01LEVEL
FULL RESERVE STUDY
A complete foundation
For a first study or a new baseline. An on-site inspection establishes your component inventory, condition assessment, life estimates, and financial analysis.
Full on-site inspectionRESERVE STUDIES, EXPLAINED
Reserve Study Levels Explained
Here is a full breakdown of the different levels of reserve studies, based on the standards set by the Community Associations Institute (CAI). The primary difference between the levels is the scope of work and, most importantly, whether an on-site inspection is performed.
02LEVEL
UPDATE WITH SITE VISIT
A fresh look on-site
Revisit an existing study with a physical review. Verify your inventory, reassess component condition, and update costs and your funding plan.
On-site review of existing inventory03LEVEL
UPDATE WITHOUT SITE VISIT
Keep the numbers current
A financial update based on existing inventory and available information. Review costs, funding, and changes since your previous study.
Desktop financial update04LEVEL
PRELIMINARY RESERVE STUDY
Plan before completion
For communities still in planning or construction. Use design documents and blueprints to establish an initial reserve framework.
Plans and specifications reviewSummary Comparison
This table provides a quick comparison of the four levels.
Level 1: Full Reserve Study
What it is: This is the most comprehensive and detailed study, establishing the association's baseline reserve plan from scratch. It is the "ground zero" report for all future updates. When it's done: This is performed for a new community or for an older community that has never had a professional reserve study.
Full On-Site Inspection
A reserve specialist conducts a thorough physical evaluation to identify, count, and measure all common area components.
Component & Condition Assessment
A complete component inventory is created. Each item is assessed to determine its:
Financial Analysis
The specialist calculates the current "Percent Funded" and prepares a long-term funding plan (usually 30 years) to cover all anticipated replacements.
Level 2: Update with Site Visit
What it is: This is the standard "check-up" study, which uses a previous Level 1 or Level 2 study as its foundation and requires a physical inspection. When it's done: This is typically recommended every 3 to 5 years to ensure the financial plan stays aligned with the actual, real-world condition of the property.
On-Site Verification
The specialist walks the property to verify the component list is still accurate and to visually inspect the condition of the components.
Update Condition Assessment
The specialist re-evaluates the Remaining Useful Life (RUL) of components based on their observed condition.
Update Financial Analysis
The funding plan is updated based on the new RULs, current replacement costs (accounting for inflation), and the association's current reserve fund balance.
Level 3: Update without Site Visit
What it is: A Level 3 Update, or "desktop update," is a cost-effective, financial-only review that does not include an on-site inspection . When it's done: This is often done annually to keep the budget and contributions accurate in the years between the more thorough Level 2 on-site updates.
No Site Visit
The specialist relies on information (e.g., projects completed, deferred projects) and financial data provided by the board or property manager.
Financial Reconciliation
The specialist adjusts the financial plan based on the current reserve balance, reported expenses, and updated figures for inflation and interest.
Schedule Adjustments
Component replacement schedules are updated based on board input and actual expenditures since the last study.
Level 4: Preliminary Study
What it is: A Level 4 study is a Preliminary Study prepared for a community or project that is not yet built. Purpose: This serves as a budgeting tool for the developer to establish the initial association budget and set the opening reserve contributions.
No Site Visit
There is no physical property to inspect.
Document Review
The specialist creates the entire initial reserve study (component list, life estimates, and funding plan) based on architectural plans, blueprints, and other design documents.
Related resources
Answers to the most common questions about reserve studies, reserve funds, and capital planning for HOA boards and property managers.
Today, over a half-million homes use the Living Reserve Study.
Decadesof Living Reserve Studies
BillionsReserves Funding Capital Needs
BillionsAnticipated Capital Expenditures
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