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5. What is a reserve fund study, and how much do they cost?
A reserve study looks at reserve accounts and analyzes all foreseeable capital
improvements and repairs. For example, if your community has a clubhouse with a
roof that needs to be replaced every ten years, the reserve study will advise how much
and how quickly your association needs to save to make the repair at the appropriate
time.
A Reserve Specialist or professional Reserve Analyst can perform a reserve study for
your association. Check with your governing documents and state regulations for any
additional requirements.
The cost of a reserve study varies with the size and complexity of your association.
The cost for conducting a first-time reserve study for a small HOA typically starts at
$2,400.
6. How often should a reserve fund study be performed?
The frequency with which your board should perform a reserve study depends on
your association's governing documents, as well as local and state laws. For example,
Virginia requires a reserve study to be conducted every five years, while California
requires one every three years.
If you're serving on the board, check your association rules and state
laws to ensure reserve studies are being completed within the proper
time frame. If you live in a community or state without guidelines, do
what makes the most sense for your community
and work with a trusted community manager to
put a reserve study schedule into place.
