With the budget season fast approaching, it’s time to seriously consider your association’s near and long-term financial needs, goals, and ultimately, its future. Capital planning is no easy feat, but having a continuous blueprint for the future is the key to a thriving community. Read the article…………………………..
HB 107 –Reserve Studies and Funding Becomes Law! (MD)
The bill requires the governing body of certain cooperative housing corporations, condominiums, or homeowners associations to have a reserve study conducted of the common areas and update the study every fivey ears. It also imposes certainannual budget requirements related to cooperative housing corporation, condominium, or homeowners association Read the entire article……………………………….
What Components are Included in a Reserve Study?
When it comes to a building or home, the entire structure is only as strong as its foundation. Similarly, when it comes to planning for your community’s future, the scope of work, or component inventory, serves as the foundation for a reserve study provider to conduct a thorough review of your property. Only then can […]
What is a Reserve Study and Why Does Your Community Need One?
The financial health of a community and planning for long-term projects is critically important to any homeowner’s association (HOA). In fact, it is so important, a term was created for it: “reserve study.” And while the term “reserve study” probably isn’t anything new if you serve or have ever served on an HOA board, many […]
A Late Legislative Arrival: Proposed Reserve Study Requirements (CO)
In direct response to the issues occurring across the nation, Rep. Titone (D) (Wheat Ridge) introduced HB HB22-1387, titled an Act “Concerning Measures to Ensure that A Common Interest Community has Adequate Reserve Funds.” Read the entire article……………………………….
Maryland General Assembly Passes Bill Requiring Reserve Studies
The Maryland General Assembly has passed new legislation requiring all condominiums, homeowner associations, and housing cooperatives to undertake regular reserve studies of common area components. Under House Bill 107, the reserve study requirement, which was previously applicable to only Prince George’s and Montgomery Counties, is applicable statewide. Read the entire article……………………………….
Picture Perfect HOA Reserves
A reserve study identifies a homeowner association’s future repairs and replacements like a snapshot in time. Imagine that you could picture the buildings and grounds as they would be in five, ten, even thirty years. A reserve study acts just like that by estimating the useful life of the common elements and the cost to […]
Why You Need A Reserve Study
If you are an HOA Board Member, you have a tough job. Your responsibility is to manage the community while also watching out for the bottom line. It can be challenging to balance these two goals, so having a reserve study will help. Read the entire article……………………………….
Reserve Funding for Condo Associations: Options and Best Practices (FL)
Millions of Florida residents live in condominium units, be they stand-alone villas or penthouse units in a 30-story building. Irrespective, Florida Statutes section 718.112(2)(f) provides a default rule that condominiums must reserve fund balances to repaint, resurface the roads, replace the roof, and perform any deferred maintenance or replacement that costs more than $10,000.
Interpreting a Reserve Study
Every homeowners association should have a current reserve analysis to coincide with its annual operating budget. Following a (reserve) funding plan is crucial to preventing the three things reserve specialists don’t like to see: a special assessment, deferred maintenance, or a sharp increase in reserve contributions. Interpreting a reserve analysis can be a daunting task, […]
How Accurate is a Reserve Study?
After you are done ringing in the New Year, you are starting to get back into the swing of things and you plan on reaching out to vendors to ask for preliminary bids. You notice that the preliminary asphalt seal coat bid is projected to be around $20,000, but your Reserve Study shows a $15,000 […]
Protecting Community Assets (GA)
Four years ago, we published two separate blog articles on funding reserves and preparing for disaster (i.e., related to insurance claims). Although these general issues are always relevant for community associations with common property, they have unfortunately been thrown into the international spotlight within the last week. Read the entire article……………………………….
Skyrocketing Construction Costs Leave HOAs to Cope with Underfunded Projects (CA)
Over the past four years, skyrocketing construction costs have created various forms of havoc throughout the construction industry, to the surprise of many HOAs in need of project work. The increases have taken on various forms. In 2017-18, a strong economy and a demand for housing fueled a labor shortage, showing an overall increase of […]
HOA 101: A Complete Guide to Reserve Studies
As a board member, you’re responsible for maintaining the financial health of your association. Key components of this task include creating a reserve fund and conducting regular reserve studies. A reserve fund is money set aside by a community association for additions to major components the association is obligated to maintain and future replacements and […]
Is An HOA Reserve Study Essential? How Does It Help Your Reserve Funds?
Reserve studies are an integral part of maintaining a healthy HOA reserve fund, but many associations underestimate just how important it is. Here is what you need to know about your association’s reserves and how a reserve study affects them. Read the article…………………………..
The Importance of a Reserve Study and Ongoing Preventative Maintenance of Reserve Study Items
Recently my brother-in-law and his fiancé were in the market to purchase their first home. We were having a conversation about prospective homes and the fact that they all have an HOA fee. To say the least, he was not thrilled about the idea of having an additional payment on top of his mortgage. Not […]
What Is a Reserve Study?
