PRELIMINARY RESERVE STUDY (Only prior to or at beginning of construction)
- Preparation of a Major Common Element Component Inventory using site plans and governing
documents
- Estimate the Use Life, Remaining Use Life
- Estimate the Valuation Estimates of Repair or Replacement
- Estimate reserve account balance and budget projections
- Estimate current reserve account earned interest rates and inflation factors
- Prepare a Full Funding Plan using the Cash Flow Method
Note: This type of study is designed for development budget planning at the outset of construction. A
Full Study should be prepared at or near Developer Transition to the Unit Owners.
These Studies address the normal deterioration of properly built and installed components with a
predictable life expectancy. Catastrophic or events beyond reasonable predictability are not considered
as a depreciable factor in this report.