Association Reserves


Reserves is a Hot Topic with mortgage lenders and that makes it important to all Associations.

Homeowners Associations have to carefully consider not only their short-term expenses, but their long-term expenses as well. What will be considerable cost items for capital improvements and repairs that will exceed the scope of and associations typically – one – year budget period? Reserves aren’t rainy day money, but specifically-earmarked funds. Think of it as a row of buckets of money… Roofs, Roads, Fitness equipment, Major renovations, Pool equipment… The idea is to make sure that the money is in the bucket when the cost comes due.

While many homeowners associations in South Carolina have a modest and workable amenity package where responsibilities and cost can be readily figured, many associations have a complex reserve picture.

For those communities who have a complex amenity structure or unknown lifespans of their assets, Community Management Group advises retaining a professional, Certified Reserve Specialist. A professional will prepare a reserve study which considers the lifespan, known and projected costs of major repairs, renovations and replacements of association assets. When complete, the reserve professional will present your Association Board with two or three basis types for consideration of allocating funds to a reserve fund.

A well funded Association reserve is a tremendous asset and something that mortgage lenders often ask an association manager about in the lending process. Conversely, a homeowners association with considerable unbudgeted expenses can end up facing special assessments and related unpleasantness when costs come due.

Skilled and experienced homeowners association managers can guide you through the process and bring you competitive proposal for a professional reserve analysis and they can also work with your board or committee’s to complete the essential process of ensuring your long-term financial needs are met.


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