CAI advocates for developers to transition communities with a current reserve study, budget that includes both operations and reserves and initial funding of reserves for future maintenance, repair/replacement of facilities/equipment.
CAI advocates for laws that allow governing boards to determine the appropriate reserve level and method for funding long-term maintenance, repair/replacement of facilities/equipment and disclose the reserve study used to their community.
Click on one of the states below to see the state's reserve study requirements.
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Blue states have a reserve study and/or funding requirement.
- Green states have statutory guidance for reserves, but do not have a statutory requirement.
- Khaki states do not have statutory guidance or a statutory requirement of a reserve study.
Many states have enacted legislation dealing with community
association reserve and operating funds to protect owners from fiscal problems
and financial hardship. More states may enact similar legislation as community
associations continue to gain popularity. The following is a summary of each
state reserve fund law.
Reserve studies or a reserve schedule for condominium
associations are required in the following 13 states: California, Colorado,
Delaware, Florida, Hawaii, Maryland, New Jersey, Nevada, Oregon, Tennessee, Utah, Virginia, and Washington State.
Washington statutorily encourages associations to have a reserve study
performed every three years unless doing so would impose an unreasonable
hardship.
Reserve studies for developers are required in the following 6 states: California, Delaware, Florida, Nevada, New Jersey, and Oregon. In Oregon, the declarant, on behalf of a homeowners association, shall conduct an initial reserve study, prepare an initial maintenance plan, and establish a reserve account.
Reserve funding for condominium associations is required in
the following 12 states: Connecticut, Delaware, Florida, Hawaii, Illinois, Maryland,
Massachusetts, Michigan, Minnesota, Nevada, Ohio, and Oregon.
Reserve funding for developers is required in the following 7 states: Arizona, Delaware, Florida, Nevada, New Jersey, Oregon, and Wisconsin. In Wisconsin, the developer of a condominium that is created on or after November 1, 2004, shall establish a statutory reserve account when the condominium is created and shall execute a statutory reserve account statement. The declarant shall determine the annual amount to be assessed unit owners for reserve funds.
Annual budget disclosure of reserve funding for condominium associations is required in 33 states and disclosure at the time of resale of reserve study and/or funding requirement for condominium associations is required in 30 states.
Please remember that community associations are governed by
state law, which can vary widely from state to state. This information is
intended for general educational and informational purposes only; it may not
reflect the most recent developments, and it may contain errors or omissions.
The publisher does not warrant or guarantee that the information contained here
complies with applicable law of any given state. It is not intended to be a
substitute for advice from a lawyer, community manager, accountant, insurance
agent, reserve professional, lender, or any other professional.
The unit owners’
associations may adopt and amend budgets for revenues, expenditures and
reserves and impose and collect assessments for common expenses from unit
owners. Section 35-8A-302(2). Sellers must present buyers with an
offering statement of the amount, or a statement that there is no amount,
included in the budget as a reserve for repairs and replacement, and a
statement of any other reserves. Section 35-8A-403(5).
There is no
statutory requirement to conduct a reserve study and no statutory requirement
to fund reserves.
ALASKA
The unit owners’ associations may adopt and amend budgets
for revenues, expenditures, and reserves and impose and collect assessments for
common expenses from unit owners. Section 34.08.320 (2).
A public offering statement must include assumptions concerning the calculation
of the amount of reserves certified by a certified architect or engineer; the
amount included in the budget as a reserve for repairs and replacement
including the estimated cost of repair or replacement cost and the estimated
useful life of the asset to be repaired or replaced; and a statement of any
other reserves. Section
34.08.530(5).
There is no
statutory requirement to conduct a reserve study and no statutory requirement
to fund reserves.
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ARIZONA
For condominiums, unit owners’ associations may adopt and
amend budgets for revenues, expenditures, and reserves and impose and collect
assessments for common expenses from unit owners. Section
33-1242(2). The resale disclosure statement must include the total amount of money held by the association as
reserves. The purchaser must also receive a copy of the most recent reserve
study of the association, if any. Section 33-1260.
For planned
communities, resale disclosure statement must include the total amount of money held by the association as
reserves. The purchaser must also receive a copy of the most recent reserve
study of the community, if any. Section 33-1806.
