It’s Your Reserve Study – can you Ask for Changes?

Yes, it is a Reserve Study prepared for your association, and you are the client. But in this case, the client is not always right.

If you’ve hired Association Reserves, we believe we have been hired for our independence, expertise, and experience, for the purpose of providing you with budget advice and accurate disclosures. We destroy our independence and fail to provide you the results we were hired to provide if we distort the truth. And that is the key.

We see the preparation of a Reserve Study like a three-legged stool – very stable. Those three legs are the Reserve Study professional, management, and the Board. When those three parties are involved, the results tend to be reliable and effective. Each correcting the other leads to accuracy. For instance, a Boardmember providing us updates on the latest projects done at the association may report the recent painting was accomplished for $50,000, but management later may correct that ($50,000 was just the 50% progress payment!). Management may suggest to us that the special assessment required to get ready for the asphalt project should be spread over the next three years, but the Board may reply that politically the association is ready, and it is best to do one special assessment and get it over with. And both management and the Board should be involved proof-reading the Reserve Study, finding any glaring typos (a Remaining Useful Life of 0 instead of 10!).

But when it comes to distorting the truth, that’s when you’ll see our heels dig in. If we are asked to change a Remaining Useful Life of an ironwork repaint project from 0 to 2 “just because you don’t think you’ll get around to it”, when it is currently rusty and the paint coverage has failed, we will keep it at zero because that is the truth of the situation. Readers of the Reserve Study need to know the truth, both physically and financially. No funny-business. Prospective buyers are reading the Reserve Study to get a sense of what they are getting into, and current owners are reading Reserve Studies to get a status report on their common areas and their financial preparedness for future projects.

Can you argue the size of the recommended Reserve contributions? You can complain (we’re used to that & don’t take offense at it), but there’s typically not much we can do. Our job is to get you prepared for future expenses, and we don’t accomplish that by being overly optimistic.

Our job is not “to keep the dues low”, or to “validate the Reserve Study done last year by the treasurer (or another Reserve Study firm)”. Our job is to present the truth of the situation to Reserve Study readers. Ask your questions, and you’ll see where we dig our heels in. The logo on the cover is ours. We welcome your insights, clarifications, and corrections, but we won’t stray from the truth for you.

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3 Responses to It’s Your Reserve Study – can you Ask for Changes?

  1. Martin Bertoni says:

    It’s been requested from a buyer’s lender regarding the sale of one of our condominiums that a reserve study is required to approve the buyers loan for the condominium sale from the seller’s association.
    Questions:
    1-The condo sale is in cape coral florida
    2-Do you have a branch office in fort myers or cape coral fl.
    3-What is the cost for this service for a 10 unit condominium
    4-How long does it take to complete this reserve study and what is required from the association

    Thanks,
    Martin Bertoni

    • Martin – We have offices in Miami and Orlando. You can contact them directly at http://www.reservestudy.com/florida. There is a “request a proposal” link on that screen. Answering a few questions there will generate a proposal for you. We typically offer Reserve Study turnaround choices ranging from 2 weeks (Rush) to a 8-weeks (Economy). Those will be outlined on your proposal.

      Thanks for your interest.

  2. Fantastic post, I really look forward to updates from you.