LmT (California)
Posts: 237
Posts: 237
Posted:
We are a California HOA. In our community we have several decaying trees that need to be removed. Is this an expense that can be taken from reserves?
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Tree Removal
Started by LmT • 29 replies • 533 views
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MarkM19 (Texas)
Posts: 1,459
Posts: 1,459
Posted:
LMT,
I lived in a large HOA as the president between 2009 and 2017 we had 1700 trees that were owned on HOA land. The short answer is the Trees are not part of the Reserves IMO. They should be handled out of the operating account and should be a budgeted item annually. Trees do have a lifespan depending on the type of Tree and when and if they fail, they are replaced. The problem always was if a 30 or 40 ft tree fall, they don't get replaced with a similar sie tree they get replace with a 20-gallon tree in many cases.
I lived in a large HOA as the president between 2009 and 2017 we had 1700 trees that were owned on HOA land. The short answer is the Trees are not part of the Reserves IMO. They should be handled out of the operating account and should be a budgeted item annually. Trees do have a lifespan depending on the type of Tree and when and if they fail, they are replaced. The problem always was if a 30 or 40 ft tree fall, they don't get replaced with a similar sie tree they get replace with a 20-gallon tree in many cases.
MelissaP1 (Alabama)
Posts: 13,836
Posts: 13,836
Posted:
This is an operational expense. Capital expenditures like road/roofs/or other long term big end projects are reserves. We had to tackle the tree issue. There are factors need to look into. Are these trees on HOA common property? If not, did the HOA approve for the trees to be planted? These details matter on who would pay for the tree removal. It may be a granting an owner allowance to remove the trees. It may be on the HOA dime. Meaning your HOA dues pay for it. That is an EVERY owner expense versus individual.
Our HOA we owned the land around your house. That meant the HOA owned the trees. We did use our dues money to remove the tree. We did it by either special assessment, raise of dues, or if you got the money.
Our HOA we owned the land around your house. That meant the HOA owned the trees. We did use our dues money to remove the tree. We did it by either special assessment, raise of dues, or if you got the money.
Former HOA President
LetA (Nevada)
Posts: 2,679
Posts: 2,679
Posted:
The short answer is Yes and No. Our reserve study calls for landscaping refresh and renew and we do those actions at that time.
A decaying tree will be cut down and the stump grounded during the refresh and renew. If the tree needed to be removed because of an
act of God or some act of vandalism or collision, then it would come out of operational budget.
A decaying tree will be cut down and the stump grounded during the refresh and renew. If the tree needed to be removed because of an
act of God or some act of vandalism or collision, then it would come out of operational budget.
KerryL1 (California)
Posts: 14,550
Posts: 14,550
Posted:
While my HOA, which has a couple of dozen 20 y.o. palms of various kinds and a huge coral tree has no reserves for them, many HOAs do have a reserve line items for trees.
But if yours are not in your reserves study, you may not, by statute, use reserves to remove or replace them. See Davis-stirling.com, a CA HOA lawyer firm for more about Reserves, which you'll find in their fabulous Index. (If you need to, for instance, it's possible to borrow from reserves in CA with certain restrictions)
You board should consult with your reserves analyst or specialist about whether you should start reserving for tree removal and/or replacement.
But if yours are not in your reserves study, you may not, by statute, use reserves to remove or replace them. See Davis-stirling.com, a CA HOA lawyer firm for more about Reserves, which you'll find in their fabulous Index. (If you need to, for instance, it's possible to borrow from reserves in CA with certain restrictions)
You board should consult with your reserves analyst or specialist about whether you should start reserving for tree removal and/or replacement.
TimB4 (Tennessee)
Posts: 21,059
Posts: 21,059
Posted:
If the trees were identified as a reserve item - then yes. Otherwise, no.
However, you can borrow from the reserves with a plan to pay the reserves back.
I would strongly suggest having an arborist evaluate all the trees on your property and come up with a five year plan.
This is what we did and it allowed us to deal with the issue as an operational expense with no need to borrow from the reserves.
In Northern Virginia, we ran $600 to $1200 for removals and $300 to $500 for stump grinding.
However, you can borrow from the reserves with a plan to pay the reserves back.
I would strongly suggest having an arborist evaluate all the trees on your property and come up with a five year plan.
This is what we did and it allowed us to deal with the issue as an operational expense with no need to borrow from the reserves.
In Northern Virginia, we ran $600 to $1200 for removals and $300 to $500 for stump grinding.
