What is a reserve study?

The reserve study is a multi-faceted tool used to predict the cost of each common property component and the year the component will require maintenance and/or replacement. A reserve study recommends annual reserve contributions that balance the expenditures. As a result, the property is prepared for capital improvement and maintenance projects.

How does a reserve study empower the property representatives from fiscal mismanagement claims?

Property decision makers are fiduciaries who must serve the best interest of the property needs. The decision makers are responsible to maintain the property in good and safe condition. Strategic reserve contributions, as recommended within reserve studies, maintain an adequate amount of working capital to preserve the property. As a result, the property representatives alleviate themselves from potential mismanagement claims as this portion of their responsibility is deferred to professionals.

What are fiduciaries and what do they do?

Property decision makers have an obligation to make choices that best serve the property needs. As fiduciaries, they are required to manage the finances of the property including operating budget, savings and checking accounts, and the reserve account. Most associations hire professional management companies to assist with operating budget, savings, and checking accounts. A prudent council of fiduciaries seeks help from a professional to educate them and empower them to develop and maintain a strategic reserve account.

We have a small property. Is there a need to conduct a reserve study?

The size of a property is independent from the need to fund capital improvement and maintenance projects. A reserve study plans for these expenditures regardless of the size of the property. In addition, the fiduciaries have transferred this responsibility to professionals which reduces their liability.

Do we need a reserve study if our property is new?

The best time to develop a reserve study is when the association is new.  Allocation of funds from the onset of the community allows sufficient time to build the reserve account to proper levels.  The longer the period of time property has to fund their reserve account, results in lower monthly reserve contributions.  Properties that wait to fund reserve accounts find that higher maintenance fees are required to establish the reserve account to necessary levels.

Why change our method if our property has a history of conducting capital improvement and maintenance projects through special assessments and bank loans?

A behavior pattern of capital improvement and maintenance projects is undesirable in many ways. First, the property decision makers are neglecting their fiduciary responsibility. Second, property values decrease when a history of financial assistance is required to fund capital improvement and maintenance projects. Buyers and agents are aware of fiscal mismanagement and avoid properties with a history of financial assistance. These properties are a risk to every member even those who can afford extra payments.

I understand our building has problems – what building doesn’t?

The purpose of a reserve study is to help the fiduciaries best manage their reserve account.  The inspection aspect of the reserve study includes a condition assessment of the common elements.  This condition assessment allows the professional to best estimate the year of capital improvement of the common elements.  An added bonus of the inspection is that it may uncover damage that, if not repaired immediately, may result in premature and costly repairs.

We require financial assistance of a special assessment or bank loan. How can a reserve study help us at this time?

A reserve study incorporates the near term financial assistance into the reserve study funding plan as necessary. The reserve consultant prioritizes the time and phases of the near term capital improvement or maintenance projects to best suit the property needs. Furthermore, the reserve study considers the maintenance and/or capital improvement to these common elements and plans their future expenditures accordingly.

Why hire a professional?

A reserve consultant provides an expert independent analysis of the property. By remaining independent, the consultant provides an objective point of view to best maintain the property. This may alleviate disputes between property representatives. Furthermore, a professional reserve study reduces the liability of the property representatives because the fiduciary responsibility is passed to a professional.

Does a reserve study provide accurate estimates of capital improvement and maintenance projects?

A reserve study uses cost engineering to develop an accurate cost of contracted work in your local area. Cost engineering estimates the maintenance and capital improvement costs through a combination of reference materials, contractor affiliation, and practical experience. The cost estimates and component quantities within a reserves study can be used to validate a contractors bid costs and materials estimates.

Will a reserve study help me sell my unit?

A reserve study is an invaluable tool when buying and selling a property. The reserve study indicates that the property representatives are responsible fiduciaries. Repeat buyers and real estate agents understand that poorly managed reserve accounts might be disastrous to a buyer’s purchase. In fact, buyers occasionally end up in foreclosure to special assessments and bank loans not anticipated at the time of purchase. Not only does this affect the buyer, but it lowers the value of the entire property. Therefore, it is prudent to purchase a property that has a reserve study in place and it recommendations abided by the fiduciaries.

Why conduct a reserve study when the developer is still in control?

All too often, developer’s artificially set low maintenance fees to attract more buyers. Too often, the property owners discover this shortfall many years later when they must impose a special assessment or bank loan. Contact your developer and urge them to conduct a reserve study for the financial well-being of your property.

Where does 3E Reserves conduct reserves studies?

3E Reserves is an international reserve study company. We visit your property to provide our service regardless of its location.


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“3E Reserves did a study for the Bay View Community Center that was extremely professional and thorough.  The report was given to us in a timely manner with helpful follow up.  I would recommend 3E Reserves.”

Linda Nieft, President/CEO   -   Bay View Community Center

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Levels of Service

3E Reserves provides three levels of reserve study services. We work with the client to determine which service is best fulfills their needs. The levels of service are as follows:

  • Full Reserve Study. A Full Reserve Study is the complete service offered by 3E Reserves. This service is provided for new and existing clients, as needed. The service involves an on-site visual inspection of the common property components and a full text report. The inspection aspect includes a component inventory, condition assessment, and on-site meeting with property representatives. The financial aspect involves life and valuation estimates, fund status, and a funding plan.
  • Update Reserve Study with Site Visit. An Update Reserve Study with Site Visit is for existing clients who require adjustment to their current reserve studies. The service involves an on-site visual inspection of the common property components and a full text report. The inspection aspect includes a condition assessment and on-site meeting with property representatives. The financial aspect involves a review of the life and valuation estimates, fund status, and a funding plan from the original Full Reserve Study.
  • Update Reserve Study without Site Visit. An Update Reserve Study without Site Visit is for existing clients who require adjustment to their current reserve studies. The service involves a review of the life and valuation estimates, fund status, and a funding plan from the original Full Reserve Study.