1. Condominium
2. Townhome
3. Homeowners
4. Timeshare

1.Reserve studies extract assets from both prior and current owners of the property.

• Reserve studies help ensure that each homeowner pays his or her fair share of the deterioration that occurs under his or her ownership since major components deteriorate naturally over time. For example, a roof must be replaced every 15 to 20 years, every owner during that time should pay a portion of that replacement cost.

2.Properly funded reserves improve property re-sale values.

• Most new buyers, lenders, and real estate professionals shy away from property with insufficient replacement reserve funds.

3.Reserve funds provide for planned replacements of major common items

• Owners expect their associations to fulfill its obligations and replace worn or obsolete items. Reserve planning allows associations to maintain the aesthetic qualities of the community, thereby enhancing property value.

4.Reserve planning minimizes the need for unanticipated special assessments.

• Poor planning and insufficient funding may result in special assessment when major components break down. A history of past or current special assessments reduces property values.

1. Reserve Studies Fulfill Legal, Fiduciary, and Professional Requirements.

• Reserve funds may be required by:
i. State statutes and other regulations
ii. Banks and mortgage lenders
iii. Your community’s declarations and bylaws, and other governing authorities

2. Fulfillment of Legal Responsibilities

• An increasing number of states have approved legislation requiring community associations to perform reserve studies. California, Florida, Hawaii, Illinois, Nevada, Virginia, Washington, and Canada have most recently adopted such legislation. As municipalities increasingly choose community associations as the “development model,” other states expect to create stricter legislation to address the planning reserve issue. Legislatures are realizing the importance of reserve studies and will continue to pass legislation to ensure property owners perform reserve studies.

3. Fulfills Contractual Obligations

• Community managers have contractual obligations to managing their community’s financial affairs. Annual budgets and accurate financial planning represents an important aspect of these contractual obligations. In fact, several lawsuits have already arisen from this issue of Breach of Contractual Obligations.

4. Protect and Improve Property

• Reserve studies ensure that funds are available when worn components need replacement.

5. Encourages Equitable Distribution of Costs Among Past and Present Owners

• All owners, whether past or present, equitably contribute to reserve funds so that no single owner unfairly bears the burden of replacement.

6. Encourages Conservative Financial Planning

• Owners often fail to account for the replacement of commonly owned components in annual budgets. Reserve studies address this fundamental part of the annual budget accounting and promote realistic, conservative annual planning.

7. Minimizes Unanticipated, Special Assessments

• Poor planning often results in special assessments that owners fail to anticipate. The financial risk resulting from poor planning applies equally to new and old structures. Only reserve planning can mitigate this risk and help you eliminate your need for special assessments.