The Importance Of Reserve Funds In The Homeowners Association
Posted on December 4, 2015 9:30 AM by HOA Sites
Categories: HOA Website
The reserve funds are an important part of being prepared for maintaining the components within the homeowners association. Some homeowners association members misinterpret the intended use of reserve funds and make the mistake of using those funds when the operating account gets low. Periodically, the homeowners association website needs updated and the same applies to areas of the community.
Eventually, the time will come when certain areas that the homeowners association is responsible for need to be addressed to keep the neighborhood as a premier location. The reserve fund is there to ensure the neighborhood receives the proper upkeep in a timely manner. Without a sufficient reserve fund, what does this mean for homeowners in the community?
Expenses Of The Homeowners Association
Expenses are dependent on a range of variables and circumstances that are beyond the control of the board. Those expenses are driven by the marketplace and items such as building materials tend to increase which significantly influences the funds that are required for future expenditures.
Often, the misguided intentions of some board members to keep the HOA fees low will make it troublesome on securing sufficient funds for the reserve account. While residents would enjoy a decrease in homeowners association fees, the savings would likely be a short-term gain as you could incur unexpected expenses in the future. Lower HOA fees can lead to a cut in the reserve funds as well as disregarding other amenities. Why should this concern you?
Board Members Have A Duty To Fulfill
Board members have a fiduciary obligation to secure an adequate amount of reserve funds for the homeowners association. When the board lacks sufficient funds for the reserve account, homeowners will be asked to pay in the form of a special assessment or accept unpleasant conditions. Try communicating with other residents through the homeowners association website to ensure the next board member fulfills their duty to secure the reserve funds needed for your community to prosper!
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