First Time Reserve Study


A well established custom home planned community with a lake, clubhouse and extensive roadways had always been self managed and never had a reserve study. During a financial review, their CPA found no reserve funds set aside, so he recommended that the community have a professional reserve study prepared, and some members with prior experience in other communities backed that recommendation, so the association hired BRG to conduct their community's first ever reserve study.

Major challenge

The community's operating budget contained no reserve fund provision, so the only funds available for future obligations were simply whatever was left at the end of each year, and those funds remaining each year were contained in the single account that funded all outlays including operating and traditional reserve expenses, so there was no telling if there were adequate reserve funds to meet the community's future obligations even if those obligations were known which they were not, and since reserve fund balances were unknown, the community was unable to comply with statutory reserve disclosure requirements.


BRG conducted a Full Reserve Study to accurately determine the community's reserve obligations, devise an equitable reserve funding plan to serve those obligations, and generate reserve disclosures to satisfy statutory compliance. During this analysis, BRG recommended the amount to be transferred into the community's newly established reserve fund account, and with this fund's establishment, a reserve funding plan was engineered ensuring that all future reserve obligations are satisfied. With the necessary pieces in place, BRG produced the reserve disclosures that brought the community into statutory compliance for the very first time.