Reserve Analysis Basics
by Dale Gifford, Complex Solutions, LTD.
What is a reserve analysis?
A reserve analysis is a budget tool for an association to use so that they will know how much money they should be budgeting and saving in order to pay for their reserve expenses.
Who needs a reserve analysis?
Every association in Utah, except for those associations still in “the period of administrative control”, is required to have a reserve analysis performed. The size of the association does not matter.
How often does an association need to have a reserve analysis performed?
Each association needs to have a reserve analysis performed every six years and then an update performed every three years. The initial reserve analysis needs to include a site visit, unless being performed on an association that is not yet built, and then the analysis performed every six years must also include a site visit.
Who can perform a reserve analysis for an association in the state of Utah?
The board can conduct their own reserve analysis, or they can engage a reliable person or organization to conduct the reserve analysis for them.
Does this mean an association can perform its own reserve analysis?
Yes, but your attorney, your insurance agent, and your management company will all encourage you to use a professional reserve analysis provider. A professional provider allows you to transfer the risk to a professional company with experience, qualifications, proper insurance coverage, who is an unbiased third party, and who can be considered an expert if an association is ever involved in a lawsuit.
Title 57 Chapter 8 Section 7.5
Condominium Ownership Act
http://le.utah.gov/xcode/Title57/Chapter8/57-8-S7.5.html?v=C57-8-S7.5_2014040320140701
Title 57 Chapter 8a Part 2 Section 211
Community Association Act
http://le.utah.gov/xcode/Title57/Chapter8A/57-8a-S211.html?v=C57-8a-S211_1800010120140701
Dale Gifford
Professional Reserve Analyst (PRA), Reserve Specialist (RS), Professional Community Association Manager (PCAM), Association Management Specialist (AMS)
Regional Project Manager, Complex Solutions, LTD.
