When you’re part of an HOA board, taking care of the residents in your association is only part of the equation. You also have to maintain the HOA finances, which means thinking about immediate costs as well thinking ahead and considering any unexpected circumstances.
It’s tempting to focus mainly on the primary operating budget each year without much emphasis on the HOA reserves. After all, the current costs are more important in the moment. And homeowners are often not excited about contributing to reserves since they often assumed they won’t still be living there by the time reserve expenses will actually be a thing.
But the truth is that the homeowners association reserve budget is extremely important long-term — and there are several important reasons that everyone should still contribute to it:
Purchasing a home is an investment, and contributing to the reserve budget is a part of maintaining that investment and the value of the property. Even if the owner isn’t going to be living in the property when the reserves are used, they are adding value to future improvements that keep the home looking attractive — increasing its chances of potential buyers.
Homeowners are all in this together, and failing to see the value in reserve contributions means that owner isn’t thinking about the unfairness of letting new owners cover the costs of needed repairs. It’s only fair to protect new owners from getting stuck with the high expensive of a repair, such as a new roof, just because the past owners neglected their responsibilities.
Your HOA likely has reserve contributions included in the governing documents stating that they’re required. So even if a homeowner doesn’t see the value of contributing, it’s likely mandatory that they do if they want to remain in the association. As a board member, you have a fiduciary responsibility to collect for the reserve — and letting members know that their contribution is required. Check out your governing documents if you aren’t sure about your HOA’s policy on reserve funds. And if you need help setting this up, an HOA management company can help.