Definition
A professional assessment evaluating common area components' condition and remaining useful life, projecting future replacement costs. It determines if reserves are adequate.
Where you’ll meet it
Is this association healthy, or a special assessment waiting to happen?
See it in Buying a condo or townhome · Step 2About this term
Reserve studies evaluate roofs, pavement, pools, and other major components, determining replacement costs and timelines. Well-funded reserves prevent special assessments and maintain property values. Underfunded reserves indicate future assessment increases. Studies typically occur every 3-5 years and should be reviewed before property purchase.
Pro Tip
Always obtain reserve studies before buying. Well-funded reserves protect property values and prevent surprise assessments.
Example
A reserve study identifies $2 million in required roof replacement over next 5 years, requiring adequate reserve funding.