ — Association Reserves, a well-known provider of reserve study services in the United States, recently announced its decision to launch a new website dedicated to their Do-it-Yourself Reserve Study kit.

Duane Tilden‘s insight:

>According to an article written using data from Association Reserves’ 30,000 reserve studies, 70 percent of associations in the United States are “underfunded.” This puts many organizations at an increased risk of special assessments, deferred maintenance, declining property values, and board member liability. According to the company, by accounting for the ongoing cost of common area deterioration and then properly funding reserves, boards are able to responsibly prepare for their associations’ future expenses.

“Our goal is to eliminate all excuses for board members not to be aware of the current strength of their Association’s reserve fund and the funding plan necessary to perform common area repairs & replacement in a timely manner,” says Robert Nordlund, PE, RS, the company’s founder. “The path from underfunded to appropriately-funded is a journey and a Reserve Study provides the necessary road map.”<

See on www.prnewswire.com

Utilizing Renewable Energy Tax Incentives to Finance First Nations Energy Projects

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Duane Tilden‘s insight:

>We recommend that a tribe use a request for proposal (RFP) or other competitive process to identify an appropriate taxable development partner, so that they can obtain the best available proposal for the renewable energy project and the best value for the 30% investment tax credit and potentially depreciation. Under the RFP strategy, the tribe would make taxable developers aware of its renewable energy development plans, as well as potentially its willingness to pay for a portion of the renewable energy project.

The RFP would request the taxable developers to provide their best proposals regarding the development and financing of the renewable energy facilities, including proposals regarding:

The overall cost of the renewable energy facilities.The particular equipment to be installed and the warranties on that equipment.The developer’s willingness to limit the amount of the financial contribution by the tribe.The developer’s willingness to limit, in time and amount, any payments by the tribe for energy from or for leasing the renewable energy facilities.

The tribe could then select the taxable development partner that provides the best financial and other terms. A potential result of the RFP process could likely be that if the tribe is willing and able to pay for one half of the renewable energy facilities, a taxable developer might be willing to finance the rest of the facilities. Even if the developer does not share any of the value of the depreciation, it may be willing to at least provide the tribe full value for the investment tax credit. This would mean that there would be only 20% of the project cost to be paid over time. This could be accomplished by having the tribe pay a reduced rate for electricity for a period of at least five years (to avoid any recapture of the tax credits under IRS rules), and then for the developer, once it is made whole on its investment, to turn the facilities over to the tribe, potentially free of charge.

This transfer could be accomplished by allowing the tribe to use its 50% contribution to the LLC to purchase the taxable developer’s interest in the LLC, and for the tribe to have the right to purchase this interest based upon the renewable energy facilities’ value under a theoretical removal and sale of the facilities. Thus, under this scenario, the tribe’s initial capital outlay for the renewable energy facilities would be reduced by half, and the tribe would be able to receive reduced-priced energy for an interim period of time and then obtain full ownership of the renewable energy facilities.<

See on www.gklaw.com

Green financing for industry still a problem in the UK

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