There is no
statutory requirement to conduct a reserve study and no statutory requirement
to fund reserves.
Section 10-3830 requires directors of nonprofit
corporations to discharged duties in good faith, with the care an ordinarily
prudent person in a like position would exercise under similar circumstances,
and in a manner the director reasonably believes to be in the best interests of
the corporation.
ARKANSAS
There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves.
CALIFORNIA
On a quarterly basis common interest development boards of directors must review reserve accounts and compare reserves to the previous year. At least once every three years, boards must conduct a competent and diligent visual inspection of the property that the association is obligated to repair, replace restore or maintain as part of a study of the reserve account requirements. The board is to annually review this study to consider and implement necessary adjustments to the board's analysis of the reserve account requirements. The required reserve study shall at minimum include identification of the major components that the association is obligated to repair, replace, restore, or maintain that, as of the date of the study, have a remaining useful life of less than 30 years, identification of the probable remaining useful life of the components identified in the study as of the date of the study, an estimate of the cost of repair, replacement, restoration, or maintenance of the components identified in the study, an estimate of the total annual contribution necessary to defray the cost to repair, replace, restore, or maintain the components identified in the study during and at the end of their useful life, after subtracting total reserve funds as of the date of the study, and a reserve funding plan that indicates how the association plans to fund the contribution identified in the study. See more detailed information in California Civil Code Section 5550-5520.
There is no
statutory requirement to fund reserves.
COLORADO
The unit owners’ associations may adopt and amend budgets
for revenues, expenditures, and reserves and impose and collect assessments for
common expenses from unit owners. Section
38-33.3-302.
When the
association has a reserve study prepared for the portions of the community
maintained, repaired, replaced, and improved by the association; whether there
is a funding plan for any work recommended by the reserve study and, if so, the
projected sources of funding for the work; and whether the reserve study is
based on a physical analysis and financial analysis. An internally conducted
reserve study shall be sufficient. Section 38-33.3-209.5
There is no
statutory requirement to fund reserves.
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CONNECTICUT
Condominium associations shall provide in the proposed budget for the condominium adequate reserves for capital expenditures.
Section 47-88e. Common interest community executive boards, at least annually, shall adopt a proposed budget for the common interest community for consideration by the unit owners. Not later than thirty days after the adoption of a proposed budget, the executive board shall provide to all unit owners a summary of the budget, including a statement of the amount of any reserves, and a statement of the basis on which such reserves are calculated and funded.
Section 47-261e. Resale disclosure statement must include the total amount of money held by the association as reserves.
Section 47-264(5).
There is no statutory requirement to conduct a reserve study.
DELAWARE
Condominiums must
contain within their declaration provisions that mandate that the association
create and maintain, in addition to any reserve for contingencies, a fully
funded repair and replacement reserve based upon a current reserve study. Section 81-205(14). Minimum contributions to reserves vary
based on the Reserve Study or a statutory formula based on number of common
area components. Section 81-315. Condominium disclosure statement must
include the current balance in reserves and the most recent reserve study. Section 81-409. Condominums and cooperatives must contain a line item in their annual budget funding any replacement and repair reserve. Section 81-324.
DISTRICT OF COLUMBIA
The unit owners' associations may adopt and amend budgets for revenues, expenditures, and reserves and impose and collect assessments for common expenses from unit owners.
Section 42-1903.08. Disclosure statement shall include the amount, or a statement that there is no amount, included in the projected budget as a reserve for repairs and replacement.
Section 42-1904.04.
There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves.
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FLORIDA
Accounting records must include, but are not limited to, all audits, reviews, accounting statements, structural integrity reserve studies, and financial reports of the association or condominium Structural integrity reserve studies must be maintained for at least 14 years after the study is completed. Section 718.501(1)(c).
