New Condominium Corporations have 2 years to do a reserve fund study and approve a funding plan.
A reserve study is an in-depth evaluation of a property’s physical components and an analysis of its reserve funds. Based on a thorough on-site inspection, a custom reserve study details anticipated replacements or repairs to common-area elements and recommends annual reserve funding to cover capital expenditures for the next 30 years.
Replacement Reserve Funds are a financial barometer, of sorts, that provide an indication of the overall stability and administrative strength of the corporation.
Reserve studies are required to be arranged and reviewed with Board. It is incumbent on the Board to establish an adequate reserve budget according to reserves schedules as set out in a study.
Once you have ordered a Reserve Study then a comprehensive analysis is required to determine if what you paid for is what you need.
Renaissance Management can assist your Board to thoroughly understand the nature of your reserve fund study. As an independent consultant, we objectively review and analyze the draft to ensure that:
- all physical assets of the common property are included
- the proposed scheduling of the work is appropriate and customized to your needs
- the costs of the estimated work are reasonable
- funding strategies have been explored for the best interests of owners
Investments must maximize returns while minimizing risks and maintaining flexibility. Therefore, the establishment of an investment strategy encompassing short and long term investments in keeping with replacement schedules is fundamental.