[fb_button]Any well managed association will eventually conduct a reserve study of its property and funds to stay on top of future expense projections and ensure the long-term health of the property. Reserve studies are contracted out to a specialized company by the association, and generally fall into three categories: Full, Update with Visit, and Update with No Visit.
The full reserve study generally needs to be done only once, usually when the building’s homeowners association is first being formed. The firm contracted for the reserve study will look at all of the property’s shared areas, and determine their price, expected lifespan, and repair/replacement projections. The company will also evaluate the strength of the association’s current reserve fund and make suggestions about how it should be managed in the future to best meet both foreseeable and unforeseen expenses.
Unlike others states, Illinois does not currently have a mandatory reserve study schedule, but a prudent association should conduct updates at least once every two years. Updates that involve a visit are more expensive but include an assessment of the condition of all shared building assets. Updates without visits look at the current state of the association’s fund and whether it falls in line with future expense projections. Property management companies, which usually do at least a yearly inspection of the property, can inform the association of any unforeseen maintenance issues that have come up, which can then be included in the new expense projections for the year and be properly apportioned for.[fb_button]