What Does a Reserve Study Do?

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A Reserve Study is a long-term budget planning tool that identifies the common elements belonging to an Association, and recommends a funding plan to maintain, repair or replace these common elements over a specified time period. Each of the identified common elements are assigned a remaining useful life and replacement cost. Using the current status of the reserve fund as a starting point, the reserve study projects the necessary contributions to the reserve fund in order to maintain an adequate, but not excessive, reserve contribution over the specified period of the study to properly fund capital projects relating to the common elements.

The reserve study is a continuous blueprint for the future. It conveys your community’s capital planning needs to current and future boards and supports the Board’s fiduciary responsibility for the maintenance and operation of the community. Following the reserve study recommendations minimizes the risk of additional assessments and bank loans and ensures capital projects can occur in a timely manner. A properly maintained community increases curb appeal and enhances property values, ultimately making the association a more desirable one to be a part of.