Reserve Fund Study

As per clause 52, Part 8 of the Directions on Association Constitution issued by RERA, Owners Association management is required to establish and maintain two distinct funds: the General fund and the Reserve fund.

A reserve fund study, commonly referred to as a reserve study, serves as a vital financial planning tool for joint ownership property management companies in Dubai. The purpose of this study is to evaluate the long-term capital expenditure requirements of a building or community. It ensures that adequate funds are reserved to cover future repairs and replacements of major components, thus preventing the need for unexpected special assessments or hikes in regular dues.

Our process:

  • We identify the all common area components that the JOP management company is responsible for maintaining. This includes items like roofs, HVAC systems, elevators, swimming pools, and parking lots etc.,

  • We assess the current condition of each component and carryout the professional inspections to determine the remaining useful life and the estimated cost of repair or replacement.

  • We calculate the total funding needed over the study period (usually 20 to 30 years) to repair or replace each component.

  • We develop a funding plan, which includes how much money should be set aside each year to meet future expenses.

  • We prepare a detailed report with all findings, including the inventory of components, condition assessments, financial analysis, and recommended funding plan.

Benefits of Conducting a Reserve Fund Study:

Financial Health:

Helps ensure that the community association remains financially healthy and avoids unexpected financial shortfalls.

Planning and Budgeting:

Assists in long-term planning and budgeting, leading to more stable and predictable financial management.

Property Value:

Helps maintain property values by ensuring that the community's infrastructure is well maintained.

Avoid Special Assessments:

Reduces the likelihood of needing special assessments, which can be burdensome to homeowners.