A Reserve Fund Study is a long-term budget done every three years that covers the replacement of all of the condominiums main components. The Study must be done by a qualified engineer, and includes a full list of building components, the condition of these components, and a financial plan to cover their replacement costs.

A typical Reserve Fund Study budgets 30 years into the future with the goal of determining how much money will be needed in the Reserve Fund in any given year, so that the condominium can start saving for such a time. For example, a Reserve Fund Study may reveal that the parking garage is in poor condition, and will need major work done in the next 5 years. It will approximate the cost of the work (including inflation), and determine how much people need to contribute in order to have the necessary funds to pay for the work at that time. This is done for all components of the condominium, and it is upgraded every three years to account for any changes. The Reserve Fund Study will have a large impact on your maintenance fees.

A summary of the Reserve Fund Study – called a Notice of Future Funding of the Reserve Fund – is also prepared by the engineer, and goes out to all potential buyers before a unit is sold.