Most board members did not sign up to become experts in roofs, boilers, and pavement. They said yes because a neighbor asked, the last board stepped down, or they care about the community. Then budget season arrives, someone mentions the reserve study update, and the room gets quiet.

A reserve study is the long-range plan for the big stuff the association owns: roofs, pavement, elevators, boilers, siding, pool equipment. It lists those pieces, estimates how long they have left, prices the work, and says what to set aside so the bill does not arrive as a special assessment. Updating it is not glamorous. Skipping it can look, for a season, like the thrifty choice.

The case for leaving it on the shelf

There are real reasons boards wait. An update costs money this year, and if dues already feel high, “next year” is an easy motion. A fresh study often says you are behind, which means a harder budget conversation. An old study is quieter. Nothing looks broken yet. The elevator still dings. And volunteer time is scarce. Those pressures are understandable. They are also why the rules exist.

The law in some states doesn’t treat this as optional

Say the community is in Maryland; delay can put the association out of compliance. Statewide rules arrived with House Bill 107 (Chapter 664 of 2022) and were tightened by House Bill 292 (Chapter 519 of 2025). The core statutes:

• Residential condominiums: Real Property § 11-109.4
• Homeowner associations: Real Property § 11B-112.3
• Cooperatives: Corporations and Associations § 5-6B-26.1
• 2022 bill: Chapter 664 (HB 107)
• 2025 funding changes: HB 292

Most residential condominiums, covered HOAs, and co-ops need an independent reserve study, updated at least every five years. HOAs are covered when the declaration makes them responsible for common areas and the components meet the statute’s cost threshold (initial purchase and installation cost of at least $10,000). Commercial condominiums sit outside the condo rule.

The study has to identify the components the association must repair or replace, state normal and remaining life, estimate cost, and state the annual amount to set aside. The preparer has to meet the statute’s experience or credential test. A board spreadsheet does not qualify.

Since October 1, 2025, funding has been harder to wave off. Boards generally must budget in line with the study, adopt a written funding plan developed with the preparer (health, safety, and structure first), and deposit the money. Owners can approve a limited deviation. It is temporary and documented, not a standing excuse. If the last report is for the past five years, the budget is sitting on numbers the statute no longer treats as current.

Lenders are the other audience

Most conventional condo loans run through Fannie Mae or Freddie Mac. Their project rules decide whether a buyer can get a regular mortgage. The relevant sections:

• Fannie Mae Selling Guide, B4-2.2-01, Full Review Process
• Freddie Mac Seller/Servicer Guide, Section 5701.5, Established Condominium Projects

The familiar test is a budget line: at least 10 percent of annual budgeted assessment income to replacement reserves. Fannie Mae’s Lender Letter LL-2026-03 (March 18, 2026) and Freddie Mac’s matching bulletin raise that to 15 percent for an application dated on or after January 4, 2027. Limited Review for established projects ended for applications dated on or after August 3, 2026, so more loans are now hit the fuller review where this test applies.

The alternative is a reserve study. A lender may use one instead of the flat percentage if it was completed within three years (Freddie Mac: dated within 36 months), prepared by an independent expert, inventories major components, analyzed whether reserves are adequate, and proposed an annual funding plan. The budget has to fund the study’s recommendation. Current guides want the highest recommended allocation, and a baseline plan that lets the balance drift toward zero does not qualify. The study also has to meet state law.

A four- or five-year-old study is already stale for lending, even if the Maryland clock has not quite run out. If the budget also misses the percentage test, the unit gets hard to finance. Sales fall through. And the “we saved money by not updating” decision shows up in someone else’s closing.

The quieter cost of skipping an update

Prices move. The roof priced in 2019 is not the roof priced now. Useful lives move too. Without a current plan, the usual ending is a special assessment, a loan, or both, announced in a letter nobody enjoys sending. Boards have a duty to look after the property the association owns. A current reserve study is the clearest way to show you did that. If a major component fails and the only study on file is expired, it is much harder to show the board was paying attention.

You do not have to fund every scenario overnight. You do have to know the number. Check the date before budget season. In Maryland, five years is the legal maximum, not the goal. Three years keeps you inside the Fannie and Freddie window. Tell owners early. A small annual increase is an easier meeting than a special assessment with a deadline.

Skipping the update feels like savings until the roof, the statute, or a buyer’s lender disagrees. If the study on the shelf is getting old, request an update on our website and we will help you get you started on the path to a current one before budget season.

General education for managers and boards, not legal, lending, or financial advice. Confirm your community’s status with association counsel.