Blog
By Jacque Martin, Reserve Advisors
Reserve studies are integral to the health and sustainability of any community association, but they aren't just a capital planning tool – they play a direct role in influencing condominium and HOA property values.
What is a Reserve Study?
Primarily acting as a long-term capital planning tool, reserve studies evaluate the condition of an association's common assets, estimate their remaining useful life, and predict the cost to repair or replace each asset. This information is compiled into a 30-year funding and expenditure plan, ensuring adequate reserves are available to complete repair and replacement projects on time.
Regular inspections of community infrastructure, combined with a reliable financial plan, make conducting reserve studies incredibly important for any association, with numerous states enacting condo and HOA reserve study requirements. The health of condo and HOA reserve funds relies on a stable, equitable capital plan, and the physical health of any community depends on awareness of each asset's maintenance needs.
How Reserve Studies Influence Property Values
Well-managed reserve funds and timely maintenance and replacement of assets ensure that associations remain attractive and functional, a key factor in maintaining and enhancing property values. Amenities and infrastructure that are properly maintained make condo and HOA units more attractive to potential buyers, and reserve studies help ensure that communities have funds available to keep the property in top condition.
Conversely, the failure to maintain adequate reserve funds can lead to a decline in property values, as neglected maintenance and the inability to cover repair and replacement costs will make the property less appealing to potential buyers.
Fannie Mae and Freddie Mac released a list of blacklisted properties that are ineligible for lending due in part to deferred maintenance, structural issues, and failure to conduct reserve studies or to properly fund reserves. If potential buyers are unable to secure loans because an association's reserve funds are inadequate, property values will ultimately fall.
The Impact of Financial Preparedness
Underfunded reserves and deferred maintenance are increasingly affecting condominium property values and marketability. As lenders, insurers, and buyers grow more aware of an association’s financial health, communities with inadequate reserve funding face difficulty selling units and a greater risk of costly special assessments. Adequately funded reserves are no longer just good financial practice; they are essential. Buyers now ask harder questions before making an offer, such as:
Reserve studies address these concerns directly by offering two interrelated benefits: financial preparedness and proactive maintenance. By understanding project costs and timing, boards and managers can set annual reserve contributions that reflect reality and ensure funds are available when needed. With adequate reserves in place, associations can complete repairs on schedule, preventing minor issues from escalating into costly emergencies. A community with well-maintained common areas and a history of stable contributions will always be more attractive to buyers.
The Value of Proactive Planning
Reserve studies are far more than a financial planning tool. They are a cornerstone of responsible community management and a critical factor in preserving and enhancing property values. Because the consequences of underfunded reserves are tangible and far-reaching, affecting everything from resident finances to marketability and lending eligibility, the safeguards provided by reserve studies are indisputable.
Communities that prioritize regular reserve studies and maintain adequate funding will always make potential buyers feel more confident in putting their best offer forward. In today's real estate landscape, a proactive approach to reserve funding is not just a best practice but a competitive advantage.
For more than 30 years, Reserve Advisors has helped community associations navigate capital planning with confidence. By combining industry expertise with tailored reserve study solutions, we empower boards and managers to make informed decisions for their communities' future.
By Charles Parsons
A Colorado HOA/COA management services Agreement is, at its core, a financial control document. While it includes operational and governance components, its primary function is to define responsibilities and protect the association’s financial health. It establishes how funds are managed, ensures proper oversight, and reduces financial risk.
The foundation of a strong management Agreement is financial management. This extends well beyond basic accounting and bookkeeping. The Agreement should clearly define how assessments are billed and collected, how delinquencies are handled in compliance with the Colorado Common Interest Ownership Act (CCIOA), and how funds are safeguarded and allocated to reserves. Expectations for monthly financial reporting, annual budgets, and reserve fund planning must be clearly outlined and understandable to non-financial board members. Transparency is not optional under CCIOA, and unclear reporting can expose both the board and management company to risk.
Equally important is authority over spending. Associations often encounter problems when Agreements fail to clearly define financial decision-making limits. The board retains fiduciary responsibility, while the management company executes within established parameters. Spending thresholds, approval requirements, and emergency authority should all be explicitly defined. Without this structure, associations risk unauthorized expenses and budget overruns.
Maintenance and vendor management also carry significant financial implications. In Colorado, where weather can accelerate deterioration and drive unexpected repairs, proactive planning is essential. Agreements should require competitive bidding, proper vendor insurance, and detailed documentation of scope and cost. Preventative maintenance should align with reserve planning to minimize the likelihood of special assessments and financial strain on homeowners.
Assessment collection policies are another critical safeguard. CCIOA outlines specific procedures for collections, including notice requirements and timelines. A well-structured agreement ensures these procedures are followed consistently, reducing bad debt while protecting the association from legal exposure.
