reserve studies

Started by AnthonyS5 • 3 replies • 1252 views

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AnthonyS5 (Florida)
Posts: 39

Posted:

Hello,

Our subdivision is nearing it's completion of homes being built by the developer. I am a board member but the developer's board is still in control of the decision making process. I am get mixed responses regarding reserve studies. I know it is wise to have a reserve study completed. Question is, is it wiser to have a professional study at a cost to the HOA (because I am told once you have a professional do the reserve study you must use that specific formula for your reserve funds moving forward.) On the other hand, has anyone known an HOA to complete its own reserve study to save money? and if so, how can I go about doing this?

DouglasK1 (Florida)
Posts: 2,046

Posted:

Here is some reading on the topic to get you started:
http://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/103517/view/topic/Default.aspx
http://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/206615/view/topic/Default.aspx

Whether you do your own or have it done depends on several factors including the size of the association (and how big the budget is) and the amount of infrastructure your HOA is responsible for.

In our fairly small (65 home) single family home HOA we've done it ourselves since there is a reluctance to spend 10% of our annual budget to have one done. I know of no Florida state law that mandates that if you use a particular formula that you have to stick with it forever, I'd ask the source of that info to cite a law, CCR clause, or something else to back that up.

City and county law can also have some bearing on reserve requirements. My county (Orange) has no specific requirement for a study, but does identify 5 distinct reserves that have to be maintained for gated communities. For those interested, they are:
(1) A routine-infrastructure-maintenance account;
(2) A capital-repair/streets account;
(3) A capital-repair/drainage pond account;
(4) A capital-repair/other infrastructure account; and
(5) A storm debris removal account.

On the off chance that you are a gated community in Orange County, here is a link: http://orangecounty-fl.elaws.us/code/coor_ptii_ch34_artviii_div2_sec34-291

Escaped former treasurer and director of a self managed association.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Anthony,

You were given some good information.

If you are in an HOA (not a condominium) and have limited amenities (no pool, rec room or club house), you can likely do a Reserve study on your own.

We did our first reserve study on our own.
We paid for the second one but didn't like the methodology used, so utilized the info the expert provided and did the second one on our own.

The link Douglas provided goes to a thread about reserves. Within that thread are links on how to do your own as well as links on understanding what a study is telling you. Some of the earlier links in that thread are broken but have been fixed later in the thread.

Hope this helps,

Tim

AnthonyS5 (Florida)
Posts: 39

Posted:

Thank you Tim & Douglas, I am reviewing those links now. I appreciate the insight !

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