Is the Generalized Inadequacy of Saving $$ for HOAs Incredulous? Or What?

Studies in California show that most HOA and Condo associations in the State are seriously underfunded in reserves (savings for replacement of major components like roofs, siding, etc.), with 60% or less in funding (savings) of what the reserve studies say should be set aside at any given time. It is no secret that many associations are facing large special assessments for large projects because available funds are inadequate.

A board president who attends a lot of the industry educational seminars and events recently said to me:

“I’m always amazed when I visit with people who think their reserves are healthy when they are 40-50% funded.”

It is amazing, because they are either missing the point or in denial about the fact that this kind of accounting and savings means a large special assessment is probably inevitable. However, on the other hand, most Americans are much less than 40-50% funded in saving for large projects for their homes such as roofs, siding or painting, and have to scrounge for money when it’s time to pay the Piper, so maybe its not so amazing. Maybe it’s just a faulty mentality.

  • Share/Bookmark

Sorry, comments are closed for this post.