Reserve Study Levels (Level I, II and III)

Reserve study levels are the service types defined in the National Reserve Study Standards: Level I is a full study, Level II is an update with a site visit, and Level III is an update without a site visit.

Level I, full study. The preparer builds the component inventory from scratch, measures or counts quantities, assesses condition on site, sets useful and remaining lives and costs, and produces the funding plan. This is the starting point for a community with no usable prior study.

Level II, update with site visit. The preparer starts from the existing inventory, visits the property to check condition, and updates lives, costs and the funding plan. Quantities are generally carried forward, not measured again.

Level III, update without site visit. A desk update. Lives, costs, the reserve balance and the funding plan are refreshed from records and conversations, with no on-site inspection.

The current standards also describe a preliminary study for communities that have not been built yet, sometimes called Level IV.

Many associations rotate between levels, for example a site visit every few years with desk updates in between. State law can set the schedule. When you compare proposals, check that each one quotes the same level.

Source: this definition follows the National Reserve Study Standards, published by Community Associations Institute (CAI), explained in our own words. State law can define the term differently for its own purposes.