One of the primary business responsibilities of a Homeowner Association or Condominium Development is maintaining and preserving property values of the Association’s Common Element or Common Area which results in protecting the  value of the  property of the owners that live there.  To do this properly, Associations must develop funding plans for future repair, maintenance or replacement of Major Common Elements or Common Area components.  A Reserve Study is a budget planning tool that identifies the current status of the reserve fund and establishes a stable and equitable funding plan to offset the anticipated future Major Common Elements or Common Area expenditures.  The Reserve Study consists of two parts:  The physical analysis and the financial analysis. 

There are many benefits to having a Reserve Study done.  First, it meets legal, fiduciary and professional requirements.  It provides for the planned replacement of major items that must, at some point in time, be replaced, as major items deteriorate during use.  It minimizes the need for Special Assessments.  And lastly, a replacement fund enhances resale values. 

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Regulatory

Alaska
Title 34, Property; Ch. 8, Common Interest Ownership  

California
Civil Code Section 1350-1376, Common Interest Development Act

Oregon
ORS 94.595 - Reserve account for maintaining, repairing and replacing common property; reserve study; maintenance plan.
 
ORS 100.175 - Reserve account for maintaining, repairing and replacing common elements; reserve study; maintenance plan.

Washington
RCW 64.32 (Horizontal Property Regimes Act) for condos whose declarations were filed before 7/1/90.

RCW 64.34 Washington Condominium Act) for condos whose declarations were filed on or after 7/1/90. Pitfall:

RCW 64.34.010 describes several provisions of the "New" Condo Act that apply to "Old" Act condos as well.

RCW 38 (Homeowner Association Act) for Pods.