New Jersey Reserve Studies Condo Study in NJ

Reserve Study

The Criterium-Lockatong Engineers Reserve Study combines an engineering review of building components with a financial analysis to determine what must be set aside on a periodic basis in a capital reserve fund to cover anticipated repairs/replacements of various system components within the facility in question during the next twenty years. In our analysis, we employ software developed exclusively for Criterium Engineers by KPMG Peat Marwick.

Condominium and home owner associations will appreciate Criterium Engineers comprehensive approach to reserve studies. If your reserve is underfunded, we will develop practical alternatives that combine common sense engineering and "Big Five" accounting expertise. If your property has known problems, or if we uncover them, we are available locally to develop repair designs, bid packages, and manage construction. If you have never had a reserve study, you will have peace of mind knowing that a reliable analysis has been performed.

The software provides clients with an analysis of their current capital reserves, future requirements, and various funding options for ensuring the viability and health of the capital reserve fund. The standard Reserve Study consists of 4 elements:

Component Inventory

Condition Assessment and Valuation

Fund Status

Funding Plan

The package includes:

A table that lists anticipated replacement/repair items complete with estimated remaining life expectancies, projected repair/replacement costs, frequency (in years) when these items require repair/replacement, and a projection, based on this frequency, of the year in which these items will require attention.

A table that shows the annual expense listing per year with subtotals of anticipated repair/replacement costs for each of the twenty years. The table also presents these costs as adjusted for an assumed rate of inflation.

A table and graph that represents end of year fund balance vs. capital expenditures based on the currently funded program and reserve balances. Any special assessments planned and/or received to date are included.

Three alternatives that will fund a reserve account based on anticipated capital expenditure projections, presented in graphic and tabular form for review. These alternatives include:
Level funding for twenty-year period with the option of special assessments as necessary.
Escalating funding over twenty years by constant percentage per year; no special assessments.
Escalating funding over twenty years by constant percentage; with special assessments.

A table and graph representing the three alternatives in comparison with each other. The table shows the anticipated capital expenditures vs. the annual ending reserve fund balance for each alternative.

We understand and comply with state and industry standards and AICPA requirements. We also understand the often politically sensitive nature of condominium and home owner associations. We have proven our ability to work effectively with owners, boards and managers.

Transition Studies are typically used by Condominium Boards of new developments who wish to determine if the developers have completed the development:

In compliance with generally recognized construction practices

In compliance with the design drawings

In new developments, Reserve and Transitions studies are generally done at the same time.

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© Criterium Engineers e-mail:info@criteriumlockatong.com		Main Office: 99 Kingwood Stockton Road, Bldg 2 P.O. Box 146 Rosemont NJ 08556-0146 P: 609.397.4106 F: 609.397.8774 Toll-Free 800.865.0133