Subject: BFA
Association Reserves New eBook & online tool help HOAs safely tap their Reserve Fund in times of financial shortfall
WESTLAKE VILLAGE, Calif., Oct. 14, 2020 /PRNewswire/ -- As the Coronavirus pandemic drives unemployment to a record high, Association-governed communities are bracing for higher than normal delinquency rates among their homeowners. Volunteer Boards across the country are all asking the same question: "Can we use our Reserve Account to cover an Operating Fund shortfall?" This includes Boards of Condominiums (Condos), Common Interest Developments (CIDs), Cooperatives (Co-ops), Community Associations (CAs), Homeowner Associations (HOAs), Property Owner Associations (POAs), Planned Unit Developments (PUDs), Townhome Associations (Townhouses), and Vacation Ownership Resorts (VORs). Robert Nordlund, PE, RS, and Founder/CEO of Association Reserves, Inc. advises that relying on Reserves to help manage a temporary cash flow disruption must be done with great care. His eBook & online tool help Boards facing operating fund shortfalls make wise decisions about Reserves.
Nordlund outlines four steps to take before an association-governed community even considers tapping into Reserves to fund operations:
- Assemble Financial Information (i.e., Bank Balances, Delinquencies)
- Review/Adjust the Operating Budget
- Maximize Communications & Collections
- Confer with legal counsel regarding Governing Document or state-level restrictions
If the Board elects to tap Reserves, that decision will come under intense scrutiny. It will be vitally important that a proper process of decision-making be both followed and documented.
uPlanIt- online Reserve Funding tool
uPlanIt gives Boards a way to forecast various "what-if" scenarios related to their most recent Reserve Study, such as:
- What if we re-prioritized our Reserve expenses?
- What if we temporarily reduced Reserve contributions?
- What if we borrowed money from Reserves?
- What if we passed a Special Assessment to restore our depleted Reserve fund?
Results of the various scenarios are delivered in an assortment of insightful charts and tables that comply with National Reserve Study Standards, which were developed under the auspice of the Community Associations Institute. The uPlanIt tool is available free to Association Reserves clients or by subscription for $149.
Association Reserves is the country's leading provider of Reserve Studies with regional offices in 10 states. Since its founding in 1986, Association Reserves has prepared over 50,000 Reserve Studies. For more information, visit www.reservestudy.com.
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