Reserve Study

What is a reserve study in a community association?

A reserve study is a financial planning tool used by homeowners associations to estimate how much money should be set aside for future repairs and replacements of common elements. It typically includes an assessment of current assets, such as roofs, sidewalks, or elevators, their expected lifespan, and projected costs to fix or replace them.

Why is a reserve study important?

Without one, the board is essentially guessing at how much to save. Reserve studies provide clarity, reduce financial surprises, and show homeowners that the board is thinking ahead. In some states, they are legally required. Even when they’re not, smart associations treat them as essential.

How can you use “reserve study” in a sentence?

The previous board didn’t do a thorough reserve study. Now the parking lot is a pothole buffet with no budget to fix it.