HOA boards and committees have to think about not only its community’s residents, but also its finances, taking care of day-to-day management and having to think ahead incase of unforeseen circumstances. With that being said, each year the committee sets up the community’s operating budget that deals with things like insurance premiums, utility bills, management fees, landscaping maintenance and the like.
With so many immediate concerns that need to be addressed, reserve contributions aren’t always at the top of the list. Thinking about reserve contributions is usually only done if the association has a surplus of funds at the end of the year. And many homeowners that are part of the HOA community don’t really think they’ll still live there when these actual expenses will happen, so they figure they shouldn’t have to pay into a reserve fund. However, they should still add reserve contributions to a community’s operating budget for a number of reasons and here are a few: