Our small HOA has no amenities – only a small area of landscaping and signage near the entrances. The board has set built up a Reserve and Operating account balance equal to 2X the annual budget. Is basing the Reserves on budget instead of replacement costs reasonable? Is 2X reasonable?
North Carolina law currently does not address this. However, most associations conduct a reserve study to know how much they should have in their reserves. That being said, your HOA may have its own requirements when it comes to reserve funding. Check your governing documents to know for sure.
Disclaimer: We are not lawyers. The information provided on this website does not constitute legal advice.