What is an HOA reserve study?

An HOA (Homeowners Association) reserve study is an analysis of a community’s reserve accounts to determine how much money it should have in reserves in order to maintain and replace the assets of the community. In California, the Davis-Stirling Common Interest Development Act outlines the responsibilities of HOAs and homeowners, including the requirement of a reserve study. A reserve study is conducted by a reserve specialist who produces a detailed report that estimates the cost of maintaining and replacing common areas such as roofs, roads, driveways, and amenities. The specialist also considers the age of the assets, the cost of deterioration, and the life expectancy of each item. This information helps the HOA Board decide how much money should be allocated from annual dues to cover the cost of repairs and replacements. The reserve study report should be updated annually or when significant changes occur, in order for the HOA to accurately plan for future expenses. Having a well-funded reserve account is essential for providing appropriate maintenance for the common areas and amenities of an HOA community. It also helps to create a sense of security for the homeowners, preserves the value of their properties, and prevents the need for sudden and unexpected special assessments.

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What is an HOA reserve study?

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