Reserves
Understand the study, then follow the decisions that shape your reserve fund.
Reserve Study Basics
What Is a Reserve Study?
A Reserve Study amortizes funding expenses over time so that current owners are not unfairly burdened with the responsibility to pay for the inspection, maintenance, repair and replacement of components (regardless of cost) that have a useful life beyond one year. Reserve funding, reserve studies and property infrastructure go hand-in-hand. Check out this Reserve Study Analyzer.
A reserve study is just as much about keeping track of components that need to be inspected, maintained, repaired and replaced on a schedule that happens less than annually as it is about planning to have the funds to do so. Failure to account for every component in either the operating budget (consistently each year) or in the reserve study means nobody will remember certain components exist nor when or how to address them, nor will adequate funds be available when the need arises.
What Belongs in a Reserve Study?
There should be no debate: if a component requires inspection, maintenance, repair and/or replacement every 2 years to 100 years, plan for it in your reserve study to amortize costs over the presumptive useful life of every such component. READ: Reserve Funding Strategies
What Belongs
- Expenses occurring less than annually for:
- inspection, maintenance, repair and replacement
- related to existing components
- replaced with substantially similar materials
- expected to occur within the property's overall useful life
What Are Reserve Expenses?
Reserve expenses are a form of for inspection, maintenance, repair, and replacement of existing substantially similar components that occur less than annually per component and that are expected to be incurred within the useful life of the property. Predictability and size are not thresholds. Multiple states require reserve studies and/or reserve funding. See .
- The expense does not have to be significant, or more than 1% of your annual operating budget.
Critical Questions for Every Reserve Study:
- Are ALL your existing components identified and included? This requires understanding what your annual operating budget will resolve.
- Are components with useful lives of 40 to 50+ years correctly calculated as part of the fully funded balance?
- Are components properly categorized as CE vs. RLCE vs. CLCE, etc. as required by your governing documents?
- Does every component reflect the correct useful life and remaining useful life?
- Does every component reflect an accurate cost to maintain, repair or replace?
- Have you applied sales tax to the cost of every component?
- Are assumptions about component inflation costs and annual interest realistic?
- Have you considered factoring in the unknown? Cost overruns on large projects can be built into a component's cost or carried as an additional component. When a sudden need cannot be met from operating funds, an association often turns to the reserve account to borrow; money in the fund can help avoid an immediate special assessment, while an empty fund cannot.
Check the Study Against Reality
Mister Rogers taught us long ago about what’s real and what’s pretend. Most reserve studies pretend to be accurate and homeowners pay the price. Read Reserve Judgment.
Special assessments to fund failing infrastructure offer a reality check, but why do associations ignore obvious errors for decades at a time? Reserve Judgment from CIC Info Bytes Issue #64 highlights one reason reserve studies aren’t accurate and The Myth of “Full Funding” includes 10 more.
Original Findings
- Replacing the fire control system will cost $330,000: over 300% more than the reserve study’s prior estimate of $107,000
- The reserve study excludes 10.5% sales tax
- The study woefully underestimates the cost of elevator modernization
- The study under-counts the total glazing (doors and windows) by about 90% and underestimates the replacement cost by 100% to 200% ($ millions)
- The study excludes the cost of a building-wide re-pipe
Generators and Common Piping
For example, generators and common piping (plumbing) are often omitted from reserve studies. The fact that there is a lack of consensus about when or if these items will reliably require inspection, maintenance, repair and/or replacement does not obviate them from being included in a reserve study. Failure to include common piping has resulted in many multi-million dollar special assessments.
Small Expenses Add Up
"Significant" and "material" and other such words become discretionary judgements unless they are clearly defined by statute or your governing documents. Quarrels have been had over less. 20 items that are 0.5% of your operating budget add up to 10%. 10x $3,000 items = $30,000. Oh, and is that 1% in current dollar terms or inflated 20 years from now? Oh and what if your estimate of the replacement cost is off by 1,000%?
How are you tracking the need to maintain, repair and replace something every 5 to 10 years if the component isn't listed in your reserve study? And how are future owners expected to budget for it?
