Tag Archives: special

Reserve Funds

 

One of the primary business duties of community associations is maintaining and preserving property values of homes and the common property.  To do this properly, associations must develop funding plans for future repair or replacement of major common area components, such as roofs, boilers, elevators, swimming pools, balconies, asphalt surfaces and decks.

An association has several funding options, including periodic assessments over the life of assets, special assessments at the time of replacement, borrowing funds when needed, a combination of the above or the most common method – and in many states the only lawful alternative: setting aside funds in a special category commonly called reserve funds.

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Playing with Fire

Few association budgets can accommodate the huge sums of money required to pursue or defend a lawsuit, and no one is happy to see an association’s money spent on lawyers.

Beyond the expense, a lawsuit can put you and your neighbors through the emotional wringer and create irreparable damage to personal relationships as well as obstacles to effective governing.

The best way to spare your community such trauma is by studying your community’s governing documents, understanding your legal responsibilities and staying alert for these common legal predicaments.

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