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HOA Financials


The goal of establishing strong finances within an HOA is to plan and ensure that the budget can provide for all necessary services of a community, including maintaining common areas and upholding property values. HOA finances encompass a few major components that are essential to providing quality services to the community: the budget, the reserve study & fund, and the assessments. The budget ensures financial stability for the HOA over the course of a year, every year. The reserve study analyzes the future state of large capital needs and ensures there is proper funding for these expenses when the time comes. Assessments refer to recurring payments to the association on behalf of each owner. The two most common types of assessments are regular and special. Regular assessments, commonly known as dues, are paid monthly, quarterly, or annually to cover the Association’s operational costs. Special assessments are less frequent and are only paid when there is a specific project in mind that needs additional funding, such as a large repair or new construction.


HOAs can ensure that there are funds available to complete sustainability projects by creating a sustainability fund. This is similar to a reserve fund in that it ensures the community has money to complete large improvement projects. However, in this case, the money is earmarked for sustainability projects, such as a conversion to water-wise landscaping or HVAC electrification. This can be incorporated during the HOA’s annual budget process, similar to that of reserve contributions.


It is very important that all Homeowners Associations have a reserve fund. A reserve fund is an HOA savings account specifically meant to cover costs for large, unexpected expenditures. When the reserves are sufficiently funded, the HOA is able to pay for unexpected expenses without causing disruptions to the day-to-day function of the HOA and without requiring special assessments. These funds generally go to large projects like roof repairs, road maintenance, HVAC repairs, and more.

Reserve specialists or consultants conduct in-depth analyses to determine the community’s probable capital improvement expenses and needs. They generally examine the date on which major upgrades or large infrastructure was installed, estimate the end-of-life date for each, and determine when the community may need to pay for a future upgrade or replacement. The study will also show the required monthly contribution for owners to adequately cover the future costs of the community. There are three major types of reserve studies that an association can receive, including Full, Update With-Site-Visit, and Update No-Site-Visit. The type conducted is based on whether the community has received one in the past, and if so, how long ago. CAP Management recommends conducting a reserve study at least every five years.

Reserve Study Consultants in Denver

  • Serves Colorado, Utah, and Wyoming
  • Works with all types of associations (e.g., high-rises, townhomes, single-family homes, etc.)
  • Incorporates local knowledge of pricing and other important regional factors
  • Strives for long-term relationships with the communities in which they work
  • Serves from Fort Collins to Colorado Springs
  • Has specific familiarity with Colorado’s local conditions and project costs
  • Aims to provide peace of mind to HOAs and unparalleled support in the form of long-term capital planning and proactive asset management

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