Recently, the Foundation for Community Association Research released a Snap Survey looking at reserve study and reserve funding trends across community associations. This survey provides a helpful pulse check on how associations are approaching reserve studies and funding, and where the biggest friction points remain. For board members and community managers, the findings reinforce a familiar truth: most communities understand reserves are essential, but many still struggle to translate a technical reserve study into confident decisions, consistent funding, and clear homeowner communication.
Below are the key takeaways, what they mean in practice, and how boards and managers can act on them.
Everyone funds reserves, yet many communities still aren’t where they need to be
One of the clearest signals from the survey is also the most encouraging: 100% of respondents reported that their community funds reserves. That reflects broad acceptance that reserve funding is not optional for responsible stewardship.
At the same time, funding levels vary widely:
- 30% report being less than 50% funded
- 22% are 50% or more funded
- 22% say they are fully funded for major structural components
- 14% report being fully funded
- 12% selected “other,” often describing alternate funding interpretations
Boards should keep in mind that “we have reserves” is not the same as “we’re prepared.” Underfunding doesn’t always manifest as a crisis today, but it often surfaces later as deferred projects, rushed decisions, and emergency assessments. For boards, the goal isn’t simply to avoid special assessments, but to minimize total long-term cost and reduce financial shocks over time.
If your community is underfunded, this should be a governance and planning priority. Ask your reserve professional and accountant to help you connect reserve recommendations directly to your annual budget and multi-year forecast.
The biggest challenge tends to be communication
When respondents were asked about challenges using reserve studies, the top answers were overwhelmingly about homeowner communication:
- 64%: Communicating funding needs to residents
- 59%: Explaining the study/concept to residents
- 25%: Special assessment concerns
- 16%: Interpreting the funding plan
This data reflects that reserve studies don’t succeed or fail solely on the information they provide. The success or failure of a reserve study often depends on whether communities can understand it, trust it, and act on it confidently.
Boards and managers should plan for communication as part of reserve planning rather than as an afterthought when dues increase. If owners don’t understand why reserves matter, the community becomes vulnerable to short-term decision-making, often resulting in delayed projects, underfunding, and inequity between current and future homeowners.
Boards should work to build a reserve communication rhythm. Instead of saving the reserve discussion for budget season, provide short, plain-language updates throughout the year, including what was done, what’s next, how the reserve balance is tracking, and what that means for assessments.
Update cycles are improving, but many communities still stretch beyond best practice
On update frequency, responses were mixed:
- 29% update every three years (recommended by CAI)
- 28% update every year
- 27% update every five years
- 15% use other intervals—often 7–10 years or “as needed”
These responses highlight a reality that managers may be familiar with. Board turnover, competing priorities, and a lack of a written reserve study timing policy can push updates further out than recommended. With inflation, labor costs, and insurance requirements changing rapidly, even recent reserve studies can become outdated. This is why the Community Associations Institute recommends updating reserve studies every three years as part of their Reserve Study Best Practices.
If your reserve study is treated as a static document, it loses value fast. Even without a full on-site update every year, associations need a plan to keep assumptions current.
Boards should adopt a written reserve study policy with (1) update cadence, (2) who owns what (board, management, reserve provider), and (3) how you will refresh assumptions annually (inflation, interest, and project timing).
Most boards see the reserve study as a planning tool rather than a living document
Significantly, 75% of respondents view the reserve study as an ongoing planning tool rather than a one-time report. Even more encouraging is that 59% review and track actuals annually, and 22% reference it when major projects are planned.
But there’s still a gap: 9% don’t actively engage with the study, and 8% mainly wait for the next professional update.
The reserve study should be part of your operating system – not a binder on a shelf. If the board is not comparing actual project costs and timelines against reserve assumptions, the funding plan can drift without notice, leaving cash short.
Homeowners don’t fully understand reserve studies, and meetings alone aren’t solving it
Homeowner understanding remains a persistent weakness:
- 53% say homeowners understand reserve studies somewhat
- 34% say not well
- Only 9% say very well
While many communities hold meetings (38% annually and 32% as needed), most do not bring the reserve professional into the room: 57% never, 18% rarely, and only 4% frequently.
Boards and managers often serve as translators of technical reports, a task that is difficult even for experienced leaders. Without the reserve specialist’s voice, homeowners may view reserve recommendations as “board opinion” rather than an independent professional evaluation.
Consider having your reserve provider attend at least one owner-facing session following a new study, either in person or virtually.
Ask for (or create) a resident-friendly “reserve dashboard”: top components, next 5–10 projects, current funding status, and what changes year-to-year.
External pressures such as insurance, laws, inflation, and aging infrastructure are reshaping reserve planning
Respondents pointed to major outside forces influencing reserve planning:
- 82%: aging buildings/infrastructure
- 55%: insurance requirements
- 47%: new state/local laws
- 23%: environmental risks (wildfire/flood/coastal)
- 18%: lending requirements (Fannie/Freddie/HUD)
Separately, 40% reported that a lender or insurer has requested their reserve study. Reserve studies are no longer “nice to have” planning documents. They increasingly affect insurability, marketability, and lending outcomes. A community with weak reserves or unclear planning may face higher premiums, tougher underwriting, or transaction delays.
Treat the reserve study as a core governance document. Ensure it is current, easily retrievable, and aligned with insurance/lending realities in your region.
Bringing it together: what boards and managers should do next
FCAR’s survey indicates the industry is moving in the right direction. More communities are funding reserves, and more leaders view reserve studies as proactive and necessary planning tools. However, there is a persistent gap in communication and usability.
If you want to reduce conflict and improve funding follow-through, focus on three things:
- Utilize the study (track actuals and incorporate scenario planning when appropriate)
- Make it visible (online access, visuals, dashboards)
- Make it understandable (homeowner education, leverage your reserve study provider at a meeting, Q&A)
Reserve planning succeeds when it becomes part of the community’s normal conversation—not a crisis response. And that’s where boards and managers can have the biggest impact by turning a technical report into a shared plan.