Condominium financial reporting rules must include, but not be limited to, standards for presenting a summary of association reserves, including a good faith estimate disclosing the annual amount of reserve funds that would be necessary for the association to fully fund reserves for each reserve item based on the straight-line accounting method. Section 718-111(13). Annual budgets shall include reserve accounts for items such as, but not limited to, roof replacement, pavement, painting and other items with a replacement cost exceeding $10,000. The amount to be reserved for an item is determined by the association's most recent structural integrity reserve study that must be completed by December 31, 2024. If the amount to be reserved for an item is not in the association's initial or most recent structural integrity reserve study or the association has not completed a structural integrity reserve study, the amount must be computed using a formula based upon estimated remaining useful life and estimated replacement cost or deferred maintenance expense of the reserve item. The association may adjust replacement reserve assessments annually to take into account any changes in estimates or extension of the use life of a reserve item caused by deferred maintenance. Funding for the accounts can be waived by a majority vote at a duly called meeting until December 30, 2024. Effective December 31, 2024, the members of a unit-owner controlled association may not determine to provide no reserves or less reserves than required. Section 718.112(f)(2).
Homeowner associations may adopt a budget that includes reserve accounts for capital expenditures and deferred maintenance for which the association is responsible. If reserve accounts are not established, funding of such reserves is limited to the extent that the governing documents limit increases in assessments, including reserves. Associations may waive reserves with proper notification in their financial statement. Section 720.303(6).
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GEORGIA
Condominium resale disclosure statement must include the estimated or actual operating budget for the condominium for the current year's reserves.
Section 44-3-111.
There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves.
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HAWAII
Condominium budgets shall include the amount of money in reserve, future reserve estimates based on a reserve study performed by the association, an explanation of how reserves are computed and the amount to be collected for reserves in the year ahead. The association shall compute the estimated replacement reserves by a formula that is based on the estimated life and the estimated capital expenditure or major maintenance required for each part of the property. The estimated replacement reserves shall include adjustments for revenues which will be received and expenditures which will be made before the beginning of the fiscal year to which the budget relates; and separate, designated reserves for each part of the property for which capital expenditures or major maintenance will exceed $10,000. Parts of the property for which capital expenditures or major maintenance will not exceed $10,000 may be aggregated in a single designated reserve. Section 514B-148.
IDAHO
There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves.
ILLINOIS
The Common Interest Community Act requires the board to give each owner a copy of the proposed annual budget which shall provide for reasonable reserves for capital expenditures and deferred maintenance for repair or replacement of the common elements. 765 ILCS 160/1-45. It also requires that the board shall maintain any reserve study as a record of the association and make the study available for examination and copying at convenient hours of weekdays by any member or unit owner in a common interest community subject to the authority of the board, their mortgagees, and their duly authorized agents or attorneys. 765 ILCS 160/1-30.
The Condominium Act requires the board of managers to adopt a budget that provides for reasonable reserves for capital expenditures and differed maintenance for repair or replacement of the common elements. To determine the amount of reserves appropriate, the board shall take into consideration the any independent professional reserve study which the association may obtain. Any association without a reserve requirement in its condominium instruments may elect to waive in whole or in part the reserve requirements by a vote of 2/3 of the total votes of the association. 760 ILCS 605/9.
Disclosure statement shall include a statement of the status and amount of any reserve or replacement fund and any other fund specifically designated for association projects.
There is no statutory requirement to conduct a reserve study.
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INDIANA
All sums assessed by the association of co-owners shall be established by using generally accepted accounting principles applied on a consistent basis and shall include the establishment and maintenance of a replacement reserve fund. The replacement reserve fund may be used for capital expenditures and replacement and repair of the common areas and facilities and may not be used for usual and ordinary repair expenses of the common areas and facilities.
Section 32-25-4-4.
There is no statutory requirement to conduct a reserve study.
IOWA
There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves.
KANSAS
There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves.
KENTUCKY
The Horizontal Property Law requires all co-owners to
contribute toward the expense of maintaining a replacement reserve fund for
repairs and maintenance of the general common elements. Section
381.870.
Condominium unit owners’ associations may adopt and amend
budgets for revenues, expenditures, and reserves and impose and collect
assessments for common expenses from unit owners. Section
381.9167. The resale disclosure statement must include the total amount of any reserves for capital
expenditures, if any, and of any portions of those reserves designated by the
association for any specified projects. Section 381.9203.
There is no
statutory requirement to conduct a reserve study.
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LOUISIANA
Associations may adopt and amend budgets for revenues, expenditures, and reserves and make and collect assessments for common expenses from unit owners.