MelissaP1 (Alabama)
Posts: 13,836
Posts: 13,836
Posted:
A small but big detail need to know prior to removing the trees is your city or county policy on removal of the debris. Each city or county can be different. Our city if you were an INDIVIDUAL owner whom removed the trees then the debris was picked up for free. Just put at the road. However, if you hired a PROFESSIONAL to remove the trees, they did not pick the debris up. Had to factor in the expense in your contract for debris removal. This can save your HOA money knowing this information when hunting for a professional tree service. Which should hire to do the job. Licensed, insured and preferably owned/operated by an arborist. This isn't something your should undertake on your own.
I had this happen when our scumsucking ex-president would cut down trees. The city got wind he was a paid contractor and refused to pick up the debris. (Guess where the wind came from?) So he then would go to the HOA and "offer" to remove the tree debris for the HOA for a fee. (So nice of him wasn't it?). Hence why you really need to vet your contractors out by reading BBB reviews. (I caught on to the Scumsucker scams and nipped them).
I had this happen when our scumsucking ex-president would cut down trees. The city got wind he was a paid contractor and refused to pick up the debris. (Guess where the wind came from?) So he then would go to the HOA and "offer" to remove the tree debris for the HOA for a fee. (So nice of him wasn't it?). Hence why you really need to vet your contractors out by reading BBB reviews. (I caught on to the Scumsucker scams and nipped them).
Former HOA President
ElleN (Idaho)
Posts: 4,420
Posts: 4,420
Posted:
Quote:
Posted By TimB4 on 07/14/2023 1:09 AM
If the trees were identified as a reserve item - then yes. Otherwise, no.
If the trees were identified as a reserve item - then yes. Otherwise, no.
I agree with TimB4 that borrowing from the reserves might be something to investigate.
In my opinion California boards and Florida boards, in particular, must increasingly take a longer, more cautious view with regard to budgeting and reserves.
JamesV3 (New Hampshire)
Posts: 50
Posts: 50
Posted:
We budget yearly for this. Line item specific "Tree Work" approx 5K
We also have a "Landscaping Extras" Line item as well approx 5K yearly.
This doesn't effect our Regular Landscaping/Snow plowing Numbers.
4 years ago before I joined the board at a meeting I suggested a long term plan for tree work as trees were hitting the buildings to lack of care damaging roofs and siding. Every year since I joined the board we do the most critical trimming. This October we will be looking at the long term as the last couple of years rainfall is below normal and we have trees that are in rough shape. Plus winter storm/ wind issues crop up every year here in NH.
We also have a "Landscaping Extras" Line item as well approx 5K yearly.
This doesn't effect our Regular Landscaping/Snow plowing Numbers.
4 years ago before I joined the board at a meeting I suggested a long term plan for tree work as trees were hitting the buildings to lack of care damaging roofs and siding. Every year since I joined the board we do the most critical trimming. This October we will be looking at the long term as the last couple of years rainfall is below normal and we have trees that are in rough shape. Plus winter storm/ wind issues crop up every year here in NH.
JohnC46 (South Carolina)
Posts: 14,265
Posts: 14,265
Posted:
We carry a budget item Landscape Repairs. We would pay for tree removal under this item meaning an operating, not a Reserve Item.
MarkM19 (Texas)
Posts: 1,459
Posts: 1,459
Posted:
When I got on my first board 15+ years ago I knew nothing about Trees. Since then I have learned more than I ever thought I would need.
They are an asset to any community. They are also a Liability. It is important to maintain them and make sure that they get pruned and thinned out at least every couple of years. If they get too thick in the middle the wind does not go through them as it should, and you run the risk of them falling. This can cause damage to fences and cars parked along the streets.
As others have stated it really should have a line in most HOAs budget.
They are an asset to any community. They are also a Liability. It is important to maintain them and make sure that they get pruned and thinned out at least every couple of years. If they get too thick in the middle the wind does not go through them as it should, and you run the risk of them falling. This can cause damage to fences and cars parked along the streets.
As others have stated it really should have a line in most HOAs budget.
KerryL1 (California)
Posts: 14,550
Posts: 14,550
Posted:
So, LmT, you can see replies are all over the place. Assuming you're a board member, urge the Board to consult closely with your reserves analyst for their advice about IF the trees--all trees?, old trees? -- should be in your reserve study and if so, in what format? Best, by far, to rely on experts vs. posters here no matter how seasoned they might be with board service. Your analyst also may encourage you to have an arborist give an opinion.
