RESERVES
If you’ve attended recent Master Board meetings or listened to the recordings, you may have heard conversation, motions, and questions about the Reserve Fund. Do you know why VCC maintains a reserve fund?
HOA communities in Florida are required to reserve funds for major repairs, maintenance, and replacement of common elements. It is essentially a dedicated bank account used to store the association’s savings. This is important to community members because these reserves help to offset and plan for such projects, thereby reducing the need for unplanned assessments.
What is the purpose of a Reserve Study?
A reserve study is an essential tool communities use to help plan for future repairs and renovations and provide funds for unexpected repairs that may become needed. The reserve study helps to understand approximately how much will be needed and when to replace, repair or renovate the assets of the community.
A reserve study will include a comprehensive review of a community’s common elements (roads, amenities, roofs, etc.) and an assessment of the physical condition to estimate their remaining useful life and potential cost associated with their repair or replacement.
A financial analysis is also conducted. It examines the current reserve balance and develops a plan to ensure that adequate funds are collected over time to cover future expenses.
Reserve studies provide a roadmap for future capital expenses, helping HOAs avoid or limit financial burdens such as special assessments or borrowing when unexpected repairs arise. By understanding the condition of community assets and the associated costs, the Master Board can make informed decisions about maintenance and improvements driven by data. Regularly updating the community regarding the status of reserve funds and future needs fosters trust among homeowners.
This is why the Master Board is excited to share news of a new software program, called UPlanIt (U Plan It). UPlanIt is a powerful interactive tool that enhances the reserve study by providing management of reserve funding information to our Finance Committee. It will allow the Board and Facilities and Finance Committees to forecast funding needs and plan for short- and long-term repairs and projects. The software also allows us to update the useful life of an asset so it can be pushed out to its next expected repair/replacement date. Soon VCC will begin working with the UPlanIt software to further develop and manage the plan for reserves for VCC. You may review the 2025 Reserve Study at this link.
