Can associations or their members do their own reserve studies or must they hire professionals?
Associations and their members may be able to do their own studies, although reserve studies often require some time and expertise. In large projects, reserve studies may be beyond the capabilities of some people. Many managing agents will do reserve studies, usually for an additional fee to cover the time involved. A reserve study requires three basic determinations: (i) which parts of the property are the association’s responsibilities; (ii) how long will the parts last; and (iii) how much will it cost to maintain, repair, or replace? Expert advice may be necessary, but the basic reserve process should not be beyond the capabilities of most people who have the time to do it.
§514B-148(a)(5), HRS has been amended in 2022 and 2023 to require that if the reserve study was not performed by an independent reserve study preparer, that it must be reviewed an independent reserve study preparer not less than every three years. A managing agent with industry reserve study designations shall not be considered as having a conflict of interest.
The association’s declaration should state which parts of the property are the association’s responsibility – the “common elements.” How long things will last may be indicated by the association’s past experience of the life of paint jobs, roofs, etc. Books which give the expected lives of certain components are also available. Warranties which come with components may also give some idea of expected useful life. The cost to maintain, repair, and replace can be obtained from past experience or from suppliers and contractors.
Revised 8/17/23