Good question. Often when a client challenges our replacement cost estimate because “it is way off”, we look into why their actual cost is out of line with what we expected. Typically we find it has to do with scope of work differences. One that comes to mind is a roof that was three times more expensive than we expected it would cost, which turned out to be because the association was reconfiguring a flat (low-slope) roof into a sloped, shingle roof. In another situation, the association went significantly over-budget on a siding replacement project, but upon investigation we found it was because they installed a much more durable material. That new material, though more expensive, was expected to last twice as long as their existing Cedar siding, making the $/yr actually lower over the life of the siding. The point is that a difference in scope of work matters. But is it a required disclosure per National Reserve Study Standards?
In a word, no. A Reserve Study is an important tool to be used by the Board of Directors and Management as they protect, maintain, and enhance the major common area assets of the association. A Reserve Study is not a vision-casting document, helping the board dream of a broad spectrum of fascinating options available in their future. A Reserve Study is also not a (re)construction specification document, that can be copied and handed out to contractors for bidding purposes. Per National Reserve Study Standards, a Reserve Study helps the Board of Directors learn the scope and schedule of upcoming Reserve projects, the strength of their Reserve Fund, and a multi-yr Funding Plan to provide for the timely repair or replacement of their anticipated expenses. Keep in mind what a Reserve Study is supposed to do, and it helps you avoid expecting it to be something different.
While the Board of Directors may ask their Reserve Study professional for input as they consider cost vs benefits for different materials (it costs more but it’s supposed to last longer… is that a wise move?), the default expectation should be that the Reserve Study will help the Board repair or replace the association’s assets with similar assets, with normal technological or aesthetic upgrades. Where differences are suggested or warranted (upgrading one type of roofing system to a different type that is more cost-effective), a disclosure is recommended for the sake of communication, but is not mandated by National Reserve Study Standards. Typically that may be as simple or as clear as the cost and Useful Life appearing in the Reserve Component List, such as moving from a 20-yr life roofing material, to a 30-yr life roofing material. We don’t need to necessarily be discussing brands, just that the next roof will be more expensive but it will last longer (and be worth it).
Note that the recommendation for effective communication goes both ways… what we recommend as a wise move to our clients, and what colors, finish materials, or redesign options an association is thinking about implementing when their current component needs replacement. We are in this together as planning partners, we both need to be on the same page.