Fee transparency is equally important. The base management fee is only one component of total cost. Additional charges—such as resale disclosures, project coordination, or administrative services outside standard management—can significantly impact the budget. A sound Agreement clearly itemizes all potential fees, allowing the board to forecast expenses accurately and avoid unexpected costs.
Insurance and risk allocation further support financial protection. The Agreement should require both the association and management company to maintain appropriate coverage, including general liability and errors and omissions insurance. Indemnification provisions must clearly define responsibility in the event of negligence or error, providing an additional layer of protection for association assets.
Communication, while often viewed as operational, also has financial consequences. Poor communication can lead to missed payments, disputes, and inefficiencies. The Agreement should establish expectations for financial disclosures, homeowner communication, and response timelines. Clear and consistent communication supports timely collections and reduces administrative burden.
Management Agreement terms should also incorporate performance standards tied to financial accountability. Clear termination clauses, renewal terms, and measurable service benchmarks allow the association to exit underperforming relationships without prolonged financial impact. At the same time, defined performance metrics help justify continuing a successful partnership and ensure the association is receiving appropriate value.
*Putting the agreement into practice requires active enforcement. Following are five areas we can focus on to effectively stick to a management Agreement.
First, use the Agreement as a performance scorecard. Review the management company’s performance regularly—typically on a quarterly basis—against the standards outlined in the contract. Focus on financial reporting timelines, budget adherence, collection performance, and responsiveness.
Second, assign clear oversight responsibility. While the board as a whole retains fiduciary duty, one member—often the treasurer or president—should monitor compliance between meetings. This promotes accountability and allows issues to be identified early.
Third, require documentation and verification. Boards should not rely solely on summary reports. Periodically review supporting data such as bank reconciliations, invoices, and collection records. If the agreement requires competitive bids, those bids should be reviewed—not just summarized.
Fourth, address issues promptly and in writing. When expectations are not met, document the issue and reference the relevant Agreement provision. This reinforces that the Agreement is binding and creates a clear record if further action is needed.
Fifth, apply consequences when necessary. While not every issue warrants escalation, repeated or significant failures should trigger defined responses, such as corrective action plans or the matter is unresolvable, termination. Decisions should be guided by the Agreement, not by convenience or emotion.
Finally, revisit and update the Agreement as conditions evolve. Changes in CCIOA, market conditions, or the association’s financial position may require adjustments to performance standards, reporting expectations, or fee structures.
“Sticking to the contract” means integrating it into day-to-day operations. Associations and management companies that do this build stronger working relationships, maintain better financial control, reduce risk, and achieve the level of performance and accountability the Agreement was designed to deliver.
By Lacie Abdella
Most HOA board members never expect their community to become the victim of fraud or financial mismanagement. Yet embezzlement, unauthorized spending, phishing attacks, and accounting errors continue to affect associations of every size.
While no system can eliminate every risk entirely, communities that implement strong financial controls are far better positioned to protect association funds and maintain homeowner trust. The most effective controls are not complicated—they simply create accountability, transparency, and oversight.
Here are five strategies every HOA board should consider.
1. Establish Dual Controls for Financial Transactions
One of the most effective safeguards against fraud is ensuring that no single individual has complete control over a financial transaction.
Expenditures should require multiple levels of approval, and associations should avoid situations where one person can authorize, process, and reconcile the same payment. Requiring dual signatures, board approval thresholds, or multiple approvers for electronic payments helps create accountability and reduces opportunities for errors or misuse of funds.
The goal is not to create bureaucracy—it is to create transparency.
2. Leverage Technology to Improve Security
As financial transactions become increasingly digital, cybercrime has become one of the fastest-growing threats facing community associations.
Boards should ensure that banking platforms use multifactor authentication, and that access to financial systems is limited to authorized individuals. Procedures should also be established for verifying vendor banking changes, wire transfer requests, and other payment instructions through a secondary communication method.
A simple phone call to verify a payment request can prevent a costly phishing incident.
3. Separate Operational Management from Financial Oversight
One of the most important financial safeguards for an HOA is ensuring that the same person or company is not responsible for every step of a transaction.
Property management companies play a critical role in coordinating vendors, overseeing projects, and supporting day-to-day community operations. However, when the same party is also responsible for approving invoices, processing payments, reconciling accounts, and preparing financial reports, the board may lose an important layer of independent review.
Lack of separation of duties does not mean necessarily misconduct is occurring. It means the system may not have enough checks and balances to provide proper vendor and invoice scrutiny.
