A Reserve Study is a physical assessment report of the common area components that the Association is obligated to maintain. Estimates are given of which components will need repair or replacement over a set period of time (Component Study).

A Reserve Study is also a long-range planning and budgeting guide which is used to calculate Reserve contributions, so the Association will have adequate funding available for each component as future repairs or replacements are required (Funding Plan).

Why have a Reserve Study performed? The Association Board of Directors has a legal and fiduciary responsibility to maintain the community in a good state of repair and to protect the Association from financial hardship. A long-range plan must be initiated to provide adequate funding for maintenance, repairs and/or replacements of common area components. A comprehensive Reserve Analysis will help the Association:

Ensure adequate funds are available for future major repairs and replacements.

Maintain the community in a good state of repair.

Reduce special assessments or the need for borrowing.

Protect property value and enhance residents' ability to obtain loans or sell their unit.

Establish an appropriate contribution for current and future owners.

Comply with the American Institute of Certified Public Accountants (AICPA) disclosure requirements for reserves.