Helping Owners Understand The Necessity Of Reserves

How often do you hear owners in your community complain about the amount of assessments and wonder why the Association needs so much money in the bank? Why can’t there just be an assessment when the time comes?

One way to help owners understand why reserve funds are so necessary and important to the health of the association is to liken it to credit card debt. Unfortunately these days, that is something many people can understand. Not putting money in reserves is just like living beyond your means. Then what happens when credit card bills don’t get paid? Other consumers end up picking up the slack in the form of fees and higher interest. Associations that don’t save money for future repairs or replacements are letting other people pay for their bills. They aren’t paying for usage and then relying on the owners who hold title when the time comes for the repair or replacement to cover the bills. It’s the same as making other people pay for your personal debts. It’s not fair and it’s not reasonable.

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