The state your community sits in can shape your board’s legal and financial exposure, and reserve funding is where that shows up most. Florida is the clearest example. For years, boards there could vote annually to waive reserve contributions entirely, letting associations defer funding the roof or the parking structure indefinitely. That loophole closed after Champlain Towers South collapsed in Surfside in June 2021, when investigators found a board that had run on threadbare reserves for years.
Legislatures across the country have been rewriting reserve rules ever since. As of now, about a dozen states mandate a professional reserve study by law, and some form of reserve requirement shows up in more than 20 state statutes total. These rules keep moving, too: Florida’s deadline has shifted twice in three years, Colorado went from no rule to a real one almost overnight, and Maryland turned county-level requirements into statewide law.
On top of it all, Fannie Mae and Freddie Mac are now tightening their own reserve standards, regardless of what any state requires. In this guide, I’ll walk you through reserve study requirements by state: which ones require a reserve study and on what schedule, which only require a funding policy or disclosure, and which have no rule at all.
Why reserve studies are important
Before getting into the state-by-state detail, it’s worth answering the question I hear most often from board members: Is a reserve study necessary, or is it just one more compliance item that some states happen to impose? Here’s what the data, the case law, and the lending market all say about why.
Most communities are already underfunded
Most communities are already behind. A reserve study works out, component by component, when the roof, elevators, or parking structure will need replacing and what that will cost. Now, Association Reserves has analyzed more than 100,000 studies, and found that about 74% of U.S. associations fall short of the 70%-funded mark the industry considers healthy.
Champlain Towers South shows where that math ends if nobody intervenes. Its reserve account held less than $800,000 against a fully funded target of $10.3 million, roughly 7% of what was needed. Closing that gap meant a $15 million special assessment, and owners hadn’t finished paying it when the building collapsed in June 2021. Most associations will never face anything on that scale, but the pattern underneath it, years of underfunding compounding until one bill forces the issue, is the ordinary story behind most special assessments.
It’s a fiduciary duty
It’s also personal exposure, not just a budget line. In a 1981 case, a California appellate court held a development’s board personally liable for breach of fiduciary duty after it never funded reserves before handing control to homeowners. Courts still tend to treat underfunded reserves this way: not a discretionary call protected by the business judgment rule, but a basic obligation the board failed to meet.
Reserve studies have become a financial issue
The newest pressure comes from lenders. Starting with loan applications dated January 4, 2027, Fannie Mae and Freddie Mac will require associations to direct at least 15% of annual assessment income into reserves, up from the 10% floor that has been held for years. Fall short, and a community risks losing its “warrantable” status, the designation that lets buyers get a standard conventional mortgage there. This drags down financing and values for every unit, not just the one being sold. There’s a way around the flat 15%, though: associations with a study completed in the past three years, funded at that study’s highest recommended level, are exempt from the flat rule.
States that require a reserve study by law
As of 2026, 12 states legally require some form of reserve study, a group that technically includes Colorado, but we covered it separately below. Even among these 12, “required” doesn’t mean the same thing twice. Some statutes ask for little more than a periodic walkthrough, while others read like structural engineering things. Here’s how the most instructive ones are built, alphabetically.
California
Civil Code § 5550, part of the Davis-Stirling Act, requires a visual inspection of every major component at least once every three years, triggered once those components’ replacement value reaches half the association’s gross annual budget, excluding reserves. Between inspections, the board must review the study annually and adjust as needed.
The study must identify every component with less than 30 years of remaining life, estimate that life, project costs, and lay out a funding plan. Senate Bill 900, effective January 1, 2025, expanded “major component” to explicitly include gas, water, and electrical service lines that the association maintains, following a utility failure at the La Veta Monterey condominiums in Orange, California, in 2023. If your latest study predates 2025, check whether it actually inspected those utility lines.
Delaware
Delaware skips the inspection schedule and builds the requirement into the legal definition of “reserve study” itself. Under Title 25, Chapter 81, a study only counts as valid if an independent, qualified professional completed or updated it within the last five years. Every condo or co-op declaration must include reserve provisions based on a current study, so one that ages past five years stops legally counting altogether.
Delaware applies pressure through the budget instead of mandating a new study directly. No current study on file means mandatory minimum contributions based on how many major systems the association maintains: 15% of the budget for four or more systems, 10% for three, 5% for two or fewer. Letting a study lapse doesn’t excuse funding reserves; it just raises the mandatory floor.