By separating operational management from financial oversight, boards create a stronger control environment. A third-party accounting or financial management partner can independently review transactions, reconcile bank accounts, prepare financial reports, and help identify inconsistencies before they become larger problems.
This structure protects the association, supports the board’s fiduciary responsibilities, and provides additional confidence that community funds are being managed accurately and transparently.
4. Review Financial Reports Consistently
Financial statements should be more than a compliance exercise.
Board members should regularly review monthly financial reports, compare actual spending to budget expectations, and ask questions about unusual variances. Bank reconciliations should be completed consistently and reviewed on a regular basis.
Associations that actively engage with their financial reports are more likely to identify issues early, before they become significant problems.
5. Foster a Culture of Transparency
The strongest defense against financial mismanagement is often an informed and engaged leadership team.
Boards should maintain clear documentation of financial decisions, communicate financial information openly with homeowners, and encourage questions regarding budgets, reserves, and expenditures. Transparency helps build trust while reinforcing accountability throughout the organization.
When homeowners understand how decisions are made and how funds are managed, confidence in community leadership grows.
Financial Control Is an Ongoing Process
Protecting association funds is not accomplished through a single policy, annual audit, or software platform. It requires a system of practical controls that work together to reduce risk and increase accountability.
By implementing dual controls, leveraging technology, maintaining independent oversight, regularly reviewing financial information, and fostering transparency, HOA boards can strengthen financial governance, protect community assets, and build long-term trust with the homeowners they serve.
Lacie Abdella, Senior HOA Financial Analyst, has been an active CAI member since 2024. Clearview HOA Financial provides specialized accounting and financial management services designed exclusively for community associations. Clearview helps HOA boards gain confidence in their financial operations and focus on serving their communities.
By Bri Yonkers & Joe Smith, Burg Simpson
No matter the age of a common interest community, an Association needs to plan and budget for the repair and replacement of major common elements to avoid finding itself without adequate funds when the time comes for expected, necessary maintenance, repair, or replacement. Associations that don’t plan AND budget properly will find themselves (1) having to special assess the owners potentially thousands of dollars to raise the funds, or (2) trying to obtain a loan to raise the funds in the short term, to be repaid with interest, or (3) foregoing timely maintenance/repair/replacement, effectively kicking the can down the road to future owners who will face the specter of paying an even higher cost.
This article has two parts. First, we provide an overview of what Reserve Studies are, how they are developed, and best practices for use by Association Boards and Community Managers. Second, we briefly discuss Reserve Studies in the context of construction defect litigation, where they may be raised by Defendants in an effort to support timing-based and other defenses.
Reserve Studies 101
No HOA board wants to be remembered for or have to navigate through the unexpected special assessment that caught homeowners off guard. However, without proper planning for the inevitable repair and replacement of community assets, even well-managed Associations can find themselves facing difficult financial decisions. That’s where reserve studies come in.
Reserve studies provide Associations with a strategic roadmap for funding future repair and replacement of major common area components, such as roofs, fencing, streets, elevators, clubhouses, and recreational amenities. They help boards meet fiduciary duties while protecting property values and community stability. One important consideration is understanding the difference between a full reserve study and an update to an existing study.
A full reserve study typically includes an onsite inspection by a qualified reserve professional who evaluates the condition of Association assets, estimates their remaining useful life, and develops funding recommendations based on anticipated future expenses. These studies are especially beneficial for newer communities, Associations without a recent study, or those that have experienced significant changes to their assets.
Reserve study updates build on previous analyses by incorporating completed projects, changes in reserve balances, inflation, and updated cost information. Depending on the type of update, an on-site inspection may or may not be included. Regular updates help ensure that reserve funding plans remain aligned with the community’s evolving needs.
Reserve studies also evaluate an Association’s current reserve balance and future obligations, identifying its funding level and comparing it to recommended goals. Based on the results, the reserve professional may recommend increasing reserve contributions including the reserve portion of monthly assessments to help the Association reach a target funding level over time and reduce the risk of special assessments or deferred maintenance.
To support consistency and industry best practices, reserve professionals often rely on the National Reserve Study Standards published by CAI. These standards establish common terminology, disclosure requirements, and methods that provide boards and managers with greater confidence in understanding and utilizing reserve study recommendations.
In the end, reserve studies are about more than preparing for future expenses, they are about preserving the financial health of the community. Whether through a comprehensive study or a timely update, proactive reserve planning today helps communities avoid surprises tomorrow.
Reserve Studies in the Construction Defect Context
Most reserve studies that we’ve reviewed wisely include clarifying language reflecting CAI’s National Reserve Study Standards’ presumption that the components being analyzed and budgeted for have been “properly constructed.” Clarifying language might read:
This Reserve Study assumes that all components for which the Association is responsible were constructed properly and are free of construction defects. Neither this Reserve Study nor our site observations are intended to or have identified the potential existence of construction defects. If construction defects are known or suspected, the Association should contact qualified legal counsel or a qualified forensic expert to advise the Association, which may include the performance of a separate Construction Compliance Study.
