Background: Reserve studies are "savings plans" that look into the future 30 years to help you set aside money to replace things like roofs, siding, windows, paint, deck coating, etc. —and all of these things usually have a lifespan of 30 years or less. Many state reserve study laws mention this 30-year time limit.
Problem: What about the things that have a longer life, like 31+ years? Things like plumbing systems, fire suppression systems, electrical panel upgrades, elevators, rockery or retaining walls?
How this problem sneaks in: Many reserve studies are updated from the past template of items and just adjust the dates of those items as the years move along, and these longer-range items aren't added once their 30-year window comes into view. Let's face it, adding things to your Reserve savings will increase your dues and that's unpopular, however, so is waking up to an unpleasant bill you haven't planned for.
We are working with lots of Boards whose buildings are 30+ years old and we are replacing things like siding and roofs, but they start asking about their low water pressure or rust colored water and we when say it might be time for a plumbing pipe replacement project they are stunned to find out they don't have that on their study and they haven't set aside the money to replace it. Or the fire sprinkler fittings are starting to leak, or the elevator is starting to need more service calls, or the infamous mid-90's CPVC plumbing is crumbling and leaking.....you get the idea.
When we help them review their study, we don't find these line items and an unplanned assessment needs to be discussed to do the work—not a fun place to be.
We don't offer or prepare Reserve Studies, but we can recommend good Reserve Study Specialists who will help you think about these items.
We are sending this out as a reminder to add "Review your reserve study" to your next board meeting agenda. Determine your building's age and start thinking about the things that may be needed in the future, and start thinking about the maintenance or insurance deductible costs you are starting to spend on some of these aging systems. Hopefully you have a longer window of time to start saving so that you don't have the surprise of an unplanned repair cost.
As the old Chinese proverb goes relating to seeking shade from the sun: "The best time to plant a tree was 20 years ago, the next best time is today." The message is, if you haven't taken the action, there is no better time than now.