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Reserve Studies

A Reserve Study is a budget planning tool used by community associations including condominiums, homeowners, and cooperatives. It identifies the current status of the reserve fund and provides a stable and equitable funding plan to offset anticipated major common-area expenditures. A Reserve Study generally consists of two parts, physical analysis and financial analysis; both performed by experienced professionals.

The reserve fund is an account maintained by the association to cover expenditures for the repair and replacement of capital items associated with the community. The reserve fund is typically separate from regular operating expenses.

Our Reserve Study is consistent with the CCI Condominium Act and is prepared in conformance with the Community Associations Institute’s (CAI) “National Reserve Study Standards” as well as the American Institute of CPA’s (AICPA) Guide. Our Reserve Study options include all of the standard levels of service. We also offer an “enhanced” version of our Reserve Study.
 
Per your request, we can customize any Reserve Study to meet the needs of your community association. We can apply various strategies to optimize your reserve funding, for example, spreading capital-intensive items over multiple years. We are also available to present your Reserve Study report at board and community meetings.

Criterium-Lalancette Engineers offers the following Reserve Study services engineered to your needs:

  • Full Reserve Study
  • Enhanced Reserve Study
  • Reserve Study Update

Full Reserve Study

A Full Reserve Study includes a physical analysis which lists each individual component forming the basis of the study and also includes the quantity, estimated replacement cost, and estimated remaining useful life for each component. This then provides the association with a basis for determining how much money they should be setting aside to repair or replace these items in future years.

One of the keys to a Full Reserve Study is the financial analysis. The financial analysis includes the review of a 20-30 year projection, giving the association a true picture of their financial well being. By looking at both the immediate and the long term, it is possible to establish a reserve funding policy which most accurately fits the specific needs of the association. This projection gives the association the necessary information to develop yearly contributions based on the average over a number of years. It also assists the association with its investment strategy for the funds by identifying when the funds will actually be needed. A Full Reserve Study includes the following scope of work:

  • A review of the association’s documents to determine which components make up the common and limited common elements (component inventory) as well as their quantities.
  • A site visit to establish the current condition of all common elements in order to assign an Estimated Remaining Useful Life (ERUL).
  • Preparation of a Full Reserve Study, including a physical and financial analysis, 20-30 year funding plan, and a threshold-funding plan.

Enhanced Reserve Study

In our Enhanced Reserve Study, our field inspection includes a more in-depth analysis of each of the reserve components. The Enhanced Reserve Study provides recommendations for ongoing maintenance of all systems as well as a condition evaluation of each. We may also consider options for improvements, enhancements, or compliance with newly enacted regulations.

The Enhanced Reserve Study comes with a complete property condition report. Each building or property system is carefully evaluated and reported on in a separate section of our report. This includes, as appropriate, site and grounds, amenities, structural systems, roof and siding, mechanical, electrical and plumbing systems, common interiors, and life safety, among others. The benefits of an Enhanced Reserve Study include:

  • The peace of mind knowing the actual condition of all building systems.
  • A document to manage the physical property.
  • Ongoing local support from our licensed, Professional Engineers.
  • An iterative funding options analysis.

Reserve Study Update

Reserve Studies should be updated every two to three years. The performance of building systems is difficult to predict as factors such as weather, use, and installation quality have dramatic effects on their durability. We can update any existing Reserve Study, whether we performed the original analysis or it was completed by another firm.

The difference between a Full Reserve Study and a Reserve Study Update is that in a Full Reserve Study, the schedule of quantities of all reserve items (i.e., roads, sidewalks) are determined and calculated. In the Reserve Study Update, it is assumed that quantities and components shown in the existing reserve schedule are accurate and therefore only updates of the unit costs and useful lives are required. A Reserve Study Update includes:

  • A site visit to establish the current condition of all common elements in order to assign an ERUL.
  • Preparation of a Reserve Study including a physical analysis, financial analysis, a   20-30 year funding plan, and a threshold-funding plan.

For a quote or more information, simply call us 800-639-4535 or request a quote online.