The Difference Between a Structural Integrity Reserve Study and a Normal Reserve Study
The Difference Between a Structural Integrity Reserve Study and a Normal Reserve Study
Structural Integrity Reserve Study vs Normal Reserve Study
As a condominium or homeowner association (HOA) board member, you have a lot of responsibilities. One of the most important is ensuring that your association's property is properly maintained and that it has the financial resources to pay for future repairs and replacements.
Two important tools that can help you with these tasks are structural integrity reserve studies (SIRS) and normal reserve studies. In this blog post, I will discuss the difference between these two types of studies and why they are important for HOAs.
What is a Structural Integrity Reserve Study?
A SIRS is a specialized type of reserve study that is designed to assess the structural integrity of a condominium or HOA's property. The study typically includes a visual inspection of the property's common areas, as well as an analysis of the property's reserve funds. The purpose of the study is to determine whether the property is structurally sound and to recommend any necessary repairs or maintenance.
The SIRS is required by law for condominium and cooperative associations whose properties are three stories or higher in height. The studies must be conducted every 10 years, and the results must be submitted to the Florida Department of Business and Professional Regulation.
What is a Normal Reserve Study?
A normal reserve study is a more general financial analysis of a condominium or HOA's common expenses and reserve funds. The study is designed to help the association determine how much money it needs to set aside each year to pay for future repairs and replacements of common assets.
The normal reserve study is not required by law, but it is a good idea for all HOAs to have one conducted. The study can help the association to:
Identify potential financial shortfalls
Make informed decisions about future spending
Ensure that the association has the financial resources to maintain its property
The Differences Between SIRS and Normal Reserve Studies
The main difference between SIRS and normal reserve studies is the focus of the study. SIRS focus on the structural integrity of the property, while normal reserve studies focus on the financial health of the association.
Here is a table that summarizes the key differences between SIRS and normal reserve studies:
Feature | Structural Integrity Reserve Study | Normal Reserve Study |
|---|---|---|
Focus | Structural integrity of the property | Financial health of the association |
Scope | Visual inspection of common areas and analysis of reserve funds | Analysis of common expenses, reserve funds, assets, and liabilities |
Purpose | To determine whether the property is structurally sound and to recommend any necessary repairs or maintenance | To determine how much money the association needs to set aside each year to pay for future repairs and replacements of common assets |
Why Are SIRS and Normal Reserve Studies Important?
SIRS and normal reserve studies are important for HOAs because they can help to ensure the safety of the property and the financial health of the association.
A SIRS can help to identify potential structural problems that could lead to a building collapse. By identifying these problems early, the association can take steps to repair them before they cause a serious accident.
A normal reserve study can help the association to ensure that it has the financial resources to pay for future repairs and replacements. This is important because even well-maintained properties eventually need to be repaired or replaced. By having a reserve study, the association can be prepared for these expenses and avoid financial hardship.
Conclusion
SIRS and normal reserve studies are important tools for HOAs. By having these studies conducted, HOAs can help to ensure the safety of their properties and the financial health of their associations.
If you are a board member of a condominium or HOA, I encourage you to contact a qualified reserve study firm to discuss your options. A well-conducted reserve study can help you to make informed decisions about the future of your association and protect your residents from financial hardship.
I hope this helps. :)
All the best,
Deb Bell
Community Association Manager & CAM Instructor
Disclaimer: This blog post is for informational purposes only and does not constitute legal advice. You should consult with an attorney to discuss your specific situation.
