NAC116.425. Reserve study: Contents.

     1. A reserve study must, in addition to the requirements set forth in NRS 116.31152, include:

     (a) A copy of the component inventory from the previous reserve study if such copy was provided by the executive board to the person conducting the reserve study;

     (b) A 30-year schedule which shows:

          (1) The projected increase in assessments that will be required in any given year to provide an adequately funded reserve;

          (2) The projected inflation and estimated interest income from the reserve fund; and

          (3) The projected ending balance of the reserve fund;

     (c) The names and credentials of any consultants and other persons with expertise used to assist in the preparation of the reserve study;

     (d) Any written reports prepared by consultants and other persons with expertise;

     (e) If there are any conflicting recommendations of the consultants or other persons with expertise while preparing the reserve study, a written explanation as to which recommendations are selected and the reasons for their selection;

     (f) The number of units in the association;

     (g) A general statement describing the current status of the reserve fund;

     (h) A general statement describing the objectives of the reserve study and the methods used in computing and evaluating the current status of the reserve fund;

     (i) A statement of the beginning and the end of the fiscal year for which the reserve study is prepared;

     (j) A projection of the initial balance of the reserve fund;

     (k) A general statement describing the development or computation of the initial balance of the reserve fund;

     (l) A tabular statement showing the remaining useful life of each major component of the common elements from the time of each component’s initial installation;

     (m) A general statement prepared in accordance with generally accepted accounting principles describing the objectives of the funding plan that is designed to allocate the costs for the repair, replacement and restoration of the major components of the common elements and the methods used in carrying out the funding plan, and discussing, where applicable:

          (1) Cash flow;

          (2) Full funding;

          (3) Threshold funding; and

          (4) Baseline funding;

     (n) A statement identifying the sources relied upon to obtain an estimate for the cost to repair, replace or restore a major component of the common elements;

     (o) A detailed description of the type of reserve study that was performed and the level of service accorded to the reserve study, including whether the reserve study was:

          (1) A full reserve study;

          (2) An update to a previous reserve study made pursuant to a visit to the site of the common-interest community; or

          (3) An update to a previous reserve study made without a visit to the site of the common-interest community;

     (p) The disclosures set forth in NAC 116.430; and

     (q) A statement, prominently displayed, which reads substantially as follows:

The projected life expectancy of the major components and the funding needs of the reserves of the association are based upon the association performing appropriate routine and preventative maintenance for each major component. Failure to perform such maintenance can negatively impact the remaining useful life of the major components and dramatically increase the funding needs of the reserves of the association.

     2. As used in this section, “adequately funded reserve” means the funds sufficient to maintain the common elements:

     (a) At the level described in the governing documents and in a reserve study; and

     (b) Without using the funds from the operating budget or without special assessments, except for occurrences that are a result of unforeseen catastrophic events.

     (Added to NAC by Comm’n for Common-Interest Communities by R129-04, eff. 4-14-2005; A by Comm’n for Common-Interest Communities & Condo. Hotels by R145-06, 4-17-2008)