With the 2026 budget season underway, community associations face the challenge of balancing financial stability, building maintenance, and complying with new legislation — all while minimizing the financial impact on residents.
Taking a proactive approach to your budget ensures your community is prepared for anything that comes your way.
Evaluating Property Conditions
It’s crucial to assess whether any structural or non-structural components of the property have deteriorated unexpectedly. This assessment should be made through a formal inspection. Any change to your building components should be updated in your community’s reserve study for future financial planning.
Repair or replacement projects that weren’t part of your original budget may now need to be included. If past projects have been delayed, consider whether further postponement could lead to higher costs down the road.
Managing Reserves and Planning for Projects
Understanding your reserve fund balance is critical. If reserves are lower than expected or have been spent on unplanned expenses, update projections for the upcoming budget cycle and create a strategy for replenishing those funds. Fully funded reserves provide financial security and allow your community to cover future repairs and essential projects without burdening residents.
Major projects, whether recently completed or upcoming, should be factored into your budget planning. When building your budget, identify any large-scale projects that need to be addressed in the next budget cycle. Working with a consultant can help you predict costs for these projects to avoid any hidden fees that could disrupt your budget.
When collecting bids for required projects, it’s important to evaluate the coverage of warranties provided and how they’ll impact your budget in the long run. For instance, a No Dollar Limit warranty covers 100% of replacement costs throughout the entire warranty period. This provides increased financial security over the course of the warranty period. Learn more about different warranty coverages here.
Utilizing Reserve Studies and SIRS
Reserve studies and Structural Integrity Reserve Studies(SIRS) are essential tools for informed budgeting. Reserve studies evaluate each building component, estimate remaining life, and create annual deposit schedules. For communities three stories or more, conducting a SIRS allows boards to plan for critical repairs and long-term projects, ensuring both safety and financial stability.
Preparing for a Successful Budget Season
With these tools in hand, community association managers and board members can proactively assess property needs, make informed decisions, and protect their reserves through long-term planning.
True Group is here to help communities protect their investments. Interested in hiring a consultant for your capital project planning? Contact us today for a free consultation.
