Reserve Studies
For New Structural Inspection Requirements Impacting HOAs and COAs
A reserve study is a budgetary planning tool that is both a physical analysis of your property and a financial analysis of your funding strategy. Beryl uses the Community Associations Institute National Reserve Study Standards as a baseline to create or update your custom Reserve Study. Florida Statutes requires Home Owner and Condominium Associations to fund a reserve account for certain capital expenditures and deferred maintenance, which is expected to exceed $10,000.
The reserve contribution must be computed using a formula which is based upon the estimated remaining useful life and the estimated replacement cost or deferred maintenance expenditure for each reserve item. Reserve study Includes:
- Easy to Read and Understand Report
- Identify Qualifying Assets
- Establish Replacement Costs
- Determine Useful Life
- Project Remaining Life
- Compute Funding Requirements
- Finding and Recommendations
Charts, Graphs, and Photographs
A Reserve Study is made up of two parts
1) the information about the physical status and repair/ replacement cost of the major common area components the association is obligated to maintain (Physical Analysis); and
2) the evaluation and analysis of the association’s Reserve balance, income, and expenses (Financial Analysis).
The Physical Analysis is comprised of the Component Inventory, Condition Assessment, and Life and Valuation Estimates. The Component Inventory should be relatively “stable” from year to year, while the Condition Assessment and Life and Valuation Estimates will necessarily change from year to year. The Financial Analysis is made up of a finding of the association’s current Reserve Fund Status (measured in cash or as Percent Funded) and a recommendation for an appropriate Reserve contribution rate (Funding Plan)
