Reserve Study – What you need to know
Hire an expert. Industry experts agree that a professional engineering firm will provide the most reliable reserve study. While the cost for an expert can range in the thousands, it pales in comparison to the cost of not having a viable reserve fund.
Know your community. During the reserve study, many questions will be presented to association leaders. Having a firm grasp of original installation and construction dates, as well as projected useful life will go a long way in easing this process.
Do your homework. While most managers understand the importance of researching experts before hiring them, some associations might think that the reserve study process can simply be handed off once the expert is hired. This is not prudent. Rather, as Back et al. suggests, seek your own replacement estimates for comparison.
Update every 3-5 years. An annual review of the study is recommended, but at least every 3 to 5 years, a professional should be consulted to identify missing components, changes in life span, or shifts in prices.
The bottom line of reserve studies is that they need to be one of the most thorough and current documents a community association maintains. As Duane McPherson, division president at RealManage, a San Rafael, Calif., association management firm, tells HOA Leader, “The reserve study should contain every single component the association has, and it should be as detailed as it can possibly get.”
