Daybreak Construction Specialties

New Construction and Remodel, Historic Preservation, and Construction Management

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Reserve Study

     Colorado State Legislature passed House Bill 1359 which became effective on August 5, 2009 which applies to all Common Interest Communities in the State of Colorado. The bill requires all homeowner associations to adopt a responsible policy regarding Reserve Studies. Every association that has maintenance, repair or replacement obligations for Common elements or for Maintenance Areas should have a full reserve study performed. Reserve Studies should have both a physical analysis and a financial analysis. An inventory of components, a condition assessment, valuation of the life of areas of maintenance and replacement to determine status of reserve funds, and a funding plan should also be included in a reserve study. The reserve study assists the association in determining what its funding plan is. Some considerations in funding goals can include:

Full funding:

     --This would be the attainment and maintenance of the reserve at or near 100% of the replacement and / or maintenance cost based upon the reserve study.

Baseline Funding:

     --This method is to keep the reserve cash balance above zero.

Threshold Fund:

     --This method is based on the baseline funding method, except the Minimum cash reserve balance would be at a predetermined dollar amount.

     Physical assets deteriorate over time. A reserve study is a vital tool to prepare in advance for inevitable capital expenses, spreading out the necessary contributions over time. A plan to establish regular reserve study updates should be implemented. The updates should include a physical inspection, assess any maintenance that has been deferred and record any damages or deterioration since the last reserve study. A Board's responsibility is to set up adequate reserve funds to ensure the timely repair and/or replacement of those common areas outlined in their governing documents. Contributing on a regular basis to a reserve fund allows a Board to anticipate the future maintenance and repairs. The Board will only have special access for unexpected emergencies.

     Daybreak Construction Specialties, Inc. assists a Homeowner Association Board in protecting and maintaining the homeowner associations' physical assets. Our company's motto is to offer the best advice, the best service in preparing for major common area repair and replacement expenses. We offer a comprehensive report which includes an onsite inspection in order to develop a Summary to identify and establish future repair/replacement and estimated economic life of your common areas for your information and consideration of future budget assessments. Every association has different Reserve requirements depending on the size and age of the association. We understand very small HOA's cannot afford or do not need full reserve studies, but find it necessary to identify deterioration and repairs that are needed now and in the future. We will also make suggestions for improved maintenance practices to preserve the existing physical assets.

Our inspection report will include:

• A full on site inspection with photo documentation to identify each item that the association is responsible for.
• An estimate of the life expectancy of each item.

     Dana would be happy to assist your association with an Inspection Report and meet with your Board to discuss your association's current needs. Prices vary by size of association, please feel free to contact us at 970-984-3336 or by e mail at daybreakconst@hotmail.comfor a quote or any further information you may need.