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Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Real Estate Law
Satisfied Customers: 118708
Experience:  Licensed attorney practicing landlord-tenant, land use and other real estate law and litigation.
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Other than legally, what is the customary amount the HOA should

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Other than legally, what is the customary amount the HOA should keep in reserves? If they are in excess of 3 to 1 ratio, do they still feel justified to ask for an increase in assessments?
Thank you for your question.

From the numbers you provided, if annual expenses were $289,000 and their reserves are in the $700K range, they are not above the 3 times the amount of their expenses range yet. The customary amount they will hold in reserve is 2 to 3 times their annual expenses and that is prudent in case for some reason one year they cannot pay annual expenses they have the money available to do so and also have money to make any major capital repair that is required.

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