                                 CODE OF VIRGINIA

ANNUAL BUDGET; RESERVE STUDY; RESERVES FOR CAPITAL COMPONENTS (§ 55.1-1826)

A. Prior to the commencement of the fiscal year, the board of directors shall
make available to lot owners either (i) the annual budget of the association or
(ii) a summary of such annual budget.

B. The board of directors shall:

   1. Conduct at least once every five years a study to determine the necessity
   and amount of reserves required to repair, replace, and restore the capital
   components as defined in &#xA7; 55.1-1800;

   2. Review the results of that study at least annually to determine if reserves
   are sufficient; and

   3. Make any adjustments to the annual budget and annual assessment the board
   of directors deems necessary to maintain reserves, as appropriate.

C. To the extent that the reserve study conducted in accordance with this
section indicates a need to budget for reserves, the association budget shall
include:

   1. The current estimated replacement cost, estimated remaining life, and
   estimated useful life of the capital components as defined in &#xA7;
   55.1-1800;

   2. As of the beginning of the fiscal year for which the budget is prepared,
   the current amount of accumulated cash reserves set aside to repair, replace,
   or restore capital components and the amount of the expected contribution to
   the reserve fund for that year;

   3. A statement describing the procedures used for estimation and accumulation
   of cash reserves pursuant to this section; and

   4. A statement of the amount of reserves recommended in the study and the
   amount of current cash for replacement reserves.

D. The board of directors shall have the discretion to meet repair and
replacement requirements through replacement reserves, additional assessments,
or borrowed funds.

HISTORY: 2002, c. 459, § 55-514.1; 2019, cc. 33, 44, 712; 2024, c. 324.