Section 9:1123.102. Public offering statements shall include an indication of the amount, or a statement that there is no amount, included in the budget as a reserve for repairs and replacement.
Section 9:1124.102.
There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves.
MAINE
Unit owners associations may adopt and amend budgets for revenues, expenditures and reserves and collect assessments for common expenses from unit owners.
Section 1603-102. Public offering statements must contain a statement of the amount, or a statement that there is no amount, included in the budget as a reserve for repairs and replacement and a statement of the amount and purpose of any other reserves.
Section 1604-103.
There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves.
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MARYLAND
If the governing body of a condominium has had a reserve study conducted on or after October 1, 201theeh governing body shall have an updated reserve study conducted within 5 years after the date of that reserve study and at least every 5 years thereafter. Section 11-109.4. If the governing body of a condominium has not had a reserve study conducted on or after October 1, 2018, the governing body shall have a reserve study conducted on or before October 1, 2023, and an updated reserve study at least every 5 years thereafter. Section 11-109.4.
Councils of unit owners have the power to adopt and amend budgets for revenue, expenditures, and reserves and collect assessments for common expenses from unit owners. Section 11-109. The level of reserves is required to be included in the annual budget; and shall be funded in the amount recommended in the most recent reserve study completed. If the most recent reserve study was an initial reserve study, the governing body shall, within 3 fiscal years following the fiscal year in which the initial reserve study was completed, attain the annual reserve funding level recommended in the initial reserve study. Section 11-109.2. Resale certificate must contain the current operating budget of the condominium including details concerning the reserve fund for repair and replacement and its intended use, or a statement that there is no reserve fund. Section 11-135.
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MASSACHUSETTS
All condominiums shall be required to maintain an adequate replacement reserve fund, collected as part of the common expenses and deposited in an account or accounts separate and segregated from operating funds.
Section 183A-10(i). Managing agents shall be responsible for rendering, in no case less frequently than quarterly, a written report to the trustees or the managing board of the organization of unit owners detailing all receipts and expenditures on behalf of the organization, including beginning and ending balances and copies of all relevant bank statements and reconciliations for the replacement reserve fund, and maintain a separate and distinct account for the replacement reserve fund. Section
183A-10(f).
There is no statutory requirement to conduct a reserve study.
MICHIGAN
Condominiums must have a reserve fund for major repairs and replacement of common elements shall be maintained by the associations of co-owners. The administrator may by rule establish minimum standards for reserve funds. Section
559.205.
The state administrative code requires the co-owners' association to maintain a reserve fund which, at a minimum, shall be equal to 10% of the association's current annual budget on a noncumulative basis. The funds shall only be used for major repairs and replacement of common elements. Additionally, the following statement shall be contained in the bylaws: “The minimum standard required by this section may prove to be inadequate for a particular project. The association of co-owners should carefully analyze their condominium project to determine if a greater amount should be set aside, or if additional reserve funds should be established for other purposes." Rule
559.511.
There is no statutory requirement to conduct a reserve study.
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MINNESOTA
The common interest ownership act requires an association to include in its annual budgets replacement reserves projected by the board to be adequate, together with past and future contributions to replacement reserves, to fund the replacement of common elements. The act also requires the association to reevaluate the adequacy of its budgeted replacement reserves at least every third year after the recording of the declaration creating the common interest community.
Section 515B.3-1441. Unit owners associations have the power to adopt and amend budgets for revenues, expenditures and reserves and collect assessments for common expenses from unit owners. Section 515B.3-101. Communities must distribute an annual report with a statement of the association's total replacement reserves, the components of the common interest community for which the reserves are set aside, and the amounts of the reserves, if any, that the board has allocated for the replacement of each of those components.
Section 515B.3-106. Disclosure statements must include the amount in the budget as replacement reserves and a statement of any other reserves.
There is no statutory requirement to conduct a formal reserve study.
MISSISSIPPI
There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves.
MISSOURI
Unit owners associations may adopt and amend budgets for revenues, expenditures, and reserves and collect assessments for common expenses from unit owners.
Section 448.3-102.1. Resale certificates must provide the amount of any reserves for capital expenditures and of any portions of those reserves designated by the association for any specified projects.