Today, there are over 351,000 homeowners’ associations in the nation. If you’re part of one, you’re probably interested in maintaining the community to the best of your abilities. One way to do so is to have reserve studies done at regular intervals. What is a reserve study? And how can it benefit your homeowners’ association? […]
Reserve Studies Made Easy
In trying to explain Reserve Study concepts for clients, Reserve Study companies and their lingo may have created some unintended consequences. Unfortunately, this just makes a board’s job more difficult. The board hires a Reserve Specialist to put together a budgetary action plan, the board reviews, then distributes the findings and votes on an action […]
Reserve Studies: Preparing Your Community Association For The Future (NC)
Reserve studies are essential to ensuring the financial security of community associations. When conducted properly, they aid in preparing associations for large future repairs and create a timeline so that the membership will have the appropriate funds allocated for such repairs. But what exactly is a reserve study? Read the article…………………………….
Get a Reserve Study of Your Condos and HOAs For a Better Budget (FL)
Do you find that your Association constantly has unexpected repair or replacement costs that you don’t have money budgeted for? If so, it may be a good idea for your Board to look into having a reserve study done for your community. Read the article……………………………
System Failure
Regular reserve studies and funding aren’t enough to cover the increasingly common threat of infrastructure failure. How do we fix the system before more tragedies strike? Read the article………………………..
Can a Board Use Reserves for an Item Not Listed in the Reserve Study? (CA)
The purpose of the reserve fund is to plan for future repairs and replacements in the association. But what about components that you can’t see and aren’t listed in the reserve study? For example, plumbing supply lines that aren’t included in the reserve study and will end up costing somewhere in the ballpark of $50,000 […]
Homeowners association reserve study guide
A reserve fund is a nest-egg that every association needs to pay for unexpected events and major expenses. This pot of money comes from the unit owners’ maintenance fee, which is split between the operating budget and the reserve fund. Over time, the money put into the reserve fund accumulates so that when the HOA […]
Reserve study important for RCSCW in Sun City West (AZ)
One of the best ways to gauge the health of a planned community association such as Recreation Centers of Sun City West is to gauge the association’s reserves. How much money an association has in reserves, as a percentage of its overall asset replacement requirements is the best way to determine whether a special assessment […]
Tips to Find the Right Reserve Study Firm
Reserve studies are reports about the condition and likely useful life of all the major components in your building or community. In a high-rise, major components include garage gates and access systems, elevators, trash compactors, and boilers; in a homeowners association, they might include the gate system, pool pumps and clubhouse HVAC system. Read […]
Tips to Help You Navigate Reserve Studies
If your association isn’t getting a reserve study, it’s impossible to determine how much money it should have in its reserves, because you’re simply taking a guess. How can you make sure your HOA or condo association understands reserve studies? Read the article……………………
Reserve Studies & Your Community’s Long-Term Goals
It is widely known that having an updated Capital Reserve Study is vital for the success of any community association; as it is a guide to help set aside funds and is the road map for all future capital improvement projects and expenditures. Read the article…………………….
HOA Homefront – Spending reserve account interest, disclosing reserves electronically (CA)
Association should be setting its budget so that its regular assessments meet anticipated expenses. Siphoning reserve income to subsidize the budget obscures the fact that an association budget is inadequate. Read the Q&A……………………..
How Much Money Should an HOA Have In Its Reserve Funds?
Reserve funds are most commonly used by businesses or organizations as a means to prepare for the future. It is considered a highly liquid asset which is set aside to meet any future financial obligations. Reserve funds can come in handy whenever there are unexpected costs. Nevertheless, it is crucial for every organization to take […]
Reserves Must Be Fully Funded Unless Waived (FL)
Q: Our condominium association just had a reserve study done for the first time in our twenty-year plus history. We learned that all of the funds we have set up are inadequate. The board said that to catch up the reserves would double our assessment, so they want to phase in the increase. Can they […]
How to Get the Most from Your HOA Reserve Study
This article is the second in a series on reserve studies. Last week, we addressed the importance of getting a reserve study done. This week, we’re going to discuss how to make the most of it. Spectrum Association Management always encourages associations to live below their means, but we recognize that preparing for future costs […]
Association Reserve Studies Explained
A reserve study is a long-term budget-planning tool designed to identify the current status of an association’s reserve fund, which offsets the association’s ongoing disrepair and future costs. A reserve study has two parts: Read the article…………………
What is a Reserve Study, Really?
The slightly technical definition of a reserve study is: a budgeting tool based on the art and science of anticipating and preparing for major common area repairs and replacement expenses an association will face in the future. Read the article………………..
