Benefit of Updating Your Reserve Study

In the world of condominium and HOA financial planning, the reserve study is a cornerstone document. It outlines the anticipated costs of future repairs and replacements for common elements, ensuring that a community can maintain its property without financial disruption. But while most jurisdictions require a reserve study to be updated every few years (every 5 years in Alberta), there’s a compelling case to be made for annual updates—even when not mandated by law.

Why Annual Updates Matter

A reserve study is not a “set it and forget it” tool. It reflects a snapshot in time, based on assumptions that are constantly changing—construction costs rise, components age differently than expected, and funding goals shift. Updating your reserve study annually allows boards and managers to make more accurate and responsive financial decisions.

Here are some of the key benefits:

1. Keeps Financial Planning Current

Construction costs, interest rates, and inflation all fluctuate year-to-year. An annual update helps adjust funding recommendations based on the most current economic conditions, keeping your funding plan aligned with real-world numbers.

2. Improves Budget Accuracy

Boards rely on the reserve study to set budgets and determine annual contributions. By revisiting the numbers every year, you're reducing the risk of underfunding or overfunding, and avoiding sudden special assessments or unexpected shortfalls.

3. Reflects Completed Projects and New Information

If your community replaces a roof or upgrades elevators, those changes need to be reflected in the reserve study. Annual updates allow you to log completed work, revise timelines, and introduce new components—such as recently added amenities or energy-efficient upgrades.

4. Helps Track Percent Funded Progress

Your Percent Funded status—how close you are to your reserve target—can fluctuate yearly based on contributions, expenses, and updated forecasts. An annual update helps you monitor this metric and adjust strategy accordingly, ensuring the community stays on track to meet funding goals.

5. Enables Smoother Financial Adjustments

Smaller, more frequent adjustments to reserve contributions are far easier for owners to absorb than major changes every 3–5 years. Annual updates allow the board to phase in funding increases more gently and with better justification.

Annual Updates vs. Full Reserve Study

It’s important to note that an annual update doesn’t always require a full site inspection. Many firms, including Stampede Engineering, offer Level 2 or Level 3 updates that review and revise financial data without the cost and effort of a full physical assessment. These interim updates are affordable, quick, and effective for keeping your reserve plan on track between major assessments.

Partner with the Experts

At Stampede Engineering, we provide tailored reserve fund updates that reflect the most current data, engineering insight, and local regulatory standards. With over 30 years of combined experience and a team of licensed professional engineers, we ensure your reserve plan remains accurate, compliant, and aligned with your community’s goals.

Let us help you take the guesswork out of long-term planning.

Call us today at (825) 734-3944 to discuss how an annual reserve study update can strengthen your community's financial health and peace of mind.