For all the reasons above and more, every less than annual expense to inspect, maintain, repair and replace components belongs in your reserve study. This is the ONLY way to ensure: 1) continuity for reasonable, reliable, tracking and 2) equity of reserving for expenses over time.
Replacement and Capital Improvements
You should not replace carpet with marble that costs 200% more and call it a reserve expense. This is underscored by WUCIOA capital improvements language related to collecting delinquent amounts RCW 64.90.485(3)(a)(i) and (b)(ii) where amounts related to "capital improvements" do not have lien priority.
(3)(a) A lien under this section also has priority over the security interests described in subsection (2)(b) of this section to the extent of an amount equal to the following:
(i) The common expense assessments, excluding any amounts for capital improvements, based on the periodic budget adopted by the association...
(b) For the purposes of this subsection:
(ii) "Capital improvements" does not include making, in the ordinary course of management, repairs to common elements or replacements of the common elements with substantially similar items, subject to: (A) Availability of materials and products, (B) prevailing law, or (C) sound engineering and construction standards then prevailing.
The Common Expense Definition
Common expenses are defined by statute and your declaration / CC&Rs and generally benefit more than one unit.
Washington (RCW 64.90.010)
"Common expense" means expenditures made by, or financial liabilities of, the association, together with any allocations to reserves. RCW 64.90.010(8)
"Specially allocated expense" means any common expense of the association, including allocations to reserves, allocated on a basis other than the common expense liability pursuant to RCW 64.90.480. RCW 64.90.010(53)
State Laws
Multiple states require reserve studies and/or reserve funding. State study and funding requirements
- The lack of a law requiring due diligence and appropriate funding should not be construed as a best practice. Don't put your faith in imperfect laws! Follow the lead of community associations that have successfully navigated decades of maintenance, repair and replacement.
- Minimum reserve funding required:
- Delaware § 81-205
- Illinois 765 ILCS 605/9
- Maryland § 11-109
- Michigan Administrative Code 559.511 (pursuant to 559.205)
- Minnesota 515B.3-1141
- Nevada 116.3115
- Ohio 5311.081 and 5312.06
- Wisconsin 703.163
- Florida 718.112(f)
- View our State Statute Details Matrix to learn which states have statutory reserve study and reserve fund requirements.
Depreciation reports are the British Columbia equivalent of reserve studies in the US.
Is your CIC located in WA state? Please read this reserve study critical reminder.
- Several reserve study vendors are still not meeting the minimum requirements of RCW 64.90.525 that applies to ALL Washington State community associations since July 2018. Over half the reserve studies analyzed by a Seattle law firm in 2021 were found to be substantially non-compliant with the statute.
- This deficiency jeopardizes your annual budget ratification process.
Plan Your Next Reserve Decision
Reserve Funding
Reserve Funding Strategies
Explore the three funding buckets and seven strategies from Info Bytes: Part XVI. Read The Myth of “Full Funding”.
Low / No Funding
Except for savvy buyers who discount the cost of a property proportionate to the risk of future assessments, loss of use, etc., none of these strategies work well for new purchasers.
Lack of Awareness
One owner recently imparted to another that “We’re well-funded. We have $1,000,000 in our reserve account.” This particular association has a reserve account that is less than 20% funded and a 4 cab, 60+ landing elevator modernization project only a few years away (the elevators are over 20 years old). That project alone will probably cost $2MM+.
“Not My Problem”
Current owners simply have no interest in paying for the portion of the useful life of building components consumed during their tenure. If it ain’t broke, don’t fix it AND don’t save for it, either.
Owners Invest Themselves
Owners are better at and/or have more flexibility with regard to investing, so they should keep their money and be specially assessed as needed.
Moderate Funding
Cash flow based funding strategies generally work well for everyone involved as owners – old and new – can successfully afford steadily increasing contributions that fund reserves adequately and generally avoid special assessments.
