Straight answers for boards and managers.
The questions that come up on nearly every first call, answered without jargon or hedging.
Reserve studies, plainly explained
What exactly is a reserve study?
It's two analyses in one document. The physical analysis inventories every common component the association must eventually replace and estimates its remaining life and replacement cost. The financial analysis runs that inventory forward against your reserve balance and contributions to show whether you're funded well enough to pay for it.
Is a reserve study required in Pennsylvania?
Pennsylvania does not impose a blanket statutory requirement the way some states do, but your governing documents, your lender, your insurer, or a secondary-market loan review may each require a current study. Boards also carry a fiduciary duty to plan for known future expenses, and a study is the standard evidence that you have.
How often should we update it?
The common cadence is a full study with a site visit every three to five years, with lighter updates in between — often annually — to refresh costs and roll the model forward. Material events like a major replacement or a large special assessment justify an off-cycle update.
What does 'percent funded' actually mean?
It compares your current reserve balance to the fully funded balance — roughly, the share of your components' accumulated wear that you have cash on hand to cover. It is a health indicator, not a target you must hit. What matters more is whether the funding plan avoids running the balance to zero.
Does 100% funded mean we have too much cash?
No. It means the reserve balance matches the depreciation already accrued on your components. Very few associations are there. Most sit well under, and the useful question is whether the trajectory is stable, not whether it hits a specific figure.
What's the difference between a reserve component and maintenance?
Reserve components are predictable, significant, and recur on a multi-year cycle — roofs, pavement, elevators. Routine maintenance is annual and small: mowing, snow removal, filter changes. Those belong in the operating budget and are excluded from the reserve model.
Can a reserve study prevent a special assessment?
It can't undo years of underfunding, but it gives you the runway to avoid one. Most special assessments happen because a large expense arrived unforecast. A study makes the expense visible years ahead, when a modest contribution increase can still absorb it.
How long does it take?
About six to seven weeks from engagement to board presentation for a typical property, driven mostly by how fast documents arrive and when the site walk can be scheduled. Updates without a site visit are considerably faster.
What documents do you need from us?
The declaration and bylaws, your current budget, the latest reserve balance, any prior reserve study, and invoices for recent capital projects. If something is missing we work around it and note the assumption.
Do you present to the board?
Yes, and it's included. I'd rather answer the board's questions directly than have your manager defend numbers they didn't build.
How is your fee determined?
Fixed fee, quoted before work begins, based on unit count, number of buildings, and component complexity. Portfolio and multi-property engagements are priced together.
Do you do the repair work too?
No — and that's deliberate. The firm has no contracting arm and no referral arrangements, so there's no incentive to inflate a scope or accelerate a replacement date.
Terms you'll see in the report
- Component
- A common element with a predictable life and a meaningful replacement cost.
- Useful life
- How long a component is expected to last when new.
- Remaining useful life
- How many years are left based on observed condition, not just age.
- Fully funded balance
- The reserve balance that matches accrued wear on all components.
- Percent funded
- Actual balance divided by the fully funded balance.
- Threshold funding
- A plan that keeps the balance above a chosen floor rather than fully funded.
- Baseline funding
- A plan that keeps the balance just above zero — the riskiest defensible approach.
- Special assessment
- A one-time charge to owners when reserves can't cover an expense.
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