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Should the HOA members all receive a copy of a Reserve Study?

Started by ThomasD2 • 11 replies • 1989 views

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ThomasD2 (California)
Posts: 208
Posted:
I'm in Southern California in an HOA of 22 units. I've written my frustrations here before. At a recent board meeting I understood we completed a new reserve study about six weeks ago. This is the more complete study with visual inspection. I asked the property manager for a copy and she forwarded one to me. She also indicated it would be posted on the HOA website during the next few days. It has been three weeks and no posting.

We used to send a copy to all the HOA members, but have not done so in about five years. There is, however, always a summary of the financial findings in the December yearly budget summary. I noticed in old posting that SusanW1 of Michigan said "Once the Reserve Study is approved or acknolwdged as a plan by the board, it becomes a part of the minutes as an attachment. You can request a copy and according to your state laws or documents, you have access to all legal records." Is that true; if it is an attachment to the minutes why would you need to request a copy otherwise? Does the board have to send out a copy to everyone? Or merely make it available? I found only this at CA's Davis Stirling codes: "Study Required. All associations, regardless of size, are required to prepare a reserve study. (Civ. Code §1365(a).)" But what about distribution?
CarolR11 (Colorado)
Posts: 2,563
Posted:
Go to Davis-stirling.com, Thomas. It's complied by CA HOA attorneys. Click on Main Index and then Reserves.

My memory is that the study must be given to homeowners upon written request., but it doesn't need to be distributed to all owners. Attachments to minutes also may be had upon homeowner request.

What I can't recall offhand is if a summary of your reserves study must be sent annually to owners. Again, visit the above site. We do send a summary every year, but I can't remember if it's required. I think so and it must contain certain pieces of information.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
It also be a cost consideration. Copies, supplies, and stamps cost money. Simply filling the request upon request is a cheaper way to go. Not posting it depends on how secure your website is. This should be for members only access not public. So that may be why not posted. It could be they only have a hard copy and never copied it electronically. Many reasons could be in play. Ask some questions.
Former HOA President
ThomasD2 (California)
Posts: 208
Posted:
Quote:
Posted By CarolR11 on 11/03/2013 10:54 AM
Go to Davis-stirling.com, Thomas. It's complied by CA HOA attorneys. Click on Main Index and then Reserves.

My memory is that the study must be given to homeowners upon written request., but it doesn't need to be distributed to all owners. Attachments to minutes also may be had upon homeowner request.

What I can't recall offhand is if a summary of your reserves study must be sent annually to owners. Again, visit the above site. We do send a summary every year, but I can't remember if it's required. I think so and it must contain certain pieces of information.

At Davis Stirling it appears to indicate that the financial findings do indeed need to be summarized in the annual budget summary. But no requirement that the reserve study must be delivered to the HOA members, only that it be made available. So your summary is correct. Of course, since the board meeting minutes are always many months late, it is unlikely the homeowners will be aware the full study was completed ...
RichardP13 (California)
Posts: 1,767
Posted:
Thomas

Have it available on a website page, either public or private.

In California, to cut down on postage, it should be a strong consideration to get as many homeowners to opt-in to electronic communication. Of the three costly yearly distributions, (annual financial report, annual disclosures and annual elections) two can be handled electronically.
CarolR11 (Colorado)
Posts: 2,563
Posted:
In CA, draft minutes must be available for review by homeowners 30 days after the meeting in question. Since you have a PM, any owner can ask to see the draft minutes. The PM can charge them for copies.

Unless your governing documents say so, minutes do not need to be sent to owners.

Does your board meet monthly?

As Richard points out, of the three documents he mentions, only the ballots need to go to owners by US mail. The other materials can be sent electronically if owners opt in and get on the list.

But, I think something else is bothering you Thomas. Why are you so interested in all owners reading the reserves study? Is there something about it that troubles you? In an HOA your size, I don't think there'd be a lot of components on it. Do you think your reserves are underfunded? Or that items that should be on it are not? Or?
ThomasD2 (California)
Posts: 208
Posted:
Quote:
Posted By CarolR11 on 11/03/2013 2:55 PM
In CA, draft minutes must be available for review by homeowners 30 days after the meeting in question. Since you have a PM, any owner can ask to see the draft minutes. The PM can charge them for copies.

But, I think something else is bothering you Thomas. Why are you so interested in all owners reading the reserves study? Is there something about it that troubles you? In an HOA your size, I don't think there'd be a lot of components on it. Do you think your reserves are underfunded? Or that items that should be on it are not? Or?

Minutes are usually posted to our (private) website about 6 months after the meetings. I think this happens because I may be the only person who usually requests them, the board is irritated by my reminders that issuing them so late is a violation of the law. I've written about this here before. I often urge my neighbors to request the minutes, but don't think they do.

It bothers me that we spend money on these studies, while they are rarely read. I think one of the reasons is that few of my neighbors are aware the studies exist. I was also upset that the reserve study contained factual errors, but no one on the board tells the company that wrote the study. For instance the reserve study indicated the security camera appeared to be in decent condition, although they noted they were unable to test its functions to see if it was recording properly. The camera is a scarecrow; it has no working functions whatsoever. Doing these expensive studies seems like a charade.
RichardP13 (California)
Posts: 1,767
Posted:
Thomas

In my opinion, but the reserve study must be used to properly prepare next years budget.
TimB4 (Tennessee)
Posts: 21,059
Posted:
Quote:
Posted By ThomasD2 on 11/03/2013 10:46 AM
At a recent board meeting I understood we completed a new reserve study about six weeks ago. This is the more complete study with visual inspection. I asked the property manager for a copy and she forwarded one to me. She also indicated it would be posted on the HOA website during the next few days. It has been three weeks and no posting.

