How to Find the Right Reserve Study Firm for Your Community
Your reserve fund is what helps your association anticipate its future – and budget for it, too. The reserve fund gives you the power to maintain the quality of your community by allowing for projects that are both necessary and expensive, including capital improvements such as a future roofing or paving project. Keep in mind that, in Maryland, a community association’s annual budget is required to provide for reserves.
Needless to say, establishing your reserve fund can be a complex task. You don’t have to go it alone -- you simply need a good reserve study firm to help. Check out our seven tips to finding the right reserve study firm for your community.
1. Do your homework.Any reserve study firm you may want to work with will want to know details about your community association. Be prepared with a complete description of your community that includes details such as location, number of units, description of buildings, list of amenities, assets, investments, accounts payable, etc.
2. Choose a firm.There are lots of options for reserve study firms; your professional property management company can suggest one from their list of qualified firms. You can also check with your local chapter of the Community Associations Institute for options.
3. Know what you want.It’s important to know what you’re looking for in a firm, and having that picture in mind will help you craft the right questions to ask them. Make sure to ask questions such as number of years in business, number of studies performed per year, company background, any specific experience with communities like yours, funding methods, pricing structure, turnaround time, association involvement and types of guarantees. Knowing the factors that matter most to your community will help you narrow the list of candidates.
4. Ask for information.Make contact with your desired firms and ask for standard informational material, such as examples of previous reserve study reports they’ve completed. When you have the opportunity, ask the questions you developed earlier, carefully recording the answers. As you interview more firms, you may find that your questions evolve as well. Don’t forget to request three references from each firm you speak to.
5. Contrast and compare.Now that the research is done, it’s time to make your comparison matrix. One easy way to do this is to make a spreadsheet that lists your hiring criteria in the left-hand column, then list your candidate firms across the top, horizontally. After that, use your research to fill in the boxes, checking off which candidates fulfill which criteria. While you’re doing this, ask your community association’s accountant to review the sample provided by the firms and to make sure they meet federal filing needs. When the spreadsheet is complete, start by eliminating those firms which meet the fewest of your criteria, and then continue to evaluate the rest.
6. Check references.The reference check should be a brief conversation, consisting of simple questions such as how similar the association is to yours, how satisfied the association was with the firm’s work, how the final costs compared to expectations, if the study was completed on time, how many firms they considered before choosing this one and whether or not the association would hire this particular firm again. Don’t ask more than 10 questions, and be friendly, efficient and respectful of their time.
You’ve gone through all the steps: chosen candidates, interviewed them, completed a matrix of their desirability and checked their references. You have all the tools to make an informed decision, so now is the time.
7. Choose a firm.
Partnering with the right reserve study firm can have a huge impact on the future of your association. Follow these seven steps and you’re certain to find yourself working with a professional firm that meets your expectations. For more help, contact FirstService Residential, Maryland’s leading property management company.