Preliminary Reserve Study

PRELIMINARY RESERVE STUDY (Only prior to or at beginning of construction)

  1. Preparation of a Major Common Element Component Inventory using site plans and governing documents
  2. Estimate the Use Life, Remaining Use Life
  3. Estimate the Valuation Estimates of Repair or Replacement
  4. Estimate reserve account balance and budget projections
  5. Estimate current reserve account earned interest rates and inflation factors
  6. 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.