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What is a Reserve Study?

A Reserve Study is a comprehensive physical assessment report of the common area components and an analysis of reserve funds. The Reserve Study is also a long-range planning and budgeting guide which is used to calculate Reserve contributions, so the Association will have adequate funding for each component as future repairs or replacements are required.

The purpose of a Reserve Study is to identify an annual Reserve contribution rate that is sufficient to address projected “common” building expenses, over a 30-year study duration.

Reserve Studies have become so important to the ongoing health of Associations that Washington State has passed legislation to requiring them annually (SB 6215). The Federal Housing Authority (FHA) requires an updated Reserve Study and a minimum standard of Reserve Funding in order for future buyers to qualify for funding.

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