“An association completed a Reserve Study about 5 years ago. The current Board wants to save the community money and selects a Level 3 (update without a site visit) report. Why do we recommend against a Level 3 report in this situation?”
First off, a long time has passed since we were last on site. During that time, components may have been replaced and upgraded to new materials that need to be evaluated to establish a proper replacement cycle (Useful Life). Also, when components are replaced, there are times it goes unreported to the Reserve Study provider and without seeing the component, the Reserve professional may assume it still needs to be replaced, when in fact it doesn’t.
The biggest reason is to verify the current condition and make sure the component is aging as expected in the original report. Please realize when we are seeing the community for the first time, we may establish a Useful Life for a component based on experience or average life for the climate and conditions. We all understand that every community is different, and associations maintain their property in different ways. By seeing the community (a Level 2 – update WITH site visit) every 2 – 3 years max, we can fine tune the Reserve Study to how components age in YOUR community.
Also, the longer time passes between updates, the more work it will be for the community manager or Board of Directors to look through records and supply the information to the Reserve Study provider.
Ideally, an association will perform a Level 3 Reserve Study in year 1 and year 2 after the original report is completed, then get a Level 2 report completed in year 3 and repeating that cycle thereafter.