If you are buying a San Diego condo, one of the most useful questions is: Could I be buying just before the HOA asks owners for more money?
You can often identify a funding problem before an assessment is approved. Look for major work coming due, compare its cost with the money available by that date, and find out whether the board has adopted a realistic way to cover the difference. The closer the repair deadline and the larger the unresolved gap, the more that issue belongs in your purchase decision.
A reserve study helps with that analysis, but it cannot assign a reliable percentage chance that your particular association will levy an assessment. That decision also depends on conditions the study may not fully capture: updated bids, the board’s choices, existing loans, insurance recoveries and work that has become more urgent since the report was written.
Here is how I work through the question with a buyer.
Start with the next expensive repair, not just the reserve balance
A statement showing $250,000 in reserves sounds reassuring until you learn the roof may cost $300,000 next year. It means something different if that roof was replaced last year and the next large expense is a decade away.
Begin with the reserve study’s component schedule. Identify the most expensive items expected in the next one to five years, then connect those estimates with newer information:
- What work is actually approaching? Look for the roof, waterproofing, exterior surfaces, balconies, elevators, paving and other association-maintained components appropriate to this property.
- When will payment be needed? A project expected in three years can become a current expense after an inspection, failure or board decision.
- What supports the cost? A reserve-study estimate and a recent contractor bid serve different purposes. Check their dates and whether they cover the same scope.
- Who is responsible? The governing documents and relevant maintenance responsibilities determine whether the cost falls to the association, an owner or another responsible party.
Read the minutes and relevant inspection or engineering reports alongside the study. A repeated discussion of leaks, a postponed repair contract or bids substantially above the study’s estimate can change the picture even if the study’s headline figures have not changed.
That is also why the year printed on a reserve study matters less than whether its assumptions still fit the building.
Follow the money the HOA will actually have
Once you have a project and a payment date, ask what can pay for it.
Ask the listing agent for the current reserve study, adopted budget, recent financial statements and available board minutes as part of your disclosure review. The HOA review checklist helps organize the records and questions.
Start with a recent reserve balance, identify money already committed to other work, and compare the study’s recommended contributions with the adopted budget and actual transfers into reserves. A recommendation to save $100,000 a year does not produce that money if the association is putting aside $60,000.
For a first screening, the calculation is:
Starting reserve cash + contributions received before payment − other reserve spending − the project payment = remaining reserve cash.
Apply it in date order. Looking only at a year-end total can hide a shortfall in the month a contractor needs payment. A proposal that might generate money later is different from a funded, approved arrangement with a usable payment timetable.
For that reason, I also ask whether the balance includes borrowed money or amounts committed to another purpose. A large bank balance can coexist with loan payments or competing repair obligations. It is the available money and the remaining commitments together that matter.
A two-year example: the roof is only the first bill
Consider a hypothetical 50-unit association with these figures:
| Item | Amount and timing |
|---|---|
| Starting reserve cash | $250,000 |
| Current reserve contributions | $5,000 per month |
| Other committed reserve work | $50,000, paid at the end of month 3 |
| Roof project | $300,000, paid at the end of month 12 |
| Elevator project | $180,000, paid at the end of month 24 |
For this example, contributions arrive before each month-end payment. We exclude interest, other income, inflation and any unlisted expenses to make the cash timing easy to follow. A real reserve study needs the full component schedule and longer-term funding analysis.
By the roof payment, the association would have $250,000 in starting cash plus $60,000 in contributions, less $50,000 already spent. That leaves $260,000 for a $300,000 roof: a $40,000 gap at month 12.
By month 24, it would have collected another $60,000 but would also need the $180,000 elevator work. Across the full two years, if nothing changes, the combined shortfall across both projects reaches $160,000.
Now change two assumptions, one at a time:
| Funding scenario | Gap at the roof payment, month 12 | Total additional funding needed by month 24 |
|---|---|---|
| Current contributions and $300,000 roof | $40,000 | $160,000 |
| Roof costs 20% more; contributions unchanged | $100,000 | $220,000 |
| Contributions rise to $10,000/month from the start; roof stays $300,000 | None (a $20,000 surplus) | $40,000 |
The higher roof cost is a stress test, not a forecast. The higher contribution is another scenario, not an assumption that a dues increase has been approved.
If these 50 units shared a $160,000 assessment equally, the illustration would be $3,200 per unit. At $220,000, it would be $4,400 per unit. Actual allocations depend on the governing documents and the adopted assessment; some communities do not allocate costs equally.
The contribution scenario shows the tradeoff just as clearly. An extra $5,000 a month across 50 equal shares would mean $100 more per unit per month. It would cover the roof on this timetable, but still leave a $40,000 gap by the elevator payment.
This is why I do not stop at “the roof is funded.” The next project may be what turns a manageable budget into a difficult one. Nor do I treat the calculated gap as an assessment already owed: the board may have other funding choices. The question is whether those choices are credible, affordable and timely.
If you have a specific condo in mind, I can help organize the financial questions around that property and your purchase budget, then coordinate the issues that need the association, lender or a qualified specialist to answer.
What percent funded tells you, and what it leaves out
Percent funded compares reserve cash with a calculated benchmark for accumulated component deterioration. It is useful context, but it is not the percentage of the next repair that is paid for, and it is not the probability of an assessment.
Association Reserves’ April 2026 industry report, drawing on more than 100,000 reports for over 25,000 properties, reported 34% of its clients in its lowest funded band, 40.3% in the middle and 25.7% in the highest. The report labels those bands 0–30%, 30–70% and 70%+, respectively. It describes its client data as directional, not statistically representative of all U.S. associations. These are funding categories, not the odds of an assessment at a particular San Diego condo.
