Guides9 min read

HOA Reserve Studies Without Falling Asleep

The unit is yours. The roof, the elevator, and the unfunded liability are a group project.

First, the scope label: this guide is for condos, townhomes, and anything with shared walls, shared roofs, or shared elevators. If you're buying a detached house with a $90/year HOA that maintains an entrance sign, you may skim and go.

For everyone else: when you buy into an association, you buy a fraction of every roof, pipe, garage deck, and elevator the association owns — including the ones it hasn't saved up to replace. The reserve study is the document that tells you whether that group project is funded or fictional.

The fifteen-minute read

A reserve study has two halves: an engineer's list of what will wear out and when, and an accountant's answer to "is there money for that?" You are reading for three numbers and one table.

1) Percent funded

The headline number: actual reserves divided by the reserves the schedule says they should have today.

  • 70%+ funded — generally healthy territory.
  • 30–70% — the gray zone. Read the upcoming-projects table carefully.
  • Below 30% — special-assessment risk is structural, not hypothetical. Price it.

"Healthy reserves!" in a listing, with no percentage attached, is a vibe. Ask for the number.

2) The funding plan

How does the board plan to stay funded — steady contributions, planned increases, or "we'll deal with it later"? A mediocre percent-funded with honest, scheduled increases beats a decent number propped up by deferring the roof.

3) The next five years of projects

Find the component table. Look for big-ticket items — roofs, elevators, garage membranes, siding, plumbing risers — with remaining life under five years. Then check whether the reserve balance plus planned contributions actually covers them. If a $2M roof arrives in year three and the math doesn't close, you've found the future special assessment. It just hasn't been mailed yet.

Special assessments: the cash call

When reserves fall short, the gap gets divided among owners. Five figures per unit is not rare for major envelope or structural work. Questions to ask in writing:

  • Any special assessments in the last five years? For what?
  • Any currently planned, discussed in board minutes, or pending votes?
  • Any active litigation? (Construction-defect suits freeze lending and drain reserves simultaneously.)

Board meeting minutes are the unredacted version of the marketing. Reserve studies are produced on a cycle; minutes are where "the engineer's bid came back double" actually shows up first.

Red flags in one pass

  • Reserve study older than three or four years, or none at all.
  • Percent funded under 30% with major components past useful life.
  • Repeated special assessments — the association is structurally underfunding.
  • Suspiciously low dues for the building's age and amenities. Dues that feel like a bargain are often borrowing from the roof.
  • Minutes that mention deferred maintenance, engineering reports, or attorneys.

Your next step

The reserve study covers the building's finances. For everything else — location, unit-level claims, listing language doing heavy lifting — paste the listing into What's Wrong With This Property? and let the panel argue about what the dues aren't covering.

You are not just buying a unit. You are joining a balance sheet. Read it before it reads you.

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