How to Convince an Alabama HOA to Establish a Reserve Account

Hi Kyle,

Since Alabama law does not mandate reserve funds for HOAs, many boards and homeowners may resist additional contributions unless they understand the necessity. Check your governing documents, too, to see if they include a requirement to fund reserves.

To convince your community of the need for a reserve account, start by educating homeowners about the purpose of reserves. A reserve fund covers major repairs and replacements for common elements like roofs, roads, and amenities. Without reserves, the HOA may face financial shortfalls, forcing special assessments or sudden increases in dues. Homeowners typically respond better when they see real-world examples of communities that failed to plan ahead and suffered the consequences.

A reserve study is one of the most effective tools for justification. Commissioning a professional reserve study provides a clear analysis of future repair costs and how much should be saved annually. Presenting data-backed projections can help counter arguments that reserves are unnecessary.

Community meetings, newsletters, and direct engagement are all effective ways of communication as well. Address concerns openly, offer clear explanations, and emphasize that reserves are a proactive measure to avoid financial instability. If the board is unwilling to act, homeowners can push for policy changes by organizing a petition or proposing an amendment requiring reserve funding.