An area where a lot of HOA board members get into trouble relate to properly understanding the operating fund and the reserve fund in a homeowners association. If the two funds aren’t properly maintained a Board can be setting up the Association for failure and don’t even know it. It’s crucial that Boards understand how to use the operating fund and reserve fund, and use them correctly so they don’t find the Association in financial ruin.
“What is a reserve study and how do we do one?” This is an important question that board members should be asking in your homeowners association. If you don’t know the last time a reserve study was done in your association or why you should even do one, then you’re in the right place to learn the answers to frequently asked questions about reserve studies.
An HOA Reserve Fund is one of the most important things a Board can plan for its association, however, many Board members misunderstand what it is, why it’s needed, or how to get it implemented. Knowing the basics about an HOA reserve fund and the reasons it’s crucial you have one will help set your community up for success.