The Component List is one of the three results of a Reserve Study, providing a listing of the major common area assets the association is responsible to maintain. A Component List typically includes the following information about each Reserve Component: Name, Description, Useful Life, Remaining Useful Life, and Current Replacement Cost.
The Component List serves as the foundation of a Reserve Study since it defines the scope and schedule of all Reserve expenses. Reserve Fund Strength and Funding Plan calculations will be performed on the basis of those expenses. It is wise to review your Component List for accuracy after it is developed, and updated it annually as your Components age or are replaced, and as costs change.
The calculation of Reserve Fund Strength is one of the three results of a Reserve Study. The measure of how well the Reserve Fund has kept pace with ongoing deterioration (computed as the Fully Funded Balance) is reported in ratio form as Percent Funded.
0%- 30% Funded is considered poor (well behind pace), 30% – 70% funded is considered fair (behind pace), and 70% – 130% is considered good (on pace).
A multi-year Funding Plan is one of the three results of a Reserve Study. The Funding Plan is a recommendation of how much should be set aside towards reserves to offset ongoing deterioration, so the association will be able to make necessary repairs & replacements in a timely manner. Reserve contributions typically comprise 15% – 40% of total assessments.