Fully Funded Statistics

Started by MarkS42 • 4 replies • 316 views

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MarkS42 (North Carolina)
Posts: 70

Posted:

I was wondering if anyone has come across any statistics or surveys for condos that show the percentage of condos that are fully funded. I have come across one survey in Florida. Florida is sort of unique so I am not sure how accurate this is across the country. After years of neglect, we are growing reserves at a fairly fast pace but still not sure the pace is fast enough. What do you think is a good time horizon to achieve a 70% fully funded level starting from 0%, 25% and 50%?

https://www.850wftl.com/how-many-condominiums-have-fully-funded-reserves-in-florida/

TimB4 (Tennessee)
Posts: 21,059

Posted:

Being fully funded means setting aside the amount of money needed for future repairs, as outlined in the latest reserve study (or reserve study update).

If an Association is not fully funded, they will need to set aside even more funds the following year to become fully funded or face the potential for special assessments in the future.

I think the sooner an Association can become fully funded the better it is for every member of the Association.

In my past association, an HOA not a COA, we hadn't done a reserve study in years.
When one was finally done, to become fully funded, we required a 20% increase in assessments.
Had we waited, it would have been more.

ElleN (Idaho)
Posts: 4,420

Posted:

I think one answer to the OP's inquiry could come from considering how many years reserve companies advise to get a HOA with a current very low (say less than 50%) percent funded figure up to fully funded (not merely 70% funded).

A few years ago, I would have bought into the 70% figure. Today I believe 95% is appropriate.

My former condo had a percent funded figure of about 26% in 2018. I believe the reserve company's report set up an "assessment increase plan" of heavy increases over about a four-year period, so as to achieve a percent funded figure either in excess of 70% or possibly 100%.

During this four year period the HOA is taking risk. Quantifying how much risk this is depends on the infrastructure and amenities that may become unusable or a hazard to others, due to lack of replacement or major maintenance (as given in the reserve study).

To me, this comes down to: By law a Board has to do what it has to do to minimize risk to the corporation's infrastructure and amenities. If this means massive special assessments and/or increases in the regular assessments, these are what a board should aim for.

MarkS42 (North Carolina)
Posts: 70

Posted:

Two excellent answers. Thank you! We did an internal reserve study and raised dues 20%. At 60-70% percent I figure it would be good to get a professional one done. I was thinking a four year plan would be really good especially with how costs are rising.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

No HOA is alike. They are all separate and independent. Not sure how those statistics much help?

Former HOA President

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