NAC116.430. Reserve study: Required disclosures.

A person conducting a reserve study and any consultant assisting in the preparation of a reserve study shall include in the reserve study the following disclosures:

     1. The background, training, qualifications and references that would qualify the person conducting or assisting in the preparation of the reserve study as competent to conduct or assist in the preparation of the reserve study.

     2. Any relationship which could result in actual or perceived conflicts of interest.

     3. Whether the person conducting or assisting in the preparation of the reserve study is bonded or has professional liability insurance.

     4. The method for determining the common area components based on:

     (a) An actual field inspection of the common elements with representative sampling;

     (b) An inventory and material information provided by the client; or

     (c) A previous reserve study and the date of that study.

     5. Industry sources used for determining:

     (a) The life of a major component; and

     (b) The cost of repairing, replacing or restoring a major component.

     6. Any guarantees, express or implied, that are given with the predictions for the cost or life expectancy of any of the major components.

     7. The source of the information regarding the initial reserve fund balance presented in the reserve study.

     8. Whether a special assessment is anticipated during the time of the contracted reserve study.

     9. A statement, prominently displayed, which reads substantially as follows:

Information provided to the preparer of a reserve study by an official representative of the association regarding financial, historical, physical, quantitative or reserve project issues will be deemed reliable by the preparer. A reserve study will be a reflection of information provided to the preparer of the reserve study. The total of actual or projected reserves required as presented in the reserve study is based upon information provided that was not audited.

A reserve study is not intended to be used to perform an audit, an analysis of quality, a forensic study or a background check of historical records. An on-site inspection conducted in conjunction with a reserve study should not be deemed to be a project audit or quality inspection.

     10. Material issues which, if not disclosed, would cause the condition of the association to be misrepresented.

     11. For updated reserve studies, a statement, prominently displayed, which reads substantially as follows:

Quantities of major components as reported in previous reserve studies are deemed to be accurate and reliable. The reserve study relies upon the validity of previous reserve studies.

     (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)