Question:
RESERVES
Quick question. I am on the BOARD of a small (27 properties) HOA. We have no ammenities within our HOA just some identified “Open Space” that is adjacent to most of the properties (individual homes on 1 + acre). Our Association Dues are (hold your breath” $168/yr per property. Our P&L Revene line is very small, and expenses are managed well but are increaseing. Conducting a Reserve Study for our Association seems like over kill. Is there a rule of thumb for how much an association like ours would set as a reasonable reserve? $2,000 per property higher or lower. I understand the benefits of a reserve, the question is what would be reasonable.
– Doris
Answer:
Hi Doris,
Unfortunately, there is no rule of thumb when it comes to the dollar amount for a sufficiently funded reserve account. It really depends on the association. It would be impossible to determine the condition of your common spaces without inspecting them. The good news is that reserve studies only tend to cost more when you have a larger or more complex association. If you have a small association with not a lot of elements, you might get a lower price. Asking for quotations or estimates is a good starting point.
Disclaimer: We are not lawyers. The information provided on this website does not constitute legal advice.
