NCW Real Estate Blog

A reader sent in this question:

In the Sunday Seattle Times there is an article about a new law starting June 12, requiring professional condo Reserve Analysis.  You can check out the article here.

This statute was news to me, and I assume most condo associations have no idea about this new requirement.  Lenders are probably going to want to know about your reserve analysis (or lack thereof) when a sale or refinance occurs and a resale certificate must be provided. 

My question is:  Are there any firms, appraisers, or organizations in NCW qualified to perform such a Reserve Analysis?  The Institute referred to in the article lists 8 firms, all on the west side.  Maybe the statute says who is qualified.  I printed it off but I haven’t read the 21 pages yet (nor do I really want to!).  Thanks for any help.
Tom Warren

Thanks Tom, the article was news to me.   So, I went to the Washington State Chapter of the Community Associations Institute, like you did.  I talked to Jim Talaga at Association Reserves of Washingon Inc. and their firm, while located in Federal Way, is a national firm and does have clients in Chelan, including Lake Chelan Shores Condominiums.

He followed up with this in his e-mail back after our conversation:

We service your area Al. A potential client simply needs to fill out and return the attached proposal request form and we will put together pricing information. Our web site has sample reports and extensive company, industry information. www.reservestudy.com 

 I also talked with Russ Jones at Cashmere Valley Bank.  He mentioned that this is yet another example where opportunity might be available for someone to capitalize on a need in Central Washington.  Here are his comments on the issue:

Hi Al,

After reading SB 6215 I thought the bill was a little squishy. It would appear that the law “encourages” rather than “requiring” condo associations to have reserve studies done. An association can bypass the law by simply disclosing to buyers that they do not have a reserve study.

The law also does not appear to define what constitutes a “reserve study professional”, but at $2500 a pop I’m thinking I would be happy to professionally accept their money to tell condo owners they need to save for the future.

Don’t get me wrong, reserve accounts are a big deal and condo purchasers need to become very informed about them before they buy but I don’t think this law will change much more than the pocketbooks of the reserve study firms.

What is more likely to drive reserve studies than this new law are new rules put out by Fannie Mae that will require loan officers to research the reserve conditions of owners associations. Lenders, who don’t have the time or don’t want the liability will simply require a reserve study before they will lend in a condo project.

SB 6215 doesn’t apply to non-residential condominiums so business office condos, boat slip condos etc will not have to comply.

 Russ Jones

So, there is at least one way to get a reserve study done and another opinion that this is a developing issue and might not require a study immediately.

Tags: General Interest //