Cash Flow is King
Reserving funds is all about cash flow and there’s no rush to fill the coffers to 100%. Unlike retirement account funding that has an end date for contributions that must then last another 10, 20 or 30+ years, community associations contribute to reserves for the life of their properties. Moreover, expenses and contributions are exponential and not linear (in line with compounding inflation) and funding needs are “lumpy” with cliffs and valleys.
Full Funding
This is a truly mythical realm that saves extraordinary amounts of money despite a number of obstacles and variables that defy the ability to correctly predict asset life and cost up to 60+ years into the future.
“Trust the Reserve Consultant”
This is a mental shortcut that leads to defects in group decision-making. “Trust the professional” allows groups – that often lack internal subject matter expertise – to forgo robust due diligence and reach an outcome with less discussion, research and debate.
“Increases Marketability”
While a severely under-funded property or one facing significant repairs and/or special assessments is often less marketable, a fully funded property is not demonstrably more marketable than one that’s 70% funded or even 50% funded. Reserve funding is only one of many factors driving property purchase decisions.
“100% Is Best”
Some people simply believe that 100% – despite being an impossible figure to correctly identify – is the right target. With 10 different reasons that reserve studies are often incorrect, 100% is a mythical figure much like a unicorn.
Have You Transformed Your Reserve Study Into a Living Document?
-
Transform your reserve study into a living document by integrating information sourced from routine
maintenance, repair and replacement including:
- WHO provided service
- WHEN it happened
- WHAT was addressed
- HOW much it cost
- WHY? Value-added contextual data facilitates reserve study updates and more accurate data related to estimated useful life and component costs. Your association will also evaluate the data more frequently than might otherwise be the case.
READ: The Prevention Plan
Homeowner Involvement
Volunteer participation is absolutely essential!
In Washington State, reserve study vendors are statutorily indemnified from being held accountable for providing inaccurate information. CICs with volunteer involvement have consistently expressed more confidence in the information their reserve studies contain. 40% of CICs have volunteers who dedicate time annually to their reserve study updates. View the 2021 CIC Reserve Questionnaire.
Owner Involvement and Study Accuracy
Many nonsensical comments over the years contend that "reserve studies are just tools" as a way to justify woefully inaccurate data related to cost and useful life. Having to complete a project 5 years early or at 10% to over 1,000% more cost is material in many cases.
If your association's major component replacement cost is $5,000,000 instead of $3,000,000, AND/OR if your reserve study has excluded hundreds of thousands or millions of dollars of components from its component list (see common exclusions), most organizations lack the capital on hand to make up the difference.
Special assessments can be avoided by applying proper planning and additional effort from reasonable people looking at the data. It does not require a certification, degree or special expertise to make your reserve study accurate, comprehensive and precise. View the difference below from 2013 to 2021.
READ Decision-Making 101
Impact of Volunteer Involvement on a Reserve Study
| 2013 (Level 3) | 2017 (Level 1) | 2018 (Level 3) | 2019 (Level 3) | 2020 (Level 2) | 2021 (Level 2) | |
|---|---|---|---|---|---|---|
| Volunteer Involvement | None | Beginning | Heavy | Heavy | Heavy | Continued |
| 30 Yr Projected Constant $ Liabilities | - | 4,209,850 | 5,592,100 | 7,304,940 | 9,103,743 | 8,661,093 |
| 30 Yr Projected Inflated Liabilities | 6,948,322 | 8,182,331 | 10,574,334 | 12,699,671 | 15,715,318 | 15,001,916 |
| % Increase | N/A | +17.8% | +29.3% | +20.1% | +23.8% | -4.6% |
| Estimated Reserve Balance | $1,504,922 | $5,019,354 | $4,314,551 | $3,279,225 | $2,351,329 | $4,448,924 |
| % Fully Funded | 21.7% | 61.3% | 40.7% | 25.0% | 20.0% | 51.4% |
Seattle Reserve Study 2021-2023
- Below is a snapshot of a reserve study for a condominium in Seattle, WA.
- 2021 data are as presented by the reserve study firm. 2023 data updated by a brief SMAARTE Group reserve study tune-up.
