What Is a Reserve Study? A Simple Guide for Reserve Studies in Rhode Island
- Kristen Hrabcsak
- Aug 17
- 6 min read
Presented by Hennessy Reserve Partners
Condominium associations, HOAs, co-ops and other common interest communities in Rhode Island have likely heard the term “reserve study” while budgeting. But what exactly is a reserve study, and why does it matter so much for your community’s financial health?
At Hennessy Reserve Partners, we specialize in performing professional reserve studies throughout Rhode Island by helping associations plan ahead, avoid special assessments, and protect property values. In this guide, we’ll walk you through everything you need to know.
What Is a Reserve Study?
A reserve study is a long-term financial planning tool used by common interest communities, like HOAs, condo associations, and co-ops, to ensure there are adequate funds to maintain and repair shared components of a property over time.
In plain terms, reserve studies are a financial roadmap. It tells your community how much money should be set aside (in a reserve fund) each year to cover major future repairs. These major repairs include roof replacement, repaving, HVAC systems, and elevator modernization.
At Hennessy Reserve Partners, our reserve studies combine detailed on-site inspections with professional financial modeling to provide Rhode Island associations with actionable and defensible reserve plans.
The Two Main Parts of a Reserve Study
A reserve study is made up of two core components:
Physical Analysis This is the on-site inspection. A Hennessy Reserve Partners analyst visits your property to:
Inventory all major common elements (roofs, parking lots, pools, HVAC, siding, elevators, etc.)
Assess their current condition and estimate their remaining useful life
Estimate future repair or replacement costs
Financial Analysis This is the budget forecasting part. Based on the physical analysis, we:
Project future expenses for major repairs
Evaluate your current reserve fund balance
Recommend annual contributions needed to maintain adequate reserves without the need for special assessments or emergency loans
Why Is a Reserve Study So Important?
Reserve studies serve several critical purposes:
Prevents Financial Surprises No HOA or condo board wants to spring a special assessment on residents. Hennessy Reserve Partners helps you plan ahead for capital expenses and avoid surprises leading to panic budgeting.
Maintains Property Value Buyers, lenders, and insurers all look at how well a community manages its reserves. A well funded reserve fund means less risk and higher property values.
Ensures Legal and Fiduciary Compliance In Rhode Island, while a reserve study may not yet be legally mandated for every community, board members have a fiduciary duty to properly manage community funds. A reserve study from Hennessy Reserve Partners is your best practice protection.
Avoids Deferred Maintenance Delaying repairs often leads to bigger problems. A well structured reserve plan ensures your community stays on top of infrastructure needs.
What Components Are Included in a Reserve Study?
Here’s what Hennessy Reserve Partners typically evaluates in a Rhode Island reserve study:
Roofs (shingle, membrane, flat)
Siding and exterior surfaces
Parking lots and driveways
Retaining walls and foundations
HVAC systems and mechanical equipment
Fire alarm and suppression systems
Elevators and stairwells
Pool structures and common amenities
Septic systems and well water infrastructure
Fencing, gates, and lighting
Mailboxes, signage, and more
Each reserve study is tailored to your property’s unique features and maintenance responsibilities.
How Often Should You Do a Reserve Study?
At Hennessy Reserve Partners, we follow national best practices and customize update timelines based on your community’s size and complexity.
Full Reserve Study: Every 3 to 5 years
Update with Site Visit: Every 3 years
Financial Update Only: Annually
Regular updates keep your reserve plan current with your property’s condition, inflation, and cost of labor and materials.
What Is a Fully Funded Reserve?
A fully funded reserve means your association has saved proportionally over time for future expenses. It doesn’t mean saving 100 percent of all future costs today. It means that your association is on a funding track that avoids deficits.
Hennessy Reserve Partners calculates your “percent funded” so you can make informed decisions on whether to increase dues or adjust your reserve plan.
What Happens If You Don’t Do a Reserve Study?
Skipping a reserve study has real consequences, including:
Unplanned special assessments
Decreased property values
Increased homeowner dissatisfaction
Insurance or lender issues
Board liability for mismanagement
Our reserve studies help communities across Rhode Island proactively plan rather than reactively patch.
Rhode Island Reserve Studies: Local Considerations
With Rhode Island’s harsh winters, coastal exposure, and aging infrastructure, regular reserve studies are critical.
Hennessy Reserve Partners brings significant local expertise. We understand how salt air, freeze-thaw cycles, and storm runoff affect roofing systems, paving, siding, and water management systems across the state, from Westerly to Woonsocket.
Who Needs a Reserve Study?
Reserve studies are recommended (and often required) for:
Condominium associations
Homeowners’ associations (HOAs)
Co-ops and planned developments
Townhome and mixed-use communities
Even small associations benefit especially when they share a roof, septic system, or paved area. We offer reserve studies for communities of all sizes and budgets.
