Importance of Reserve Studies

A well prepared Reserve Study is vitally important for many reasons. First, it ensures that the Association complies with the Applicable legal requirements. The Davis-Stirling Common Interest Development Act - Section 1365.5 requires a Reserve Study for any Common Interest Development whose replacement value of those components which the Association is obligated to maintain, repair, or replace is equal to or greater than one-half of the gross budget for any fiscal year. Additionally, Section 1365 establishes reporting requirements necessitating the inclusion of Reserve Study information in the Associations Annual Budget.

Third, a Reserve Study provides a more accurate and complete picture of an Association's financial strength and market value. As such, outside parties often request a copy. Lending institutions for the Association, its individual owners considering financing decisions. For perspective buyers, reserve information is an important factor in evaluating a property and its value. The Reserve Study is also necessary for the Accountant to prepare the Annual Audit.


| THE COMPANY | RESERVE ANALYSIS | AN INDUSTRY LEADER | THE PRESIDENT | HOW OFTEN? |


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