The main purpose of a reserve study is to help establish a budget for an association and to plan for future expenses. Unfortunately some associations don’t realize this and think they only need to perform a reserve study because it’s required by state codes or statutes. These associations typically call their reserve study specialist after their budget has been established and right before they are supposed to send out their annual mailing. I can’t tell you how many times I’ve recieved a call saying our budget needs to be sent out next week, can you get me a reserve study before that!?! This really defeats the main purpose of getting a reserve study done.
Smart responsible associations should start their reserve study around 6 months before their fiscal year end. This way they can contract with their reserve specialist and provide him with all the information he needs. Then they can set up a time to meet with the specialist and or have the site inspection done. Next the draft study can be sent to the hoa board for review. The board then can review the study, provide any feedback to the specialist and the final report can be delivered. Once the final report has been received the association can make informed responsible decisions about what their reserve budget will be. This whole process can take a couple months especially when most boards only meet once a month. Then, most states require that the budget must be sent out somewhere between 30 and 90 days before the associations fiscal year end. Some people say we like to wait until the end of the year so we can see what all our expenses are. That’s understandable but the study can always be modified, typically for no cost, if unplanned expenses arise late in the year. So it’s really never too early to plan for future expenses and get started on your reserve study.