When a board is hesitant to increase reserve contributions, the answer isn’t simply to push for more funding. The better approach is to understand what’s behind that hesitation, look at the community’s options, and use reliable reserve data to help the board make an informed decision.
Increasing reserve contributions is rarely an easy conversation. HOA and condominium boards have to balance the long-term needs of the community with what homeowners are being asked to pay today.
When a board is hesitant to increase contributions, it doesn’t necessarily mean they’re ignoring the community’s future. They may be concerned about affordability, homeowner reaction, or simply unsure whether an increase is truly necessary.
But avoiding the conversation can create its own challenges. One thing I’ve learned from more than 25 years in reserve planning is that the longer a potential funding gap goes unaddressed, the fewer options a community may have when major repairs and replacements eventually come due.
There’s also a question of how those costs are shared over time. Homeowners today are using community assets as those assets age. Consistent reserve contributions can help distribute the cost among the owners benefiting from them, rather than shifting a disproportionate share to future homeowners.
The goal shouldn’t be to convince a board to increase reserve contributions at all costs. It should be to understand the reason for the hesitation, look objectively at what the reserve study tells us about future expenses and funding needs, and make sure board members understand the options in front of them.
Let’s look at how to make that conversation more productive.
Why Might a Board Be Hesitant to Increase Reserve Contributions?
There are plenty of legitimate reasons a board may hesitate before increasing reserve contributions. In working with boards over the years, those concerns often come down to balancing what the community needs long term with what homeowners can reasonably manage today. Understanding that hesitation is an important first step because it helps determine what information the board needs to make a confident decision.
Common concerns I often hear include:
- Homeowner affordability: Even a reasonable increase can have a real impact on residents who are already managing higher costs elsewhere.
- Assessment fatigue: If homeowners have recently experienced dues increases or special assessments, boards may understandably be reluctant to ask for more.
- Pressure to keep dues competitive: Boards may worry about how higher assessments will be received by current homeowners or how they could affect perceptions of the community.
- Uncertainty about the need: When a roof replacement or other major project is still years away, it can be difficult to understand why additional money needs to be collected today.
- Difficulty communicating the decision: Board members know they’ll likely be asked why contributions are increasing, and they need to be able to clearly explain what the additional funding is preparing the community for.
Before getting into the numbers, I like to understand what’s driving the hesitation. Once that’s clear, the conversation can focus on the information the board needs to evaluate its options.
How Can a Reserve Study Help Guide the Conversation?
When opinions differ about reserve contributions, a reserve study gives everyone a common starting point. Instead of debating whether an increase feels too high, the board can look at what the community has today, what it expects to spend, and what it will need in the years ahead.
Start by reviewing:
- Current reserve funding: How much does the association have available today, and what is it currently contributing?
- Upcoming capital expenses: Which major components are approaching repair or replacement, and when are those projects expected?
- Projected costs: What should the community reasonably anticipate spending on those projects?
- Future funding needs: Based on planned contributions and expenses, when could the community begin facing a funding shortfall?
- Recent changes: Have completed projects, inspections, unexpected repairs, or changing costs altered any of the assumptions behind the current plan?
A reserve study isn’t there to make the decision for the board. It’s there to provide an objective look at the community’s property and funding needs so board members can understand the tradeoffs behind the choices available to them.
With the numbers in front of them, the conversation can shift from “Do we really need to increase contributions?” to “What happens under each of the options available to us?”
What Options Does a Board Have If It Doesn’t Want a Large Increase at Once?
A significant increase in reserve contributions isn’t always the only path forward. Depending on the community’s financial position, upcoming projects, and current funding plan, there may be several approaches worth exploring.
