Salvatore J. Sciacca aka "Condoboss" interviews Nik Clark about the importance of community associations having reserve studies done in order to accurate plan long term.

1. CHICAGO PROPERTY SERVICES, INC.
PRESENTS
Condoboss Q&A with Nik Clark,
Cofounder and Partner at Superior Reserves
Why are Reserve Studies Critical for Proper
Community Association Planning?
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2. `
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LESS WORRYING.
Why are Reserve Studies Critical for Proper
Community Association Planning?
Condoboss Q&A with Nik Clark
Nik is the co-founder and a partner at Superior Reserve
Engineering and Consulting and is one of the leading experts in the
reserve study industry with over 10 years of experience.
Nik’s contact information is:
nik@superiorreserve.com
www.superiorreserve.com
888-688-4560
Condoboss(CB): Tell me a little about yourself. Why are you passionate about the
community association industry? Tell me about your background in serving the
industry.
Nik Clark(NK): Superior Reserve Engineering and Consulting is a new company, but we are industry
veterans. Between the 2 founding partners, [I] and Justin J. Maier PE RS, we have 24 years of
experience conducting reserve studies for community associations. Our passion is real estate. We
love buildings and construction. Community associations are a huge piece of the real estate world
and we feel very strongly that our higher level of expertise can bring greater value to community
associations than previously seen in the industry. Our pride in our work and ability to innovate on
behalf of our clients demonstrates success to us.
Our passion for the community associations industry is derived from the rewards of providing
associations with expert consulting regarding their property that is crucial to the sustainability of that
property. When associations fail to plan, and buildings fall into disrepair, it’s bad for everyone. It’s
hard for managers to manage and it affects the quality of life of the people who live, rest, eat, work,
and recreate in the place they call "home" within a community. We believe that through our
innovative service, we improve people's quality of life, and as we pursue that ultimate goal, the
rewards of the business relationship improve our quality of life. Pardon the cliché, but it’s a "win win".
CB: Why should an association pay for a reserve study?
NC: This is a question that I believe I could write a thesis on. If I had to draw it down to a few key bigpicture points it would be as follows. Sustainability is a key consideration not just for associations but
for businesses, municipalities and other entities on a local, regional and national scale. No matter

3. what kind of asset or infrastructure we refer to: buildings, parking lots, roads, bridges, pools. All
assets must be maintained or they fail to serve their purpose. For an association, there is no more
fundamental obligation than to ensure that their building continues to serve its purpose in
perpetuity. Maintaining and replacing their capital assets therefore, is critical.
As volunteer-run non-profit entities, an association board has a huge fiduciary responsibility to plan
for these expenditures. The time and expertise involved in developing a reserve study is such that
most associations choose to leverage the expertise of a professional reserve study provider.
Selecting a capable provider and paying them to perform this service ensures that the study is
accurate, complete, and respects the precious amount of "free time" that volunteer board members
have outside of their professional endeavors to enjoy "life". In short, an association should pay for a
reserve study because they are important, useful, and require unique expertise that is outside of
most volunteer boards’ skill-set.
CB: Most boards typically throw the reserve studies into a drawer. How do you prevent
that from happening?
NC: We prevent this from happening in several ways. First, we take a realistic personalized approach
to each study. We know that most associations have drastically under-funded their reserves for a
long period of time. As such, reserving enough money to make up for years of under-funding in order
to complete every project that "should" be done right away may not be possible. We know boards
will need to make "business decisions" about what to fund and what to defer. In our studies we
identify critical projects that shouldn't be deferred, and others, while perhaps not ideal, that could be
pushed off.
We also help associations understand that most condominiums are drastically under-funded and that
the reserve study presents an ideal level of funding that, if not immediately attainable, should still be
consciously worked towards to become better funded over time. The truth is that assets WILL fail if
not replaced or maintained. Doing nothing is not an option. You must do something, and a good
reserve study will give you the best information to make the right decisions for your association.
CB: What about smaller buildings that really can’t afford $3,000 reserve studies? What
can you offer them? Say a 15 unit condo association?
NC: Even small associations have expensive projects. Small associations need to be even more
mindful of how they spend money and make sure they are armed with the information they need to
procure the most appropriate contracts on future work. We give associations information not found
in other reserve studies. We include more than just a replacement cost and year. We conduct every
property inspection with an Illinois Licensed Professional Engineer (PE) who includes targeted advice
in the report that allows associations to potentially save thousands of dollars on future projects.
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4. With 14 years of reserve study and several more of forensic building investigation experience in the
Chicagoland area we bring a unique skill-set to the reserve industry. This allows us to create a reserve
study that does more than tell you what to reserve. We tell you how to save money on future
projects and make sure they are done right. Our goal is to make the reserve study "pay for itself"
many times over with information that can be leveraged to obtain better bids, avoid contractor shortcuts, and extend the useful lives of assets.
CB: What is so unique and different about Superior Reserve compared to the other
reserve study companies?
