California Department of Real Estate Issues New 2016 Operating Cost Manual
The California Department of Real Estate (DRE) recently issued an updated version of their Operating Cost Manual for Homeowners Associations to their website. This recently revised version will go into effect in April 2016. The last time the DRE issued a revised version of their Operating Cost Manual was in 2007.
The Operating Cost Manual is designed as a guideline to assist developers, homeowners associations, and management firms of common interest developments in budget preparation. The Operating Cost Manual provides benchmark operational costs and reserve requirements for the long-term repair, replacement and/or restoration of all the components intended to be included in new residential developments.
Since it has been nearly ten years since the Operating Cost Manual has been updated, many of the required cost minimums have increased. As a result, some associations will see an overall increase to the DRE budget as well as an increase to the estimated monthly assessment dues.
What is the timing and impact to my developing project?
The DRE will continue to accept budget submissions that used the 2007 Operating Cost Manual guidelines until April 2016. You should note that if the submission receives a budgetary-related deficiency, the entire budget may be required to be resubmitted using the new 2016 Operating Cost Manual standards.
It is important to us that our clients are aware of these ongoing changes and how they may potentially impact project planning for the future. The FirstService Association Consulting team is available to discuss how these changes may potentially impact your future projects and how we can assist you in navigating through the revisions. Please feel free to contact your Budget Consultant directly or call (866) 914-3332.