Florida
No state’s reserve law carries more weight. After Champlain Towers South collapsed in June 2021, killing 98 people, the legislature created the state’s first statewide structural integrity reserve study, or SIRS, requirement through Senate Bill 4-D in 2022, later narrowed by Senate Bill 154 in 2023 and House Bill 913 in 2025. It’s codified at Florida Statute § 718.112(2)(g).
Every condo association with a building three or more habitable stories high needs a Structural Integrity Reserve Study completed at least once every 10 years, building by building, even for multi-building associations. At minimum, a SIRS must evaluate the roof, load-bearing components, fireproofing, plumbing, electrical systems, waterproofing, windows and doors, and anything else whose failure would compromise those items if repair would cost more than $25,000.
It has to be performed or verified by a licensed engineer, architect, or a reserve specialist certified by the CAI or the APRA. Associations that existed on or before July 1, 2022, needed their first SIRS by December 31, 2025, with a one-year extension for those coordinating it with a required milestone inspection. If yours hasn’t been completed, it’s already overdue. For budgets adopted on or after December 31, 2024, owners can no longer vote to waive or underfund the reserves a SIRS identifies, and willfully skipping a required SIRS is treated as a breach of fiduciary duty.
Hawaii
Hawaii’s law, HRS § 514B-148, dates to 2004 and centers on a funding number rather than an inspection cycle. Every condo association’s budget must be built around a reserve study, reviewed by a certified professional at least every three years if it wasn’t originally prepared by one. The funding floor stands out: associations must collect enough to fund at least 50% of the study’s estimated replacement reserves, or a full 100% if using an alternative 30-year cash flow projection instead.
Hawaii also backs this with an unusual enforcement mechanism: any individual owner can sue to force compliance, and the burden of proof falls on the board, not the owner. The mandate applies only to condos under Chapter 514B. Hawaii’s HOAs, governed by a separate chapter, have no equivalent requirement.
Maryland
Maryland’s statewide law grew out of two county pilots, Prince George’s and Montgomery, before House Bill 107 made it statewide, effective October 2022. It now lives at Real Property § 11-109.4 for condos and § 11B-112.3 for HOAs. Associations need an independent study every five years covering every structural, mechanical, electrical, and plumbing component: its remaining life, replacement cost, and the annual contribution needed to stay on track.
Preparers must meet credential requirements: a licensed architect or engineer, a CAI- or APRA-certified reserve specialist, or someone who has completed 30 or more studies in three years at a specialized firm. House Bill 292 and Senate Bill 63, both passed in 2025, closed a gap that used to let boards commission a study and then budget however they wanted. The annual budget now has to visibly connect back to what the study recommends.
Nevada
Every common-interest community’s board must have a reserve study done at least once every five years, and must revisit the findings annually to decide whether the fund is on track and adjust if it isn’t. The study itself must be completed by a professional licensed under NRS Chapter 116A.
New Jersey
New Jersey has already revised its reserve law once, a sign of how much attention it’s getting. The original mandate, effective January 2024, applies to any association holding more than $25,000 in common area capital assets, a low bar that catches plenty of smaller associations. Studies need sign-off from a CAI-credentialed reserve specialist or a licensed engineer or architect, and must run on a five-year cycle at a minimum.
Amendments signed in August 2025 redefined “adequate” funding as a 30-year plan under which the reserve balance never goes negative. Boards got some flexibility too: they can fund at just 85% of that plan for up to five fiscal years, if owners get written notice of the shortfall in 20-point bold font.
Oregon
Oregon skips the fixed multi-year cycle and instead requires the board to determine reserve needs every year, either through a new study or an update to the existing one, adjusting contributions as needed. The declarant must conduct an initial study and set up the reserve account before turnover happens. Planned communities fall under ORS 94.595. Condos have a nearly identical version at ORS 100.175.
One wrinkle: communities recorded on or after October 23, 1999, are automatically bound by this. Anything recorded earlier is only covered if the board adopts a resolution to opt in or a majority of owners petition for it.
