Reserves

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Budgets & Reserve Studies: Your Best Planning Tools

As the summer months are winding down, TV commercials for school supplies abound and parents are overjoyed with soon-to-be quiet households. It truly is a wonderful time of the year – unless you work in property management. For property managers,

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Is Your HOA Board Saving Enough for the Reserves?

How does the reserve fund in your homeowners association look? If your fellow HOA board members tend to look the other way, not want to deal with the reserves, or simply refuse to fund them, you’re not alone. Many Associations

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The Reserve Budget

Many of you are in the process of completing your 2017 operating budgets for your boards/committees/commissions (constituencies). Most operating budgets consist of anywhere between 80-100 individual line items that will guide the association with its operations for the next year.

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Budget Chess: Formulating a Strategic Plan for your Association

Once we have completed our annual budgets, held all our meetings, approved the plans and sent out the annual assessment coupons /statements, we can breathe that sigh of relief and look forward to the new year. Hopefully in preparing your

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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, associations should refer to their governing documents (Covenants Conditions and Restrictions) with the help of a qualified attorney specializing in HOAs.

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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. Money is allocated each year to a

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

A correctly performed Condo Association Special Assessment is one that is not done in haste, but rather after thorough and exhaustive research that demonstrates a Special Assessment is the best path forward.  Read the article…………

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

In this discussion, Robert & Kelly identify and avoid common “root causes” of association conflict, so you can live more peacefully and productively.    Read the article……….

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Is Your HOA Reserve Fund Being Managed Properly?

How you handle your HOA reserve funds really makes a difference in the successful running of your association. The quality of the strategic planning of your homeowners association can actually make or break your community. It’s also really important to

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Should Your HOA Invest Its Reserves?

Your homeowners association (HOA) has diligently been adding to its reserves account and now would like to invest that money to possibly grow it even more. As a nonprofit, your HOA has the ability to generate income on your reserves.

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

Managing a major project in a Condo Association is one of the more grueling parts of Condo life – whether you’re an Owner, Board Member or Management. The costs, disruption, and constant oversight will impact you no matter who you

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

Funding community operations is one of the most important, if not the most important, functions of an HOA board. Properly overseeing day-to-day actions and long-term projects insures the homeowners association will have a continuous supply of funds to keep the

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Capital Improvements: Getting Financing and Board Approvals

Even if your condominium or homeowner’s association (HOA) is a fortified castle atop a hill and surrounded by a moat, one day, someone will hit it with a really big rock, and thus it’s inevitable: work will be done, repairs

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Why Reserve Funds Are Necessary

No one likes to spend their hard-earned money on community association dues. Just like taxes, everyone complains about having to pay them and resents it when they go up. Sometimes an HOA will try to please their residents by avoiding

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Is Your Condo Following the Proper Reserve Protocol?

The start of a new year represents a slew of new beginnings for most community associations. From holding annual elections to the preparation of annual budgets, the first quarter of the year marks a pivotal time for many associations. With

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Numbers Never Lie: The Future of Building Restoration

The increase in size, volume and complexity of buildings needing to be restored, the knowledge of business, the increase in non-site related personnel, the restraints to financing, and at the same time, the reduction in the number of restoration companies

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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. However, assessments have a couple of drawbacks. First, they usually take a fair amount of time to collect since most unit-owners don’t have a

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Neighborhood outraged over increase in HOA fees (NV)

Shelter Management said the HOA and its members have to start heavily funding the reserve, or the state will take it over and that would make dues *more* expensive.   Read the article…………

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Four HOA Reserve Fund Investment Hurdles

HOA boards are faced with a challenge. They have limited time and resources, yet must meet the financial obligations of the reserve study by following a funding plan that provides adequate member contributions and additional revenue from prudent investment of

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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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Reserve Studies 101 – The Component List

Reserve Studies help the board make informed decisions about the care of the main physical and financial assets of the association.  Reserve Studies help minimize surprises by accurately identifying the association’s major, predictable common area repair and replacement projects, allowing the association to give

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How can my condo fee be too low?

I often hear the question “Why is this condo fee so high?” by both potential buyers as well as agents. But I ask the opposite question of some condominiums – “Is this condo fee too low?”   Read the article……….

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Can Reserve Funds be used for Drought-Friendly Landscape Renovations?

In the middle of a major drought, many of our California clients are asking this question as they try to be both “good citizens” and financially responsible. The answer is yes, but…   Landscape renovations can be classified as a Reserve

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Read Your Reserve Study, Then Look Down

At a recent conference/expo I asked all of the reserve study companies if they had begun to include the things that are not obvious, in their studies.  Most said ‘no’, but they would try to help an association if they

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Why Your HOA Should Contribute to Reserves

HOA boards and committees have to think about not only its community’s residents, but also its finances, taking care of day-to-day management and having to think ahead in case of unforeseen circumstances. With that being said, each year the committee

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The reasons why associations need reserves in their budgets.