KerryL1 (California)
Posts: 14,550
Posts: 14,550
Posted:
So, LmT, you can see replies are all over the place. Assuming you're a board member, urge the Board to consult with your reserves analyst for their advice about IF the trees--all trees?, old trees? -- should be in your reserve study and if so, in what format? Best, by far, to rely on experts vs. posters here no matter how seasoned they might be with board service. Your analyst also may encourage you to have an arborist give an opinion.
MarkM19 (Texas)
Posts: 1,459
Posts: 1,459
Posted:
Kerry,
I am going to politely explain our All over the place replies. When a poster gives limited info as this person has done it leaves much to our own thoughts as to all the missing information. Here are questions if LmT ever checks the post.
1) Are you on the board?
2) Are the decaying trees on HOA property or owners property?
3) Have you seen the budget or the Reserve study?
I personally wish in the posting rules a few simple suggestions could be added so that we do not get the vague questions and also a reminder that responses come quickly and make sure that the poster knows to get notified when posts are answered.
I am going to politely explain our All over the place replies. When a poster gives limited info as this person has done it leaves much to our own thoughts as to all the missing information. Here are questions if LmT ever checks the post.
1) Are you on the board?
2) Are the decaying trees on HOA property or owners property?
3) Have you seen the budget or the Reserve study?
I personally wish in the posting rules a few simple suggestions could be added so that we do not get the vague questions and also a reminder that responses come quickly and make sure that the poster knows to get notified when posts are answered.
KerryL1 (California)
Posts: 14,550
Posts: 14,550
Posted:
No explanation needed, Mark : ) I sure as heck am not criticizing. I think the variety of replies are really useful to the OP because they show there are a lot of ways to think about this topic. And, from what we know now and your questions, I feel safe in believing, "It depends..."
Imo, tho', any items that boards are considering placing in reserves need such an analyst's expert opinion. As you know, this in part will be based on the climate where the OP is, which a local reserves specialist will know. It's really possible the latter will rec an arborist. It's really possible there should be a reserve line item or two and also an operating budget line item.
It's also really possible that the experts might advise that xx # of trees would be removed every year. On that kind of schedule, the operating budget-- especially for skirting and lacing annually, as we do, makes the most sense especially since annual expenditures should not be in reserve studies. There really are a lot of things to think about & analyze.
Imo, tho', any items that boards are considering placing in reserves need such an analyst's expert opinion. As you know, this in part will be based on the climate where the OP is, which a local reserves specialist will know. It's really possible the latter will rec an arborist. It's really possible there should be a reserve line item or two and also an operating budget line item.
It's also really possible that the experts might advise that xx # of trees would be removed every year. On that kind of schedule, the operating budget-- especially for skirting and lacing annually, as we do, makes the most sense especially since annual expenditures should not be in reserve studies. There really are a lot of things to think about & analyze.
ElleN (Idaho)
Posts: 4,420
Posts: 4,420
Posted:
Quote:
Posted By KerryL1 on 07/14/2023 2:36 PM
No explanation needed, Mark : ) I think the variety of replies are really useful to the OP because they show there are a lot of ways to think about this topic.
No explanation needed, Mark : ) I think the variety of replies are really useful to the OP because they show there are a lot of ways to think about this topic.
California is highly regulated when it comes to reserve spending and borrowing. The board has a very limited set of options here. The board's decision will very much depend on a close reading of California statutes.
In certain other states, boards have a lot more flexibility when it comes to how to pay for something like tree removal.
KerryL1 (California)
Posts: 14,550
Posts: 14,550
Posted:
My 07/14 3:03 AM remarks summarize the 2 statutes in Elle's recently added citations. I repeat "But if yours [trees] are not in your reserves study, you may not, by statute, use reserves to remove or replace them. See Davis-stirling.com...for more about Reserves, which you'll find in their fabulous Index. (If you need to, for instance, it's possible to borrow from reserves in CA with certain restrictions)"
I have no idea why Elle pretends I neglected summarizing these important statutes including my directions to the OP how to access the info, especially about reserves in general. (Elle once already repeated in the earlier post, the possibility of borrowing from reserves, which is clear in my way above).
How to think about and analyze what to do about an HOA's trees has a variety of solutions--some are right in this thread-- that might be advisable. These general options are not restricted by CA statutes.
I have no idea why Elle pretends I neglected summarizing these important statutes including my directions to the OP how to access the info, especially about reserves in general. (Elle once already repeated in the earlier post, the possibility of borrowing from reserves, which is clear in my way above).
How to think about and analyze what to do about an HOA's trees has a variety of solutions--some are right in this thread-- that might be advisable. These general options are not restricted by CA statutes.
TerriS6 (California)
Posts: 3,284
Posts: 3,284
Posted:
Kerry, when a person has ALL the answers, there is no need to read the comments of others.