Tennessee
Tennessee’s version, folded into the Tennessee Condominium Act and effective January 1, 2024, is narrower than most. It applies only to condo associations with common elements whose aggregate replacement cost exceeds $10,000, and doesn’t reach ordinary HOAs at all. Studies commissioned on or after January 1, 2020, must be updated within five years and then on that same five-year rhythm afterward, and a copy has to reach every owner by email or the community website.
A handful of situations are exempt: while a declarant still controls the board, condos titled to a single owner, and condos held by a married couple as tenants by the entirety. Outside those, boards must still review funding adequacy every year between full updates.
Utah
Utah calls this a “reserve analysis” rather than a study, split across § 57-8-7.5 for condos and § 57-8a-211 for HOAs. Either way, a full analysis is required at least every six years, with a review and update every three years in between. There’s no mandated dollar figure or percentage target, just a general duty to fund reserves “prudently.”
The detail worth knowing: Utah owners can vote down the board’s proposed reserve contribution. If 51% of lot owners vote against it within 45 days of budget adoption, the reserve line gets vetoed. That flips the usual risk: instead of underfunding, Utah boards sometimes have to worry about their own owners rejecting adequate funding outright.
Virginia
Virginia covers this through two mirrored statutes, § 55.1-1965 for condos and § 55.1-1826 for property owners’ associations, despite a common misconception that only condos are required to comply. Both need a study at least every five years, with an annual board review in between, and a 2024 amendment added a formal statutory definition of “reserve study” to both acts.
The annual budget must disclose each component’s replacement cost and remaining life, current reserve cash against expected contributions, and how the recommended figure compares to what’s on hand. Virginia sets no minimum dollar amount or percentage target. Boards can lean on reserves, special assessments, or borrowed funds in whatever mix makes sense, as long as the disclosure is accurate.
Washington
Washington’s rules used to depend on which statute a community fell under, based on formation date and type. That changed with ESSB 5129: as of January 1, 2026, the WUCIOA standard at RCW 64.90.545 applies to every common-interest community in the state, regardless of when it was formed. That means an initial study from a qualified professional, annual updates, and a full visual inspection at least every three years, for everyone.
Reserve funds must sit in a segregated, interest-bearing account separate from operating funds, and Washington backs this with enforcement: owners can sue to force compliance and potentially recover attorneys’ fees. But there’s a narrow exemption for communities where replacement costs come in under 50 to 75% of the annual budget, excluding reserves, and the study itself would cost more than 10% of that budget.
States that require reserve funding, but not a formal study
In eight states, your board has to fund reserves and usually disclose what’s in the account, but none require bringing in an outside professional to set that number. Every state below gives the board room to set its own number, and little cover if that number is wrong.
Connecticut
Connecticut’s Common Interest Ownership Act keeps it simple: once a year, the board adopts a budget, and within 30 days, every owner must receive a written summary of the dollar amount in reserve and the basis used to calculate it. No inspection or professional sign-off is required. This is a transparency duty, not an inspection one. A 2025 bill that would have required annual professional studies statewide died in committee that June.
Illinois
Illinois runs two systems. Non-condo HOAs fall under the Common Interest Community Association Act, requiring the proposed budget, with reserves as their own line item, to reach every member 30 to 60 days before adoption. Condo associations fall under the Condominium Property Act instead, requiring only “reasonable” reserves, a standard in place since 1990.
Neither requires a professional study. Illinois treats one as just one of five optional factors a board may weigh. A two-thirds owner vote can waive the requirement entirely if governing documents are silent on reserves.
Indiana
The Indiana Condominium Act requires every assessment to be calculated using generally accepted accounting principles, including a replacement reserve fund kept in its own interest-bearing account, never commingled with operating cash, and restricted to capital expenditures rather than routine maintenance. No study is required, so the reserve figure’s quality depends entirely on the board’s own process.
Kentucky
Kentucky’s Horizontal Property Law puts the funding duty on individual owners rather than the association. Each co-owner pays a pro-rata share of maintenance and replacement costs, with reserves riding along inside that bill. There’s no target percentage, no study requirement, and the only number disclosed at resale is whatever balance happens to be in the account. A 2023 Planned Communities Act gave HOAs a statutory framework for the first time, but barely touched reserves.
