In 2010 Robert Nordlund, President of Association Reserves, Inc., compiled data from over 7,000 recently completed reserve studies to create a profile of HOA reserve funding strength. The results are reflected in the graph below.
RECOMMENDATION: Healthy reserves increase property values and improve sales. To comply with the Davis-Stirling Act, boards need to have a reserve study done every three years with annual updates in between. Associations should use experienced companies to prepare their studies, including a reserve funding plan. To improve marketability in their HOAs, boards should then make every effort to raise their reserve funding levels as quickly as possible. In addition, they should fully disclose the condition of their reserves.