Reserve Study Basics for HOAs

What is a Reserve Study?

A reserve study is a study made of all the major capital systems in an association.  The study includes a list of all common and limited common elements within an association and outlines the life expectancy and replacement cost of each element.  A reserve study is not mandatory in all states, however California Civil Code §5300 requires that homeowner associations prepare and distribute certain financial information, including reserve disclosure documents, 30-90 days prior to the start of the association’s next fiscal year.

There are 2 Parts to a Reserve Study –

Physical Analysis & Financial Analysis

  • The Physical Analysis is based on the review of the condition and repair/replacement costs of the HOA’s components.
  • The Financial Analysis evaluates the HOA’s current funds, reserve funds, and calculates the HOA’s percent funded.  The reserve study then estimates the total annual contribution necessary to fund  the future costs of maintaining common elements. Click here to see SCT’s Sample Reserve Study.


  • Level I

    Full: Complete Reserve Study
    With-Site Visit

    Level I
  • Level II

    Update: With-Site-Visit
    On-Site Review

    Level II
  • Level III

    Update: No-Site-Visit
    Off-Site Review

    Level III


Click here to see a timeline of when your HOA should request a bid for a reserve study.