The CAI National Reserve Study Standards recommend updating a Reserve Study at least every three years. But three years is a guideline, not the only factor communities should consider.
Major projects may be completed or delayed. Construction costs can change significantly. A special assessment may alter the funding plan. Storm damage or other unexpected events can change the condition of the property. Any of these may be a reason to update a Reserve Study sooner.
In a recent Reserve Reel, Global Solution Partners Founder Keith Ruehl discussed how often Reserve Studies should be updated. Below, we take a closer look at the circumstances that can affect the timing of an update and what boards and community managers should consider.
When Does an Earlier Reserve Study Update Make Sense?
A Reserve Study may need to be updated sooner when:
- Major repair or replacement projects have been completed or delayed
- Hurricanes, hail, fires, or other disasters have affected the property
- Labor or material costs have changed significantly
- A special assessment has occurred
- The funding plan from the previous Reserve Study was not followed
Any of these can change the assumptions behind the previous Reserve Study. Completed or delayed projects can affect both the timing and cost of future capital needs, while changes in construction costs can make previous replacement-cost estimates less useful for current planning.
Keith compares an update to hearing “recalculating” from your GPS. It doesn’t necessarily mean the previous plan was wrong. It means conditions have changed, and the Reserve Study should reflect where the community is today.
Three Years Is a Good Checkpoint, But Look at What Has Changed
The three-year guideline provides a useful checkpoint, but boards and community managers should also ask a more practical question: What has changed since our last Reserve Study?
If several years have passed, significant projects have been completed or delayed, costs have changed substantially, or the community’s funding has not followed the previous plan, it may be worthwhile to update the study sooner.
If you have questions about your community’s Reserve Study or whether an update makes sense, feel free to contact Global Solution Partners. If you’re ready for a new or updated study, you can also request a proposal.
