The Communicator - Volume 1, Issue 1 - (Page 10)

Complying with California’s Reserve Study and Disclosure Laws In following years, an association can update the life and cost assumptions and incorporate new starting balance information (Update No-Site-Visit), or go the extra step and in addition to the above diligently visually reinspect all the assets (Update With-Site-Visit). How often should you prepare a Reserve Study? How often should you review a budget line item that is typically 15-40 percent of your total budget? How many budget line items do you have that are that large? The point is, isn’t it appropriate to annually check to see if this dominant budget line item is appropriately sized? I n C a l i for nia, ou r leg i sla tors deemed this import ant enough to require that each year, the current Reserve Component List, current Reserve cash balance, By Robert M. Nordlund, P.E., R.S. LET’S START THIS review with a quick quiz. What is a Reserve Study? What does it mean, or take, to be compliant with respect to Reserves here in California? How often do you need to do a Reserve Study? And does it need to be professionally prepared? And what difference does the annual 1365.2.5 Assessment and Reserve Disclosure make? Now in our 21st year of Reserve Study preparation, I continue to be amazed at how few board members and managers know the correct answers to the above questions. There are three “types” of Reserve Studies: 1) “Full” Reserve Study 2) “Update With-Site-Visit” Reserve Study 3) “Update No-Site-Visit” Reserve Study Each type is a Reserve Study, whether it is a first-time or update report, whether it involves a site inspection or not. A Full Reserve Study is sometimes called a First Time Reserve Study, as it usually only needs to be done once. In a Full Reserve Study, the Component List is developed and all major assets are measured during the site inspection. This information forms the basis for all future updates. 10 • The Communicator

Table of Contents Feed for the Digital Edition of The Communicator - Volume 1, Issue 1

The Communicator - Volume 1, Issue 1 Contents President’s Message Capitol Recap Complying with California’s Reserve Study and Disclosure Laws The Devil Is in the Details Ask the Experts – Deferred Maintenance HOA Banking, Then and Now 2008 Events & Education Calendar Welcome to CAI BayCen Index to Advertisers

The Communicator - Volume 1, Issue 1

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