Reserve Fund Study & Depreciation Report
What Is A Reserve Fund Study?
A reserve fund study is a comprehensive analysis of a condominium corporation’s reserve fund, including its current status and future funding needs. The study evaluates the current condition of the property, identifies the necessary repairs and replacements that will be required over time, and determines the funding required to complete these projects. A reserve fund study includes a physical analysis of key components of a building. Components can include:
- Amenities
- Boilers
- Building Envelope
- Common Interiors
- Electrical Systems
- Financial Analysis
- Fire Alarms
- Grounds
- Life Safety
- Mechanical Systems
- Plumbing Systems
- Roofs
- Siding
- Site Services
- Sprinkler Systems
- Structural Systems
- Windows
- And more
Included in the reserve study will be a detailed report that outlines the quantity, estimated replacement cost, and estimated remaining useful life for each component.
Additionally, Keller Engineering will include a Property Condition Report, physical analysis, and financial analysis, including a 30-year funding plan with an analysis of iterative funding options.
Why Is A Reserve Fund Study Important?
A Condominium Corporation must have a well-funded reserve fund in order to ensure the long-term financial stability and maintenance of the property. A Reserve Fund Study will provide you with a basis for determining how much money your Condominium Corporation should be setting aside to account for the repair or replacement cost of key components of the building in future years, as the useful life comes to an end.
- The Property Condition Report includes a careful evaluation of each building or property system to present a complete view of their condition and estimated useful life remaining.
- The Financial Report includes a review of a 30-year projection, in order to provide the Condominium Corporation a true picture of their financial well-being.
By looking at both the immediate and long-term, it will be possible to establish a reserve-funding plan, which most accurately fits your specific needs. This projection will give the Corporation the necessary information to develop its yearly contributions, based on an average over a number of years, and assists its investment strategy for the funds as it identifies when repairs will be needed.
A well-maintained building and well-funded reserve can help to increase the value of the property by demonstrating to potential buyers and lenders that the corporation is committed to maintaining the property in good condition.
Our Reserve Fund Study Process
Here is what you can expect:
- A review of the Condominium Corporation’s documents to determine which components make up the common and limited common elements (component inventory) as well as their quantities.
- Our team will perform an on-site inspection, to establish the current condition of all common elements to assign an estimated remaining useful life. We will inspect the building’s systems, structures, and components. This typically involves a visual inspection of the building’s exterior and interior, as well as testing of various systems, such as electrical and plumbing. The auditor will take measurements, gather data, and take photographs to document their findings.
- The auditor will prepare a Full Reserve Study, which includes a Property Condition Report, physical analysis, and financial analysis, including a 30-year funding plan.
- We can also provide an analysis of iterative funding options.