Aside from protecting reserve providers who may not have the training or experience to identify construction defects, this language can be crucial to an Association that subsequently pursues construction defect litigation. This is because Associations in Colorado may have just two years from the date a construction defect manifests to put the potentially responsible parties on notice of the defects and then initiate legal action if necessary.
A reserve study that does not include clarifying language like that above may be used by a construction professional’s defense attorneys to argue that conditions identified in the reserve study are defects that had manifested by the time of the reserve study investigation. If, as is often the case, the reserve study was issued to the Association years earlier, defense attorneys may argue the applicable 2-year time frame to pursue defect claims had passed by the time the Association began taking steps to pursue litigation. If successful, this argument can result in the dismissal of some or all of the Association’s defect claims.
Reserve studies that include clarifying language, on the other hand, make it difficult for defense attorneys to meet the relatively high burden required to establish that an Association’s defect claims are untimely. By making sure every post-turnover reserve study includes this kind of protective language, Board Members and Community Managers provide significant protection to their community in the event construction defects exist and warrant litigation.
2026 Colorado Reserve Study Legislation
On April 13, 2026, Governor Jared Polis signed HB26-1099. Effective August 12, 2026, HB26-1099 amends CCIOA and contains the following requirements, among others:
Despite the efforts of Colorado’s Legislative Action Committee, declarants are not required to fund reserves in accordance with the study they commission before turnover. HB26-1099 can be viewed and downloaded at https://leg.colorado.gov/bill_files/114514/download.
About the Authors: Bri Yonkers, Marketing Director, Burg Simpson; Joe Smith, Construction Defect Attorney, Burg Simpson
By Nicole Bailey
Investment products are more accessible than ever, giving community associations a wide range of investment options. With that accessibility comes greater responsibility to ensure association funds are managed prudently and protected from unnecessary risk. Community managers and boards of directors have a fiduciary duty to preserve funds needed for future repairs and replacement of major association assets. Just as associations rely on attorneys or tax professionals, they should also work with a licensed investment advisor to manage reserve investments. A professional advisor can help ensure investments comply with governing documents, maintain liquidity for upcoming expenses, and earn a competitive rate of return. Associations should prioritize safety, liquidity, and yield—in that order.
SAFETY
As communities age, reserve funding becomes a growing concern, and associations face the financial consequences of being underfunded. Many states have introduced legislation governing reserve management. In Colorado, Senate Bill 100, passed in 2005, requires associations to adopt an investment policy. Like the other governance policies required by the law, the investment policy should be prepared with guidance from the association’s attorney.
A formal investment policy provides consistency as board members, priorities, and market conditions change over time. The policy typically outlines the association’s investment objectives, acceptable investment vehicles, and management requirements. In most cases, the primary objective is preservation of principal. This generally limits investments to vehicles insured by the FDIC or backed by the full faith and credit of the United States government.
Common examples include certificates of deposit (CDs), treasury bills, government-backed money markets, and other federal securities. These investment options reduce credit risk and help protect association funds from market volatility and economic uncertainty. While all investments carry some degree of risk, restricting investments to federally insured or government-backed vehicles can significantly reduce exposure.
LIQUIDITY
Balancing available cash with anticipated expenses is one of the most important aspects of reserve fund management. Reserve funds are intended for the repair and replacement of association assets, so the board, management team, and investment advisor must ensure funds are available when needed.
A professional investment advisor can use the reserve study to build a customized investment strategy that aligns cash availability with projected expenses. This allows associations to maintain sufficient liquidity while still earning interest on funds that are not immediately needed. If too much cash remains idle in low-interest accounts, the association may lose potential earnings opportunities. Money market accounts can provide liquidity while generating interest income, though rates may fluctuate as market interest rates change. CDs offer a different advantage by locking in a fixed interest rate for a specific term. Working with a licensed investment advisor allows boards and managers to find the appropriate balance between accessibility and long-term growth.
YIELD
An association’s investment returns are heavily influenced by broader interest rate trends, particularly movements in the 10-year U.S. Treasury note. Interest rates fluctuate in response to economic reports, inflation, geopolitical conditions, and financial markets. These movements affect CD rates, money market yields, mortgage rates, and other lending and savings products.
Higher interest rate environments can create an impactful opportunity for community associations to strengthen reserve funds without taking on additional investment risk. For associations with larger reserve balances, these additional earnings can help to offset the impact of inflation, reduce funding shortfalls, and lessen the likelihood of special assessments or loans.
