A reserve fund study is critical in helping condominium corporations plan and budget for major repairs and replacements. Here are some common questions and what you need to know.
What is a reserve fund study?
A reserve fund study is a comprehensive analysis of a condominium corporation’s reserve fund, which is a special account used to pay for future major repairs and replacements. The study helps the corporation understand its long-term financial obligations and plan for the future.
Why is a reserve fund study important?
A reserve fund study is an important tool for helping condominium corporations make informed decisions about their finances. By analyzing the state of the reserve fund, the study provides information about the corporation’s current and future financial obligations, which can help the board make informed decisions about budgets, repairs, and replacements.
What does a reserve fund study include?
A reserve fund study typically includes an analysis of the current state of the reserve fund, an assessment of the current and future financial needs of the corporation, and recommendations for how to improve the health of the reserve fund. The study may also include a comprehensive list of all major components of the building and an estimate of their expected life spans and replacement costs.
When should a reserve fund study be done?
A reserve fund study should be done regularly, typically every three to five years. This helps the corporation stay informed about its financial obligations and ensure that its reserve fund is adequate to cover future repairs and replacements.
Who should do a reserve fund study?
A reserve fund study should be done by a qualified and experienced professional, such as an engineer, accountant, or reserve fund planner. This ensures that the study is accurate and provides the corporation with the information it needs to make informed decisions.
What are the benefits of a reserve fund study?
A reserve fund study provides a number of benefits to condominium corporations, including: