Perhaps one of the most significant legislative changes in recent years is the introduction of the reserve study budgetary disclosure. In many states, including Washington and Virginia, Associations are now required to provide their members with an annual reserve funding disclosure. The disclosure clearly states the amount of reserves recommended by the reserve study as against the actual amount of reserves currently available. The comparison gives a clear picture as to how well funded an Association is, and more importantly, what options they have moving forward.
The takeaway for owners is that they are being provided with a better understanding of the adequacy of their reserve account. They are also beginning to understand the importance of reserves and proactively preparing for the future. A small legislative change with a big impact.