Reserve Data Analysis, Intl.
 
Articles and Information
 

 

The Reserve Study – A Multi-Purpose Tool

 

prepared by

 

Edwin G. Edgley, CEO/Founder

Reserve Data Analysis, Intl.

May 31, 2010

 

Your Reserve Study is an important part of your association's budgetary process.  Following its recommendations should ensure the association smooth budgetary transitions from one fiscal year to the next, and either decrease or eliminate the need for "special assessments".

 

In addition, your Reserve Study serves a variety of useful purposes:

  • Following the recommendations of a Reserve Study performed by a professional consultant can protect the Board of Directors in a community from personal liability concerning reserve components and reserve funding.
     

  • A Reserve Analysis Study is required by your accountant during the preparation of the association's annual audit.
     

  • A Reserve Study is often requested by lending institutions during the process of loan applications, both for the community and, in many cases, the individual owners.
     

  • Your Reserve Study is also a detailed inventory of the association's major assets and serves as a management tool for scheduling, coordinating and planning future repairs and replacements.
     

  • Your Reserve Study is a tool which can assist the Board in fulfilling its legal and fiduciary obligations for maintaining the community in a state of good repair.  If a community is operating on a special assessment basis, it cannot guarantee that an assessment, when needed, will be passed.  Therefore, it cannot guarantee its ability to perform the required repairs or replacements to those major components which the association is obligated to maintain.
     

  • Since the Reserve Analysis Study includes precise measurements and cost estimates of the client's assets, the detail reports may be used to evaluate the accuracy and price of contractor bids when assets are due to be repaired or replaced.
     

  • The Reserve Study is an annual disclosure to the membership concerning the financial condition of the association, and may be used as a "consumers' guide" by prospective purchasers.

Edwin G. Edgley is the CEO and founder of Reserve Data Analysis, Intl.  Mr. Edgley is a published author, routinely lectures at a national level, and teaches on the subject of reserves and reserve analysis preparation.  He is the author of the RDA RESERVE MANAGEMENT SOFTWARE program, and is actively involved as an expert witness in his field.  This document may be freely quoted, copied, reproduced and/or distributed, in whole or part, for non-commercial purposes, provided all credits and copyright information remain intact.

 

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