Depending on the community’s financial position and how soon major projects are coming, options may include gradually increasing contributions, adjusting project timing where appropriate, using preventative maintenance to extend the life of certain assets, or considering a special assessment or financing.
| If the board is concerned about… | One option to consider | What to keep in mind |
|---|---|---|
| A large increase all at once | Gradual reserve contribution increases | Smaller increases over several years may be easier for homeowners to manage, if the community has enough time before major projects are due. |
| An upcoming major expense | Reviewing project timing | Some projects may have flexibility, but delaying necessary work can lead to further deterioration and higher costs. |
| Getting more life from existing assets | Preventative maintenance | Proper maintenance may extend the life of some components and give the community more time to prepare for replacement. |
| Not having enough in reserves | Special assessment or financing | These can help cover a funding gap, but boards should understand the added cost and impact on homeowners. |
| Not knowing which approach makes sense | Review the funding plan with your reserve study provider | Look at upcoming projects, current reserves, expected costs, and how much time the community has to prepare. |
Those options could include:
- Increase contributions gradually: A series of smaller annual increases may be easier for homeowners to absorb than one larger adjustment.
- Phase increases over multiple budget cycles: Establishing a multi-year funding plan can give homeowners greater predictability while moving the community toward its long-term goals.
- Revisit project timing: Some projects may have scheduling flexibility. Review whether work can responsibly be moved without creating additional risk, deterioration, or higher costs later.
- Look for opportunities to extend asset life: Appropriate preventative maintenance may help certain components reach their expected useful lives and give the community more time to prepare for replacement.
- Evaluate other funding options: Special assessments or financing may be appropriate in some situations, but boards should understand the long-term costs and implications before relying on them.
There isn’t one funding strategy that’s right for every community. And each option comes with its own tradeoffs.
These decisions are also best made alongside your reserve study provider. One of the biggest factors is timing. There may be opportunities to phase increases when major expenses are still several years away. If those projects are approaching quickly, the community may not have the same flexibility.
That’s why I find it’s important to look beyond a single contribution number and understand what each approach accomplishes today, what it costs, and what financial obligations it may leave for the community tomorrow.
“Ultimately, there are only so many ways to pay for these projects. You fund them through reserves, borrow the money, or collect it through a special assessment. The real question is how you want to prepare for that expense.”
Todd Walter, PE, PRA, RS
Regional Executive Director, Great Lakes | Reserve Advisors
What Can Happen When a Community Waits to Address a Funding Gap?
Waiting to address a reserve funding gap doesn’t automatically mean a community will face a special assessment or have to delay important work. But the longer a gap remains, the fewer options a board may have when major expenses arrive.
The effects can include:
- Less flexibility around projects: Addressing funding needs earlier can give boards more time to evaluate project timing, compare options, and prepare financially for upcoming work.
- Greater reliance on future homeowners: Delaying contributions can shift more of the cost of today’s asset use onto the homeowners who will be living in the community when repairs or replacements come due.
- Larger funding adjustments later: A contribution increase that feels difficult today may become an even larger adjustment if the funding gap continues to grow.
- More difficult project decisions: If necessary work arrives before sufficient reserves are available, the board may have to consider larger contribution increases, special assessments, financing, delaying work where appropriate, or a combination of approaches.
A funding gap doesn’t dictate what happens next. But addressing it sooner generally gives a community more choices for how to respond.
That’s an important distinction when discussing reserve contributions with a hesitant board. The conversation isn’t simply about paying more today. It’s about understanding how today’s decision could affect the options available tomorrow.
How Can Property Managers Help Boards Have a More Productive Funding Conversation?
Property managers are often in a unique position during reserve funding discussions. They understand the community’s day-to-day needs, work closely with the board, and know many of the questions that are likely to come up before the conversation even begins.
That perspective can help make a difficult funding discussion more productive.
- Share information early: Give board members time to review relevant reserve information before the meeting so they aren’t seeing important numbers for the first time at the table.
- Connect the numbers to real projects: An increase is easier to understand when board members can see what the additional funding is preparing for, whether that’s a roof replacement, pavement work, mechanical equipment, or another major expense.
- Anticipate the questions: Think about what board members and homeowners are likely to ask. Why now? What happens if we wait? Are there other options? Preparing that context can keep the discussion focused.
- Help the board compare scenarios: When multiple funding approaches are available, clearly laying out the tradeoffs can help board members understand what each option could mean over time.
- Keep the focus on the community: Rather than framing the discussion around whether anyone wants to increase contributions, bring it back to what the community needs and how the available options address those needs.
Property managers don’t need to convince the board that one particular funding number is the right answer. Their role is to help board members understand what the numbers mean, what the community is preparing for, and what the tradeoffs are among the options available.
