STI Reserve Studies

What is a Reserve Study?

The purpose and value of a Reserve Study is to identify the useful life of existing capital assets and the anticipated replacement cycle and replacement (or major maintenance) cost associated with these elements.

The real value of a Reserve Study is its ability to accurately reflect the budget / reserve requirements for an Association incorporating the "real" useful life of elements at the property as opposed to industry standards.

The Reserve Fund should not be used for ongoing annual repair, maintenance items or operating expenses which should be budgeted and assessed on an annual basis.

Reserve Studies must incorporate subjective data regarding the anticipated & remaining useful life of each of the elements included in the study. Therefore a Reserve Study is essentially an estimate of the actual cost of replacement (including adjustments for inflation) and the remaining useful life of each element.

Why does your Association require a Reserve Study?

The accrual of monies in a "Reserve Fund" is a critical element which indicates fiscal responsibility by the Association and will facilitate the timely repair & replacement of capital assets.

The Association / Association Board must determine the appropriate level of assessment of their membership to fund the required replacement or major repair of capital assets or understand that a "Special Assessment" of the homeowners will be required as capital items require major maintenance or replacement.

A properly designed and implemented Reserve Study will establish the appropriate level of Reserve Fund contribution and accumulation of funds to achieve the Association's objectives for capital asset repair or replacement.

What your Reserve Study proposal should include:

1. Detailed On-Site Inspection of elements to be included in the study
2. Photographic Documentation of the elements & deficiencies
3. Detailed written analysis of existing conditions including repair recommendations
4. Financial Reports & Spreadsheets to facilitate budgeting & funding