What is an HOA Reserve Study and does your community need one?
Why Get A HOA Reserve Study?
An HOA reserve study is a financial planning tool used by homeowners’ associations (HOAs) to determine the current and future financial needs of the community for long-term maintenance and repairs of the common areas and amenities. It involves an examination of the physical components of the community and an analysis of their remaining useful lives, as well as an estimate of the costs associated with their eventual replacement.
The process of an HOA reserve study typically involves the following steps:
- Inspection of common areas and amenities: A professional reserve study consultant will conduct an inspection of the community’s common areas and amenities to identify any current or potential problems and determine the remaining useful lives of each component.
- Review of financial records: The consultant will also review the HOA’s financial records, including the budget, past expenditures, and any outstanding liabilities, to get a clear picture of the community’s current financial situation.
- Projection of future costs: Based on the information gathered during the inspection and financial review, the consultant will project the costs of future repairs and replacements for each component, taking into account inflation and other factors that may affect cost.
- Preparation of the reserve study report: Once the information is collected and analyzed, the consultant will prepare a detailed report that includes a summary of the findings, a list of recommended repairs and replacements, and a funding plan for the community’s reserve fund.
- Review and implementation: The HOA board will review the report and work with the consultant to implement the recommended actions.
It is important to note that The Shingle Master, a local family-owned roofing company can also help your HOA with a reserve study for the roofing systems of your community. We will provide you with a report on the current condition of the roofing systems, the remaining useful life, and the estimated cost for any repairs or replacements that may be needed in the future.