Navigating Differences: Reserve Studies and Structural Integrity Reserve Studies

SIRS Component ListThe core purpose of any reserve study is the same – to serve as a capital expenditure forecasting tool and reserve funding plan to offset such expenditures. These resources provide knowledge on the true cost of ownership for your community and aim to ensure the physical well-being of your association. However, there are some key differences between a typical reserve study and a Structural Integrity Reserve Study (SIRS)

First and foremost, conducting a SIRS and following its funding plan became legally required in the state of Florida as of March 2022, per Senate Bill 4-D. Reserve studies are legally required only in some states, but are recommended for all associations by the Community Associations Institute’s Reserve Study Standards

The core difference between services is in the name – structural integrity. SIRS were mandated and developed to ensure associations with buildings three stories or higher are up to par with structural integrity and safety standards. While a regular reserve study focuses on all of an association’s reserve components, a SIRS focuses on eight key structural reserve components. 

However, it’s important to note that the legality of SIRS establishes a baseline for the service and different firms conduct them in various ways. Some firms may offer a SIRS at the baseline level, covering just the required components, while other firms may offer SIRS alongside or combined with traditional reserve study components, beyond the statutory list. For example, a SIRS conducted by Reserve Advisors includes all reserve components in the report, separated into structural and non-structural funding plans. 

Non-structural components, while not legally required to be included in a SIRS, still pose a significant financial impact on your association, with many associations spending more than 50% of their overall reserves on non-structural items. Additionally, if you’re still relying on a previous traditional reserve study it’s important to note that, depending on the provider, it may not include out-of-sight items like plumbing, waterproofing, and electrical systems, all of which are costly to maintain or replace. These items are included in a SIRS for good reason, but non-SIRS components can be equally costly and should be kept in mind. When collecting bids for a SIRS, ask if and how the provider incorporates non-structural components to make the choice that best suits your community’s needs. 

Legislation requires full funding for the required SIRS components, but funding for non-structural components can still be waived by a majority of the community’s voting interests. However, because non-structural items can be significantly costly to maintain, it’s important to understand if funding for non-structural items should be waived and the implications of doing so. Sometimes, associations will waive funding for non-structural and put all funding towards SIRS components. This can be because the immediacy of complying with legislation and catching up on funding for structural items seems overwhelming, especially if the association is already underfunded. 

When it comes to cost, conducting a baseline SIRS including only structural elements may be cheaper, with fewer components to inspect and a shorter capital plan. Of course, this will always depend on the firm, and it’s important to weigh the benefits of incorporating non-structural elements based on your association’s needs and current financial status. Ask questions of the providers from whom you collect bids, and weigh each option against your association’s current and future needs. 

While there is some overlap in who can conduct reserve studies and SIRS, SIRS are legally required to be conducted by licensed engineers, registered architects, reserve specialists, or professional reserve analysts. For typical reserve studies (where state statutes do not require specific credentialed individuals), it is still considered best practice, with Community Associations Institute’s Reserve Study Standards most highly recommending designated reserve specialists.

While SIRS and reserve studies have many similarities, their main differences are the scope of work (depending on the provider), the legal requirements of SIRS, and who is required or recommended to conduct them. A baseline SIRS will fulfill your legal obligations. Still, your community’s physical and financial needs are unique so it’s important to understand which SIRS option and provider will best set your association up for success.

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