Section 448.4-109.1.
There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves.
MONTANA
There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves.
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NEBRASKA
Unit owners associations may adopt and amend budgets for revenues, expenditures, and reserves and collect assessments for common expenses from unit owners.
Section 76-860.
There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves.
NEVADA
The common interest ownership act requires an association to establish adequate reserves, funded on a reasonable basis, for the repair, replacement and restoration of the major components of the common elements.
Section 116.3115. Additionally, the executive board of an association is required to conduct a study of reserves at least every five years, review the study to determine if reserves are sufficient, and adjust reserves, if necessary. The statute specifies how the study is to be conducted.
Section 116.31152. A public offering statement must include a budget which has a statement of the amount included in the budget as reserves.
Section 116.4103.
NEW HAMPSHIRE
Public offering statement must include the status and amount of any reserve for the major maintenance or replacement fund and any portion of such fund earmarked for any specified project by the board of directors.
Section 356-B:58.
There is no statutory requirement to conduct a reserve study
and no statutory requirement to fund reserves.
NEW JERSEY
The association may levy and collect assessments duly made by the association for a share of common expenses or otherwise, including any other moneys duly owed the association, upon proper notice to the appropriate unit owner, together with interest thereon, late fees and reasonable attorneys' fees, if authorized by the master deed or bylaws. All funds collected by an association shall be maintained separately in the association's name. For investment purposes only, reserve funds may be commingled with operating funds of the association. Commingled operating and reserve funds shall be accounted for separately, and a commingled account shall not, at any time, be less than the amount identified as reserve funds.
Section 46:8B-15.
Reserve studies are required within one year if not done within five years of the effective date. Associations with planned real estate developments having less than $25,000 in total common area capital assets are exempt. These requirements aim to ensure financial readiness for maintaining common interest community assets over an extended period, promoting transparency and planning. Section 52:27D-132.4
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NEW MEXICO
Unit owners associations may adopt and amend budgets for
revenues, expenditures, and reserves and collect assessments for common
expenses from unit owners. Section
47-7C-2. Disclosure statements must statement of the amount or a statement
that there is no amount included in the budget as a reserve for repairs and
replacement and a statement of any other reserves. Section
47-7D-3.
There is no
statutory requirement to conduct a reserve study and no statutory requirement
to fund reserves.
NEW YORK
Condominium bylaws may contain provisions governing the payment, collection and disbursement of funds, including reserves, to provide for major and minor maintenance, repairs, additions, improvements, replacements, working capital, bad debts and unpaid common expenses, depreciation, obsolescence and similar purposes.
RRP Section 339-V. Co-operative corporation directors must periodically set aside reasonable sums for reserves.
CCO Section 72.
There is no statutory requirement to conduct a reserve study.
NORTH CAROLINA
Unit owners associations may adopt and amend budgets for revenues, expenditures, and reserves and collect assessments for common expenses from unit owners.
Section 47C-3-102 and
47F-3-102. Public offering statements must include the amount, or a statement that there is no amount, included in the budget as a reserve for repairs and replacement and a statement of any other reserves.
Section 47C-4-103.
There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves.
NORTH DAKOTA
There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves.
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OHIO
Unless otherwise provided in the declaration or bylaws, the condominium unit owners association, through the board of directors, shall adopt and amend budgets for revenues, expenditures, and reserves in an amount adequate to repair and replace major capital items in the normal course of operations without the necessity of special assessments.
Section 5311.081.
Planned community owners associations, unless otherwise provided in the declaration or bylaws, through its board of directors, shall annually adopt and amend an estimated budget for revenues and expenditures. Any budget shall include reserves in an amount adequate to repair and replace major capital items in the normal course of operations without the necessity of special assessments, unless the owners, exercising not less than a majority of the voting power of the owners association, waive the reserve requirement annually.
Section 5312.06.
There is no statutory requirement to conduct a reserve study.
OKLAHOMA
There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves.
