A reserve fund study is one of the most important documents condominium associations rely on to determine the amount of reserve fund contributions that are necessary to meet future repair and replacement expenses.
To complete a reserve fund study, a NJ property management company will conduct a comprehensive on-site review of the community and its current condition, as well as an analysis of recent repairs and replacements. The company preparing a reserve fund study will often require reports from contractors in order to determine the remaining lifespan and a financial analysis to estimate replacement costs.
The New Jersey Condominium Property Act states that units cannot be sold in a new building being unless a reserve fund study has been completed by a “Qualified Person” as described in the Act, and a copy of the Reserve Fund Plan must be included in the buyer disclosure package.
Today, banks and mortgage financing entities typically require a reserve fund study to be completed as a prerequisite to funding a mortgage for the buyers. Federal Housing Administration (FHA) financial aid is often dependent on the outcome of the reserve fund study.
At mem property management, we work with an experienced network of engineering consultants to provide Capital Reserve Studies that inform developers of the funds needed for replacement of these capital structures over time. Our Capital Reserve Studies are prepared under the supervision of a Community Associations Institute (CAI) Certified Reserve Specialist (RS).