A Reserve Fund Study (also known as a Sinking Fund Analysis) is the identification and assessment of suitable financial provisions to meet the forecast expenditures required for substantial maintenance and replacement of major assets within a building. The implementation of a reserve/sinking fund allows the building owner to collect adequate funds on an annual basis to meet large capital expenditures in the future.
The assessment requires extensive information gathering, detailed inspections, quality and quantity verification, life-cycle analysis, cost estimation and financial forecasting. Carter Stephenson Quinn’s building surveyors and cost managers are vastly experienced in carrying out these types of assessments. We can provide detailed reports and cash flow forecasts that can be tailored to each client’s requirements or to meet market standards.
Guidelines and regulations established by the Real Estate Regulatory Authority (RERA) govern the management of jointly owned properties. These regulations require that the Owners Association (OA), and their OA managers, establish funds – a general (operating) fund and a reserve fund. The general fund is established through budgets and quotations for various services such as maintenance, insurances, security, cleaning etc. The reserve fund is established through a comprehensive reserve fund study carried out by a qualified and licensed professional. A formal reserve fund study is required for an OA to obtain RERA’s approval for annual budgets.
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