Component Cost Comparison
Landscape Light Fixtures - Replace
Compare the chart with the .
| Component | 2021 | 2023 |
|---|---|---|
| Landscape Light Fixtures - Replace | $10,000 | $73,000 |
| Terrace Railings - Repair & Paint | $27,090 | $87,210 |
| Elevator - Modernization | $525,160 | $1,378,130 |
| Parking Garage Insulation - Maintenance | $10,000 | $25,790 |
| Construction - Contingency | $21,926 | $50,000 |
| Lobby - Refurbish | $60,000 | $136,500 |
| Door & Gate - Rekey | $18,400 | $38,540 |
| Access System - Upgrade | $35,000 | $50,000 |
| Terrace Pedestal Pavers - Maintenance | $22,130 | $36,380 |
Spending
Start with your state statutes. Three different Washington State CIC statutes provide the language below. Reserve funds are intended to be expended specifically for maintenance, repair and replacement activities, NOT for capital improvements (BUT you can often borrow from your reserve funds with a specified repayment schedule). Reserve studies do not contemplate capital improvements as part of their over-time funding and expense algorithms.
WA: RCW 64.34.384 + RCW 64.90.540
An association may withdraw funds from the association's reserve account to pay for unforeseen or unbudgeted costs that are unrelated to replacement costs of the reserve components. Any such withdrawal must be recorded in the minute books of the association. The board must give notice of any such withdrawal to each unit owner and adopt a repayment schedule not to exceed twenty-four months unless the board determines that repayment within twenty-four months would impose an unreasonable burden on the unit owners.
The board must provide to unit owners along with the annual budget adopted in accordance with RCW 64.90.525 (a) notice of any such withdrawal, (b) a statement of the current deficiency in reserve funding expressed on a per unit basis, and (c) the repayment plan.
Payment for major maintenance, repair, or replacement of the reserve components out of cycle with the reserve study projections or not included in the reserve study may be made from the reserve account without meeting the notification or repayment requirements under this section.
The board may withdraw funds from the reserve account without satisfying the notification of repayment requirements under this section to pay for replacement costs of reserve components not included in the reserve study.
Florida Condominium Act - 718.112(2)(f)(3)
Reserve funds and any interest accruing thereon shall remain in the reserve account or accounts, and may be used only for authorized reserve expenditures unless their use for other purposes is approved in advance by a majority vote at a duly called meeting of the association...
Why Would an Association Use Reserve Funds for Items Not Contemplated in the Reserve Study?
- to pay for inspection, maintenance, repair or replacement of a component that will be added to the reserve study
- to fill a gap in operating funds (!) by BORROWING and repaying the reserve fund over time
-
to pay for capital improvements that will be
depreciated over a period of several years with the borrowing repaid to the reserve fund over time
- amortizing large expenses reduces the immediate cost burden
- if a new asset is going to last 10, 20 or 30 years, it might make sense to pay for it over time
Investing
With the exception of 10-year Treasury Notes, principal-guaranteed securities such as money market funds, certificates of deposit (CDs) and US Treasuries (bills, notes and bonds) have NEGATIVE INFLATION-ADJUSTED RETURNS from the year 2000 to 2024.
Unlike retirement planning which is finite (humans have an expiration date),
community association reserve funding needs are infinite!
Contrary to the common wisdom of most long-term investment planning (university endowments, pension plans, whole life insurance assets, etc.), community associations have been lead to believe that risk-adversity is key to storing their collective billions of reserve dollars in an eroding investment scheme as a best practice. Guaranteeing return of principal (moving to more conservative investments) a well-known concept employed by target-date funds, but as we've already stated, community association common assets are typically planned for inspection, maintenance, repair and replacement in perpetuity.
Most associations with more than minimal common assets would benefit from rethinking their reserve investment plan to PRESERVE AND GROW capital on an inflation-adjusted basis INSTEAD of an absolute, fixed dollars-in, dollars-out concept. Prudent investors understand that purchasing power decreases over time.
READ: HOW CAN YOUR ASSOCIATION INVEST ITS RESERVE FUNDS?
