Reserve studies are reports that show funding models to communities to estimate and provide for the funding necessary to repair or replace components of common areas as they wear out. These reserve studies may be performed by a number of professionals with varying backgrounds.
Currently, there is only one state, Nevada, which requires licensure through its professional business licensing department. All other states have no such licensure requirement. That doesn’t mean that all preparers of reserve studies will perform the assignment to the same level of quality, however.
There are a few keys you should look for in your reserve study preparer.
Reserve Specialist Designation
One important quality to look for is the RS (Reserve Specialist) Designation. The RS designation is awarded from the Community Associations Institute, a national trade association with 60 national chapters that educates homeowners and business service providers that service common interest developments. The RS recipient has to show that they perform reserve studies that adhere to the national reserve study standards, which include a 19-point required content checklist, an 8-point required disclosure, and a professional code of ethics. Additionally, the RS designation requires a certain amount of reserve studies performed and no less than three years experience in performing them.
A second key quality is the preparer’s background. Backgrounds in engineering, architecture, or general contracting typically are going to be the most beneficial to the client. This is because the reserve study involves a lot of technical and construction trade skills and individuals with these backgrounds are more likely to be very competent in them. There are also a lot of math-related parts to a reserve study, where an engineering background will come in handy.
A third key quality is experience. A noteworthy reserve study preparer will have qualifications demonstrating their proficiency and experience conducting reserve studies. It should be noted that this should be on an individual basis rather than the firm itself. The reason for this is to ensure the quality of the reserve analyst who will be analyzing your association’s reserve components. There is a huge difference in the quality of the reserve study from someone with a lot of experience as opposed to someone who is just starting out in the field. Someone with a lot of experience will do a better job of predicting the remaining life and useful life of the components.
With this checklist in mind, your community can make the appropriate decision about who will prepare your reserve study to help ensure that your funding needs are met.