Reserves

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Earmarking Reserves In Your HOA

Most homeowner associations are entrusted with substantial common elements which must be maintained, replaced or renewed. All of this costs a lot of money. Borrowing said money is a very bad idea because it comes at a very high price

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Ask the HOA Expert: Proper Funding Levels

Question: Our HOA recently had a reserve study update which the board is evaluating to ensure that we are adequately funded. What is a proper funding level? I have heard numbers from “30% Funded” to “80% Funded”.    Read the Q&A…………….

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Why Does Your HOA Board Need to Maintain Reserve Funds?

You probably receive your HOA’s annual budget for review and notice the line item called “reserve fund.” You probably wondered: why does the Board need to maintain reserve funds? Well, this post will answer that question for you. Let’s start

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How a Strong HOA Reserve Fund Effects Home Prices!

Reserve contributions are often relegated to “what’s left” status in the budget process, regularly characterized by Board members and homeowners, as a problem for future owners. We’ve been challenging this way of thinking for over 30 years, and finally, there’s

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Inadequate Reserves: The Risks of Not Keeping Up

There are few feelings worse than encountering an unexpected expense and finding the piggy bank empty. That is why reserve funds and reserve studies are such important elements in the financial well-being of co-ops, condos and homeowners associations. It pays

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Funding Your Future: Predicting & Budgeting Your Association’s Repairs & Improvements

All community associations require routine maintenance, repairs, and replacement over time to ensure they remain in good condition. The task of ensuring the Association retains sufficient funding to pay for this maintenance, repair and replacement work falls squarely on the

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HOA Homefront: Can we skip the reserve account?

Dear Mr. Richardson: I am wondering, are HOAs required to have a “reserve” account or it is just recommended?      Read the Q&A…………….

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Protecting That Nest Egg Called the Reserve Fund

Is an investment-policy statement right for your board?  Like any co-op or condo board, you keep a reserve fund for capital projects and emergency repairs. In fact, the New York Cooperative Corporations Law requires that boards “periodically set aside reasonable

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The Homeowner Association’s Future Forecast

Preparing for and overseeing a homeowner association’s finances are perhaps the most important board responsibilities. It takes money and careful planning to maintain and preserve common area property. One of the best forecasting tools is a “reserve study” is needed

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Association Deficits Don’t Excuse Developer From Funding HOA Reserves (FL)

For the developer of the Sullivan Ranch community in Mount Dora north of Orlando, it appears that its decision to stop funding reserves after it established the account and began funding it in 2007 has significantly backfired. The Fifth District

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Ensuring You Don’t Over Plan Condo Association Major Projects

Planning for a major project in a Condo Association is a big deal. You have to bid out projects, work with vendors, educate Owners, and execute. You want the project to go as smoothly as possible, of course. And an

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Best practices for condo boards to plan for future building repairs

Q: We live in a condo building of 56 units. We have a reserve fund marked for separate items like the elevator, roof, parking lot, painting, etc. If we didn’t have enough money to replace the elevator, can we use

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Funding Reserves For the Common Good

Subdivisions, planned community, and condominium owners are different types of community and offer different types of amenities and surrounding. However, there is one common denominator that people living inside these communities are obliged to conform with to ensure the common

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Appeals court decides Centex must pay into HOA reserve (FL)

The 5th District Court of Appeal recently decided in favor of a pair of homeowners representing themselves in a case against their homeowner association at Sullivan Ranch.  According to a report by the Orlando Sentinel, Sara MacKenzie, who had only

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Reserve Funding for On-Site Managed Communities

Increasingly reserve funding has become more and more important in validating the community association operations and their management. All on-site managed communities whether they are Luxury Condominiums, Large-Scale On-site Managed Communities or Active Adult communities should have reserve funds with

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A primer on condo association reserves

Q: Our community association just announced that our monthly assessment fee increased as of January. The reason is that we do not have enough reserves in our budget. What are reserves, and why does our association need them?   Read the

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Should We Invest Our HOA Reserve Fund?

Many signs are pointing to a US economy on the upswing – consumer confidence is up, unemployment rates are down, and the stock market is approaching record territory. Companies are investing in growth, so shouldn’t your HOA or community association

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Court Decision Clarifies HOA Developer Reserve Funding Obligations (FL)

Last month, Florida’s Fifth District Court of Appeals issued yet another opinion in Mackenzie v. Centex Homes, by Centex Real Estate Corp., Case No. 5D16-1254 (Fla. 5th DCA, December 22, 2016) reinforcing that a developer is obligated to contribute money

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What are pooled reserves and how do we implement them?

Q: I am a new director on my condominium association board. At a recent board meeting, there was a discussion about switching to “pooled” reserves. What are pooled reserves and what does the association have to do to implement pooled

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How Much are Adequate Reserve Contributions?

At Association Reserves we understand board members face a big challenge to budget for the maintenance and replacement of their association’s major common area assets. Boards typically have little knowledge of project costs and when those costs are expected to

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Should condo association borrow money for new roof or use reserves?

Q: We are a 35-unit condo building. Our reserves are nearly enough for a new roof. The board is having a heated discussion on whether we should have a special assessment for the remainder of the roof or take out

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Reserve fund issues are subject to debate (IL)

Q. Our condominium association, with more than 100 units, had a reserve study done over a year ago. The reserve study recommended an annual increase in the reserve funds of more than $30,000 for each of the next five years.

