Reserve Studies

Importance of Reserve Studies

A reserve study provides a current estimate of the costs of repairing and replacing major common area components (such as roofs or pavement) over the long term. Ideally, all major repair and replacement costs will be covered by funds set aside by the association as reserves, so that funds are there when needed. This requires:

examination of the association’s repair and replacement obligations;

determination of costs and timing of replacement; and,

determination of the availability of necessary (reserve) cash resources.

Because the board has a fiduciary duty to manage association funds and property, a replacement reserve budget is very important. Not only does this information supplement the annual pro forma operating budget in providing owners with financial information; the reserve study is also an important management information tool as the association strives to balance and optimize long-term property values and costs for the membership.

For buyers, understanding the reserve study is an important part of evaluating the value of a CID (or HOA) property. For association members, reserve planning helps assure property values by protecting against declining property values due to deferred maintenance and inability to keep up with the aging of components.

A good reserve study shows owners and potential buyers a more accurate and complete picture of the association’s financial strength and market value. The reserve study should disclose to buyers,lenders, and others the manner in which management of the association (i.e., the board and outside management, if any) is making provisions for non-annual maintenance requirements. Preparing a reserve study calls for explicit association decisions on how to provide for long-term funding, and on the extent to which the association will set aside funds on a regular basis for non-annual maintenance requirements. A good reserve study may also function as a maintenance planning tool for the association.

This independent research report was developed under contract for the California Department of Real Estate by Eva Eagle, Ph.D., and Susan Stoddard, Ph.D., AICP, Institute for the Study of Family, Work and Community and David H. Levy, M.B.A., C.P.A. Janet Andrews, MBA, was responsible for the original design, layout, and typography. The Department of Real Estate revised this publication in August 2010. It includes updates by Roy Helsing PRA, RS to insure it aligns with current California Law and the guidelines of the Association of Professional Reserve Preparers (APRA) and the Community Associations Institute (CAI).,” The report does not necessarily reflect the position of the Administration of the State of California.

The entire article is available at: http://www.dre.ca.gov/files/pdf/re25.pdf

Beach Club Town Homes HOA’s Reserve Studies

Click on one of the following links to view the Reserve Studies.

An update of our Replacement Reserve Study was conducted in 2017 with a plan dated to start in 2018. It was performed at the request of the HOA Board of Directors as part of a regular/periodic update process – which calls for updated every 3 years.

2017 Replacement Reserve Study Report (Updated)

The 2013 Study was performed after the completion of the Ryan Homes. The Study was performed at the request of the Owner-controlled Board in order to have a complete study of the entire community.

2013 Replacement Reserve Study

The 2011 Study was performed prior to the building of the Ryan Homes and was conducted at the request of the Developer-controlled HOA Board of Directors.

Importance of Reserve Studies

Beach Club Town Homes HOA’s Reserve Studies

2017 Replacement Reserve Study Report (Updated)

2013 Replacement Reserve Study

2011 Reserve Study

Our Community

Footer Widget 2