It has been discussed before that the best reserve studies are a team effort. In order to make a reserve study most effective, it is important to thing of the different parts that go into them.
List All of the Reserve Items
One thing an association can do is to make a list of all reserve item components and give them to the reserve analyst. Obviously, the reserve analyst can’t include items that he didn’t know were supposed to be included. Additionally, at the beginning of the assignment, the reserve analyst may look over the list and suggest a few inclusions. The reserve analyst also may encounter a few unplanned reserve items during the site visit. All of these scenarios are common.
Keep Very Good Association Records
A second way to make the reserve study most effective is to keep good association records. This can be a combination of invoices, work orders, and construction plans. This is very important. Since board turnover is high in some communities, good records will help the new board members hit the ground running with capital expense histories. It is also very important to give this information to the reserve analyst or make it available when they visit the property. In older communities, it is of even greater importance. Sometimes it is difficult to ascertain how old or what condition of a reserve item is in just by looking at it.
Have a Review Process
Another thing to do is to have a review process with the association board. The reserve study should be thought of as a preliminary draft when it was first submitted. It is common for a good percentage of reserve studies to require changes, amendments, revisions, or corrections. Ideally, when the reserve study is completed, it is distributed to the property manager and then also to all of the board members. It is our opinion that all of the board should look through the report, rather than just the treasurer or president. The more sets of eyes that are on the report, the more accurate and customized it will be. After each member of the board has reviewed it, suggested changes can be agreed upon, and then these changes can be passed back to the reserve analyst.
If you take these suggestions into account, you will be maximizing the effectiveness of a reserve study for your community.