A Reserve Study is like a map for your condo’s financial future…

A Reserve Study tells you what capital projects are looming in your condominium’s future,  when you’re going to have to tackle them, and how much they are going to cost.  It’s like a map for your Association’s financial future – and you need to keep it current.

The new Zachem Bridge in Boston

Think about how many exits and roads have been changed in Boston just in the past 5 years as they wrapped up the Big Dig project.  Our maps from only a few years ago simply don’t cut it any more (thank God for GPS!).  When the landscape changes, so must the map!

In the same way, a Reserve Study must be kept current with the changes that occur at your condominium.  If your community completes a major capital repair project (like replacing the roofs, for example), then the Reserve Study should be updated to reflect that.  You no longer need to be contributing large sums of reserve money to the roof replacement fund, now that the project has passed.  That money should be directed elsewhere to the next priority project.

Secondly, it is possible that the condition of some of the common area components has changed unexpectedly, and the timetable laid out in the last Reserve Study simply isn’t realistic.  For example, maybe the parking lot pavement has deteriorated much more rapidly than anticipated, and it’s clear to the owners that you can’t wait another 8 years (as planned) to replace it.   Or, vice versa, maybe the recent maintenance you performed actually has extended the life of your siding beyond expectation.  Maybe the siding replacement project can be put off for an several more years.  This is one of the most difficult aspects of preparing a Reserve Study – it’s a difficult task to predict the future.

Changing economic factors, such as rising material costs and interest rates, must also be taken into account.  How realistic are those cost estimates from your 2001 Reserve Study?  What are the real costs if you were to bid out these project today?

If your Reserve Study is more than 3 years old, or if you’ve had any significant changes at your condo, it’s time for an update!