There are currently 12 states in the U.S. that have enacted condominium or “Common Interest Community” laws that make conducting a periodic (usually every 5 years) reserve study a legal requirement for an association’s executive board. The 12 states are California, Colorado, Delaware, Florida, Hawaii, Maryland, Nevada, Oregon, Tennessee, Utah, Virginia, and Washington State.
Several of these states, such as Virginia, leave it up to the association to either conduct the study themselves (internally); use a 3rd party company or some combination of the two. To better guide the process the state developed a document entitled “Guidelines for the Development of Reserve Studies for Capital Components” which, if you are located in Virginia, is a great starting point should your association decide to conduct the study internally.
If you decide to take on the study internally it’s critical that you get the component inventory and calculations for current estimated replacement cost, estimated remaining life, and estimated useful life of the capital components correct as this drives all other aspects of the funding plan.
HealthyReserves was built for exactly this purpose and is able to handle to the basics of the component inventory plus other dimensions such as the impacts of inflation and return of the associations investible funds.
Deciding whether to take on an internal reserve study comes down to the individual association and the complexity of the community. If you as a board decide that it makes sense to conduct it internally then using a tool such as HealthyReserves that was purpose built for this analysis could end up saving significant time, money and headaches.
Eliminating unplanned HOA assessments and underfunded reserves really doesn’t need to be that hard. HealthyReserves can help.