The Davis-Stirling Act - All Associations, regardless of size, are required to prepare a Reserve Study. (California Civil Code)
There are two exceptions to the requirement:
- No Common Areas. Reserve studies are not required if an association does not have common area components that require repair or replacement.
- Commercial Developments. Commercial and industrial common interest developments are exempt from reserve requirements.
I have been a Director of several Boards and was surprised to find that many Boards & Directors do not use a current Reserve Study to determine replacement expenditure and proper Reserve Funding.
Do other Agents selling condos insist on a recent Reserve Study for their Buyers to review before removing Buyer's Contingencies in the Residential Purchase Agreement?