The Federal Open Market Committee (FOMC) also plays a major role in shaping interest rates. When inflation is elevated, the FOMC may raise rates to slow economic activity. Conversely, rates may be lowered during periods of economic weakness. Because interest rates are constantly changing, associations benefit from working with professionals who actively monitor market conditions.
A licensed investment advisor can help determine the most appropriate investment strategy based on both current market conditions and the association’s liquidity needs. In some environments, maintaining a disciplined CD ladder may be the best approach. In rising rate environments, shorter maturities may provide more flexibility to capture higher future yields. In declining rate environments, longer maturities may help lock in stronger returns before rates fall further.
Ultimately, maximizing yield is not simply about finding the highest available interest rate. It is about selecting investments strategically to balance safety, liquidity, and market conditions while supporting the association’s long-term financial goals.
Community associations have a responsibility to current and future owners to protect and preserve association assets. By focusing on low-risk investments, maintaining appropriate liquidity, generating interest income, and working with qualified investment professionals, associations can strengthen reserve funds and fulfill their financial obligations to the community.
The information contained herein has been derived from sources believed to be reliable, but no representation or warranty, express or implied, is made by RBC Wealth Management, its affiliates, or any other person as to its accuracy, completeness, or correctness. All opinions and estimates constitute the author’s judgment as of the date of this publication, are subject to change without notice and are provided in good faith but without legal responsibility.
Investment and insurance products offered through RBC Wealth Management are not insured by the FDIC or any other federal government agency, are not deposits or other obligations of, or guaranteed by, a bank or any bank affiliate, and are subject to investment risks, including possible loss of the principal amount invested.
Past performance is no guarantee of future results. It is not possible to invest directly in an index
Neither RBC Wealth Management, a division of RBC Capital Markets, LLC (“RBC WM”), nor its affiliates or employees provide legal, accounting or tax advice. All legal, accounting or tax decisions regarding your accounts and any transactions or investments entered into in relation to such accounts, should be made in consultation with your independent advisors. No information, including but not limited to written materials, provided by RBC WM or its affiliates or employees should be construed as legal, accounting or tax advice.
RBC Wealth Management, a division of RBC Capital Markets, LLC, registered investment adviser and Member NYSE/FINRA/SIPC.
Nicole Bailey is a Certified Financial Planner ™ and financial advisor serving community associations nationwide, focused on helping clients protect, preserve, and grow their assets.
By David Ford-Coates, Western Alliance Bank
Every community association eventually faces the same uncomfortable moment of realizing the pool looks tired, the roofs are aging faster than a ski bum in the Colorado sun and the asphalt resembles a topographical map of the Rockies.
Then comes the million-dollar question (sometimes literally) - should the association phase the project over several years or obtain funding and tackle it all at once?
From an HOA lender’s perspective, the answer is rarely one-size-fits-all. Much like reserve studies, board meetings and owners replying-all to community emails, things can get complicated quickly.
The Case for Phasing Projects
Phasing capital improvements can feel financially responsible and politically safer. Instead of one large loan or special assessment, the association spreads costs over time and addresses projects in manageable chunks.
This approach often works well when:
The challenge? Construction costs rarely decrease over time. Inflation, labor shortages and material pricing have turned “waiting until next year” into a surprisingly expensive strategy. A project that costs $2 million today may easily cost significantly more three years from now.
There is also the “Swiss cheese community” problem, which is when projects are phased too aggressively associations can end up with half new, half aging infrastructure. Nothing says “consistent community aesthetic” quite like brand-new roofs sitting above parking lots that resemble lunar craters.
The Case for Financing the Entire Project and Getting it Done Now
Financing allows associations to complete large-scale improvements immediately while spreading repayment over time. In many cases, this creates stability for both the association and homeowners.
From a lender’s perspective, financing often makes the most sense when:
There are also operational benefits. Completing projects at once can reduce contractor mobilization costs, minimize resident disruption and avoid years of ongoing construction fatigue.
Let’s be honest, nobody wants to explain for the fourth consecutive summer why the pool, clubhouse parking lot and front gate are all still under construction.
Financing can also preserve property values. Communities with visible deferred maintenance tend to experience buyer hesitation, increased owner frustration and insurance challenges. Well-maintained communities simply compete better in the marketplace. This is especially important in a buyer’s market.
So, Which Option Is Better?
The real answer lies in balancing financial capacity, project urgency and owner tolerance.
An association should ask:
In many cases, the smartest approach could be a hybrid strategy. Finance critical infrastructure projects while phasing cosmetic or lower priority improvements over time.
For example, an association may finance roofing, siding and drainage repairs immediately while delaying clubhouse upgrades or amenity enhancements.
