What is Washington State’s Reserve Study Law? Part 1
In June 2008, Washington State passed a law requiring condominium associations to have a Reserve Study professional prepare an initial (Level I) Reserve Study. Additionally, the Condominium Association needs to update the study annually and have a Reserve Study professional update the Study with a site inspection every three years (Level II). The law also requires that a condominium Public Offering Statement or Resale Certificate include a copy of the current Reserve Study or disclose to the potential buyer that the Association does not have a Reserve Study.
Each Reserve Study is required to have a significant amount of detailed information. Minimum requirements are as follows. A Reserve Component List, including quantities and estimates for Useful Life of each Reserve Component, Remaining Useful Life of each Reserve Component, and current repair and replacement cost for each component; the date of the study and a statement that the study meets specific requirements; the level of Reserve Study performed, the Association’s Reserve Account Balance; the Percentage Funded; Special Assessments already implemented or planned; interest and inflation assumptions; current reserve account Contribution Rate; recommended reserve account Contribution Rate; projected reserve account balance for thirty years and a funding plan to pay for projected costs from those reserves without reliance on future unplanned Special Assessments; and whether the Reserve Study was prepared with the assistance of a Reserve Study Professional. A Reserve Study shall also include a specific disclosure.
Daniel Zimberoff an attorney with Barker Martin provides a great FAQ article regarding the Washington State Reserve Study Law. The article mentions a Reserve Study credential process with APRA. There is also a credential/designation process with the Community Association Institute, known as Reserve Specialist (R.S.).