Building A Condo Association Reserve Fund Or Hoa Reserve Funds Requires Extreme Expertise

By Author: Jessica Smith
Total Articles: 9
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Building a condo association reserve fund or HOA reserve funds is an essential consideration for condominium and homeowners associations. However, getting the right start is the most important consideration – with a quality reserve study, an ideal fund can be built to accommodate maintenance and replacement needs into the future.

Understanding Reserve Studies

Whether you represent a homeowners association or a condo association, it’s important that you understand just how vital reserve studies are to building up the ideal reserve fund for your specific needs. It’s also important to understand that no two HOA reserve funds will be identical. The Federal Housing Authority (FHA) has brought more scrutiny to homeowner associations reserve funds as a result of recent mortgage problems. The FHA typically requires a fund that is at least 10% of the association’s budget to be used on major capital expenditures or emergency repairs. Each situation differs considerably, based on specifics about the site, the development’s age and other criteria.

Reserve studies form the basis for decision making in regards ...
... to reserve funds. Without an accurate, in-depth study performed by a reputable architectural firm, you will not have the essential information on which to base your reserve funds.

What Should a Reserve Study Include?

It’s important to understand what a reserve study should include. First, you should ensure that the study includes an in-depth, individualized inspection of your site, from the ground up (interior and exterior). Many studies only include major components that experience wear, such as HVAC systems or common areas. However, not all architectural firms will include important areas of the property and some firms do not include important structural items in their study.

The Right Architectural Firm

Choosing the right architectural firm is very important – the ideal firm will understand from the outset that reserve studies to create HOA reserve funds should be tailored to the specifics of your particular property or neighborhood. There’s no such thing as a one-size-fits-all reporting method. The time must be taken to create a detailed, specific report based on the exact conditions present at your property.

The entire purpose of a reserve study is to allocate the appropriate resources to a condo association reserve fund (or a fund for your HOA) to be used for major repair and replacement of essential components and equipment at your property.

Without a reserve study based on your property’s exact situation, that will not be possible.

When your reserve study has been completed and delivered, you can begin planning your reserve fund. With a study from a high quality architectural firm, it should be relatively simple to start building a fund that will not only address your property’s maintenance and repair concerns now, but will put you in a good position for the future.

J. Hershey Architecture is a premier full service architectural design and consulting firm specializes in home additions and renovations. We provides high quality HOA, Capital, FHA and condo association reserve fund for properties situated in Libertyville and throughout the Illinois.