A reserve study is a budget planning tool. It consisting of both a physical and financial analysis. The study identifies the components an association must maintain or replace, the current status of the reserve fund, and a stable and equitable funding plan to offset anticipated major common area expenditures, according to the Foundation for Community Association Research’s Best Practices report on reserve studies and reserves management. If you or your boards members are not part of CAI , I encourage you to join. The value you will get from this association will be of great benefit to your association.
CAI’s Government and Public Affairs Committee recently convened a special meeting with experts representing attorneys, builders, reserve specialists, and insurance professionals to discuss best practices, standards, and public policies related to the tragedy in Surfside, Florida. Three working groups have convened to establish guidance and model language for CAI’s state legislative action committees as well as considerations for state legislators and best practices for community association board members, managers, and other professionals.
The three working groups are:
- Building inspections and maintenance.
- Reserve study planning and funding.
- Insurance and risk management.
CAI advocates for developers to transition communities with a current reserve study and a budget that includes both operational funds and reserves, as well as initial funding of reserves for future maintenance, repair, and replacement of facilities and equipment.
