How does an HOA board write a five-year plan?

By OurHOA · General information · Revised October 19, 2026

How an HOA board writes a five-year plan that ties the reserve study, major projects, the dues path and policy work into one document owners can read.

Part of the HOA board handbook: running the board.

The short answer

A five-year plan is a short board document, usually four to six pages, that lays out what the association expects to repair, replace, change and spend in each of the next five years, and how dues will pay for it. Most small boards already have the pieces: a reserve study, an annual budget, a list of projects someone mentioned at the last meeting, and a few policies that need updating. The plan puts them in one place so the next board, and the owners, can see the road ahead. No statute in Texas, Florida or Colorado requires a five-year plan. Some of what feeds it is required, though, such as Colorado's reserve study policy and the annual budget rules in all three states, covered below. The board adopts the plan by resolution, treats it as a guide rather than a promise, and updates it every year before budget season. This is general education. Your governing documents and state law control what the board can actually do, so run anything that changes dues or rules past the association's attorney or CPA.

Start with the reserve study, then add what it leaves out

Pull the component schedule from the latest reserve study and copy out every item with a replacement year in the next five years, with the study's cost estimate. Check the study date first. If it is more than three years old, prices are stale, and an update should be the first line in year one. Then add the projects a reserve study does not cover: improvements owners have asked for, such as a new playground or LED street lights; one-time work, such as a drainage fix, a survey of common area boundaries or a records cleanup; and anything a city, insurer or lender has told you to do. Give each item a year, a cost range and the source of the number. 'Pool resurfacing, year 2, $34,000 to $40,000, reserve study 2025 plus 3 percent a year' tells a future treasurer where the figure came from. 'Pool, $38,000' does not. Our guide on how to read an HOA reserve study explains the component schedule and funding plan if your board has never worked through one.

Build the dues path with real numbers

This is the section owners read, so show the math. Take a sample 80-home association. Dues are $1,200 a year, so the budget is $96,000: $72,000 for operations and $24,000 to reserves. The reserve account holds $60,000. The plan shows pool resurfacing at $38,000 in year 2, asphalt sealcoat at $22,000 in year 4 and a clubhouse roof at $45,000 in year 5, and operating costs, led by insurance, are assumed to rise 5 percent a year. If dues stay flat, rising operating costs squeeze the reserve contribution from $24,000 to about $8,500 by year 5, and the reserve balance ends year 5 near $37,000, with the roof just paid and the big items in the study's later years still ahead. If dues rise 5 percent a year, reaching about $1,459 in year 5, the reserve contribution grows from $24,000 to about $29,200, and the balance ends year 5 near $87,600. Put both paths in a small table. Owners can see that holding dues flat is a choice to spend reserves, not a way to save money. If the gap is too large for steady increases, say so, and name the year a special assessment or a loan would come up. If the community is a condominium, Fannie Mae's full project review checks that at least 10 percent of the budget goes to reserves, which affects whether buyers can get conventional loans.

What state law says about budgets and reserves

The plan itself is optional, but the budget it feeds is regulated, so write it to fit your state's budget process. In Colorado, C.R.S. 38-33.3-209.5(1)(b)(IX) requires a written policy stating when the association has a reserve study prepared, whether there is a funding plan for the work it recommends and where that money will come from. An internally prepared study counts. Under 38-33.3-303(4)(a), the board must send owners a summary of each adopted budget within 90 days and set a meeting, and the budget stands unless a majority of all owners, or a larger share set by the declaration, vetoes it. In Florida, section 720.303(6) requires an annual budget but makes HOA reserves optional; once owners approve statutory reserves, they can waive or reduce them only by majority vote, and only for one budget year at a time. Florida condos are different: section 718.112(2)(g) requires a structural integrity reserve study at least every 10 years for buildings three habitable stories or higher, and those reserves generally cannot be waived. Texas Property Code chapter 209 requires no reserve study and no budget, but section 209.0051(h) says assessment increases, special assessments, borrowing and budget approval must be voted on at an open, noticed board meeting. None of the three states caps special assessments by statute. The declaration controls, so check it for a cap or an owner-vote requirement before the plan assumes one.

Add the policy and governance work

A five-year plan that only covers money misses half the board's job. List the policy and governance tasks by year as well. Typical entries: review the collection policy and fee schedule with the attorney in year 1; restate the bylaws to match current state law in year 2; update the rules on rentals, parking or architectural standards when complaints keep repeating; replace the reserve study on its cycle; review the insurance program and the fidelity coverage limit each renewal; move records and owner contact data into one system the next treasurer can use. Each line needs an owner, meaning a named director or committee, and a target quarter. Keep this section short. Five to ten items over five years is realistic for a volunteer board of three to five people. Twenty items means nothing gets done and the plan loses credibility.

Wording the board can use

Open the plan with a paragraph like this one: 'This plan shows the major work, costs and policy changes the board expects over the next five years, based on the [year] reserve study, current contracts and owner input. It is a planning guide, not a commitment. Costs are estimates, and each year's budget is adopted separately under our governing documents. The board will review this plan every [month] before preparing the next budget.' A motion to adopt: 'I move that the board adopt the five-year plan dated [date] as a planning guide, direct the treasurer to use year 1 as the starting point for the [year] budget, and post the plan for owners within 30 days.' For an owner survey before the draft is final, one question is enough: 'Rank these projects from most to least important to you: playground replacement, entrance landscaping, LED street lights, pond fountain.' A ranked list is easier to act on than open comments.

A sample timeline for the first plan

Give the first plan about four months, finishing before the budget is due. Month 1: the treasurer pulls the reserve study, three years of actual spending and current contracts, and each director lists the projects and policy problems they know about. Month 2: one director drafts the project table and the two dues paths, and the board reviews the draft at a regular open meeting. Month 3: post the draft for owners, run the one-question survey and take comments at a meeting. Month 4: revise, adopt by motion and post the final plan with the minutes. After that, the annual update takes one meeting: drop the year just finished, add a new year 5, replace estimates with actual bids where you have them, and note what changed and why. Our guide on how to build an HOA annual budget picks up from there, using year 1 of the plan as the starting draft.

Mistakes boards make with long-range plans

Writing it once and filing it. A plan that is not updated each year is wrong by year 2, so tie the review to the budget calendar. Copying the reserve study and calling it a plan. The study tells you what wears out. The plan decides how and when to pay for it and what else the board will take on. Promising projects. Owners remember dates, so label every line as an estimate and keep the 'not a commitment' language in the opening paragraph. Hiding the hard year. If year 4 needs a special assessment under any realistic dues path, say so now, while owners have three years to plan for it. Skipping the operating side. Insurance, utilities and landscaping contracts usually rise every year, and a plan that holds them flat makes the reserve numbers look better than they are. Letting one director own it. When that director leaves the board, the plan leaves with them. Keep the working file in the association's records, not on a personal laptop.

Sources

These guides are general education for HOA boards and residents, not legal, tax, or financial advice. Rules vary by state and by your community's governing documents - check with a professional for your situation.

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