Frequently Asked Questions

Here are some questions we usually get about Reserve Studies.

What is a Reserve Study?

A Reserve Study is an independent long term analysis of common property. The analysis documents a condition assessment of the component inventory and estimates the cost of repair or replacements. It also provides a stable and equitable Funding Plan to offset the anticipated future major common area expenditures as they wear out over their predicted useful life.

How is a reserve study calculated?

A collaboration between the client’s resources and Reserve Analyst that brings together the client’s unique first-hand knowledge with the Analyst’s professional expertise.

Why do we need a reserve study?

Here are just a few reasons to have a reserve study done:

Helps the board fulfill its fiduciary responsibility
Fulfill statutory requirements
Guarantee the reserves are based on up to date information
Buyers finding lack of reserves back out of real estate purchases
Lenders finding lack of reserves may not lend money
Satisfy the community’s governing documents
The costs of maintaining the property will be fairly shared by all owners
The reserve study provides a predictable replacement schedule
A healthy reserve fund protects your investment
Increases marketability
Adequate reserves help avoid special assessments which are both unfair and difficult to collect
The American Institute of Certified Public Accountants (AICPA)) requires the community association to disclose its reserve funds in its financial statements