Great question! A reader asked this yesterday, describing their association as a residential association with many private homes along a common street, with little other common area assets (a gate system and a tot lot).
Boards are free to choose how to fund Reserves. Typically Governing Documents require the Board to collect "adequate" or "sufficient" Reserves to care for the association's common areas.
Are Reserve Contributions in Excess of “Actual Costs”?
A California client asked a very interesting question. California law (Civil Code 1366.1) specifically limits associations from collecting assessments in excess of the actual costs for which the funds are being collected.
