Most community association board members understand what a New Jersey reserve study is as well as the important role that it plays in managing the financial future of the community association. Another important study that comes up for recently constructed associations is the transition study New Jersey.
The purpose of a reserve study is to analyze the capital items that the association is responsible for maintaining, which typically include roofs, siding, and concrete. This study provides information about each item, including its life expectancy as well as the cost to replace it in the future in case of a problem. Specifically, a reserve study NJ looks to see if and when the item will deteriorate as a result of ordinary wear and tear. On the other hand, a transition study NJ has a narrower purpose.
The purpose of a transition study is to identify and document potential construction or design deficiencies. The key word with a transition study New Jersey is “defect.” For instance, a transition report would reveal things such as roof leaks, concrete settlement and water infiltration caused by poor craftsmanship or design. A cost estimate for remedying the defect is usually provided as part of the analysis.
A reserve study is meant to assist the community association in future budgeting for the cost to repair its capital items. Throughout the life of a community association, maintenance and repair is an ongoing issue that the board has to address continually. For instance, even if a roof was replaced recently, the association should immediately start budgeting for future roofing repairs as well as costs based on the life expectancy of the new roof.
On the other hand, a transition study NJ, ideally just occurs once at the time that the property transitions over from the developer’s control to the homeowner board. At this point in time, some high quality developers can even order the transition study in order to turn over the property with a “clean bill of health.”