The Edgewood Homeowners Association (HOA), associated with the Birdcage Heights neighborhood in Citrus Heights, California, is currently facing significant scrutiny regarding its reserve fund management.

📉 Reserve Fund Status
According to the 2024/2025 Reserve Study conducted by the Browning Reserve Group, the HOA's reserve fund is critically underfunded. As of the end of the 2024 fiscal year, the reserve fund was approximately 14% funded, with a projected cash balance of $228,053 against a fully funded requirement of $1,628,274 . This shortfall suggests that the association may struggle to meet future repair and replacement obligations without additional funding.

⚠️ Allegations of Financial Misrepresentation
Concerns have been raised by community members regarding the accuracy of financial disclosures. In July 2024, it was reported that the HOA president had claimed the reserves were at 55%, a figure later contested by subsequent communications indicating the actual reserves were only 8%. This discrepancy has led to allegations of financial misrepresentation and has prompted calls for increased transparency and accountability within the HOA.

📝 Recommendations for Homeowners

If you are a homeowner within the Edgewood community:

Review Financial Documents: Examine the latest Reserve Study and financial reviews to understand the HOA's fiscal health.Engage with the HOA: Attend board meetings and participate in discussions to stay informed and voice concerns.

Consult Professionals: Seek advice from financial or legal professionals if you have concerns about the HOA's management of funds.

Stay Informed: Monitor updates from official HOA communications and community forums to stay abreast of developments.

If the Edgewood HOA board fails to collect the anticipated special assessments, the consequences could be serious for both the association and homeowners. Based on the 2024–2025 financial review and reserve study from birdcageheights.com, the HOA is already facing substantial reserve underfunding—meaning it doesn't have enough money set aside for expected repairs and maintenance of common property. If special assessments aren't levied or paid, the following scenarios are likely:

🔴 Consequences of Not Collecting Special Assessments

1. Deferred Maintenance and Property Deterioration

• Major repairs (roofs, fencing, pool resurfacing, asphalt, etc.) may be delayed.

• Neglected maintenance can lower property values throughout the community.

2. Violation of Fiduciary Duty

• Board members may be failing their legal responsibility to maintain the community’s assets.

• This can expose the board—and the HOA—to legal action from members or even lenders.

3. Emergency Repairs at Higher Cost

• When systems fail without proper funding, the HOA may have to secure emergency loans, often at unfavorable rates, increasing future dues or assessments.

• Vendors may also refuse service until partial payment is made.

4. Loss of Insurance or Increased Premiums

• Insurers may increase premiums or decline coverage if key repairs are unaddressed.

• Underfunded reserves are red flags in risk underwriting.

5. Legal Liability and Lawsuits

• Owners may sue the HOA for breach of contract or mismanagement.

• State laws often require HOAs to maintain reserves and fund capital repairs—failure could result in penalties or state oversight.

🧾 What Owners Can Do

• Demand transparency: Owners have a right to access financials, including budgets and reserve studies.

• Request a meeting: Ask the board for a detailed plan outlining how they intend to fund shortfalls.

• Consider removal or recall of board members if they consistently fail in their fiduciary duties.

• Consult legal counsel if you suspect misrepresentation or financial mismanagement.

💡 Bottom Line

Not collecting special assessments the board has already publicly indicated are needed would further erode the HOA’s ability to meet its obligations, leading to deterioration of common areas, financial instability, and legal exposure. If you're a homeowner, now is the time to ask serious questions and demand a concrete action plan.