Real (Inflation-Adjusted) Returns by Quarter Century
US-dollar assets - annualized, inflation-adjusted
Each color = a 25-year era; 2000-2024 in yellow
Compare assets in the chart or the stacked asset panels on narrow screens. Hover a desktop bar for its return, or open the complete data table below.
Equity
Treasury (10yr)
Treasury Bill
House Prices
Gold
Copper
Oil
Wheat
Commodities (CRB)
2000-2024 · Treasury Bill: -0.7%
Source: GFD, Bloomberg Finance LP, Deutsche Bank Long-Term Asset Return Study (2024)
Accessible data table: all assets and periods
| Asset | 1800-1824 | 1825-1849 | 1850-1874 | 1875-1899 | 1900-1924 | 1925-1949 | 1950-1974 | 1975-1999 | 2000-2024 |
|---|---|---|---|---|---|---|---|---|---|
| Equity | +9.0% | +6.5% | +7.2% | +6.5% | +3.9% | +6.0% | +6.6% | +11.8% | +4.9% |
| Treasury (10yr) | +8.4% | +4.8% | +3.5% | +5.0% | -1.0% | +2.3% | -0.6% | +4.1% | +1.3% |
| Treasury Bill | +5.7% | +4.7% | +2.9% | +3.5% | -0.1% | -0.1% | +0.4% | +2.1% | -0.7% |
| House Prices | Series not begun / unavailable | Series not begun / unavailable | Series not begun / unavailable | Series not begun / unavailable | -1.0% | +1.3% | 0.0% | +0.9% | +2.3% |
| Gold | +0.7% | +0.5% | -1.5% | +0.1% | -3.4% | +1.5% | +3.0% | -2.9% | +6.8% |
| Copper | -1.9% | -0.9% | -1.1% | -0.6% | -4.5% | -0.2% | +2.1% | -3.6% | +3.9% |
| Oil | Series not begun / unavailable | Series not begun / unavailable | Series not begun / unavailable | +3.1% | -1.3% | -1.6% | +3.2% | -1.7% | +1.5% |
| Wheat | Series not begun / unavailable | Series not begun / unavailable | +0.1% | -0.6% | Series not begun / unavailable | -0.4% | -0.2% | -7.4% | +1.9% |
| Commodities (CRB) | Series not begun / unavailable | Series not begun / unavailable | Series not begun / unavailable | Series not begun / unavailable | Series not begun / unavailable | -0.8% | -0.1% | -2.9% | -0.2% |
Further Reading
Replacement Reserves and Infrastructure
RESERVE STUDY + RESERVE FUND INVESTMENT READING
- Reserve Study Calculator🖩
- 2022 Reserve Questionnaire Results
- DOLLAR$ and SEN$E: Are you Investing, Gambling, or Guessing?!?
- Principal Guaranteed Securities: Don't Trade CONVENIENCE for YIELD
- Example Replacement Reserve Funds Policy
- Reserve Study Standards Updated July 2023 | CAI
- National Reserve Study Standards (v. 2016) | CAI
- Explanation of Reserve Study Standards | CAI
- Best Practices: Reserve Studies / Management | FCAR
- Reserve Studies: What they Do and Don’t Include | WSCAI October ‘21
- Board Duty to Fund Reserves | Unexpected Reserve Expenses | Davis-Sterling.com
- The Reserves Truth | Policy Pressure | Common Ground September/October ‘21
- Replacement Reserve Responses | 2020 Homeowner Satisfaction Survey
- $$$ - Example Reserve Investment Policy | Louis Orloff - Reserve Fund Advisers
- $$$ - Reserve Funds: How and Why Community Associations Invest Assets | CAI
- $$$ - The Vicious Cycle of “Keeping Fees Low” | Nick Smith - Superior Reserve
- $$$ - Investing Association Funds Legal Memo | Condominium Law Group
- $$$ - How Much are Adequate Reserve Contributions | Association Reserves
Investing Reserve Funds: Questions You Should Ask
- How much are your homeowners (members) paying to compensate for reserve investments that perennially underperform inflation?