Thomas, perhaps that individual isn't as adapt at uploading documents for members to view. Perhaps they simply haven't had the time to accomplish that task.

You may want to consider volunteering to administer the website and take on the responsibility of posting things so they are available to the membership. The Board may or may not take you up on the offer. However, at least you would have tried to offer a solution to the issue.
SheliaH (Indiana)
Posts: 6,964
Posted:
Quote:
Posted By ThomasD2 on 11/03/2013 3:50 PM
Posted By CarolR11 on 11/03/2013 2:55 PM
In CA, draft minutes must be available for review by homeowners 30 days after the meeting in question. Since you have a PM, any owner can ask to see the draft minutes. The PM can charge them for copies.

But, I think something else is bothering you Thomas. Why are you so interested in all owners reading the reserves study? Is there something about it that troubles you? In an HOA your size, I don't think there'd be a lot of components on it. Do you think your reserves are underfunded? Or that items that should be on it are not? Or?


Minutes are usually posted to our (private) website about 6 months after the meetings. I think this happens because I may be the only person who usually requests them, the board is irritated by my reminders that issuing them so late is a violation of the law. I've written about this here before. I often urge my neighbors to request the minutes, but don't think they do.

It bothers me that we spend money on these studies, while they are rarely read. I think one of the reasons is that few of my neighbors are aware the studies exist. I was also upset that the reserve study contained factual errors, but no one on the board tells the company that wrote the study. For instance the reserve study indicated the security camera appeared to be in decent condition, although they noted they were unable to test its functions to see if it was recording properly. The camera is a scarecrow; it has no working functions whatsoever. Doing these expensive studies seems like a charade.

It may seem to be a charade, but it sounds like part of the problem is the Board didn't provide a clear explanation of why reserve studies are commissioned and how it'll be used to prepare future budgets. As for your neighbors, it's unfortunate they don't seem interested in reviewing the minutes (if they won't review that, how can you expect them to wade through a reserve study?)

There may also be an issue as to whether the Board itself really understands what the study reveals and so they stonewall you because they really don't know the answer to the questions either. Or they don't like what it says and would rather keep quiet, otherwise people would question their competency.

Perhaps your board can bring in the reserve specialist to make a presentation on the study and people can ask questions on what's in it, why certain things were and weren't included, etc. If it's a halfway decent company, that option should have been presented to the board at the start - that's one of the first questions I asked our reserve specialist when we did our study last year.

We also prepared a summary in the newsletter, which began with an explanation of what reserve studies are and how they're used, along with definitions of a few technical terms. We'd reviewed the study with our reserve specialist before it was published and also gave homeowners the option of ordering a copy (they had to pay a nominal fee to cover printing and postage or they could get it relatively quickly if they had email).
If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
CarolR11 (Colorado)
Posts: 2,563
Posted:
Again, Thomas, visit davis-stirling.com, Main Index, Reserves, Reserves Study Required, to see that they are indeed required in CA. Do read the exceptions, Thomas, and who is permitted to conduct the study.

Your frustration seems to stem from homeowners who simply aren't interested in the governance of your HOA or the details of your finances. If you personally cannot encourage their interest, you're without support for your concerns. Even if every owners had a copy of the detailed study, no one can force them to read it.

Our study termed a small fridge in a little lounge off our Billiards Rm., a "dishwasher." Mistakes happen. Since you have a PM, most likely s/he accompanied the analyst around your premises.

If you have questions, Thomas, ask directors at the open forum of the next meeting.

Sheila might be right. Perhaps Thomas' board doesn't understand the study. Sadly, most members of the board in my HOA don't either. I'm the only director who's actually read the details of ours (we have over 200 components).
ThomasD2 (California)
Posts: 208
Posted:
Quote:
Posted By CarolR11 on 11/04/2013 3:00 PM
Again, Thomas, visit davis-stirling.com, Main Index, Reserves, Reserves Study Required, to see that they are indeed required in CA. Do read the exceptions, Thomas, and who is permitted to conduct the study.

Your frustration seems to stem from homeowners who simply aren't interested in the governance of your HOA or the details of your finances. If you personally cannot encourage their interest, you're without support for your concerns. Even if every owners had a copy of the detailed study, no one can force them to read it.

Our study termed a small fridge in a little lounge off our Billiards Rm., a "dishwasher." Mistakes happen. Since you have a PM, most likely s/he accompanied the analyst around your premises.

If you have questions, Thomas, ask directors at the open forum of the next meeting.

Sheila might be right. Perhaps Thomas' board doesn't understand the study. Sadly, most members of the board in my HOA don't either. I'm the only director who's actually read the details of ours (we have over 200 components).

I think you are right in saying that even if all the owners received a copy of the Reserve Study, no one can force them to be interested in it.

The board forwards meeting minutes months too late, and the property manager is going to be so tardy in posting the reserve study that it will lose all currency. The property manager should repeatedly ask the board to forward the minutes (which will make HOA members aware of the reserve studies existence) and the board should repeatedly ask the PM to post the reserve study. Unfortunately I think I will be the only one asking about these things. The homeowners have to care for any progress to be made.

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