Frequently Asked Questions

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

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