How To Find A Reserve Analyst For Your Corporation
In a condo corporation, reserve studies are necessary to properly maintain the property and fund its reserve account. It’s the job of a reserve study professional, also known as a reserve specialist or reserve analyst, to conduct a reserve study. Follow this guide to help your condo find the perfect reserve study professional.
What is a Reserve Study?
A reserve study looks at the reserve fund and analyzes all foreseeable capital improvements and repairs of the common elements. For example, if your community has an amenity with fencing that needs to be replaced every ten years, the reserve study can calculate how much your condo needs to save to make the repair at the appropriate time. Typically, reserve studies are comprised of two parts:
- The physical analysis. Evaluating the physical status of the condo and estimating the repair and replacement costs of the major common area components.
- The financial analysis. Assessing the current reserve fund status and recommending an appropriate reserve contribution rate.
What is A Reserve Fund?
A reserve fund is money set aside by a corporation for additions to major components the condo maintains and future replacements and repairs that don't occur on an annual basis. Funds are raised through maintenance fees. It’s then used on things like:
- Roof replacements
- Pool pumps
- Playground equipment
- Replacing fencing in common areas
- Painting of community buildings
- Major landscaping projects
- Construction and major renovations
- Road and sidewalk resurfacing
To determine how much money your condo should have in its reserve fund and ensure you’ll have enough money for a repair or replacement, it’s critical to regularly conduct a reserve study.
Who Conducts Reserve Studies?
Condos must hire a reserve study professional—a reserve specialist or reserve analyst—to conduct their reserve study. People in these roles are trained to handle the detailed and complex nature of a typical reserve study.
What to Consider When Finding a Reserve Study Professional
1. Budget
Before exploring your options for a reserve study professional, you’ll need to look at your budget to determine how much money you can allocate to finding and hiring someone for the role.
The cost of a reserve study varies with the size, complexity, and location of your community.
2. Study Type
Typical reserve studies are comprised of two parts. First, there’s the physical analysis, which evaluates the physical state of your community and estimates the repair and replacement costs of major common area components. Then, the financial analysis looks at your condo’s finances and current reserve fund status to see how you can fund needed repairs and updates.
. The most common forms of a reserve study are:
- A reserve study with a site visit (WSV). WSV studies are less thorough than a full analysis, and one completed every 3 years in accordance with the Condo Act.
- A reserve study with no site visit (NSV). With no on-site visit, a reserve analyst collects information about the upkeep of the community from conversations with the board, vendors, and maintenance staff. These kinds of studies are meant to be used between WSV years. 3. Location
Each community, province, state, and city has different laws regarding reserve funds and studies. Which is why it is important to hire a professional qualified expert to complete the study.
4. Experience
Attention to detail is key to an effective reserve study, so it’s crucial to hire the most experienced and qualified professionals to get the job done. Experience matters and can make all the difference in the quality of work. Look for professionals with:
- Industry accreditations. Organizations like the Community Associations Institute (CAI) and the Association of Professional Reserve Analysts ensure that analysts conduct reserve studies under a strict set of regulations.
- Previous experience that suits the role. Firms or individuals with backgrounds as required by the Condo Act will be best suited to handle the needs of your community during the reserve study process, as they have formal education that’s directly connected to the structural knowledge required to perform at the top level.
- References or examples of previous work. Look for analysts who break down what you can expect from their work. Ask for references that are similar in size and budget of your own community.