Reserve Recommendations for a New HOA

Kathleen - It is more responsible to use what you have to fix the deficiency than wait till it causes further deterioration down the line. However, fixing the problem presents a catch 22, be careful to document the problem. Prior to performing any repairs you must document the deficiences in writing to the builder, the municipality, the state and give them a chance to respond. You do not want the builder or anyone to turn around and say you made the problem worse by fixing the deficiency. Trust me, this will be the builder's out. It does not sound like the statute of limitations has expired on going after the builder. Check your closing documents or with the state and see if you have a Builder's Limited Warranty. Roofs should be warrantied for much longer than one year. Roofs should not fail within one-year, their replacement is usually at the 20-25 year mark. As a rule of thumb associations should allocate 25% of their annual gross income to reserves. State laws or not, it's a good practice. Have you hired a transition engineer, or at least a certified building isnpector to perform a study on your property? At the end of the day, a solution is to videotape everything, assess each owner $125.00 to cover the $500.00 difference, take the $3,000.00 and perform the repairs, and immediately increase the maintenance and reserve fund allocation. Inform the owners with your course of action. Gerald