A Lender’s Perspective on Board Decision Making
One of the biggest misconceptions about HOA lending is that financing signals financial weakness. In reality, many well-run associations use loans strategically to preserve reserves, avoid large special assessments and complete projects efficiently.
Strong communities plan proactively. They evaluate reserve studies carefully, communicate transparently with owners, and analyze total project cost.
The goal is to protect the long-term health of the community, and sometimes that means accepting a loan payment today to avoid much larger costs tomorrow.
After all, deferred maintenance has an uncanny ability to become emergency maintenance at the least convenient possible time, usually right after the board finally thought things were calming down.
As every HOA professional knows, nothing says “good morning” quite like discovering the roof replacement project you delayed for three years has now evolved into an interior water intrusion project.
David Ford-Coates is Senior Vice President of HOA & Special District Banking for Western Alliance Bank. Member FDIC.
By Pat Wilderotter
HOAs are not multi-million-dollar corporations like McDonalds, Starbucks, Marriott Hotels, Yahoo and countless other companies. Why are HOAs vulnerable?
Hackers recognize that HOA board members are typically volunteers. Associations typically possess valuable financial information including homeowners contact information, banking and payment information, assessment payment records, operating and reserve accounts, etc. Couple that with associations having few safeguards to protect their digital records and they are an easy target for hackers. Even when the association is using a management company, boards often can direct the management company to transfer funds to a fraudulent vendor’s invoice that they received and to move funds from the operating account to a reserve fund that has been unknowingly hacked…etc.
The most common cyber attacks involved fraudulent email communications. Hackers can gain access to an email account or impersonate the management company, a vendor or a board member.
Ransomware attacks are one of the fastest growing cyber threats. Hackers infiltrate computer systems, encrypt critical data and demand payment to restore access.
Data Breaches target stored personal information. Members of the HOA’s names, addresses, credit card information, etc. are now compromised. The affected individuals have to be notified with the association having to provide credit monitoring services, legal services to help re-establish an individual’s identity, etc.
Social engineering is when hackers manipulate individuals into providing sensitive information or authorizing financial transactions. Phishing is a type of social engineering where internet users are “tricked” through deceptive emails etc. to reveal sensitive information, unknowingly installing viruses, etc. and often are aimed at a large group of recipients. Additionally, we know that 1 in 6 hackers are now turning to AI to create phishing emails and deepfakes.
Boards traditionally look to cover the property, liability, D&O and crime exposures for their association. Crime policies historically did not offer coverage for cyber attacks. We are now in the computer/digital age where insuring protection from hackers is as important as property and liability coverages. Board members have a fiduciary responsibility to protect the association’s assets. Whether buying separate cyber insurance or seeing what coverages can be added to their crime policy, each association’s insurance renewal should include cyber insurance coverage. Cyber coverage is not expensive but is now a necessary part of the association’s risk management responsibilities. For example, $250,000 of coverage with a $2,500 deductible can cost from $600 - $700 annually.
Boards and managers should request insurance coverage for potential cyber attacks if they do not currently have coverage or are not offered coverage at their renewal. Cyber insurance can help to cover financial and recovery loss, ransomware payouts, notification services, credit monitoring services etc. In 2025, the average U.S. data breach cost 10.2 million. High dollar costs that the association will have to incur if they do not have adequate cyber insurance.
About the Author: Pat Wilderotter is past-president of the Rocky Mountain Chapter of CAI. She is one of 150 agents in the US to hold the designation of CIRMS (Community Insurance and Risk Management Specialist). Pat heads the HOA team at CCIG where she is an executive VP and Partner.
By Derek Brase, Empire Works
Most community Board of Directors have already experienced the moment…
A roof proposal comes in higher than expected. They hope the asphalt paving can make it one more season. A siding, waterproofing, or concrete repair project gets moved from “this year” to “next year” because the estimated prices feel uncomfortable.
Boards are supposed to be cautious and diligent with community funds, so delaying projects can feel responsible at the moment. But in the current construction market, waiting is not always the safer choice. In many cases, it simply moves the same project into a more expensive year.
Oil volatility, fuel costs, tariffs, material escalation, labor pressure, and transportation costs are all showing up in contractor pricing. For associations responsible for common area assets, these cost factors are becoming evident in the bids their community receives.
Construction Costs Continue to Climb
According to Associated Builders and Contractors, direct construction prices rose at a 12.6% annualized rate during the first quarter of 2026. Overall direct construction prices were up 3.1% from February 2025 to February 2026, but the early-year acceleration shows how quickly costs can increase when fuel, metals, transportation, and supply chain issues hit at the same time.
