Overview of Reserve Study Services
To identify and forecast the useful life expectancy and cost of funding large capital elements.
The community capital elements are set forth in the Declaration; the following is merely an example of one association’s property elements.
Segregation of Property Elements
Our Analysis Includes Segregation of the Property Elements for the Purpose of Identifying the Areas of Responsibility for Repair and Replacement Such as the Following:
- Reserve Components
- Long-Lived Property Elements
- Operating Budget Funded Repairs and Replacements
- Property Maintained by Homeowners
The Reserve Components are Comprised of Items Likely to Require Reserve Expenditures During the Next 30 Years:
- Exterior Building Elements; e.g., Gutters and Downspouts, Light Fixtures, Roofing, Brickwork, Paint Finishes, Vinyl Siding, Wood Decks, etc.
- Property Site Elements; e.g., Asphalt Pavement, Concrete, Fences, Light Posts, and Fixtures, Retaining Walls, etc.
- Clubhouse Elements; e.g., Building Service Equipment, Interior, Roofing, Windows and Doors, etc.
- Pool Elements; e.g., Concrete Deck, Fencing, Mechanical Equipment, Plaster Finish, and Tile Repairs, etc.
Long-Lived Property Elements
Long-Lived Property Elements are Items Without a Predictable Remaining Useful Life:
- Electrical Systems
- Structural Frames
- Sewer and Water Pipes
Operating Budget Funded Repairs and Replacements
The Operating Budget Provides Money for the Repair and Replacement of Certain Reserve Components:
- General Maintenance to the Common Elements
- Paint Finishes & Touch-Ups
- Other Repairs Normally Funded Through the Operating Budget
Property Maintained By Homeowners
Certain Items have been Designated as the Responsibility of the Homeowner to Repair or Replace:
- Garage Doors
- Heating, Ventilating and Air Conditioning (HVAC) Units
Photographs: Photographs document the condition of various property components as of the date of the visual inspection
Financial Analysis: Repair, maintenance and replacement costs will be acquired and projected over time based on the determined life expectancy of each element, which, in turn, will create the data for a Funding Plan.
Reserve Funding Plan: By utilizing spreadsheets, graphs and text, the Reserve Funding Plan will allow the Board to plan for any increases or decreases in the association maintenance fee and/or special assessments in order to maintain a fully funded reserve fund.
Reserve Expenditures: Segregating the property elements (shown above) allows the Board to minimize the expenditures of the reserve account, thereby utilizing the operating account whenever possible.
Reserve Study Updates: An ongoing review by the Board and an update of the Reserve Study every two to three years is necessary to ensure an equitable funding plan, since a Reserve Study is only a snapshot in time. Many variables change after the study is conducted, which may result in significant homeowner over-funding or under-funding of the reserve account.
Together, our Reserve Study analysts have 60 years of corporate operational, financial and accounting management experience along with 20 years of structural engineering experience. Their combined expertise includes forensic financial auditing, projection cost analysis, financial forecasting, plan implementation and structural engineering. Local third-party engineers and general contractors are used on an as-needed basis.
Thank you for considering us for your reserve study needs. The cost associated with completing a Reserve Study varies from Association to Association.
Need Reserve Study Help?
Get in touch with KareCondo today by clicking below.