The Benefit of Updating your Reserve Study Annually
Reserve Studies are budget planning and disclosure documents prepared to help the board meet their responsibility to care for the assets of the association.
Many, if not most Governing Documents require the Board to set aside “adequate Reserves” to care for the common areas. But what exactly are “adequate Reserves”?
California Civil Code 5550 requires a Reserve Study based on a “diligent visual site inspection” at least every third year, but requires the Board review that Reserve Study annually and “consider and implement necessary adjustments”. That’s called an annual Reserve Study update.