Benefits

Benefits of a Reserve Study

With a professionally prepared reserve study, your homeowners, timeshare or other interest common development association will receive many benefits. Following the recommendations of a reserve study performed by a competent professional consultant company can protect the Board of Directors in a community from personal liability concerning reserve components and reserve funding.

  • A reserve analysis study is often required by your accountant during the preparation of the association’s annual audit.
  • A reserve analysis study is frequently requested by lending institutions during the processing of loan applications, both for the community and, and many cases, the individual owners.
  • The reserve analysis study lists a detailed inventory of your association’s major assets and serves as a management tool for scheduling, coordinating and planning these future repairs and replacements.
  • This reserve report is a tool that can assist the association’s board in fulfilling its legal and fiduciary obligations for maintaining the community in a state of good repair. If a community is operating on a special assessment basis, it cannot guarantee that an assessment, when needed, will be passed. Therefore, it cannot guarantee its ability to perform the required repairs or replacements to those major components that the association is obligated to maintain.
  • Since the good reserve analysis study includes accurate measurement and cost estimates of the client’s assets, the detail reports may be used to evaluate the price of contractors’ proposals when assets are due to be repaired or replaced.

The reserve study is an annual disclosure to the membership concerning the financial condition of the association, and may be used as a “consumers” guide by prospective purchasers.