NC: First, our experience. Every study is conducted by a *licensed* Illinois Professional Engineer (PE)
with 14 years of reserve study experience who has also obtained their Reserve Specialist (RS)
designation from the Community Associations Institute. Many companies claim to use engineers, but
actually employ recent college graduates with an engineering degree. While these individuals can
produce a solid standard reserve study, they lack the experience to make the most accurate
projections and deliver information beyond just average cost and useful life estimates. Second, we
have a more intuitive, easier-to-use report.
We applied 24 years of combined reserve study experience and client feedback to design a powerful
report based on unmatched engineering expertise that doesn't require that a manager or board
member have an engineering degree to understand and use. Lastly, we know that service matters.
We are a boutique engineering firm with the knowledge and flexibility to meet our clients’ unique
needs, not a big corporate cookie-cutter firm that has an assembly-line approach to processing
clients.
CB: Why MUST larger associations have a current up to date reserve study?
NC: The larger the association, the larger potential liability on the part of a board of directors for
failing to fulfill the fundamental role of setting aside appropriate reserves to maintain the property in
perpetuity. All associations benefit from a good reserve study, but larger associations even more-so
because the sheer magnitude of future expenditures is so large that without a quality reserve study,
it’s virtually impossible to budget, plan, and collect appropriate assessments from unit owners.
CB: What are the risks of NOT having a current and up-to-date reserve study?
NC: The greatest risk of not having a current reserve study is an unexpected special assessment.
Over the years, we have observed associations that fail to reserve accumulate deferred maintenance
that results in special assessments from a few thousand to 10's of thousands and even over 100,000
dollars PER UNIT special assessments. Association boards have been sued for failing to reserve.
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5. Some associations who failed to reserve even reached a point of disrepair that resulted in being
declared uninhabitable by local building inspectors. Beyond special assessments, for many people,
their condominium unit is one of their largest investments. Failure to set aside appropriate reserves
results in deferral of critical maintenance and upkeep which significantly affects the resale value of
their unit. Unfortunately, failure to reserve does not extend the useful life of assets. They will
require replacement. Doing nothing is not an option.
CB: In my experience, reserve studies are unrealistic. The financial expectations for
associations are usually not practical. What is your opinion about that?
NC: Some reserve studies are unrealistic. Many reserve studies are unrealistic. For this reason, an
association should critically review the qualifications of potential reserve study providers and retain
one who has the experience and willingness to go the extra mile to be sensitive to their unique
situation. Associations should select a reserve study provider that will ask the right questions, listen,
and develop what they believe to be a realistic plan and then continue to consult with the association
to make sure that the plan the provider thought was realistic is realistic for the association.
We include information in our report that helps associations who are significantly under-funded
make the best out of a less-than-ideal situation. We lend our expertise to help them understand
which projects can be deferred and which cannot.
CB: How should reserve studies integrate into budgets and capital plans?
NC: Reserve studies should be an integral part of the budgeting and planning process. A superior
reserve study shouldn't *only* be part of the annual budgeting and planning process, but rather
should be referenced throughout the year as projects are discussed, and bids obtained and critiqued.
Our reports contain additional information beyond budgetary projections that can arm boards with
information to be better, more informed consumers when it comes to contracting projects.
CB: What are the bottom line benefits of your reserve studies?
NC: Our reserve studies save clients money. With more accurate cost projections, we ensure that
associations are not taking in more funds than they need. With a more custom condition assessment,
we project replacement dates that are based on true condition, not a "book" average. This saves
money by maximizing the useful life of elements and avoiding premature replacement. Finally,
because we have the industry's most experienced reserve analyst who is a licensed Illinois
Professional Engineer we can provide money-saving advice to associations regarding their upcoming
projects and ways to extend the useful lives of existing assets that less experienced providers cannot.
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6. About the Authors:
Salvatore J. Sciacca aka “Condoboss” is one of the nation’s leading
experts in the community property management industry. He is also
the President and Founder of Chicago Property Services, Chicago’s #1
community property management company specializing in
management and operations of condos/townhomes/HOA’s of 100units
and under.
Salvatore is also the founder of managemycommunity.com (MMC),
which is a state-of-the-art online support portal for community
associations. With over 20 years of industry experience, Salvatore is
recognized for his extensive knowledge of capital planning,
preventative maintenance, cost-saving measures and community
building techniques.
He holds industry stature as a Certified Manager of Community Associations (CMCA), the
designation of Association Management Specialist (AMS) and is fully licensed as a
manager (License #: 261.001386) through the State of IL.
Salvatore can be reached at: 312.455.0107 x102 or
ssciacca@chicagopropertyservices.com
Or followed on social media at:
Nik Clark is the co-founder and a partner at Superior Reserve
Engineering and Consulting and is one of the leading experts in the
reserve study industry with over 10 years of experience.
Nik can be reached at: 888-688-4560 or
nik@superiorreserve.com
www.superiorreserve.com
www.chicagopropertyservices.com
MORE LIVING. LESS WORRYING.