How is a Reserve Study to benefit an Association? Do reserve studies really serve a purpose, or are they an unnecessary expense and bother for the Board and Management?

A properly prepared Reserve Study will provide the following:

1. Defines and details long term reserve expenses.
2. Provides a Funding Plan to meet long term reserve expenses.
3. Helps insures stability in year-to-year budgeted assessment rates.
4. Satisfies Nevada State Requirements.
5. Allows for periodic inspection of Common Elements to insure proper up-keep and maintenance.
6. Provides a maintenance schedule guide for repair and or replacement of major common element components.
7. Reserve Study Preparer offers an un-biased (3rd party) evaluation and projected funding plan of reserve required.

It wasn't too long ago that many Associations raised money to paint the buildings or re-roof their homes by charging each owner a Special Assessment. This Special Assessment, was limited in it’s use by the Association’s governing documents to be assessed and used within that one year. In addition, it had to be voted on by the owners and in order to pass, required (depending on the limits set by their CC&R’s) 50%, 66%, 75% and sometimes even 90% of the owners to agree to the Special Assessment. Because the costs for large maintenance jobs was expensive, the Assessments could be thousands of dollars. This could lead to a financial hardship on many owners, particularly those on fixed incomes. With a Reserve Contribution, the benefit of paying into the Reserve Fund a little each month is so much easier and financially more feasible than an Annual Special Assessment. Also, the best part is that when the streets need replacement or the buildings need painting, the money is available to do the work. It also benefits because the Association areas can be kept up in good shape, all the time. This helps property value and visitor saying, “Oh, what a nice place this is to live”.