- Do your relevant state statutes and governing documents restrict the type of investments you can make?
- Is your Board meeting its fiduciary duty or duty of care by failing to look beyond fixed income and/or guaranteed return of principal investments?
- Is your association acting like a prudent investor that has considered all the risks and performed all the necessary due diligence to make financial decisions that are reasonable for all time periods from 1 year to 3+ decades?
EXPECTED USEFUL LIFE (EUL), MAINTENANCE & REPL. REFERENCES
- Comprehensive Condominium Component List
- RS Means Preventative Maintenance for Multi-Family Housing
- Fannie Mae Appendix F - Multifamily EUL Tables (2019)
- Fannie Mae Physical Needs Assessment with EUL
- HUD Capital Needs Assessment Tool
- CCPIA Estimated Life Expectancy Charts
- WA Department of Commerce EUL Table
- Florida Housing EUL Tables
- BOMA Preventive Maintenance Guidebook (2010)
- FCAR Best Practices for Community Association Maintenance (2023)
- ASHRAE HVAC Service Life Database
- NAHB Life Expectancy of Home Components (2007)
- InterNACHI Standard Estimated Life Expectancy for Homes
- John Wiley & Sons EUL (2016)
- Portland, OR EUL for Capital Assets (2017)
- IRS Publication 946 (2021) - How to Depreciate Property
- 2020 Architectural Manual Rehabilitation Guide
INFRASTRUCTURE READING
- Strata (Canada Condominium) Repairs & Maintenance
- Longevity of Infrastructure – Reserving and Risk Management in Condominium Maintenance in Canada
- Condos and the future: mitigating risks and ensuring long-term sustainability
- Longevity of Condo Infrastructure - Canadian Institute of Actuaries
- Florida Condominium Safety Reforms | June 2022
- Condominium Safety Public Policy Report | CAI
- Condominium Infrastructure Safety Questions | CAI
- Examining Aging Infrastructure | CAI
- Infrastructure Resources | CAI
- The Prevention Plan | Common Ground May/June ‘22
- Creating a Proactive HOA and Condo Building Maintenance Strategy | Hazel Siff
- Creating a Maintenance Plan | Jim Talaga
- High Alert | Common Ground September/October ‘21
- Inspections & Actions to Keep your Building Structure Safe | WSCAI October ‘21
- Shedding Light on Plumbing & Structural Systems | WSCAI October ‘21
- Heavy Burden ($$$ Infrastructure Replacement) | Common Ground Nov/Dec ‘21
- Modernizing Mid-Century | Common Ground March / April ‘22
- Signs of Deterioration Video | Mitch Frumkin of Kipcon
Washington State Reserve Study and Reserve Fund Statutes
- WA HOMEOWNER ASSOCIATION ACT: RCW 64.38.065 - 64.38.090
- WA CONDOMINIUM ACT: RCW 64.34.372 + 64.34.380 - 64.34.392
- WA COMMON INTEREST OWNERSHIP ACT: RCW 64.90.535 - 64.90.560
Reserve Study Working Group Key Learnings
- % of reserve funding as a proportion of annual operating budget: averages from ~15% to ~30% depending on a variety of factors including age of the property and funding goals.
- Incorrect component cost assumptions aren't always due to inaccurate data from databases. Sometimes you want broadloom carpet and need 2x your square footage to make all the patterns line up!
Strategies: Monitoring and Updating Your Reserve Study
- Start reviewing reserve study updates 5 to 6 months before your fiscal year end
- Ensure that bids from different vendors are comparable and if they aren't, make sure you know why
- Try to keep the same reserve consulting firm for several years
- Get volunteers involved! Your reserve study vendor may well be indemnified from monetary damages and other liability by statute. There’s no guarantee that paying a third party will achieve accurate and/or precise information
Determining If EUL and Cost Estimates Are Correct
- It's important to understand if expected useful life (EUL) figures are consultant estimates vs. actuals based on repair and replacement experience
- Sometimes your CAM (management representative) can gather data from other associations managed by the same company to inform EUL and cost estimates
- Expert review for specific infrastructure and systems can dramatically improve the accuracy of both EUL and cost estimates
- Ensure that bids from different vendors are comparable and if they aren't, make sure you know why
- Associations have experienced consistent and dramatic differences in component EUL (expected useful life) attributed to a specialist contractor like Boiler Masters vs. a generalist like McDonald Miller.
