Reserve funding for associations varies widely based on the size of the association, number of reserve components, and cost of the reserve components. So comparing the annual funding amount of one association to another is an apples-to-oranges comparison. The best comparison, however, would be to compare the percent funded of associations. Percent funded essentially measures […]
Special Assessment
Why Should a Special Assessment Be a Last Resort?
The phrase “Special Assessment” can be a dirty word around a community association. It essentially means that all members of the association pay their fraction of the cost to repair or replace something around their community at one time. On the surface it seems like that may be an okay way to find the funding […]
Reserve Study Frequently Asked Questions Part 7
We have to make very costly renovations to our building and do not have the reserve funds to cover it. What should we do? In this case, there are two realistic options the board has. The first is to get a bank loan for the community to cover the cost of the renovation. There are […]
What Your Reserves Do
Reserve funds are the backbone of community associations. It is how they are able to pay for big ticket repairs and replacements. Funding reserves is advantageous to your association for several reasons: Keep Property Values Up The biggest reason why you fund reserves is they help maintain and increase property values. It is very difficult […]
Reserve Study Frequently Asked Questions Part 5 – Florida Specific
Do I have to have a reserve study for my association in Florida? No. There is no part of statues 718, 719, 720 (condominiums, co-operatives, home owner associations, respectively) that mandates that associations get a reserve study. Not only do these associations not need a reserve study, but they can choose to waive funding of […]
What to Do When Your Reserves Are Underfunded
Living in an association requires diligent financial management. The financial management has two distinct parts: the short term and the long term. Every year associations have to prepare a budget. Most of the line items in the budget are for ongoing operations and maintenance. Examples of these are tree-trimming, grass cutting, professional fees, insurance, etc. […]
Why You Should Fund Reserves
In Florida, it is not required for associations to fully fund reserves or fund reserves at all for that matter. Many older associations never set up reserves and would just issue a special assessment to their members when it came time to repair a capital item or asset. Most Equitable Way to Do Things This […]
Partially Funding Reserves Leads to Special Assessments
When budget season comes around, expenses seem to keep adding up. There might be some temptation by members of the community to take a shortcut to save some money. One possible idea is to only partially fund reserves. By Florida statutes, members of an association do not have to fully fund reserve accounts (you have […]
Five Ways to Avoid a Special Assessment
In a community association, the most dreaded phrase you can hear is “special assessment.” A special assessment is a real property tax proportionately levied on homeowners and landowners to cover the costs of improvements that will be for the benefit of all upon whom it is imposed. Special assessments come in all shapes and sizes. […]