What does NRS 116 require the executive board to do with the reserve study?

The correct answer focuses on the requirement established by NRS 116, which states that the executive board must review and adjust the reserve study at least annually. This entails not only examining the existing reserve fund's adequacy but also making any necessary adjustments to ensure that the association is financially prepared for future repairs and replacements of major components. The annual review is vital for maintaining the financial health of the community, as it allows the board to assess changing conditions, project future costs, and determine if the reserves are being adequately funded.

In the context of community management, this requirement emphasizes the importance of proactive financial planning and ensures that associations are taking responsible steps to maintain property values and manage capital expenses effectively. By conducting annual reviews, boards can make informed decisions based on updated information and changing circumstances.

Options that suggest adopting the reserve study "as is" or funding the reserve at 100% do not capture the dynamic approach required by NRS 116. The statute does not mandate that the reserve study be adopted without consideration or that reserves must be funded to a specific percentage. Instead, it promotes an ongoing process of evaluation and adjustment to stay aligned with the community's financial needs and responsibilities.