AB 2050: A Circular Attempt at Mandatory HOA Reserve Funding
Supporters of AB 2050 say HOAs must fund reserves, at least at a minimal level. But it won’t fix what owners must pay for deferred maintenance.
Property
To Rescue Aging Condos, Treat Them as Homes. Not Businesses.
Condominiums from the 1970s and 80s are having a midlife crisis. What if we could reimagine state law to simplify and incentivize repair and preservation? Here’s a proposal for the Vintage Condominium Act.
HOA Reserve Fund Tax: Why Your Association Pays a Higher Rate Than Apple
HOAs pay a 30% tax on reserve fund interest. Legislative history from 1980 shows Congress set it deliberately high because they thought people in HOAs were well off.
Member Voting for Special Assessments: How a Bad Law Sabotages Older Condos
When HOAs have flat reserves or their dues are too low, California’s Davis-Stirling Act is unforgiving. A punitive law–an extreme outlier among states–makes it harder than it should be for new boards to catch up when they inherit a mess.
The Real Lesson of Champlain Towers: What the Surfside Condo Collapse Tells Us About How Buildings Fail
After a condominium building collapsed in Surfside, FL, taking 98 lives, the Florida legislature reacted by mandating fully funded reserves. But design flaws, not low reserves, were the root of the tragedy. Heavy-handed reserve requirements may endanger more buildings than they save.
A Rational Approach to Reserve Funding
Conventional wisdom says you should fully fund your reserves. But it’s hard: humans aren’t wired to save for the future, nor does it always make good sense from an investment perspective. Here’s a different approach to condominium reserves and funding major projects.
Anatomy of a Reserve Study: The $1 million Item It Missed
California law requires HOAs to do a condo reserve study every three years. The study can include a daunting list of minor components while leaving gaping holes—and unexpected expenses to be covered by special assessments.
LADWP Electricity Rates: One that May Save Your HOA Money is Still Secret
Almost two years after CondoWonk reported that a little-known electric rate could lower HOA common area electric bills, an LADWP spokesperson acknowledges that its website provides no information. Instead, LADWP’s website refers only to a residential rate that causes bills to spike in the summertime.
10 Things to Know about Buying a Condo in an Older Building
Most condo units for sale in Los Angeles are in buildings that are more than 30 years old. They may offer nicely remodeled units with generous space, but older buildings need more maintenance. Here’s advice on issues buyers are likely to find while shopping for a condo unit in older buildings.
Earthquake Insurance—Does Your Condo Need It?
Given the reality of multi-million-dollar deductibles that may exceed actual damages, even HOAs that carry expensive earthquake policies may not have meaningful coverage. Boards can consider dropping the coverage—if their CC&Rs let them.