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CONDOMINIUM COMMUNITY SERVICES
A Physical Needs Assessment (PNA) is best described as a pre-purchase inspection of a multi-family residence or a Community Community Facility. Similar to a single-family residential pre-purchase inspection, the PNA identifies the repairs, replacements, and significant maintenance items that will require attention over the term of the mortgage.
Most often, the PNA will also require an estimate of the costs to implement the recommended repairs or replacements. It may therefore also be referred to as a Preservation Capital Needs Assessment or simply a Capital Needs Assessment.
A Reserve Fund Study is a variation of the PNA. In a Reserve Fund Study, an engineer evaluates the current condition, remaining useful life of the covered building components, maintenance requirements, and estimated cost of maintenance and repair. However, an additional calculation is made to determine how much money must be set aside, on a regular basis, to fund repairs when required. In other words, how much capital, or money, should the condominium corporation reserve, or put aside, to maintain itself over a period of years. Typically, a twenty-year time frame is used, although it can be shorter or longer. There are generally two types of funds maintained by condominium corporations.
Contingency, or Maintenance, Funds are intended to be used for operating expenses during a twelve-month period (e.g. utility costs, sewer cleanouts, pest control, etc.). Reserve Funds are for project repairs and replacements. Items such as regular periodic repairs (e.g. painting), irregular periodic repairs (e.g. deck surfacing), foreseeable failure, catastrophic failure, and outdated design/aesthetics may be included in a Reserve Fund Budget.
TRANSITION STUDIES / PERFORMANCE AUDIT
A Transition Study (Performance Audit) is defined as an evaluation of the condition of the property at the time the Board or Management Company takes it over from the Developer.
Typically, one is concerned with whether all elements are complete, if construction was completed in compliance with plans and specifications, appropriate approvals were obtained, and that there are no construction defects or developing concerns.
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Affiliated with Criterium Engineers Home Inspection and Building Inspection Experts since 1957