MarkB28 (New York)
Posts: 40
Posts: 40
Posted:
Yes, reserves are also known as Deferred Maintenance. In other words, every year there is usually money in the budget, e.g. $1,000, put towards reserves so when a unexpected maintenance item comes up, like the one you described, money is available to deal with that.
KerryL1 (California)
Posts: 14,550
Posts: 14,550
Posted:
That's true as far as it goes, MarkB. In A, and perhaps in many stats funds in reserves may only be expensed for components that are listed in the reserve study.
KellyM3 (North Carolina)
Posts: 2,239
Posts: 2,239
Posted:
My opinion is that the spot removal of an individual tree falls under operational expenses.
Wholesale removal of several trees with replacement options falls under capital or reserve expenses due to the sheer scale. I also understand that Reserve Studies can be comprehensive and still not list every conceivable capital project.
I'd say communicate with transparency, explain to the dues payers (or discuss it in open meetings) any likely effect on other capital project plans and, if approved, tap your reserve funds to remove and replace multiple trees. This project is bigger than basic maintenance or "ordinary expense."
Of course, plan better in the future.
Wholesale removal of several trees with replacement options falls under capital or reserve expenses due to the sheer scale. I also understand that Reserve Studies can be comprehensive and still not list every conceivable capital project.
I'd say communicate with transparency, explain to the dues payers (or discuss it in open meetings) any likely effect on other capital project plans and, if approved, tap your reserve funds to remove and replace multiple trees. This project is bigger than basic maintenance or "ordinary expense."
Of course, plan better in the future.
KerryL1 (California)
Posts: 14,550
Posts: 14,550
Posted:
In CA, Civil Code states reserve funds can't be spent on anything except what's designated as reserve funds. That might be different than in NC.
CA Civ. Code 55110(b) "The board shall not expend funds designated as reserve funds for any purpose other than the repair, restoration, replacement, or maintenance of, or litigation involving the repair, restoration, replacement, or maintenance of, major components that the association is obligated to repair, restore, replace, or maintain and for which the reserve fund was established."
CA Civ. Code 55110(b) "The board shall not expend funds designated as reserve funds for any purpose other than the repair, restoration, replacement, or maintenance of, or litigation involving the repair, restoration, replacement, or maintenance of, major components that the association is obligated to repair, restore, replace, or maintain and for which the reserve fund was established."
KerryL1 (California)
Posts: 14,550
Posts: 14,550
Posted:
In CA, Civil Code states reserve funds can't be spent on anything except what's somewhere designated as reserve funds. That might be different than in NC.
CA Civ. Code 55110(b) "The board shall not expend funds designated as reserve funds for any purpose other than the repair, restoration, replacement, or maintenance of, or litigation involving the repair, restoration, replacement, or maintenance of, major components that the association is obligated to repair, restore, replace, or maintain and for which the reserve fund was established."
CA Civ. Code 55110(b) "The board shall not expend funds designated as reserve funds for any purpose other than the repair, restoration, replacement, or maintenance of, or litigation involving the repair, restoration, replacement, or maintenance of, major components that the association is obligated to repair, restore, replace, or maintain and for which the reserve fund was established."
KellyM3 (North Carolina)
Posts: 2,239
Posts: 2,239
Posted:
Quote:
Posted By KerryL1 on 07/16/2023 3:31 PM
In CA, Civil Code states reserve funds can't be spent on anything except what's somewhere designated as reserve funds. That might be different than in NC.
CA Civ. Code 55110(b) "The board shall not expend funds designated as reserve funds for any purpose other than the repair, restoration, replacement, or maintenance of, or litigation involving the repair, restoration, replacement, or maintenance of, major components that the association is obligated to repair, restore, replace, or maintain and for which the reserve fund was established."
In CA, Civil Code states reserve funds can't be spent on anything except what's somewhere designated as reserve funds. That might be different than in NC.
CA Civ. Code 55110(b) "The board shall not expend funds designated as reserve funds for any purpose other than the repair, restoration, replacement, or maintenance of, or litigation involving the repair, restoration, replacement, or maintenance of, major components that the association is obligated to repair, restore, replace, or maintain and for which the reserve fund was established."
I read that section as allowing for the replacement of multiple trees in the community. The loss of an entire grouping of trees should exceed reasonable operations budget expectations and thus be considered capital expenses. Otherwise, you have HOA boards creating operations budgets with vastly presumptive expense estimates that are too high as to cover every contingency. Besides, I'd say most trees should be expected to live longer than 30 years, which is a cutoff point for inclusion in Reserve Funds in many cases.
