In this inaugural installment of The Governance Ledger’s industry watchdog series, Common Interest Advisors names Building Reserves Inc. as the 2026 “Worst Community Association Reserve Study Firm” for its role in producing a reserve study at 175 East Delaware Place HOA that:
- Concealed $67.7 million in capital replacement obligations by pushing them beyond the 30-year study window
- Assumed 0% income taxes on tens of millions in taxable reserve investments
- Embedded a negative 3.30% real return funding model
- Projected reserves falling to 9.38% funded (VERY WEAK)
- Accepted revisions from parties other than a majority of the board
- Enabled operating income taxes to be improperly paid from reserve funds
Drawing on 23 years of forensic reserve analysis — beginning with nuclear decommissioning reserve fund work adopted by the Illinois Commerce Commission — this investigation explains how reserve study manipulation creates:
- Intergenerational inequity
- Artificially low assessments
- Deferred infrastructure collapse
- Compounding financial instability
This case study at 175 East Delaware Place HOA (former John Hancock Center) illustrates a systemic pattern across the community association industry: economic incentives reward understatement, management companies control referrals, and professional standards lack meaningful enforcement.
This is not merely bad forecasting. It is structural governance failure.
Reserve study fraud is where the story begins.
Governance collapse is where it ends.
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