Sunday, October 16, 2011

Reserve Studies 101

Regardless of where you are in terms of your reserve study, here is a set of notes you can use as talking points among committee members advising the board, or among board members as you address this critical task.

On a regular basis, the board is required to conduct, update and report based on the association's reserve study. 

What's absolutely true about condominiums and other common interest associations is this: The buildings will outlast us all. Imagine the value of being able to own useful space in buildings that are well-maintained and in good repair, because the board consistently pays attention to reserve study guidelines.

Please print these notes as a way to begin your conversation.
  • What is the age of your building(s)?
    • How many separate buildings do you own?
    • Do you have active repairs or PM planned for the coming construction season?
  • Who performed your last reserve study?
    • How many reserve studies have been completed for your community/ how long has your association been commissioning reserve studies?
    • What is the impression of your current reserve studies? 
      • Are they sufficient?
      • Are they reasonable -- consider our weather/ geography?
      • Any feedback?
  • Where are you in the construction defect repair process? (You may be well past it, or haven't started it yet.)
  • What do you currently use as an annual preventative maintenance PM repair plan?
  • Where did you get your budget number to pay for your reserve study this year? 
    • How much flexibility do you have in your budget to spend more?
  • What association assets are listed in your current study?
    • Do you want to add assets?
    • Do you want to remove assets?
  • Are you aware of the January 1, 2012 effect of the Reserve Study Law and its reporting requirements? (These dictate your actions this year in preparation for your 2013 budget, assuming your association was formed after 1991.)
  • How do you currently address the funding levels for your reserves?
    • Are you adequately funded/ underfunded? What descriptor would you use?
People involved in the reserve study conversation may want to take the time to read the following sections of the Washington State Law, below, regarding reserve studies and funding, as a way of basic education if you don't already have it: 

These are all online under Chapter 64.34, RCW -- Revised Code of Washington -- Condominium Act. These links make the law available online.
64.34.380Reserve account -- Reserve study -- Annual update.
64.34.382Reserve study -- Contents.
64.34.384Reserve account -- Withdrawals.
64.34.386Reserve study -- Demand by owners -- Study not timely prepared.
64.34.388Reserve study -- Decision making.
64.34.390Reserve study -- Reserve account -- Immunity from liability.
64.34.392Reserve account and study -- Exemption -- Disclosure.

NB: Your governing documents may have a tighter control over reserve studies than the state law, or if they are silent, the state law is your guide.