Updating an HOA Reserve Study
A reserve study is an indispensable planning tool to schedule major renovation and systematically raise the money to pay for it without the use of special assessments. It is also extremely important to update the reserve study each and every year since there are many moving parts that change each year and impact both the […]
14 Things Your Reserve Analysts Might Not Tell You – And It’s Not Their Fault (Part 3)
Two weeks ago,, we shared five focus points to help you analyze property components. Last week, we offered another five, which were practical considerations to discuss with your reserve analysts in order to estimate project expenses as accurately as possible. To recap, we’ve covered: Read the article………………
14 Things Your Reserve Analysts Might Not Tell You – and It’s Not Their Fault (Part 1)
Reserve studies are invaluable tools for condominiums, cooperatives, and homeowners associations. Used properly, they assist boards and managers to make good decisions for reserve funding with long range planning in view. They also help to plan for near term capital projects. The reserve study provides a basis for a systematic and disciplined approach to reserve […]
14 Things Your Reserve Analysts Might Not Tell You – and It’s Not Their Fault (Part 2)
Last week’s blog offered five focus points to improve the accuracy of your reserve plan. Nuggets 1 through 5 help you analyze property components. This week, we share nuggets 6 through 10. These are practical considerations to discuss with your reserve analysts in order to estimate project expenses as accurately as possible. Read the article………………
A Reserve Study Takes the Long (30-Year) View
A reserve study is a budgeting tool that helps boards plan for the replacement of all of the common-area components when they reach the end of their useful lives. These include mechanical systems, roofing, facades, and parking decks, all of which will ultimately need to be replaced over the course of a 30-year period. When […]
Don’t Get Blindsided By Capital Projects (NY)
What is blindsiding? It’s a phenomenon I come across a lot when I have to give boards bad news. An example would be when we do a facade inspection. Local Law 11 mandates it every five years, and the board asks us to tell them what’s wrong with the building and what they need to […]
Association Reserve Studies
There are an estimated 342,000 community associations in the United States today and that number is growing rapidly, but only a small percentage of those communities have the financial protection provided through a professional Reserve Study to ensure the continued value of the common community assets. It is well known that the board of directors […]
Why It’s Crucial to Regularly Collect for Reserves at Your Homeowners Association
Reserve funds are not an extra expense. They are part of the ongoing expenses of the homeowners association which occur at various points in time. The plan provided by your reserve fund specialist will help you in this process. It’s much more preferable that homeowners associations have a plan to set the funds aside now, […]
How Many Years Should an HOA Reserve Study Cover? (CA)
So, your homeowners association is contemplating doing a reserve fund study. Perhaps you are a new HOA and need to establish and start funding the reserves; or, you are an older HOA that has had a reserve for years, but it is time to update it. How many years should your HOA reserve study cover? […]
How To Interpret Your HOA Reserve Study
More often than not, sitting down to review your HOA Reserve Study can be about as easy-to-understand and enjoyable as sitting down to review the U.S. Tax Code. And just reviewing your HOA Reserve Study is not enough. As an HOA Board member, you’re responsible for using that HOA Reserve Study to plan for, allocate, […]
Why Your HOA Board Should Use a Reserve Specialist
As an HOA board member you probably know what a reserve study is and the importance of doing one. If you don’t, take a couple of minutes to read this blog to familiarize yourself with frequently asked questions about doing a reserve study in your homeowners association. It’s important to know that the law actually […]
6 Tips for Making the Most of Your Hawai’i Association’s Reserve Study
For a community to last for generations, its major components – like elevators, clubhouses and swimming pools – all need major maintenance or replacement eventually. The funding for these capital improvements comes from putting a portion of the community’s money into a reserve fund determined by a reserve study. It is more than just another […]
Community Association Reserve Study | A Fool And His Money
We all know we need a community association reserve study – well, we mostly do, right? However, do we utilize these reserve studies in the way that was intended? Are we USING these reserve studies to plan ahead, research and study possible scenarios? Proverb – Wiktionary – a fool and his money are soon parted […]
Can You Afford NOT to Have a Capital Plan? (NY)
Planning for capital expenses can be a touchy subject for co-op and condo boards. Many balk at the cost of hiring an engineer to thoroughly assess the physical condition of the building and its systems. Some prefer to rely on the building super for such assessments. Others, in a more head-in-the-sand approach, avoid planning altogether […]
Service Life of Building Components
The standard reference for service life of building components such as HVAC systems, Plumbing, air handlers, Digital Controls, and elevators, etc. may come nfl jackets for boys from many different reference books whose authors have deduced, observed, or tested a sample of similar components to produce a “mean” service life. It is unlikely that any […]
A Practical Overview of the Condo Association Reserve Study
The Condo Association reserve study is perhaps the most boring document you can imagine. It is also one of the most important for your community. It is a foundational document for all of your financial planning as a community, and the difference between smooth sailing and a special assessment. Here is an overview of the […]
Understanding the Importance of a HOA Reserve Study
For each Home Owner’s Association (HOA) there are regular expenses that come out of the annual operating fund, and there are the occasional necessary large expenses that must come from the HOA’s reserve fund. It’s not always easy to predict when these special expenses will occur or how much money they’ll be and it’s especially […]