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Reserve Study Law California
On a quarterly basis common interest development boards of directors must review reserve accounts and compare reserves to the previous year. At least once every three years, boards must conduct a competent and diligent visual inspection of the property that the association is obligated to repair, replace restore or maintain as part of a study of the reserve account requirements. The board is to annually review this study to consider and implement necessary adjustments to the board’s analysis of the reserve account requirements. See more detailed information in California Civil Code Sections 1365 and 1365.5.
Levels of Service
We offer our clients three levels of service, depending on their situation and need as it relates to compliance with government regulations regarding reserve fund responsibility. Services are specifically tailored to the laws and codes of the respective states of each client.
Level I
Level I is a Full Reserve Study and is the most comprehensive study that we offer. A Full Reserve Study is recommended for an initial baseline study of a new facility. This study creates a complete component list and provides the foundation for all future Reserve Studies. The Level I study includes:
- Thorough onsite inspection
- A full set of measurements
- Full-color photographic component inventory list
- Scope and schedule of future repairs and replacement
- Financial analysis of useful life, remaining useful life and replacement costs
- Calculation of current Reserve Fund Strength based on financial analysis
- Custom Funding Plan to avoid special assessments
Level II
A Level II Reserve Study Update relies on the accuracy of the measurements taken during the Full Reserve Study and therefore, does not include the taking of measurements. The Level II Reserve Study is recommended for a periodic update to the component list and financial analysis. Periodic updates should be scheduled every two to five years. A Level II Reserve Study may be warranted more frequently for facilities with complex component inventories or that have recently completed a major repair or replacement project. The Level II study includes:
- Thorough onsite inspection
- Full-color photographic component inventory list
- Scope and schedule of future repairs and replacement
- Financial analysis of useful life, remaining useful life and replacement costs
- Calculation of current Reserve Fund Strength based on financial analysis
- Custom Funding Plan to avoid special assessments
Level III
Level III is a Reserve Study Update Without Site Visit. This service relies on communication via email and telephone with onsite personnel and service vendors to gather the information needed to update the financial analysis. This level of service depends heavily on the reliability of the existing Reserve Study and is appropriate for years where there has been little change and for facilities with limited component inventory lists. Since there isn’t a site visit, no photographs or measurements are taken. The Level II study includes:
- Update of component inventory list
- Financial analysis of useful life, remaining useful life and replacement costs
- Calculation of current Reserve Fund Strength based on financial analysis
- Custom Funding Plan to avoid special assessments
Call us today to discuss your Reserve Study needs! 1.800.500.8505