- In certain circumstances, you can save a lot of money and headaches by hiring a specialist who may recommend rebuilding vs. replacing equipment
Examples of EUL and Cost Estimate Inaccuracies
- Fitness Center Equipment: $21,180 (+300%) – 2 years early
- Landscaping: $11,800 (+236%) – 2 years early
- Carpet & Paint: $218,080 (+24.6%) – plus additional anticipated costs
- Traction Elevator Maintenance: $10,362/cab (+311% per cab) – 1 year early
- Sealant Joint Replacement : $350,000 (+1,032%) – 6 years early
Which Components to Include in Your Reserve Study
- Some organizations do not include items under a $ threshold (e.g. $10,000)
- Others include all items not in the annual operating budget
- RCW 64.34.382: In preparing a reserve study, the association shall estimate the anticipated major maintenance, repair, and replacement costs, whose infrequent and significant nature make them impractical to be included in an annual budget.
- A Reserve Study amortizes funding expenses over time so that current owners are not unfairly burdened with excessive assessments for components that have a useful life beyond one year.
Major Components: Windows
- some associations have chosen to not budget for this expense whatsoever
- others are budgeting to replace individual windows over time
- others that have a lump-sum set aside (in 1 or 2 phases) for year 40 or 50
- the high expense involved to replace windows is difficult to budget into a reserve study and make all the numbers “work”
Separating RLCEs From CEs in Your Reserve Study
- There's legal precedent to physically separate RLCE and CE reserve funds into their own accounts. See this Expense Allocation blog for more information
Earthquake Insurance
Earthquake insurance shook its way into one rocking discussion, but it created a fissure in our reserve study component list and we deferred geological inclinations to another meeting.
- If your organization participated in the 2021 Seattle Condo Questionnaire, there's some great data available in those results about differing levels of EQ insurance.
- VIEW: Insurance information
Planning and Funding
- Reserve Funding StrategiesThis page
- Example Reserve Study Component ComparisonThis page
- Mister Rogers taught us long agoneighborhoodarchive.com
- Reserve JudgmentCondo Connection · 04/27/23
- The Myth of “Full Funding”Condo Connection
- SMAARTE Group Reserve Study Tune-UpSMAARTE Group
- The Prevention PlanCommon Ground
- View the 2021 CIC Reserve QuestionnaireCondo Connection
- Common ExclusionsCondo Connection
- Decision-Making 101Condo Connection
- DOLLAR$ and SEN$E: Are you Investing, Gambling, or Guessing?!?Condo Connection
- Principal Guaranteed Securities: Don't Trade CONVENIENCE for YIELDCondo Connection
Spending, Investing, and State Laws
- NEGATIVE INFLATION-ADJUSTED RETURNSCondo Connection · 11/14/24
- HOW CAN YOUR ASSOCIATION INVEST ITS RESERVE FUNDS?Condo Connection
- State Statute Details MatrixCondo Connection · Google Docs
- reserve study critical reminderCondo Connection · 05/26/22
- Annual Budget Ratification ProcessCondo Connection
Tools and Related Resources
- Open in Google DocsCondo Connection · Google Docs
- Reserve Study AnalyzerSMAARTE Group
- PROPERTY INFRASTRUCTURECondo Connection
- RESERVE EXPENSE ALLOCATIONCondo Connection
- INSURANCECondo Connection
- LENDER REQUIREMENTSCondo Connection
- GOVERNANCECondo Connection
- RESOURCESCondo Connection
Reserve Studies and Investment
- Reserve Study Calculator1drv.ms
- 2022 Reserve Questionnaire ResultsCondo Connection