OREGON
The declarant, on behalf of a homeowners association, shall
conduct an initial reserve study, prepare an initial maintenance plan and
establish a reserve account. A reserve account shall be established to fund
major maintenance, repair or replacement of all items of common property which
will normally require major maintenance, repair or replacement, in whole or in
part, in more than one and less than 30 years. The board of directors of the
association annually shall conduct a reserve study or review and update an
existing study to determine the reserve account requirements. After review of
the reserve study or reserve study update, the board of directors may, without
any action by owners adjust the amount of payments as indicated by the study or
update and provide for other reserve items that the board of directors, in its
discretion, may deem appropriate. Section 94.595 and 100.175. Following a turnover
of power from the declarant to the association, the board of directors at least
annually shall adopt a budget for the planned community and include moneys to
be allocated to the reserve account. Section 94.645 and 100.483. However, the
board of directors, with the approval of all owners, may elect not to fund the
reserve account for the following year. Section 94.595 and 100.175.
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PENNSYLVANIA
Unit owners associations may adopt and amend budgets for revenues, expenditures, and reserves and collect assessments for common expenses from unit owners.
Chapter 33 Section 3302 and
Chapter 53 Section 5302. Disclosure statements must statement of the amount or a statement that there is no amount included in the budget as a reserve for repairs and replacement and a statement of any other reserves.
Chapter 33 Section 3402 and
Chapter 53 Section 5402.
There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves.
RHODE ISLAND
Unit owners associations may adopt and amend budgets for
revenues, expenditures, and reserves and collect assessments for common
expenses from unit owners. Section
34-36.1-3.02. Public offering statements for condominiums must disclose a
budget detailing the amount of reserves sufficient for painting exterior
surfaces, replacing roofing, resurfacing roadways or other items subject to
declaration. Must also disclose itemized life spans for common elements and
expected impact on assessments. Section
34-36.1-4.03.
There is no
statutory requirement to conduct a reserve study and no statutory requirement
to fund reserves.
SOUTH CAROLINA
There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves.
SOUTH DAKOTA
There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves.
TENNESSEE
Unit owners associations may adopt and amend budgets for revenues, expenditures, and reserves and collect assessments for common expenses from unit owners. Section 66-27-402. Disclosure statements must include the amount, or a statement that there is no amount, included in the budget as a reserve for repairs and replacements, and whether any study has been done to determine their adequacy, if a study has been done, where the study will be made available for review and inspection, and a statement of any other reserves. Section 66-27-503.
If the condominium board of directors has had a reserve study conducted on or after January 1, 2023, the board shall have an updated reserve study conducted within five (5) years after the date the reserve study was conducted, and at least every five (5) years thereafter, for purposes of assessing the condition of and planning for repair and maintenance of the common elements critical to structural integrity and safety. If the board of directors has not had a reserve study conducted on or after January 1, 2023, the board shall have a reserve study conducted on or before January 1, 2024, and the study must be updated every five (5) years for purposes of assessing the condition of and planning for repair and maintenance of the common elements critical to structural integrity and safety. Section 66-27-403.
There is no statutory requirement to fund reserves.
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TEXAS
Unit owners associations may adopt and amend budgets for revenues, expenditures, and reserves and collect assessments for common expenses from unit owners.
Section 82.102. Resale statements must include the amount of reserves, if any, for capital expenditures and of portions of those reserves designated by the association for a specified project.
Section 82.157.
There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves.
UTAH
Condominium
management committees must cause a reserve analysis to be conducted no less
frequently than every six years and review and, if necessary, update a
previously conducted reserve analysis no less frequently than every three
years. Section 57-8-7.5. The management committee
may conduct a reserve analysis itself or may engage a reliable person or
organization, as determined by the management committee, to conduct the reserve
analysis. An association of unit owners shall annually provide unit owners a
summary of the most recent reserve analysis or update. Section 57-8a-211. In formulating the
association's budget each year, an association shall include a reserve fund
line item in: (a) an amount the board determines, based on the reserve
analysis, to be prudent; or (b) an amount required by the governing documents,
if the governing documents require
an amount higher than the amount determined under Subsection (6)(a).
There is
no statutory requirement to fund reserves.
VERMONT
Unit owners associations may adopt and amend budgets for revenues, expenditures, and reserves and collect assessments for common expenses from unit owners.
Section 27A-3-102. Public offering statement must include the amount, or a statement that there is no amount, included in the budget as a reserve for repairs and replacement and statement of any other reserves.
