In Washington State do reserves have to be fully funded? It’s a great question – when you review the Washington Uniform Common Interest Ownership Act (WUCIOA) it really doesn’t say how much an association needs to have. Fully funded is one of the most misused terms in our industry because there is not just one definition. Generally fully funded is having adequate funds in the reserve account so the association will have enough money to repair or replace building components at the end of their useful lives. For this reason we will use “percent funded” as the metric we measure association health.
Most associations never get to 100% funding of their reserves but still have adequate funding to cover projects that are up coming. For this reason we normally don’t push our associations to be fully funded or at 100% funding. We usually recommend that they try to consistently be between 60% and 80% funded.
