What Every California Homeowner Needs to Know About HOA Reserve Funds (Part 1)

Most homeowners know their HOA is supposed to set aside money for future repairs, but few understand how those funds are calculated, what they’re actually for, or what the “percent funded” number on their annual budget summary really means. In this episode of HOA HELL, which is Part 1 of 2, attorney Michael Kushner walks you through the core elements of a reserve fund and reserve study, explains how they’re structured under California law, and breaks down exactly what your reserve study should be telling you. 

From “Useful Life” and “Remaining Life” to “Current Replacement Cost,” Kushner explains how to spot red flags in your reserve disclosures and why underfunding can be a sign of serious financial mismanagement—or even fraud. 

🎯 What You’ll Learn in This Episode: 

✅ What Civil Code sections 5550, 5560, and 5600 require HOAs to include in reserve studies and budget disclosures.

✅ Why “percent funded” is the most important number in your reserve summary—and how to interpret it.

✅ What “Useful Life,” “Remaining Life,” and “Current Replacement Cost” actually mean in plain English.

✅ How to use reserve fund numbers to assess whether your HOA is financially healthy or headed for special assessments.

✅ What range of funding levels Kushner considers acceptable—and why anything in the 50% range (or lower) should scare buyers off. 

If you’ve ever ignored your HOA’s reserve disclosures or wondered how boards calculate future repairs, this episode gives you the tools to read between the lines and see what your HOA is really telling you. 

🔔 Subscribe for more full-length episodes and shorts to help you fight back against abusive HOA practices. 

🌐 📞Need help? Contact MBK Chapman at www.mbkchapman.com. Mention the HOA HELL podcast for a discounted consultation. 

Disclaimer:  

This content constitutes attorney advertising.  

The content of this podcast is for general informational purposes only and does not constitute legal advice. No attorney-client relationship is created by listening to this podcast, submitting a question, or receiving a response. Always consult with a licensed attorney regarding your specific legal situation. MBK Chapman and Michael Kushner disclaim any liability for actions taken or not taken based on the information provided in this podcast.  

This communication does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.  

About:  

Michael Kushner is the attorney who pioneered this niche area of the law—representing homeowners in disputes with their HOAs—in California. He created and taught the systems now used by the biggest law firms in the state focused on HOA litigation. Through his firm, MBK Chapman, and now through HOA HELL, Kushner continues to give homeowners practical legal tools to fight back. 

#MichaelKushner #MBKChapman #HOALaw #CaliforniaHOA #BadHOA #LSCarlsonLaw #HOAReserves #ReserveStudies #DavisStirlingAct 

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