Great Advice For Interpreting The Reserve Study Of Your Homeowners Association
Posted on April 20, 2020 8:00 AM by HOA Sites
Categories: HOA Website
In many homeowners associations, specific technical expertise isn’t usually required to become an HOA board member. Anyone that has ever attempted to review the HOA reserve study might disagree with that sentiment since it isn’t easy or enjoyable. Unfortunately, reserve studies are an essential aspect of the planning, allocation, and collection of reserve funds. Therefore, you should always ensure that you interpret and utilize the reserve study to the best of your ability.
The first order of business is to learn and understand why an HOA has a reserve study. Most of the time, the homeowners association website will inform you that the reserve study lists every major component in the community that eventually needs to be repaired, replaced, or requires some maintenance. This is assembled by performing a visual inspection of the landscaping, roofing, and other significant assets in the area.
Such visual inspections are typically performed every three years, though an annual review is also necessary to make funding adjustments. These type of lists are only effective if they are generated by a professional that has expertise or experience with managing funds in HOA’s.
In order to get a complete understanding of the figured outlined in the reserve study, it’s essential that you review it annually. For instance, if you decide to replace the roof of a building, you need to know the exact amount that will cost so you know the funds that need to be collected to reach the target amount. This is one reason why annual reviews are necessary and this information isn’t posted on the homeowners association website.
Calculations should be kept unbiased and that can be done by ensuring everyone contributes their fair share even if some members intend to depart the community before costly repairs are completed. Though reserve studies can be complicated, they are crucial towards shaping the community’s future so remember this advice when interpreting a reserve study.
- What Elements Should Be Included In The Homeowners Association Budget?
- Are Neighbors The Best Form Of Security In Your HOA?
- How To Tell If The HOA Has Been Properly Maintained
- The Significance Of Setting Up A Maintenance Plan For The Homeowners Association
- Can The Board Use Reserve Funds For Items Not Listed In The Reserve Study?
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