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Manage assets, plan expenses, and avoid special assessments with our reserve study software.
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Reserve ProfessionalStreamline report generation, manage client portfolios, and win more projects with all-in-one platform.
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Colorado HOA Reserve Fund Requirements (2025 Guide)
Introduction
In 2022, Colorado enacted HB22-1387, introducing specific reserve study requirements for homeowners’ associations (HOAs) and condominium associations. This legislation emphasizes proactive financial planning to ensure communities maintain their shared property elements while avoiding unexpected financial shortfalls. This guide explains the key aspects of Colorado’s reserve study laws, the benefits of compliance, and steps for associations to meet these requirements effectively.
Are reserve studies required in Colorado?
Yes, under HB22-1387, Colorado requires HOAs and condominium associations to conduct reserve studies to assess the financial needs for maintaining and replacing common elements. These studies must guide the funding plans for the association's reserve accounts, ensuring adequate preparation for future expenses.
Frequency of reserve studies
The law mandates that reserve studies be conducted every five years, ensuring that financial plans and contributions remain aligned with the evolving needs of the community and its assets.
Minimum reserve fund contributions
Associations must establish funding plans based on their reserve study findings. While the legislation does not mandate specific contribution levels, reserve accounts should be sufficiently funded to address anticipated repair and replacement costs without reliance on special assessments or loans.
Don’t wait until it’s too late—schedule a reserve study today to secure your community’s financial future.
Key Provisions of Colorado’s HB22-1387
Key provisions:
- Five-Year Reserve Studies: Associations are required to perform reserve studies every five years to assess the condition and expected costs of maintaining shared property elements.
- Annual Reviews: Boards must annually review the reserve study findings and funding plans to ensure they remain accurate and relevant.
- Transparency with Homeowners: Reserve study results and funding strategies must be disclosed to association members to maintain transparency and build trust.
Benefits of Conducting Reserve Studies
Some of the benefits include:
- Proactive Financial Planning: Reserve studies provide a roadmap for managing future expenses and budgeting effectively.
- Avoiding Special Assessments: Properly funded reserves reduce the need for sudden financial contributions from homeowners.
- Maintaining Property Values: Timely maintenance supported by reserve funds protects the community’s appearance and property values.
- Building Trust: Sharing reserve study findings fosters confidence in the board’s financial management.
Step-by-Step Guide to Complying with Colorado’s Reserve Study Law
Engage a Reserve Study Professional
Hire a qualified professional to conduct a thorough evaluation of the community’s shared assets.
Inventory Common Property Elements
Identify and assess all shared components, such as roofs, parking lots, and recreational facilities, noting their age, condition, and remaining lifespan.
Estimate Costs and Lifespans
Calculate the anticipated costs for maintaining and replacing each asset, considering inflation and future market conditions.
Develop a Funding Plan
Use the reserve study findings to establish a funding strategy that ensures sufficient reserves for future expenses.
Review Annually
Review the reserve study and funding plan annually to address any changes in the community’s needs or financial situation.
Update Every Five Years
Conduct a new reserve study every five years to reflect the current condition of property elements and future financial requirements.
FAQs
About PropFusion: Simplifying Reserve Study Management
PropFusion’s all-in-one software helps streamline reserve study management, offering automated reminders, detailed financial forecasts, and an intuitive dashboard to keep your HOA’s finances on track. Whether you’re in Alabama or any other state, our platform provides the tools you need for effective reserve planning.
Don’t wait until it’s too late—schedule a reserve study today to secure your community’s financial future.
The information contained on this page is provided for informational purposes only, and should not be construed as legal advice on any subject matter. You should not act or refrain from acting on the basis of any content included on this page without seeking legal or other professional advice. The contents of this page contain general information and may not reflect current legal developments or address your situation. We disclaim all liability for actions you take or fail to take based on any content on this report.
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How PropFusion Simplifies Reserve Studies
PropFusion offers powerful tools that make managing reserve studies easier for HOAs:
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