A reserve study is only as good as its component list. Every dollar figure in the funding plan comes from it, so it is worth checking the list line by line before you accept a draft.
The four tests for a reserve component
CAI’s National Reserve Study Standards use a simple test. An item belongs in reserves when all four are true:
- The association is responsible for it under the declaration.
- It has a limited useful life.
- Its remaining life can be predicted.
- It costs enough to matter, usually above a threshold the board sets.
Anything that fails the test belongs in the operating budget (lawn care, small repairs) or nowhere at all (a structure expected to last the life of the building).
Items Ohio boards often leave out
- Concrete flatwork. Walks, stoops, curbs and garage aprons crack and heave with freeze and thaw. Budget for sections, not the whole lot at once.
- Balconies and railings. Salt and water get into the concrete and the anchors. Mid-rise buildings in the Cleveland area are a common example.
- Retaining walls and storm drains. On hillside sites around Cincinnati these are often the largest items outside the buildings.
- Ponds. Aerators, outlet structures and dredging are easy to forget in suburban planned communities.
- Mailbox clusters, entry signs and site lighting. Small individually, but they all wear out together.
Items that usually do not belong
- Unit interiors, unless the declaration says otherwise.
- Routine maintenance such as gutter cleaning or snow removal.
- Items with no realistic end of life, such as building foundations, unless an engineer has flagged a problem.
How to check a draft list
Start with the declaration’s maintenance chart and tick each item off against the study. Then walk the site with the list in hand and look for what is missing. Ask the provider why any big item is grouped with others, because grouping hides the year it comes due.
Ohio law asks that the budget carry an adequate reserve for major capital items. A complete component list is how you show that the reserve is adequate. For timing, fees and the waiver option, start from our Ohio reserve studies page.