Townhome Reserve Funds

John, I would interpret "exterior surfaces to be more, not less, than interpreted by your Board. I suggest your association amend their Declaration to be very specific on maintenance responsibilities. Following is an example for a townhome we manage.

ARTICLE VIII - MAINTENANCE RESPONSIBILITIES
Section 8.1 Association Maintenance.
The Association shall maintain the Common Area and, except for Limited Common Areas, shall
provide exterior maintenance, repair and replacement (including paint and/or stain as is
appropriate) on each Lot and the homes thereon, as follows:
The exterior building surfaces such as roofing shingles and underlayment; vents to the
extent they are outside of the roof sheathing or exterior wall plywood and roof jacks;
gutters and downspouts; exterior siding, soffits, and trim (but not including replacement of
doors and door frames, and windows and window frames); decks and fences; skylights
installed by the original builder or installed with the Association’s written permission;
security lights which are controlled by photocells located in the Common Area; and sewer
lines serving more than one Lot, including but not limited to the main sewer lines.

All items upon the Lots and the homes thereon that are not specifically the Association’s
responsibility shall be the responsibility of the Owner(s) of the Lot.

Maintenance and repair of the interiors of the homes shall be provided by the Association only to the extent needed to repair damage caused by the Association’s negligent performance of its maintenance duties as specifically set forth in the Association’s governing documents.

Section 8.2 Owner Maintenance.
Except as set forth in Section 8.1 herein above, the Owners shall be responsible for all
maintenance repair and replacement of the Lots and homes except those included in Section 8.1, including but not limited to, the following:
All components of the Lots and homes including the walls and wall coverings; all doors
including garage doors and door frames, coverings, and seals; all windows and glass
including window coverings, frames, and seals; all external items on the Lots and homes
which are controlled from inside the homes, including but not limited to, electric outlets,
lights, sump pumps, individual sewer lines from the interior of the homes upon the Lots up
to the point where the line joins a common service line shared by more than one Lot, even
though part of these sewer lines will be outside of the Lot boundaries, and water faucets
and other Limited Common Area items, including but not limited to, solariums, solar
systems, satellite dishes, cables and wiring attached to the Unit; and those items listed as
the Association’s responsibility if the need for maintenance or repair is caused by the
negligent acts or omissions of an Owner, their family, tenants, residents or invitees.

Section 8.3 Owner’s Negligence.
In the event that the need for maintenance or repair is caused through the willful or negligent act or omission of the Owner, an Owner’s family, guests, or invitees, the cost of such maintenance or repairs may be, at the discretion of the Board of Directors, a Default Assessment to such Owner and such Owner’s Lot.

JohnC31 - In my experience of living in townhomes, windows and doors are the responsibility of the owner to replace. Window and door frames, shutters, roofs, and all other exterior elements are that of the association.

Gerald, Roger,

Thanks for your input. How about HOA fees? According to our treasurer, twenty percent of HOA fees are allocate to the Reserve Fund. In your experience is this a reasonable ratio for a Reserve Fund? On average, townhome owners fees in our development are approximately $590 per quarter or almost $2400 annually.

John

JohnC31 - 20% may or may not be adequate. My math indicates you set aside $208,800 per year to Reserves. From 2010 to 2032 you will have transferred $4,593,600. Less Reserve expenses of $3,000,000, theoretically there will be at least $1,593,600 remaining in the Reserve account. What you need to do is make sure a predetermined amount in Reserves never dips below a expenditures over time. This predetermined amount is called a Reserve Threshold. Some communities have the Threshold at 5% of the total replacement cost of all the common elements.