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Finance Reserves

When it comes to finances, homeowners’ associations (HOA) operate like any other corporation or business. HOAs have different accounts set up to pay for different things. A checking account to pay for everyday expenses, and separate savings and investment accounts set aside for future repairs and improvements. While appropriately funded spending and savings accounts are crucial to a well-run association, the savings part of the equation can often get ignored. Some studies estimate that nearly 70% of HOAs in the United States are underfunded and lack the proper savings to pay for major projects or repairs.

Resources

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You Need to Know About Reserve Funds & Studies

When it comes to finances, homeowners' associations (HOA) operate like any other corporation or business. HOAs have different accounts set up to pay for different things.

Bulding Condition Assessments And Reserve Fund Studies

Your co-op will want a solid plan for maintaining its buildings and properties for the benefit of current members and those who will live there in years to come.

Building Condition Assessment & Reserve Fund Study

The Agency has developed these guidelines to help your co-op understand the content of your draft Building Condition Assessment & Reserve Fund Study (BCA & RFS). Unless you understand the draft, you can’t review it properly to ensure that the final report is as accurate as possible.

Questions and Answers Underfunded Reserves

When we review your co-op's Annual Information Return (AIR), we look closely at your capital-replacement reserve. We also check to see how much money you hold in cash and investments. Sometimes we see that a co-op has less in cash and investments than it holds on paper in its reserve. In other words, the reserve is underfunded.

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