2020 has been full of unexpected trials. Planning for Murphy’s Law is part of an HOA board’s responsibility.
Make sure your HOA is covered for the unexpected by having an adequate reserve fund.
What is a reserve fund? A reserve (capital) fund is your HOA’s saving account; it is not used for the day-to-day necessities and amenities like repairs and maintenance, snow removal, and lawn care. It is used for large scale projects like roof replacements, replacing fencing, painting community buildings, and construction and major renovations, like replacing a parking lot or installing a new sidewalk.
Re-sale in Your HOA. Not only is your reserve fund important for the unexpected, it can also be a determining factor for those looking to purchase in your community. Community buyers often review an HOAs Reserve Fund before making an offer for purchase.
Reserve Study. While having an adequate amount tucked away in your reserve fund is important, it is equally prudent to not collect excessive amounts from association owners. A planned Reserve Study is a worthy investment. There are many third-party groups who complete Reserve Studies for HOAs, non-profit groups, and churches.