Commercial office building, condominium style, HOA budgeting questions
Hi all,

This is in reference to a 40ksqft commercial office building. \~10 tennants each owning their space.

I'm curious how HOA budgets normally work in regards to 1. Keeping reserves for emergencies and 2. Large, predictable projects.

The building currently does not have any budget line item for building reserves. However the building currently has reserves of 40k (120k yearly budget for reference). I'm not sure how it got here as I just recently bought my space and became involved with the HOA (which was nonexistent before me).

Do we need a budget line item to build reserves over time? Do we only add a line item on years when our reserves have dropped due to emergencies, in order to start building back to an agreed upon level?

Also, how are large things like parking lot repaves or landscaping redo's handled? Special assessments or budgeted by a line item building reserves for capex? I emailed the HOA law firm I worked with to rewrite our bylaws and guide me through things about this stuff, but curious what you all think.

I'm new to this and trying to save a nonresponsive and brutally neglected HOA singlehandedly so forgive me.
[{"id": "iu58lyg", "text": "We budget for a reserve, which goes into a capx account.  Nobody like special assessments, and imo they can be a sign of poor management -- you know the roofs and parking lots and hvac will have to be replaced.   I always increase annual budgets by inflation. Not fair for some owners to not pull their load via low dues and then sell out, and for new owners get a 20% increase or hit with SAs (especially SAs for opex!).  I've seen a couple of HOAs in a chaos because everyone sucked equity out by freezing dues in place -- feels good in the short term but wrecks the HOA in long-term.", "replies": [{"id": "iu802s2", "text": "&gt;Nobody like special assessments, and imo they can be a sign of poor management -- you know the roofs and parking lots and hvac will have to be replaced. \n\nSorry, what? Don't the assessments guide that? Not following the line of thought here", "replies": [{"id": "iu8vzx2", "text": "general assessments versus special assessments.  general assessments are your monthly/quarterly dues for opex and reserves.   special assessments are a one time /(large) cash-call, usually b/c reserves are insufficient for a new roof, elevator refurbishment.   Worst case scenario special assessments are made because budgeting and management was so bad that the hoa can't pay opex (water-sewer, janitorial, electricity)  as they burned through the operating account -- and those types of folks usually have burned their their reserve-capx account to pay opex.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "iu6qdbl", "text": "I\u2019m just wondering - why do you call it an HOA? Not sure if there\u2019s any difference, but just curious.", "replies": [{"id": "iu80kql", "text": "Probably meant a POA, but it's the exact same thing as an HOA except with non-homes lol", "replies": [], "depth": 2}], "depth": 1}, {"id": "iuyt5tc", "text": "Yep, I\u2019m in an apartment HOA (10 owners various buildings 100+ units) and concur with owners not liking the special assessments for CAPX not being budgeted in past years.  New HOA Prez is apartment investing guru so HOA dues go up every year for inflation and CAPX account is now specifically line-item budgeted for roads, managers unit, playground, etc. Monthly HOA now covers all the landscaping, fire extinguisher service, annual smoke detector inspections and other things the city requires from apartment owners.", "replies": [], "depth": 1}]