- DOLLAR$ and SEN$E: Are you Investing, Gambling, or Guessing?!?Condo Connection
- Principal Guaranteed Securities: Don't Trade CONVENIENCE for YIELDsites.google.com
- Example Replacement Reserve Funds PolicyCondo Connection
- Reserve Study Standards Updated July 2023CAI
- National Reserve Study Standards (v. 2016)CAI
- Explanation of Reserve Study StandardsCAI
- Best Practices: Reserve Studies / ManagementFCAR
- Reserve Studies: What they Do and Don’t IncludeWSCAI October ‘21
- Board Duty to Fund ReservesDavis-Sterling.com
- Unexpected Reserve ExpensesDavis-Sterling.com
- The Reserves TruthCommon Ground September/October ‘21
- Policy PressureCommon Ground September/October ‘21
- Replacement Reserve ResponsesFCAR
- 2020 Homeowner Satisfaction SurveyFCAR
- $$$Example Reserve Investment PolicyLouis Orloff - Reserve Fund Advisers
- $$$Reserve Funds: How and Why Community Associations Invest AssetsCAI
- $$$The Vicious Cycle of “Keeping Fees Low”Nick Smith - Superior Reserve
- $$$Investing Association Funds Legal MemoCondominium Law Group
- $$$How Much are Adequate Reserve ContributionsAssociation Reserves
Useful Life and Maintenance
- Comprehensive Condominium Component Listdocs.google.com
- RS Means Preventative Maintenance for Multi-Family Housingcostworks.rsmeans.com
- Fannie Mae Appendix F - Multifamily EUL Tables (2019)multifamily.fanniemae.com
- Fannie Mae Physical Needs Assessment with EULhud.gov
- HUD Capital Needs Assessment Toolhud.gov
- CCPIA Estimated Life Expectancy Chartsccpia.org
- WA Department of Commerce EUL Tablecommerce.wa.gov
- Florida Housing EUL Tablesfloridahousing.org
- BOMA Preventive Maintenance Guidebook (2010)icap.sustainability.illinois.edu
- FCAR Best Practices for Community Association Maintenance (2023)FCAR
- ASHRAE HVAC Service Life Databaseweblegacy.ashrae.org
- NAHB Life Expectancy of Home Components (2007)hcmuddox.com
- InterNACHI Standard Estimated Life Expectancy for Homesnachi.org
- John Wiley & Sons EUL (2016)onlinelibrary.wiley.com
- Portland, OR EUL for Capital Assets (2017)portlandoregon.gov
- IRS Publication 946 (2021) - How to Depreciate Propertyirs.gov
- 2020 Architectural Manual Rehabilitation Guidedca.ga.gov
Infrastructure
- Strata (Canada Condominium) Repairs & Maintenancewww2.gov.bc.ca
- Longevity of Infrastructure – Reserving and Risk Management in Condominium Maintenance in Canadacci-newfoundland.ca
- Condos and the future: mitigating risks and ensuring long-term sustainabilitycia-ica.ca
- Longevity of Condo Infrastructure - Canadian Institute of Actuariescia-ica.ca
- Florida Condominium Safety ReformsJune 2022
- Condominium Safety Public Policy ReportCAI
- Condominium Infrastructure Safety QuestionsCAI
- Examining Aging InfrastructureCAI
- Infrastructure ResourcesCAI
- The Prevention PlanCommon Ground May/June ‘22
- Creating a Proactive HOA and Condo Building Maintenance StrategyHazel Siff
- Creating a Maintenance PlanJim Talaga
- High AlertCommon Ground September/October ‘21
- Inspections & Actions to Keep your Building Structure SafeWSCAI October ‘21
- Shedding Light on Plumbing & Structural SystemsWSCAI October ‘21
- $$$Heavy Burden ($$$ Infrastructure Replacement)Common Ground Nov/Dec ‘21
- Modernizing Mid-CenturyCommon Ground March / April ‘22
- Signs of Deterioration VideoMitch Frumkin of Kipcon
- Has your reserve study left you scratching your head?
- Want help planning for a more sustainable future for your reserve contributions?
- Does service from your reserve vendor fail to meet all your expectations?