Section 27A-4-103.
There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves.
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VIRGINIA
Associations must conduct a reserve study at least once every five years to determine the necessity and amount of reserves required to repair, replace and restore the common elements or capital components. The board of directors must review the study at least annually and make adjustments as the board determines to keep the funding of reserves sufficient. The statutory provisions on reserves also include requirements for the contents of the association budget if reserves are determined to be a necessity.
Section 55.1-1965. Resale certificates must include the current reserve study report or a summary thereof, a statement of the status and amount of any reserve or replacement fund and any portion of the fund designated for any specified project by the association.
Section 55.1-1991.
WASHINGTON
Unit owners associations may adopt and amend budgets for revenues, expenditures, and reserves and collect assessments for common expenses from unit owners and establish and administer a reserve account and prepare a reserve study. Section 64.34.304 and 64.38.020. The decisions relating to the preparation and updating of a reserve study must be made by the board of directors of the association in the exercise of the reasonable discretion of the board. Such decisions must include whether a reserve study will be prepared or updated, and whether the assistance of a reserve study professional will be utilized. Section 64.34.388. Associations are encouraged to establish a reserve account to fund major maintenance, repair, and replacement of common elements, including limited common elements that will require major maintenance, repair, or replacement within 30 years. Unless doing so would impose an unreasonable hardship, an association with significant assets shall prepare and update a reserve study. The initial reserve study must be based upon a visual site inspection conducted by a reserve study professional. Unless doing so would impose an unreasonable hardship, the association shall update the reserve study annually. At least every three years, an updated reserve study must be prepared and based upon a visual site inspection conducted by a reserve study professional. Section 64.34.380 and 64.38.065. The public offering statement shall include copies of the association's current reserve study, if any. If the association does not have a reserve study, the public offering statement shall contain the following disclosure: “This association does not have a current reserve study. The lack of a current reserve study poses certain risks to you, the purchaser. Insufficient reserves may, under some circumstances, require you to pay on demand as a special assessment your share of common expenses for the cost of major maintenance, repair, or replacement of a common element.” Section 64.34.410. Any association created after 2018, must prepare and update a reserve study in accordance with this chapter. An initial reserve study must be prepared by a reserve study professional and based upon either a reserve study professional's visual site inspection of completed improvements or a review of plans and specifications of or for unbuilt improvements, or both when construction of some but not all the improvements is complete. An updated reserve study must be prepared annually, unless doing so would pose an unreasonable hardship. A site visit must be conducted at least every third year by a reserve study professional and based upon a visual site inspection conducted by the reserve study professional. Section 64.90.545. An association required to obtain a reserve study pursuant to RCW 64.90.545 must establish one or more accounts for the deposit of funds, if any, for the replacement costs of reserve components. Any reserve account must be an income-earning account maintained under the direct control of the board, and the board is responsible for administering the reserve account. Section 64.90.535.
There is no statutory requirement to fund reserves.
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WEST VIRGINIA
Unit owners associations may adopt and amend budgets for revenues, expenditures, and reserves and collect assessments for common expenses from unit owners.
Section 36B-3-102. Public offering statement must include the amount, or a statement that there is no amount, included in the budget as a reserve for repairs and replacement and statement of any other reserves.
Section 36B-4-103.
There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves.
WISCONSIN
The declarant of a condominium that is created on or after November 1, 2004, shall establish a statutory reserve account when the condominium is created and shall execute a statutory reserve account statement. The declarant shall determine the annual amount to be assessed unit owners for reserve funds. The declarant may elect not to establish a statutory reserve account at the time the condominium is created or, at any time thereafter, may elect to terminate a statutory reserve account during the period of declarant control. If a declarant has elected not to establish a statutory reserve account or to terminate an account, establishment of a statutory reserve account shall be addressed at the first annual meeting of the association held after, or at a special meeting of the association held within one year after, the expiration of any period of declarant control under. An association may, with the written consent of a majority of the unit votes, create or terminate a statutory reserve account.
Section 703.163.
There is no statutory requirement to conduct a reserve study.
WYOMING
There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves.
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Note: This information is for informational purposes and is not intended to provide legal advice.