Category Archives: Reserves

Tyler Berding

Wikipedia describes The Tragedy of the Commons as  “a situation in a shared-resource system where individual users acting independently according to their own self-interest behave contrary to the common good of all users by depleting or spoiling that resource through their collective action.”  But isn’t that just human nature?  Don’t we normally make choices and decisions based on our immediate needs and what benefits us?  And isn’t that especially true for people who are generally struggling to make ends meet?  Can the current model of HOAs and condos function properly for all?

Tyler Berding joins us On The Commons.  Tyler is the principle attorney and founder of Berding-Weil, a California law firm.  Tyler represents residential associations and has long been concerned about the lack of adequate reserve funding, construction defects, condo conversions and the flawed  HOA  and  condo   model.  He is particularly concerned about the buildings as they near the end of their useful lifespans.  What happens to the buildings that need to be refurbished?  What happens to the owners and their assets?  Who pays to make the units habitable if the reserves are inadequate to fund it all? Can retirees on fixed incomes and low income owners afford massive special assessments to cover the shortfall?  What Tyler is talking about is the classic “tragedy of the commons”.  Tyler shares with us  his presentation for a summit next month.  Tyler also has a blog called  Condo Issues  with lots of thought provoking blogs covering all things condo.

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Robert Nordlund PE, RS

I often wonder what my life would be like if I had complete and total control over it. Would I be able to deflect all the curve balls life throws at me? Or would I still be floating on the sea of life like so much flotsam and jetsam, subject to all the vagaries lurking in the shadows, just waiting to trip me up? Happily we can take control of many things in our lives but unfortunately for those of us living in America’s ever growing number of residential associations, we seem to be losing the war. It is just a handful of people who make the major decisions that affect our lives and more importantly, our wallets.

Robert Nordlund joins us On The Commons. Robert is the founder and CEO of Association Reserves in California. In his professional life he studies the common elements in an association, be it a condo, HOA, Co-op, dockominium or parkominium to determine whether or not the corporate entity responsible for maintaining the common elements is adequately funded.

The news isn’t good. According to Robert, 70% of all associations are underfunded, which means only 30% are not in immediate danger of incurring special assessments. We’ll talk about the reasons for underfunded associations. Are artificially low assessments the (only) reason for this dilemma or could other common practices be responsible for this predicament? Could better business practices help? And is there a “quick and dirty” way for housing consumers to figure out what the financial health of the association they are considering buying into?

I have to wonder whether throwing more money at something that is broken is the only fix or is it simply the easiest short term solution for a problem? Are there other ways of dealing with it that we are overlooking.

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