Why Oil Costs Matter to Your Association
Oil and fuel costs are heavily tied to construction in several ways. Many materials used in association projects are petroleum-based or highly affected by petroleum pricing. Asphalt, sealants, roofing products, waterproofing materials, coatings, insulation, and PVC piping all rely on oil or petroleum inputs in some form.
Even when crude prices pull back after a spike, suppliers and contractors may price cautiously because replacement inventory, delivery costs, and future fuel expenses remain uncertain.
Transportation and Mobilization
Construction is a delivery-heavy business. Materials, equipment, crews, and specialty products all must get to the property, and these costs are directly affected by diesel fuel.
In February 2026, diesel fuel prices increased 20.3% from the prior month and were 3.1% higher year over year, according to the Associated General Contractors of America. That kind of short-term jump can show up quickly in trucking, delivery, mobilization, and supplier pricing.
Energy-Intensive Materials
Many construction materials require significant energy to produce. Concrete, steel, aluminum, glass, roofing materials, and manufactured components all depend on energy-intensive production. That is one reason metal-related increases have been so noticeable. AGC reported that aluminum mill costs were up 39.1% year over year as of February 2026 and steel mill products were up 20.9%.
These increases can affect railings, fencing, flashing, gutters, structural repairs, electrical components, mechanical systems, and window or door systems.
What Boards Can Do Now
If a project has already been approved and included in the reserve plan, postponing it may create more risk than savings. The community maintenance or repair project will still be there next year and in most cases, it will be worse resulting in project cost increases.
Preventive maintenance is rarely exciting, but it is often where associations save the most money. A small repair today can turn into a replacement project if overlooked. A manageable reserve expense can quickly become a special assessment conversation.
Bid Earlier Than You Think You Need To
Boards should start the bidding process well before a project becomes urgent. Early bidding gives the association time to compare scopes, ask questions, review contractor qualifications, and understand the real market price.
It also gives the Board more flexibility. When a project is urgent, the association may have fewer contractor options, less negotiating room, and a shorter window to make decisions.
Starting early does not obligate the Board to move forward immediately. It simply gives the Board better information to make more informed decisions.
Ask About Price Holds
Boards should ask vendors and contractors how long pricing can be held. Some contractors may only honor a proposal for a short window, especially when material costs are unstable. Others may be able to hold pricing for a defined period if the scope is clear and the contract is signed promptly. Any price hold terms should be in writing.
The Bottom Line
Waiting can feel conservative and sometimes it is. But in today’s construction market, waiting can also be more expensive.
Oil volatility, fuel costs, tariffs, labor pressure, and transportation costs are all affecting community association projects. Boards that plan early, update their reserve assumptions, communicate clearly, and move forward with necessary work are in a stronger position than boards that defer and hope for a better market.
The Board’s job is to preserve, protect, and maintain the association’s common assets. Right now, that means treating timing as part of the financial decision.
About the Author: Derek is Vice President of EmpireWorks Reconstruction and a construction industry veteran with over 20 years of experience. He has spent 14 of those years specializing in HOA reconstruction, bringing deep expertise as a Senior Project Manager, Cost Estimator, and Consulting Expert. Since joining EmpireWorks in 2015, Derek has helped establish the company as an industry leader in reconstruction services.
By Jason Ryan, WestWork Management
The duty of a community manager is to provide tools that allow volunteer Board members to make good decisions. These tools come in all shapes and sizes and vary from third-party experts to financial reports that are easily understandable and actionable. I believe the days of delivering a 70-page financial packet with massive amounts of data but none of the insights are coming to a close. Boards have spent decades looking in the rearview mirror to see what has happened. Management firms have a responsibility to change that and to move Boards from reactive decision making to predictive financial analytics that tell you not just what happened, but what will happen.
All of the standard monthly reports that include income statements, balance sheets, and variance reports are backward looking and contain very little context. We can compare budgeted items to actuals, but that is only as good as the budget process that produced them. While a $200,000 or even a $2,000,000 reserve account may "feel" healthy, every Association is unique, and without context those numbers tell you nothing. Boards face real decision fatigue when they are asked to approve line-item budgets and reserve funding goals without understanding what is normal, what is risky, and what their community needs.
Reserve studies are a vital piece of the data puzzle but they are no longer enough on their own. If you do not have a current reserve study, what model are you using to determine the lifespan of your parking lot or the end-of-life date for your fire alarm panel? One size does not fit all when it comes to reserve requirements, and the age, construction type, and location of a property all change the equation. At a minimum, every manager and every Board member should be able to speak confidently about the likely capital expenses facing their community over the next ten years. If that conversation is uncomfortable, it is time to go back to the drawing board.
