What is a Reserve Fund? Do we have to have one? Where do we start? What does a reserve study cost?
Reserve funding allows an association to provide for the repair, maintenance and replacement of the association’s assets as the community ages. Currently, Arizona law does not require a developer or an association board to create and fund reserves for a community association (however, some association documents may require this).
There are a number of reputable companies in Arizona that can help an association plan and prepare a reserve study to properly fund an association for the future. A reserve study is a budgeting guide that will provide a comprehensive plan that shows an association how much is reasonable to place in reserve for a specific replacement or maintenance project. When properly executed, it can give a clear picture for the maintenance, repair or replacement requirements of association assets for the life of the association.
In our experience, a professional reserve study will range between $500 – $5,000 depending on the size and amenities of the association.
Mulcahy Law Firm, P.C. is here to help! If your association would like more information on reserve funding or reserve studies, please contact Beth Mulcahy, Esq. at bmulcahy@mulcahylawfirm.com. For more information, review our Mulcahy Community Association Cheat Sheet entitled, Reserve Funds for Community Associations.