For your purchase, place that percentage beside the actual payment schedule. A thinly funded association with a large repair approaching and no adopted funding response presents a more immediate cash problem than the percentage alone reveals. Even a stronger reported percentage needs scrutiny if the report omits major work or relies on stale costs.
I do not give a building a passing grade simply because it crosses a particular percentage. I want the numbers and the repair plan to agree.
Which findings deserve the most attention?
The clearest concern is a documented bill or necessary repair approaching faster than the association can fund it. Several findings together can make the need for answers more urgent:
Work is approaching, but the funding decision is still open. Bids or an engineering recommendation identify a significant cost, while minutes show repeated postponement of the funding decision. Ask what decision remains, who must make it and when the money would be available.
Actual contributions fall short of the assumed plan. Compare what the study recommends, what the board adopted and what the financial statements show. A contribution increase discussed for next year should not be counted as money already collected.
The project has grown or moved forward. A roof estimate may exclude related waterproofing, access costs or damage discovered later. A specialist or contractor should explain the scope and urgency; the purchase analysis then needs the corresponding revised costs and dates.
Several expensive components come due together. Funding one repair may consume the cash expected to pay for another. Ask for the combined cash-flow forecast, including work already contracted.
The plan depends on money that may not arrive in time. An anticipated claim payment, settlement, refinancing or future vote should be identified separately from cash already available. Find out what happens if it is delayed or smaller than expected.
Conversely, completed work, current estimates and an adopted plan supported by actual collections give a buyer more usable evidence. They do not eliminate every future expense, but they make the present funding position much easier to evaluate.
Turn the findings into specific questions before you buy
A general question such as “Is the HOA healthy?” is hard to answer usefully. These questions connect the records to your budget:
- Which major projects are expected within the next five years, and what is the current basis for their timing and cost? Ask whether newer inspections or bids have changed the reserve study’s assumptions.
- How much reserve cash is available today, and what is already committed? Use a balance date and identify work paid or contracted since the study.
- How much is actually going into reserves each month? Reconcile the study, adopted budget and recent financial statements.
- Does the cash-flow forecast stay funded when each project is paid? Include overlapping work and any required loan payments; ask for the association’s explanation of a projected gap.
- Has the board discussed or approved an assessment, loan, dues increase or other funding source? Request the relevant decision and terms rather than relying on a verbal summary.
- What remains undecided, and when will it be resolved? A purchase deadline can arrive before a board vote or final bid. That timing belongs in the offer and due-diligence discussion.
The records may support an assessment as one plausible funding route without establishing an amount or a decision to levy it. If the cost or timing remains unresolved, I show you what is known, test a reasonable budget range and identify which answer could change your willingness to proceed.
Your lender should also receive relevant repair and assessment information early. Fannie Mae’s project rules require attention to critical repairs and current or planned assessments; unfinished critical repairs can affect project eligibility. My condo mortgage project-approval guide explains why this review is separate from your personal mortgage qualification.
California’s reserve-funding law also needs to be read on its actual timeline. The AB 2050 guide covers the law and its implementation dates. For a purchase now, continue to examine the association’s current cash, commitments and decisions rather than assume a statutory framework has already funded its work.
If an assessment is already approved, the question changes
Once the HOA has actually levied an assessment, move from forecasting the funding gap to understanding the specific obligation: amount, purpose, allocation, payment dates, remaining work and how the purchase contract addresses it.
That is the subject of my separate guide to buying a condo with a special assessment. A seller paying the assessment may help your acquisition budget, while the repair schedule and the building’s remaining funding needs still deserve review.
For a possible future assessment, I compare the exposure with the cash you expect to retain after closing, the property’s price, likely ongoing dues and your comfort with unresolved work. A credit, price adjustment or longer review period can address different parts of that decision; the right approach depends on the actual transaction and financing.
My Daily Mail comments on HOA costs and reserves addressed the same practical concern: a building’s repair needs eventually have to be paid for. In a purchase, the useful work is connecting those needs to the records, the timing and your own budget.
At Blum Realty Group, I help buyers bring those questions into the purchase process while there is still time to get answers and make an informed decision. You can read more about how I review the HOA as a condo buyer’s broker.
Frequently asked questions
Can a reserve study tell me whether a special assessment is coming?
It can identify projected costs and funding needs that make an assessment a relevant question. Compare those figures with current reserve cash, actual contributions, newer bids and the board’s decisions. The study alone does not establish that the HOA will levy an assessment or what your share would be.
What reserve funding percentage is safe for a condo buyer?
There is no single percentage that answers the whole purchase question. Percent funded is a benchmark for reserve strength, while the payment schedule shows when cash will be needed. Review both, together with the condition of the property and the association’s adopted funding plan.
Can an HOA with money in reserves still need a special assessment?
Yes. Its reserve balance may be smaller than upcoming costs, already committed to other projects or based on estimates that have changed. Review the amount available when each project is paid, not only the balance shown on one statement.
How can I estimate what an assessment might cost my unit?
Start with a supported estimate of the association’s unresolved funding gap, then check the allocation method in the governing documents and any actual assessment decision. Equal division by the unit count is useful only as an expressly hypothetical scenario when equal allocation has not been established. The funding gap is not itself an approved bill.
What if the HOA says no special assessment is planned?
Ask how the upcoming work is funded and whether the current cash-flow forecast supports that answer. A recent adopted budget, current project costs and clear funding decisions provide more useful information than the statement alone. Review any later bids, minutes or notices received before closing with your broker, lender and any specialist involved.
The figures here are illustrations. A property-specific review may also require a reserve specialist, engineer, lender, insurance professional or attorney, depending on the question involved.