Two halves of one report
The Community Associations Institute describes a reserve study in two parts. The physical analysis is the component inventory, a condition assessment and life and cost estimates. The financial analysis looks at the reserve balance, measures how well funded the account is, and sets out a funding plan, usually over 20 or 30 years.
The three levels
| Level | What happens | When boards use it |
|---|---|---|
| Full study | Complete inventory, site inspection, condition, lives, costs and a funding plan | The first study, or after major changes to the property |
| Update with a site visit | The existing inventory is inspected on site; conditions, lives and costs are revised | Every few years once a full study exists |
| Update without a site visit | Figures revised from records, no inspection | Between site-visit updates, often yearly |
What a Wisconsin study looks hard at
The component list is much the same across the country. The lives are not. In Wisconsin, firms pay particular attention to roofs and ice dams, asphalt paving and frost heave, concrete and masonry exposed to deicing salt, sealants that work through repeated freezing, and decks and balconies that sit under melting snow. Our winter wear ledger sets out why.
Mid- and high-rise buildings in Milwaukee and Madison add elevators, facade and window systems, boilers, chillers and garage structures, which is why they cost more to study.
What to send the firm
- The declaration, plat and any amendments, so the firm knows what the association maintains.
- The current budget and the latest reserve account balance.
- Any statutory reserve account statement on record.
- The previous reserve study, if there is one.
- Invoices or contracts for big projects in the last ten years: roofs, paving, siding, windows.
- The number of units, buildings and stories, and anything you already know is failing.
Using the result
The board adopts the budget, not the firm. A good study gives you a recommended contribution, the reasoning behind it, and enough detail to explain it to owners and, when a unit sells, to buyers reading the executive summary.
Sources: CAI, Reserve Studies and Funding Resources; Wis. Stat. 703.163.