Reserve Studies for Management Professionals

By: Robert A. Felix, CMCA, PCAM, RS - The Felix Reserve Group

An association should conduct a reserve study and fund in order to plan for future capital expenditures, ensure the board is fulfilling their fiduciary duty and avoid surprise capital expenses or the loss of an asset, amenity or lifestyle.

Competent common area capital analysis and reserve funding decisions are key elements to a successful community association in today's housing market.

A reserve study is a budget-planning tool that identifies the current status of a reserve fund and sets forth a stable and equitable funding plan to offset the future expense of replacing major capital components within the association.

A board has the responsibility to preserve, maintain and enhance the value of the assets of their community, and with that premise they need to consider three important matters for when dealing with their reserve study.

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