Reserve Studies-Planning and Funding...

More and more of our Neighborhood websites are being utilized by organized community associations such as HOAs and Condo Associations. A hot topic for these groups is Reserve Studies.

One of the primary duties of a community association is to maintain and preserve the market values of both the residential property and the common area property. In order to do this correctly, the Board of Directors of an association will need to do develop a funding plan for future repair, maintenance and possible replacement of common areas such as swimming pools, decks, asphalt surfaces, fencing and much more. Thus, a reserve fund will need to be created for these future expenses.

The first step in planning for the correct reserve funding is having a professional Reserve Study performed. A reserve study is essentially a "blueprint" of future funding needs. Due to the technical details involved, a community association is best served by having the reserve study performed by a professional.

Once the reserve study is created, the association will have to determine how to to create and maintain the reserve fund. Reserve funds can be funded by special assessments, monthly dues, or even loans.

Below we have highlighted a number of articles in the Neighborhood Link Resource Guide that go into the specific details of Reserve Studies and their creation and funding.