Blog: Why Our Current “Reserve Study” Isn’t Valid—and How to Fix It Fast

Summary: The Association circulated a new “reserve study” in 2025. It lists no author or methodology, shows no Board vote of adoption, and appears to have been led by the President’s spouse. Two directors are attorneys but not HOA counsel, and there’s no neutral legal review. That combination means the document shouldn’t be relied upon for budgets, disclosures, or resale packets—yet. Here’s what a valid reserve study requires, why this matters, and a clean path to cure.

Why reserve studies matter

• They determine how much we save for big common-element repairs and replacements.
• They drive dues levels and special-assessment risk.
• Buyers, lenders, and insurers look for a current, adopted study to gauge financial health.

What happened (high level)

• A prior study was delivered in January 2021, but no recorded Board vote accepting or adopting it appears in the minutes we’ve reviewed.
• In 2025, the project was reportedly assigned to the President’s spouse as “lead.”
• The resulting report names no author, lists no participants or methodology, and there is no Board action adopting it.
• Two sitting directors are attorneys—but not HOA attorneys—and there’s no written legal review by neutral HOA counsel.

Why this makes the 2025 document unreliable

1. No authorship or methodology
   A reserve study must say who prepared it, when, what components were included, useful lives, remaining lives, replacement costs, and the funding model used. Without that, owners and auditors can’t verify assumptions.
2. No Board adoption
   Until the Board votes to accept/adopt the study (or ratifies prior action), management has no clear directive to implement it. Owners have no enforceable record to rely on.
3. Process and conflict optics
   Assigning a core fiduciary task to the President’s spouse without a recorded scope, disclosures, or recusal plan creates appearance-of-conflict issues—avoidable with standard governance hygiene.
4. No neutral legal review
   Even if directors are attorneys, that isn’t a substitute for HOA counsel confirming process, reliance, and any needed ratification language.

What a valid reserve study looks like

• Authorship: Name/firm, credentials, and date.
• Methods: Component inventory, remaining life, replacement cost, inflation/escalation, and funding model.
• Deliverables: Clear report + tables; recommended funding plan.
• Adoption: A Board motion recorded in minutes adopting the study and directing management to implement.
• Record: The study and any counsel memo attached to the adopting minutes.

The cure (fast, clean, and transparent)

1. Disclose the report’s authorship, data sources, and methods.
2. Obtain a brief neutral review by HOA counsel (process sufficiency + recommended adoption/ratification language).
3. Place on agenda: “Reserve Study—Authorship, Counsel Review, and Adoption.”
4. Adopt (or revise then adopt) by motion; attach the counsel memo and final report to the minutes.
5. Direct management to integrate funding recommendations into the draft budget and owner disclosures.

Why owners should care

A properly adopted study protects your dues, your resale value, and our ability to avoid avoidable special assessments. A quick, professional cure now prevents bigger costs and disputes later.