Reserve Study Explained
One of the clearest truths about reserve planning is that reserve costs are not created by the board, the property manager, the insurance company, or even the governing documents. The real drivers are simply Mother Nature and Father Time. Roofs age. Asphalt wears out. Paint fails. Components deteriorate whether an association is financially ready or not.
That is why a reserve study is so essential. It helps a board understand exactly what is wearing out, how strong the reserve fund is today, and what funding plan makes sense going forward. It transforms future unknowns into visible, manageable decisions.
Reserve planning does not increase the true cost of ownership. It simply gives associations a better way to prepare for costs that are already inevitable. Without a reserve study, communities often face deferred maintenance, special assessments, loans, or all three.
A healthy reserve plan is not about fear. It is about fairness, stability, and ensuring that each owner pays their fair share over time—rather than leaving a heavier burden for whoever lives there when the bills finally come due.
The Importance of Reserve Funding
Not only is Reserve Funding important to the Association’s future but it’s now Florida law that reserve funds must be fully funded.
Reserve funding is crucial for organizations, especially homeowner/condominium associations (COAs), as it acts as a financial safety net for unexpected or future expenses, preventing financial strain on members. Adequately funded reserves ensure that organizations can handle routine maintenance, major repairs, and capital improvements without resorting to costly special assessments.
Past Special Assessments
Unfortunately, past COA Boards prior to early 2022 did not fund the reserves properly and they chose to vote to delay the funding. This “kick the can” approach does nothing for the Members but create hardships when “expected” projects are needed and there is not enough money to do the work. So, the only option left at that point is to have a special assessment. That process is no longer legal. Expected projects must be planned and in the reserve funding.
When the current Board took over in 2022, we voted to and began filling the Reserve Funds in full immediately even though the law did not go into effect for another two years. That put our community in very good financial shape for the future.
We had two such Special Assessments before this current board took over in 2022. One in 2019 for $400k (building painting and resurface parking lots) and another in 2021 for $880k (roofing project). For more about how this was allowed to occur feel free to look over the detailed page about these Two Special Assessments and see the Timeline page for around 2019 to 2021 .
It is our COA Board’s goal to never have another “surprise” special assessment ever again.
Funding begins with a Reserve Study.
A third-party group is hired by the COA about once every three years to evaluate the entire community. The report is then written and presented to the organization. The items that are on a timeline for repair, replacement or enhancement are listed with projected costs over years. The total costs are reduced down to a single number which is the total the COA is recommended to collect each year to be able to fill the Reserves.
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Our 2024 number according to the most recent Reserve Study completed on November 10th 2023 was: $194,000. During 2024 we actually put aside 233,500. Our budget for 2025 has us putting aside $255,000 while the Study recommended $198,000. Needless to say, our reserves are well funded for the future.
We decided to go ahead and have a new Reserve Study completed even though we were not yet at the three-year mark. The reason was the change in inflation and cost of living increases over the past year. Having a new report would give us a clearer picture of what to expect. Our previous 2023 report was completed by Global Solution Partners and so we had them do the new 2026 report as well. The report cost $3,460.50 and is in the budget to occur every two to three years.
Our 2026 budget had us putting aside $202,768.93. This total was taken from the 2023 Reserve Study prior to the 2026 Study being completed. It was approved by the Board in a unanimous decision at the Budget Meeting on November 20th 2025 before the 2026 report was finalized. The 2026 report has us putting aside $236,500 which is off by $33,731.07. The Board will vote to approve the transfer of that amount from our Contingency Reserves fund to offset the balance needed. This will balance the numbers in the 2026 Study and make everything line up properly for the next year without having to alter the 2026 budget.
The 2026 Reserve Study – December 18th 2025
The 2023 Reserve Study – November 10th 2023
The 2020 Reserve Study – April 1st 2020
In this 2020 Study you will see how a past board voted to not collect the suggested amounts for the Reserve Funds which is why they had to have two Special Assessments in less than 2 years for $1.2 Million.
It is our COA Board’s goal to never have another “surprise” special assessment ever again.