Who Performs Reserve Studies?
Hennessy Reserve Partners provides certified, unbiased, and highly detailed reserve studies designed specifically for Rhode Island communities.
What’s Included in a Hennessy Reserve Study Report?
A typical Hennessy Reserve Partners study includes:
Executive Summary Key findings and funding strategy
Component Inventory Breakdown of all assets and systems
Site Inspection Report Visual assessment with photos and condition notes
Cost Estimates Inflation-adjusted repair and replacement forecasts
Funding Plan Contribution schedule for 20 to 30 years
Scenario Modeling Optional funding approaches (baseline, threshold, full)
Charts and Graphs Visuals that make the report easy to understand for board members and homeowners
Introducing the Hennessy Reserve Partners Leadership Package for Reserve Studies
Most reserve studies leave boards with lengthy, data heavy reports and little guidance on what to actually do next. At Hennessy Reserve Partners, we believe your community deserves more than just numbers on a page. That’s why we created the Reserve Leadership Package, a board-focused capital planning service designed to help associations lead with clarity and confidence.
The Hennessy Reserve Partners Leadership Package includes everything found in a traditional reserve study but adds a critical leadership layer: clear, actionable, board-friendly plans paired with in-depth financial and physical analysis.
We go a step further by incorporating invasive building assessments, giving your board a clearer and more complete picture of your property’s actual condition. It’s not just what’s visible from a surface level walkthrough. Our approach provides early detection of structural issues, deferred maintenance, and capital project risks that other firms often miss.
This package is ideal for communities that want to go beyond “checking the box” and instead lead with strategy. It is built to help boards shift from reactive management to proactive leadership, ensuring your community stays financially prepared, structurally sound, and well-positioned for the future.
By choosing the Hennessy Reserve Partners Leadership Package, your board gains:
Comprehensive capital planning that aligns with your long-term goals
Straightforward guidance that empowers board decision-making
Strategic prioritization of repairs and improvements
Deeper building insight through invasive inspection methods
Ongoing support as your reserve plan evolves
The Leadership Package provides more strategic insight, making your reserve study informative and truly actionable.
How Are Reserve Contributions Calculated?
We use industry standard models to forecast future costs and align funding with your goals. The three main strategies are:
Baseline Funding Just enough to avoid a zero balance
Full Funding Save based on asset depreciation
Threshold Funding Maintain a cash buffer above a defined level
We walk you through the pros and cons of each model to choose what works best for your board and community.
Are Reserve Studies Legally Required in Rhode Island?
Currently, Rhode Island does not mandate reserve studies by law for all associations. However:
FHA and Fannie Mae lending guidelines require them
Many governing documents require reserve studies
Boards have fiduciary responsibilities that imply them
Insurers may request them during underwriting or renewal
Hennessy Reserve Partners helps you meet industry, insurance, and lender standards even in the absence of a legal mandate.
The Role of Your Property Management Company
If your association works with a property management company in Rhode Island, they likely coordinate:
Providing past maintenance records
Budget integration and implementation
At The Hennessy Group, our reserve division, Hennessy Reserve Partners, works hand-in-hand with our licensed real estate brokerage and property management arm to offer end-to-end support. Conducting everything from inspections to execution, we’re your Rhode Island reserve planning partner.
When to Update Your Reserve Study
Update your reserve study when:
A major project is completed (roof, paving, HVAC)
Inflation or cost of materials increases sharply
New amenities or systems are added
A lender or insurer requests it
Your board wants to change its funding strategy
Hennessy Reserve Partners makes annual financial updates fast and cost effective, so you always stay ahead of what’s coming.
How to Get Started With a Reserve Study in Rhode Island
Getting started is easy:
Request a Free Proposal Contact Hennessy Reserve Partners with your property details.
Schedule a Site Visit We coordinate directly with your board or manager.
Receive the Draft Review the study, ask questions, and make adjustments.
Finalize and Adopt Integrate the reserve plan into your next annual budget.
Update Annually Keep things current as your property evolves.
Final Thoughts: Why Your Community Needs a Reserve Study
A reserve study isn’t just a budgeting tool, it’s a safeguard against financial stress and unexpected assessments. It protects property values, promotes transparency, and empowers your board to make smarter, more confident decisions.
At Hennessy Reserve Partners, we specialize in building reserve studies that are comprehensive, compliant, and cost efficient for Rhode Island associations of all sizes.
Ready to Start Planning for Your Community’s Future?
Contact Hennessy Reserve Partners today for a free consultation or reserve study proposal. We proudly serve communities across Rhode Island, including:
Providence
Warwick
Cranston
Newport
South Kingstown
Westerly
And beyond
Together, we can build a stronger financial foundation for your community.
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