OPERATING COST MANUAL - FOR HOMEOWNERS AS SOCIATIONS - Revised January 2016

Oct 23, 2026

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Operating Cost Manual for Homeowners Associations provides guidance for common-interest subdivision budget preparation, supporting homeowners associations, developers, and management firms. It explains how to use the manual’s structured cost categories and where the cost data are applicable. The revision states reliability as of January 2016 and highlights inflation impacts on future operating budgets. The foreword describes the data collection sources, summarizes major cost groupings, and clarifies limitations on accounting instruction, referencing high-rise considerations and submission suggestions to the Department of Real Estate.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages60

Reading Time2 h 31 min

AccessFree to download

Part I - Foreword

Using the Manual

Part II: Operating and Maintenance Cost Data

100’s—Fixed Costs

200’s—Operating Costs

Part III: Reserve Cost Data and Administration

300’s—Reserves

400’s—Administration

500’s—Contingency

Part IV: Summary and Worksheet

Budget Submittal and Review Summary

Budget Worksheet [RE 623]

Part V: Operating Cost Manual Index

OPERATING COST MANUAL FOR HOMEOWNERS AS S OCIATIONS CALIFORNIA DEPARTMENT OF REAL ESTATE Revised January 2016 OPERATING COST MANUAL FOR HOMEOWNERS AS S OCIATIONS Table of Contents PART I Foreword ........................................................................................................................................ 1 Using the Manual .......................................................................................................................... 2 PART II: OPERATING AND MAINTENANCE COST DATA 100’s—Fixed Costs ........................................................................................................................ 7 200’s—Operating Costs ................................................................................................................. 11 PART III: RESERVE COST DATA AND ADMINISTRATION 300’s—Reserves ............................................................................................................................. 21 400’s—Administration .................................................................................................................. 26 500’s—Contingency ...................................................................................................................... 31 PART IV: SUMMARY AND WORKSHEET Budget Submittal and Review Summary ....................................................................................... 32 Budget Worksheet [RE 623] .......................................................................................................... 36 PART V: OPERATING COST MANUAL INDEX .................................................................... 51 PART I Foreword This is the 14th revision of this manual, which was ﬁrst published in 1975. The manual is designed as a guideline to assist homeowners associations, developers, and management ﬁrms of common interest subdivisions in budget preparation. The materials are applicable, at least in part, to the following common-interest subdivisions: • Planned developments (PDs) • Condominiums (Condos) • Community apartments (Com. Apts.) • Stock cooperatives (Stock Co-ops) • Undivided interest subdivisions/TIC (Tenancy in Common) The cost data are considered to be reliable as of January 2016. Costs incurred in maintaining and operating the common facilities in common interest subdivisions are likely to be affected by inﬂation. Inﬂationary inﬂuences should therefore be considered in budget preparation for budgets that are prepared far in advance of the operating period covered by the budget. The data in this manual has been collected by the Budget Review Section staff of the California Department of Real Estate (DRE/Department) from a variety of sources, including homeowners associations, professional management ﬁrms, service organizations, public utilities, and manufacturers. It has been assembled in a form to facilitate multi-purpose use by lay governing bodies of homeowners associations, developers, and professional management ﬁrms alike. As such, some parts of this manual may not apply to your situation and other resources should be solicited. THIS MANUAL IS NOT INTENDED TO INSTRUCT HOMEOWNERS ASSOCIATIONS IN ACCOUNTING PROCEDURES OR FORMAT. The Department will appreciate receiving suggestions for improvement of the manual. Please send to: Department of Real Estate Budget Review Section 320 W. 4th Street, Suite 350 Los Angeles, CA 90013-1105 (213) 576-6983 Please include your telephone number on correspondence to facilitate follow-up communication by telephone. CALIFORNIA DEPARTMENT OF REAL ESTATE 1 PART I Using the Manual Items to be budgeted have been divided into the following ﬁve categories: 100’s—Fixed Costs (taxes, insurance, etc.) 200’s—Operating Costs (utilities, goods and services) 300’s—Reserves (for replacement and major maintenance) 400’s—Administration (legal, accounting, etc.) 500

FAQs

What is the purpose of the Operating Cost Manual for Homeowners Associations?

It is designed as a guideline to assist homeowners associations, developers, and management firms in preparing budgets for common interest subdivisions.

Which major cost categories does the manual define for budgeting?

The manual divides items into five categories: 100’s—Fixed Costs, 200’s—Operating Costs, 300’s—Reserves, 400’s—Administration, and 500’s—Contingency.

How should inflation be handled when preparing budgets with this manual?

Inflationary influences should be considered when preparing budgets that cover an operating period far in advance, since maintenance and operating costs are likely to be affected.

Oct 23, 2026

Upload by lilac