That creates a better foundation for whatever decision the board ultimately makes.
When Should You Bring in a Reserve Professional?
Sometimes the most useful next step isn’t another board discussion. It’s bringing in someone who can provide additional context and answer the questions behind the numbers.
Consider talking with a reserve professional when:
- The board doesn’t understand a recommended funding change: A reserve professional can explain how the recommendation was developed and what assumptions are driving it.
- Project costs have changed substantially: If current bids or estimates look very different from the numbers in the reserve study, it may be time to understand what’s changed and how it affects the plan.
- The community has changed: Completed capital projects, unexpected repairs, new inspections, or other significant developments may affect assumptions in the existing study.
- The board wants to compare funding scenarios: A reserve professional can help explain how different approaches could affect the community’s long-term financial position.
- Technical questions are driving the conversation: Questions about component condition, remaining useful life, replacement timing, or projected costs may benefit from additional professional insight.
I don’t see my job as simply giving a board a recommended contribution number. My job is to help the board understand how we got there, what’s behind the recommendation, and what the available options could mean for the community.
That’s an important part of how we approach reserve planning at Reserve Advisors. The report provides the roadmap, but the conversations that follow help boards and property managers understand the reasoning behind the plan and use that information to make informed decisions for their community.
“Our job isn’t just to hand the board a report and a contribution number. It’s to help them understand how we got there, answer their questions, and make sure they understand the options in front of them.”
Todd Walter, PE, PRA, RS
Regional Executive Director, Great Lakes | Reserve Advisors
Reserve Contributions FAQ
How do you know if HOA reserve contributions need to increase?
Start by comparing the association’s current reserve balance and planned contributions with the major repairs and replacements identified in the reserve study. If the current funding plan isn’t keeping pace with expected expenses, the board may need to consider increasing contributions or evaluating other funding options.
Does a reserve study require an HOA to increase reserve contributions?
A reserve study provides boards with recommendations based on the community’s components, projected expenses, and funding needs. It doesn’t necessarily dictate one specific funding decision. Requirements can also vary by state, so boards should understand any laws or regulations that apply to their community.
Can an HOA gradually increase reserve contributions?
Depending on the community’s circumstances, phased increases may be an option. Working with your reserve study provider can help the board determine how quickly contributions need to increase based on upcoming projects, asset conditions, and funding needs. This can give homeowners greater predictability while helping ensure the association is still setting aside enough to protect and maintain the community’s assets.
What happens if an HOA doesn’t have enough money in reserves?
An underfunded reserve account doesn’t automatically lead to one particular outcome. Depending on the size and timing of the funding gap, a community may need to consider increasing contributions, a special assessment, financing, adjusting project timing where appropriate, or a combination of approaches.
Can an HOA delay a major project instead of increasing reserve contributions?
Sometimes, but project timing should be evaluated carefully. The condition of the component, maintenance requirements, safety considerations, and the potential for additional deterioration can all affect whether postponing the work is a reasonable option. Delaying necessary work can sometimes increase the eventual cost.
How often should a reserve funding plan be reviewed?
Reserve funding should be revisited regularly to make sure the plan continues to reflect the community’s current condition and financial needs. Major completed projects, unexpected repairs, new inspections, or significant changes in project costs may also be reasons to review the plan sooner than originally anticipated.
Have Questions About Your Community’s Reserve Funding?
If your board is struggling with reserve funding decisions, I’m happy to help you understand your options and what your reserve study is telling you.
I work with communities throughout the Great Lakes region, and Reserve Advisors has experienced reserve professionals serving communities across the country. If I’m not the right person for your community, I can connect you with someone on our team who is.
Have a question about your reserve funding plan? Connect with me or find a Reserve Advisors expert in your area.
About Todd Walter, PE, PRA, RS
Todd Walter is Regional Executive Director for Reserve Advisors’ Great Lakes region and has more than 25 years of experience helping community associations plan for major repairs, replacements, and long-term reserve funding. A licensed Professional Engineer, Todd has completed thousands of reserve studies and on-site inspections, giving him firsthand insight into the challenges boards and property managers face as their communities age.
Known for making complex issues easier to understand, Todd helps boards understand their reserve needs, weigh their funding options, and plan responsibly for major projects.