Massachusetts
Massachusetts states its rule plainly, then leaves the key word undefined: every condo must maintain an “adequate” replacement reserve fund in a segregated account. The legislature has never defined “adequate” in dollars or as a percentage, which is exactly why a professional reserve study has become the practical way boards demonstrate they’ve cleared the bar. This mandate stops at the condo line. Massachusetts HOAs aren’t covered by any equivalent statute, so a community’s declaration and bylaws are the only rules that apply.
Michigan
Michigan’s rule comes in two pieces. The Condominium Act puts the underlying duty on associations, and Administrative Rule R 559.511 sets the actual number at a minimum 10% of the current annual budget, restricted to major repairs. Hitting that floor isn’t automatically enough, though. In Newport West Condominium Ass’n v. Veniar, the Michigan Court of Appeals ruled boards must actually consider a property’s age and condition, not just default to the minimum. No professional study is required yet, but a bill that would add one for larger associations has resurfaced as House Bill 5784.
Minnesota
Minnesota’s coverage depends on community type. Condos are covered regardless of age under the Minnesota Common Interest Ownership Act, while townhome, planned community, and cooperative associations are only covered if formed after June 1, 1994, or if they’ve opted in. Covered associations must fund reserves at whatever level the board projects will be enough and reviewed at least every three years. But there’s no professional required. One rule reaches everyone regardless of coverage: disclosing to buyers which components the association is saving for.
Ohio
Ohio originally set a hard 10% minimum in 2004, but Senate Bill 61 replaced it in 2022 with a looser “adequate” standard, similar to Massachusetts’s, waivable by a written majority owner vote each year.
States with no statutory reserve study requirement
Twenty-seven states, plus D.C., have no statute currently requiring a reserve study: Alabama, Alaska, Arkansas, the District of Columbia, Georgia, Idaho, Iowa, Kansas, Louisiana, Maine, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Texas, Vermont, West Virginia, and Wyoming.
Special cases
These three states don’t sort cleanly into “must study” or “must fund.” Each solves the problem in its own way.
Colorado
The Colorado Common Interest Ownership Act has never forced existing associations to commission a reserve study. What it requires is a written disclosure policy: whether a study exists, whether a funding plan is in place, and whether any analysis on file covers both physical condition and financial cost. The bar is low. A board member’s own estimate satisfies the statute as well as a licensed specialist’s report would.
Lawmakers have tried to raise that bar twice. A 2022 bill would have introduced tiered professional studies with a required update schedule, but Governor Polis vetoed it, citing the financial strain on smaller associations. This year’s House Bill 26-1099 takes a narrower approach: it leaves existing communities under the old disclosure-only rule and instead targets turnover.
Developers of new planned communities and condos must now commission and pay for an independent 30-year reserve study before control passes to the homeowner-elected board. Polis signed it in April 2026, effective August 12, 2026, closing a real blind spot for boards that used to inherit a developer’s funding assumptions with no independent check.
Arizona
Arizona requires no reserve study and no funding level at all. It leans entirely on disclosure instead. Whenever a unit changes hands, the seller, or the association itself in communities of 50 or more units, must tell the buyer the total dollar amount currently in reserves and provide the most recent study, if one exists. That’s a transparency requirement standing in for a funding one. Skipping a study isn’t illegal in Arizona, but hiding that you skipped it isn’t possible, since every resale forces the number into the open.
Wisconsin
Wisconsin barely uses the word “study” at all. State law requires condos to set up a “statutory reserve account,” automatic for any condo created on or after November 1, 2004, with 18 months to comply for older ones. A majority of owners can vote, in writing, to eliminate the requirement entirely.
No professional inspection or third-party analysis is required at any point. The board sets the funding level itself, weighing the current balance, the projected cost, and the remaining life of common elements, and how much of that future cost the account should cover versus other funding sources. Wisconsin also shields directors, officers, and declarants from personal liability for how they set that level, or for skipping an account altogether.
Final thoughts
Whether your state mandates a structural engineering-grade study or says nothing at all, the lending market, your insurer, and your own fiduciary duty are all converging on the same expectation: a documented, defensible number behind every reserve contribution. States are still actively rewriting these rules, and Colorado’s law this year shows how fast “no requirement” can become “detailed requirement.” The most durable move for any board is the same: get a current study, connect your budget to what it recommends, put the reasoning in your minutes, and revisit it on a set cycle rather than waiting for a law, a lender, or a failed roof to force the question.
