CAI-NJ June 2021

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be easier to determine if the reserves, and the estimated useful lives upon which they were based, are accurate and appropriate. Even though an engineering and accounting study will not cost nearly as much as with a larger community, it will still be a fairly significant financial investment for smaller communities. An association with a single, midrise con- dominium building housing approximately 20 units should expect to pay in the range of $10,000 to $20,000 for a Transition Engineering study plus around $5,000 for a Financial study. Of course, if the building has complex sys- tems or features, such as a rooftop deck or pool, the cost will likely be higher. However, investment in these studies are vitally important. Even if the engineer and accountant do not find any construction defects and/or anomalies, transition reports often provide key information about how the building systems operate, how they should be main- tained, whether any minor adjustments to reserve savings are appropriate, etc. The information in these reports is important even beyond the context of using them for settle- ment leverage over a sponsor/developer.

study and be upfront with them about how much the asso- ciation can spend on the report. In a smaller community, the scope of the engineer’s investigation can likely be somewhat abridged to meet cost constraints. Moreover, if the building is smaller, the high costs associated with mobili- zation and access (such as hydraulic lifts, scaffolding, large crews, etc.) will likely not be present. The engineer will likely be able to access and investigate exterior cladding and roof systems from the ground level or with ladders. Also, the square footage of buildings to be investigated in smaller communities will be less, so the time the engineer needs in the field should be less. With respect to accounting studies in smaller communi- ties, that investigation will likely also be narrower in scope. If there are only a handful of units, the volume of records the accountant will have to review and analyze will likely be modest. Also, regarding reserve studies, a smaller com- munity will likely have less complex systems and it should

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