Reserves are extremely important for any homeowners’ association, as there is always the possibility of a large and unexpected expense cropping up. Consider your property and all of the things that could potentially go wrong. What would you do if

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3 Things an HOA Board Can Do Now to Combat Costly Maintenance

There is always work to be done, especially in a homeowners association. It’s crucial that an HOA Board plan for general, ongoing maintenance and upkeep. This is important in order to keep the Association a safe place to live and

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Back to Basics: Reserve Fund Accounting

Reserves are monies set aside for the future replacement or renovation of the major community components. Every major improvement to the community that the community is responsible to maintain, such as driveways, parking lots, street lighting, playground, pool, roofs, painting,

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Operating, reserve funds must be kept in separate accounts

Community associations need two pots of money, an operating account and a reserve account. The first is for paying day-to-day bills, and the second is for occasional big-ticket items like roofs and boilers.     Read more……….

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HOA Boards need to keep reserve budgets fully funded

Q. Our condominium association last raised our assessments in 2010, which left us with a small surplus above our annual expenses to fund our reserve account. With no assessment increases since then, but increasing expenses, we are no longer able

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Is 10% of Budget to Reserves a Law?

Due to the financial meltdown that began approx 2008, more lenders are particular with respect to making loans. Fannie Mae, Freddie Mac, and FHA have enacted a requirement that Reserve contributions comprise at least 10% of an association’s total budget.

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Why are Reserve Contributions Needed?

When it comes to adopting an operating budget, reserve contributions are far down on the list of items to include. A typical operating budget will include things like; utility bills, insurance premiums, landscaping maintenance, and management fees.      

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“Red Flags” that Signal Potential Reserve Account Problems

Homeowners associations must conduct periodic reserve studies in order to have a realistic estimate of the costs of repairing and replacing major common area components such as roofs. Ideally, an association will have funds set aside in a reserve account

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Boards need to keep reserve budgets fully funded

Q. Our condominium association last raised our assessments in 2010, which left us with a small surplus above our annual expenses to fund our reserve account. With no assessment increases since then, but increasing expenses, we are no longer able

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Quick Primer on Reading Reserve Funds Studies – Deficits! Deficits! Deficits!

It shocks me how regularly I find underfunded reserve funds in condominiums.  I don’t mean that from a perspective that based on the depreciated value of the asset, in accordance with the assessment of experts, that condominiums do not have

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6 Questions HOA Board Members Ask About Operating & Reserve Budgets

An area where a lot of HOA board members get into trouble relate to properly understanding the operating fund and the reserve fund in a homeowners association. If the two funds aren’t properly maintained a Board can be setting up

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What is CDARS?

With the recent stress in the financial market, many boards and property management companies are beginning to closely monitor the insurance of their funds. For many years now, leaders in the HOA banking and auditing industry have stressed the importance

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Associations beefing up reserve accounts, report shows

Condominium assessments continue to go up, and so do the bills for taking care of the buildings.  But associations in general could be in better shape financially than they were a decade ago. They are socking more and more money

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Reserve Funding: Condo and HOA Unknowns

The benefits of a reserve study have been well documented and universally accepted. Reserve studies highlight the scope of predictable repair and replacement an association will face over a predefined period, providing not only a roadmap of anticipated costs but

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Reserves: An Overview for Community Associations (FL)

The topic of “reserves” in community associations is one which can be confusing. Chapters 718 (governing condominiums), 719 (governing cooperatives) and 720 (governing homeowners associations) of Florida Statutes each contain provisions regarding reserves. However, while similar in some respects, the

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Understanding reserve and operating accounts

Well-run community associations keep two pots of money. One is the operating account, used for the day-to-day costs of running the association and maintaining the property. The other is the reserve account, which is earmarked for the repair and replacement

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Failing to Reserve and Deferred Maintenance is a Recipe for Disaster

If you have ever served on the board of directors of an HOA, you know that some members are never happy to see their annual assessments increased. In fact, some folks can be downright hostile when faced with an increase.

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Older condos plagued by high maintenance costs

To be more precise, a condo unit will remain a viable real-estate ownership alternative for as long as its monthly maintenance fees and realty taxes remain below the monthly rental of a comparable unit in another condo complex or apartment

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Condo Smarts: Depreciation reports can’t predict everything

Dear Tony: How does a buyer know whether a depreciation report is accurate or not?    We have been looking at different condos in Surrey and Delta, and find reports confusing. Some reports do not include all of the items

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Underfunded Reserves – the $10 Solution!

In a recent webinar, an attendee remarked how simple it seemed to get on the path to appropriate Reserve funding. They were right! The problem of underfunded Reserves in community associations across the country can eliminated in five years with

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Responsible Reserve Funding: Keep Calm & Be Smart!

Society is replete with examples of intelligent people doing foolish things, especially regarding their homes and their money. Homeowners know that maintenance and repair expenses are unavoidable, that the cycle of deterioration begins the moment the last shingle is nailed

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