In a word, yes.
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.
California Civil Code 5300 and Civil Code 5560 together require that every association annually adopt and disclose their Reserve Funding Plan. Most Reserve Studies have a 30-yr Funding Plan. But if it is two years old, then the association doesn’t have a current plan. Time has marched on, and the plan is out of date. Get your updated 30-yr Funding Plan, every year, when you update your Reserve Study. Then adopt it and disclose it!
That same Civil Code 5300 requires a full Summary of the Reserve Study be included in the annual budget report. That “summary” is defined in Civil Code 5565. You’ll note throughout 5565 the word “current” with respect to Reserve Study information. That can have only one interpretation… the “current” year (not information from one or two years ago).
California Civil Code 5570 defines the annual Assessment and Reserve Funding Disclosure. The only purpose of this form is to provide owners with a disclosure of current information. And the only way one can report current Reserve Balance, current Reserve Contribution rate, current Percent Funded, and a projection forward of at least five more years of that same information, is to have a Reserve Study prepared/updated for the current year. In case you haven’t seen one, an example completed form looks like this.
But what if you don’t care about what the law says? Who’s going to “call you on the carpet” and make you comply? On a practical level, adequate Reserve contributions, required by almost every association’s Governing Documents, comprise 15-40% of the association’s budget. This means Reserve contributions are one of an association’s largest budget line items. Being so large means it is fiscally irresponsible to disregard such a large budget line item for years at a time. Tip: failing to update your Reserve Study for years at a time is a key reason for special assessments. That’s the practical benefit. Save your homeowners from that headache!
For further reading, see this article focused on the topic of preparing the annual Assessment and Reserve Funding Disclosure Form in California.