This is a philosophical debate over interpreting capital projects. Replacing a stand of trees makes sense to me in this case. Building a new pickleball court or replacing the pool plaster with Italian marble absolutely should be limited or disallowed as it is additive to the community footprint and future cost. The trees are not additive.
My HOA isn't flush with enough operations budget cashflow to engage in capital projects (as to not "violate" the capital reserves). Our budget cares and maintains what is reasonably expected - which is a couple of trees per year in reality - but not for an entire stand.
In NC, a hurricane would easily destroy enough timber to trigger a need to use Reserve Funds. Also, a fatal fungus has attacked a stand of trees in the community. The fungus was unforeseen when the trees were popular in the early 1990s so the Reserve Fund doesn't address them. Going forward, any reserve fund of ours should absolutely chart the plantings once we've replaced them.
KerryL1 (California)
Posts: 14,550
Posts: 14,550
Posted:
I see your point, Kelly and there's some debate around this state, too, as to whether ONLY components listed in a reserves study (required annually in CA) may be repaired/replaced with reserves funds OR can everything the HOA's responsible for be repaired/replaced with reserves funds.
ElleN (Idaho)
Posts: 4,420
Posts: 4,420
Posted:
California Civil Code 5510(b):
"The board shall not expend funds designated as reserve funds for any purpose other than the repair, restoration, replacement, or maintenance of... major components that the association is obligated to repair... and for which the reserve fund was established.
The underlined part is where IMO the board will have a hard time legally justifying spending the reserve funds on anything other than what is in the most recent reserve reserve study. In my opinion this is not trivial. It's key to protecting owners from, for one thing, frivolous board spending.
"The board shall not expend funds designated as reserve funds for any purpose other than the repair, restoration, replacement, or maintenance of... major components that the association is obligated to repair... and for which the reserve fund was established.
The underlined part is where IMO the board will have a hard time legally justifying spending the reserve funds on anything other than what is in the most recent reserve reserve study. In my opinion this is not trivial. It's key to protecting owners from, for one thing, frivolous board spending.
KerryL1 (California)
Posts: 14,550
Posts: 14,550
Posted:
Yes, ElleN, as I observed way above, the item has to be listed in the study as shown in the last few words of the statute (b).
LmT's HOA attorney may see it differently, though. This'll be fun for you Elle: Review the Davis-stirling.com website's "citation" of this statute. Hmmmmmm.
LmT's HOA attorney may see it differently, though. This'll be fun for you Elle: Review the Davis-stirling.com website's "citation" of this statute. Hmmmmmm.
TerriS6 (California)
Posts: 3,284
Posts: 3,284
Posted:
Our board never had a reserve account or did a reserve study until 2 years ago. The reserve study company never did a visual inspection. There has t be a diligent visual inspection. If a major component is not included in the study, it has to be excluded but that was not done. The reserve study company just took one director's figures for road replacement and put it on his letterhead. Since we have an invalid study, I'm guessing the board doesn't have a basis for following it?
ElleN (Idaho)
Posts: 4,420
Posts: 4,420
Posted:
Quote:
Posted By KerryL1 on 07/17/2023 6:26 PM
Yes, ElleN, as I observed way above, the item has to be listed in the study as shown in the last few words of the statute (b).
Yes, ElleN, as I observed way above, the item has to be listed in the study as shown in the last few words of the statute (b).
AFAIC, California boards should not be dipping into reserve funds willy-nilly. If the board must borrow from reserves, fine, follow the requirements in the statute and bylaws for borrowing. Or the board can comply with the requirements for a special assessment.
Go ahead and throw your latest tantrum. I am calling you out when your communications are utterly garbled. I expect you to do no less with my posts.
ElleN (Idaho)
Posts: 4,420
Posts: 4,420
Posted:
Quote:
Posted By TerriS6 on 07/18/2023 5:48 AM
Our board never had a reserve account or did a reserve study until 2 years ago. The reserve study company never did a visual inspection. There has t be a diligent visual inspection. If a major component is not included in the study, it has to be excluded but that was not done. The reserve study company just took one director's figures for road replacement and put it on his letterhead. Since we have an invalid study, I'm guessing the board doesn't have a basis for following it?
Our board never had a reserve account or did a reserve study until 2 years ago. The reserve study company never did a visual inspection. There has t be a diligent visual inspection. If a major component is not included in the study, it has to be excluded but that was not done. The reserve study company just took one director's figures for road replacement and put it on his letterhead. Since we have an invalid study, I'm guessing the board doesn't have a basis for following it?
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