Trees & Plants

Should My HOA Reserve For Trees and Plants?

Q. Can we add a line item in our reserve study for tree and/or plant replacement?

A. There are two sets of criteria available to scrutinize potential reserve components. The first is the California Civil Code and the second is the National Reserve Study Standards.

The California Civil Code §5550 states…

1) Identification of the major components which the association is obligated to repair, replace, restore, or maintain which, as of the date of the study, have a remaining useful life of less than 30 years.

2) Identification of the probable remaining useful life of the components identified in paragraph (1) as of the date of the study.

3) An estimate of the cost of repair, replacement, restoration, or maintenance of the components identified in paragraph (1). 

4) An estimate of the total annual contribution necessary to defray the cost to repair, replace, restore, or maintain the components identified in paragraph (1) during and at the end of their useful life, after subtracting total reserve funds as of the date of the study.

A nationally developed set of reserve study standards says you must be able to answer yes to the following four questions…

1) Is it a common area maintenance responsibility?

2) Is its life limited?

3) Is its remaining useful life predictable?

4) Is its replacement cost above a minimum threshold amount?

If you have now decided to include something in the Reserve Study, what and how will you budget for the future expenditures?  I do not recommend itemization of each type of tree and plant, but rather allow for “lump sum” periodic replacement or area enhancement projects.  An example could be to breakup an Association into quadrants with every four to eight years spending $6000 to remove, replant, and/or enhance each of these identified areas with new trees and/or plant material.  Each Association is different so putting a plan together will require some thought.

There could be some debate as to whether trees and plants belong in a Reserve Study but if you follow the guidelines it is not unreasonable to include something for them.  The lifespan of trees and plants vary from specie to specie, your landscape contractor could be of some help in coordinating with the reserve study preparer to help you with establishing a program that will work.

Contributed by Michael C. Graves, RS, the 39th designation recipient.