QUESTION: Our building is thirty years old and our landscaping is at the end of its lifespan. All homeowners agree it needs to be replaced. Many want to hire a landscape designer to design an attractive low-water landscape. The designer's fee is $25,000. Landscaping is not currently in our reserve study. However, the board ordered a new study and landscaping will be added. Can we pay for the designer out of our reserves?
ANSWER: Yes, you can pay for a designer from your reserves. It is a legitimate part of the cost of replacing your landscaping.
Missing Component. Landscape replacement is often overlooked by associations when putting together a reserve study. Belatedly adding the component is within the board's authority and does not require a vote of the membership.
Impact on Reserves. Using reserve funds to replace your landscaping means your existing funds will dip. Depending on the adjusted level, you may need to increase your annual contributions to keep the funding at safe levels for future component replacements.
Recommendation: Work with your reserve analyst to revise your reserve study to establish proper future contributions. Otherwise, special assessments may be in your future.
ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.
