What is a Reserve Study?
A Reserve Study is a formal review of a building’s major common elements, including Mechanical, Electrical, Plumbing, and Fire Protection (MEPFP) systems, at the time the study is performed. Typically, a Reserve Study is performed by one or more professionals and consists of site visits and the preparation of a written report. The report includes a master spreadsheet allocating budget costs for system and component repairs and replacements that are anticipated within a 20-year planning horizon.
The Benefits of a Reserve Study
- Supports a condominium association’s requirement to maintain an appropriate level of capital within their financial reserves.
- Provides a decision-making framework to prioritize and plan for major repairs and capital projects.
- Documents the potential need for common fees, assessments, and loans if necessary.
- Protects condominium unit owners from unexpected large assessments or debt service on loans for capital improvement projects.
A Reserve Study is not only important for current condominium owners, but for future buyers, lenders who may be called upon for loans, and insurers looking to establish long term relationships with well-run and adequately funded community associations.
Reserve Study Elements
- A review of (1) existing building drawings; (2) the previous Reserve Study and/or allocation spreadsheet (if a previous study was completed); and (3) available system documentation.
- Staff interviews.
- An on-site review of the building’s common element systems to generate/confirm an inventory of major components and equipment with nameplate data (e.g., manufacturer, basic specifications, etc.) that can be used to request additional information, as needed; and to visually ascertain and assess the physical condition of each piece of identified equipment or major component.
Data Analysis & Recommendation
- Upon evaluation of available information and taking into consideration age, condition, and remaining useful service life; recommendations are developed for the timing of repair or replacement for capital projects of $5,000 or greater that should be budgeted to maintain the property for 20 years.
- A provided written report will include an executive summary, project methodology, a physical analysis section, a financial analysis section (with master spreadsheet), and recommendations.
Added Valued from Elara Engineering
Enhanced MEPFP Solutions
In addition to the above-described elements relative to MEPFP systems, Elara’s experienced engineering team also includes – as part of its Reserve Studies — the preliminary identification of MEPFP system alternatives that offer ancillary building benefits such as increased energy efficiency, enhanced occupant comfort, beneficial technology upgrades, and significant utility cost savings, as applicable.
It should be noted that alternative systems evaluated as part of any reserve study and their associated costs are intended to be used as a budgeting tool for future planning. Independent studies (often termed “Schematic Design”) are frequently recommended when it is time to undertake the capital project in order to further detail and update cost estimates and determine the project basis of design.
Real-World Cost Estimates = Better Planning
As described above, cost estimates for a Reserve Study are derived from recent equipment cost information provided by vendors. However, to provide a more complete picture of the total potential costs involved, Elara’s cost estimates are further extrapolated to include consideration for current market trends based on similar, recent experience. Elara’s proprietary cost estimating tool is based on real-time data of various construction-related activities from our design and construction experience in lieu of theoretical construction estimating methods. In this manner, building stakeholders gain a much more complete view of the true costs that may be incurred over a 20-year planning period.
Elara’s reserve studies are performed by professional engineers to ensure that building stakeholders receive the full depth and breadth of Elara’s experience identifying and designing MEPFP upgrades in similar buildings.
For additional information about Reserve Studies or to inquire about Elara’s Reserve Study services specifically, please contact Kelsey Dale at firstname.lastname@example.org.