The next layer is benchmarking. For an HOA, benchmarking means comparing key metrics such as reserve funding percentage, assessment delinquency rate, maintenance cost per unit, insurance expense trends and comparing them against similar communities in the same geographic area and asset class. Why does this matter? A community sitting at 72% reserve funding means nothing in isolation. Is that strong or concerning for a 1980s wood-frame building in Denver? The answer depends entirely on context, and that context is now more accessible than ever. The data exists. The models can be built.
What does this look like in practice? Imagine presenting a Board not with a balance sheet, but with a scored financial health summary that contains reserve adequacy, delinquency trend, cash flow trajectory. These reports should be set alongside benchmarks from comparable communities in their market. That is the difference between a data dump and a decision. Using this type of data analysis you would be able to identify an association trending toward a special assessment eighteen months before it would have surfaced in a standard monthly report. This lead time changes everything. Moving from crisis management to strategic planning.
The tools to build these models exist today. The barrier is not technology. It is the willingness of management companies to invest in systems that aggregate data meaningfully and train their managers to deliver insight, not just compliance. Boards deserve the same financial visibility that any well-run business expects from its leadership team.
The CAI community has an opportunity to set a new standard. Stop delivering packets. Start delivering intelligence. The Boards we serve are volunteers making real financial decisions on behalf of their neighbors and they deserve nothing less.
Jason Ryan, co-owner and President of WestWork Management, leads a premier community association management firm serving Colorado's Front Range. Specializing in townhomes and HOAs, he combines innovative technology with personalized service to enhance community living. WestWork is celebrating its 10th year as champions for excellence in association management.
By James Carr
For many community associations, irrigation systems are often viewed as a maintenance necessity rather than a strategic asset. Yet landscape irrigation frequently represents one of the largest—and most unpredictable—operating expenses within an association's budget. As water rates continue to rise and regional water supplies face increasing pressure, reducing water consumption is no longer solely an environmental objective; it has become a critical financial responsibility.
The challenge is that meaningful water savings rarely come from a single product or technology. Instead, successful associations follow a structured plan that improves system performance, protects assets, and delivers measurable returns on investment.
1. Establish the Baseline with a Comprehensive Irrigation Assessment
Every sound financial strategy begins with understanding current conditions. Before investing in new technology, associations should first evaluate the health and integrity of their existing irrigation infrastructure.
A comprehensive irrigation assessment identifies hidden issues such as leaks, broken lateral lines, sunken sprinkler heads, pressure inconsistencies, aging components, and inefficient coverage patterns. While smart irrigation technology often receives the most attention, these underlying deficiencies can significantly undermine any water-saving initiative. An assessment ensures the foundation of the system is functioning properly before additional investments are made.
2. Leverage Smart Technology and Flow Monitoring
Once system deficiencies have been corrected, the next step is implementing smart irrigation technology. Modern weather-based controllers can automatically adjust watering schedules based on local climate conditions, helping landscapes receive only the water they actually need.
However, a smart controller should not operate alone. Pairing it with a master valve and flow sensor creates an additional layer of protection. Flow monitoring technology continuously measures water usage and can detect abnormal conditions caused by broken pipes, stuck valves, or major leaks. When excessive flow is detected, the system can automatically shut down, preventing costly water loss, erosion, and potential property damage.
3. Ensure Proper Programming and Optimization
Technology delivers results only when configured correctly. One of the most common mistakes is installing advanced irrigation controllers but programming them as if they were traditional timers.
To maximize water savings, controllers must be programmed using accurate site-specific information, including plant material, soil conditions, precipitation rates, sun exposure, and microclimates. Proper programming allows the system to apply water more precisely, helping associations achieve the 20% to 40% water savings that smart irrigation systems are capable of delivering.
4. Protect the Investment Through Proactive Inspections
Water management is not a one-time project. Landscapes evolve, equipment ages, and irrigation components are subject to ongoing wear and tear.
Routine inspections are essential for identifying small issues before they become costly problems. Regular system audits, zone testing, and visual inspections help detect leaking valves, clogged nozzles, damaged sprinkler heads, and other inefficiencies that contribute to unnecessary water consumption. Consistent maintenance protects both the landscape and the association's budget.
Effective water management is not about sacrificing landscape quality. It is about improving precision, accountability, and operational efficiency. By following a disciplined approach—assessing infrastructure, implementing smart technology, optimizing programming, and maintaining proactive oversight—community associations can reduce water waste, stabilize operating costs, protect property values, and demonstrate responsible environmental stewardship.
About the Author:
James Carr holds numerous irrigation certifications and licenses and supports BrightView's national irrigation and water management initiatives. He works with community associations and commercial properties to improve irrigation performance, reduce water waste, and develop sustainable long-term water management strategies.
