Understanding Reserves: A Guide To Your Association's Reserve Fund & Reserve Study

by Kevin Leonard, Robert Nordlund

Understanding Reserves is a comprehensive Reserve Study guidebook for board members and community managers. Besides answering common questions related to Reserve Studies, we thoroughly address each facet of the Reserve Study process. From why associations should reserve funds to understanding the three key results of the study, Understanding Reserves is a quick read that will enhance your Reserve Study knowledge. This informative guide exposes and resolves many of the misunderstandings or confusion surrounding reserve funds and reveals the importance of a reserve study. Questions answered Why should an association set aside reserves? What is a reserve study and why is it important? What level of reserve funding is adequate? How should a reserve study be conducted? What is a reserve component? What does percent funded mean? How is a reserve funding plan calculated? “Robert and Kevin’s new book Understanding Reserves is a must‐read for any community association manager, homeowner or board member who wants to understand the how’s and importantly, the why’s of reserve studies. Well‐paced, logical and highly informative, Understanding Reserves should act as the industry text book about this very important aspect of community management.” - Community Association Professional. “As an attorney specializing in community association law for over thirty years, I have reviewed many reserve studies, met with numerous reserve specialists, and read innumerable articles and pamphlets on reserve studies. This book is the gold standard...thoughtfully organized, clearly written and highlighted with easily understandable graphs and charts...with the added plus of witty quotations before each chapter! It is a must for everyone involved with management and administration of community associations...from engaged owners through the top tiers of professionals.” ‐ Community Association Attorney. “Understanding Reserves accepts the challenging job of distilling 33 years of experience into a clearly presented, highly readable book on a complicated activity with enough wit and wisdom to encourage you to read more. This book should serve as the definitive guide to all who are involved with association finances.” ‐ Community Board Member.

161 pages, Paperback

Published January 8, 2021

Reviews

[Brad Lyerla · Rating 3 out of 5]

A few years ago, I was elected to the Board of our HOA in Florida, where we live in the winter time. My wife persuaded me to say ‘yes’, when I was invited to run.

A few months after I was elected, our treasurer was pressured to resign and the president asked me to assume that role. Reluctantly, I agreed (no one else wanted the position, and it was important to start fixing the mess the previous guy had left behind). One big thing that I have needed to address quickly has been our underfunded reserves.

Kevin Leonard’s book is very helpful in that regard. It turns out that HOA reserves have national standards for the preparation of reserve studies to help Boards like mine. And Leonard is an expert in those standards. His book is a quick practical read and anyone serving on a condo or homeowners’ association board will benefit from reading it. (One other tip: I have a guy on my finance committee who was a significant partner in PriceWaterhouse Coopers in their audit business before he retired. He has been a lifesaver.)

[Lyle Radke · Rating 4 out of 5]

This is a must-read if you own or are thinking of buying a home in a condo, cooperative, or planned unit development. It is also a great resource for people involved in the real estate business such as listing agents, buyer agents, appraisers, and lenders. It clearly explains the basics of what is a reserve study and how to reserve for maintenance expenses. It explains the benefits of being fully funded and touches on the fiduciary responsibility of the association board. Limitations include not everyone has a need to know this, and while it is a fantastic introduction, it doesn’t get into the more technical aspects of how to estimate cost and remaining useful life. Otherwise I would have rated it a “5”, and it is very easy to read and understand.