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Change to the FHA “10% to Reserves” Rule?

FHA approval is a status condo associations can attain, allowing unit owners/buyers to receive FHA insurance on their loans which make those loan more attractive to lenders. Depending on your location, as much as 30% – 40% of all residential

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Funding Your Reserves: Banking Against Surprises

Bill and Martha Jensen bought a new condominium in Brockton in 1995 and lived there for 19 years. In 2014 they sold the unit to Max and Rita Diaz. A year later, the condominium association’s board of directors voted to

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Condos Must Reserve To Preserve — And Get Loans

Every community association should have money set aside “in reserve” to cover the cost of emergency or major repairs

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Real Estate Condo associations should build up reserves for a rainy day

Every community association should have money set aside “in reserve” to cover the cost of emergency or major repairs.

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Questions About How an HOA Board Uses the Reserve Fund

Each and every homeowner’s association should have a reserve fund as part of its budget to plan and prepare for future repairs and maintenance, as well as unanticipated expenses and needs. HOA board members are responsible to make sure a

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Budgets & Reserve Studies: Your Best Planning Tools

As we near the end of the year, there are a few tips one can utilize to verify that an association stays within budget and anticipates concerns

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Is Your HOA Board Saving Enough for the Reserves?

Many Associations across the country aren’t saving enough in their reserves to make major repairs which can cause a multitude of problems

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The Reserve Budget

When you and your constituencies are reviewing the proposed budget, how much time is spent on analyzing your reserve budget?

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Budget Chess: Formulating a Strategic Plan for your Association

Hopefully in preparing your budgets you reviewed your association’s reserve study and all contracts in place.

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7 Things you should know about HOA Reserve Funds

Reserve Study Laws and Reserve Funding Legislation vary by state. In the absence of specific legislation regarding Reserve Funding,

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The Critical Importance of Community Association Reserve Funds and Reserve Studies

Successful HOAs and community associations must plan ahead for their future needs, so they can budget and save today for property and amenities that will require repair and replacement well into the future

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The Condo Association Special Assessment Process #2: Assessing the Situation

Another important thing to consider is that in many cases, rehabilitating a system sooner than later will result in substantially cheaper costs.

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Conflict at Your Association – You Don’t Say (Webinar)

Remember that few boardmembers or business partners are truly experts in their field. Conflict is reduced when boardmembers come with a spirit of learning

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Is Your HOA Reserve Fund Being Managed Properly?

The quality of the strategic planning of your homeowners association can actually make or break your community

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Should Your HOA Invest Its Reserves?

As a nonprofit, your HOA has the ability to generate income on your reserves. But should you?

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Managing a Major Project in a Condo Association #2: Hiring Technical Representation

The first part of nearly any project is to ensure you have proper technical representation for your Association.

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How an HOA Board Should Use the Reserve Fund vs. Operating Fund

As an HOA board member you have a fiduciary duty to make sure any money is properly allocated.

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Capital Improvements: Getting Financing and Board Approvals

But some projects are of greater consequence than others, and these are often referred to as “capital improvements.”

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Why Reserve Funds Are Necessary

Sometimes an HOA will try to please their residents by avoiding fee increases and dipping into their reserve funds to cover a rise in costs

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Is Your Condo Following the Proper Reserve Protocol?

Contrary to common misconceptions, Florida Statutes require that associations must present a fully funded reserve to their fellow unit owners.

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Numbers Never Lie: The Future of Building Restoration

In 5 to 10 years, Restoration Contractors will work for 4 or 5 Property Management Companies/Consultants and those Property Management Companies/Consultants will contract all their work to one Restoration Contractor

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Loan or Assessment? Your Condo Board Might Want to Consider “Split Funding”

Assessments have been the traditional vehicle for condominiums to raise money for repairs and capital improvements

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Four HOA Reserve Fund Investment Hurdles

Here are four hurdles the board must jump when tackling reserves investment.

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Costly roof assessment result of not funding reserves

Q: My condominium association has no reserve funds for our roof. Every year at the annual meeting, the board asks the owners to waive the reserve funding and every year the owners vote to waive the reserves. Now we need

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Condo associations steadily building reserve accounts

Condominium assessments are escalating, but that’s not necessarily bad news. A good chunk of that money is headed for reserve funding.  These and other trends are shown in the recently released “2015 Expense Analysis: Condominiums, Cooperatives and Planned Unit Developments”

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Don’t Raid the Cookie Jar: Capital Budgeting is Essential

Sometimes the future seems like it’s an awfully long way away. If a roof is going to last 30 years, why should we worry about it today? Same with that shiny new boiler or that flat, crack-free pavement just poured

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An overview on Condominium and HOA Reserve Funds

For community associations, preserving the property and its common areas is one of the foremost duties of the association directors. Beyond the day-to-day maintenance responsibilities, association directors and managers are responsible to develop funding plans for the upkeep and replacement

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Funding Your Reserves – Making Strategic Choices

Popular management consultant Peter Drucker famously stated “The best way to predict the future is to create it.” With that in mind, what future do you want for your association? Will there be sufficient cash to maintain “curb appeal” and

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