A reserve fund for your Homeowners Association (HOA) townhouse maintenance is important to the solvency of your townhouse community. Large maintenance items are costly, and a reserve fund can cover those expenses if managed properly. If reserve funds do not exist when large repairs or maintenance occurs, your HOA will have to levy a special assessment to owners. RowCal has resources for planning and budgeting for reserves to handle funding of townhouse maintenance.
Special Assessments Should be a Last Resort
A special assessment happens when the operating budget of an HOA cannot cover a repair or maintenance item. Many HOA boards attempt to run on a shoestring budget and keep HOA fees low so they are easily collectable from owners. But when a maintenance item exceeds the operating budget, you will need to levy a special assessment on owners. No one likes unexpected increases in their HOA fees through special assessments.
Budget Development for Townhouse Maintenance
Your property should have a detailed budget inclusive of all predictable maintenance over the course of 20-30 years. As an example: a roof only lasts so long, so you should amortize the cost of roof replacement over its expected lifespan to come up with a yearly cost. Then you would add the cost into HOA normal operating fees and put in a reserve fund for roof replacement when it is time. Other predictable large-scale maintenance items to consider are:
● Parking Lot Resurfacing
● Sidewalk and Walkway Replacements
● Changing Building Siding and/or Painting
● Shared Recreation Equipment
State Regulations and Legislation
Many states have laws on the books regarding the creation and management of HOA reserve funds. HOA boards have a fiduciary responsibility to manage both operating funds and reserve funds, keeping them in good standing. You should plan for large-scale projects, and manage these through reserve funding. We have resources and information on the creation and management of your reserve funds to keep you in compliance with your state’s regulations and laws.
Keeping Townhome Properties Marketable
A savvy townhome buyer will ask about the solvency of an HOA before purchasing a townhome. When you need large maintenance type items, and there are not adequate funds in the HOA budget, the shortage falls to the property owners to cover. The shortage in funds may even translate to higher future assessments, increasing the cost of ownership for property owners. Inadequate HOA maintenance reserves make potential buyers stray away from purchasing a townhome in lieu of one with a better managed HOA.
Townhome Maintenance Management Solutions
We offer applications, tools, and advice your board members and homeowners need. Join our network to get the technology to make managing your property more cost-effective. RowCal helps your HOA manage reserve funds for townhome maintenance by providing services and resources you need. For more information about our services, call us at 651-233-1307, or you can message us on our contact page.