Many states have implemented laws concerning reserve and operating funds for community associations, aiming to shield owners from economic difficulties. As these associations become more prevalent, additional states might adopt similar measures. Below is an overview of state-specific reserve fund legislation.
In 12 states, condominium associations are mandated to conduct reserve studies or maintain a reserve schedule. These states are California, Colorado, Delaware, Florida, Hawaii, Maryland, Nevada, Oregon, Tennessee, Utah, Virginia, and Washington. In Washington, associations are encouraged to undertake reserve studies every three years, except in cases of undue hardship.
Reserve funding is compulsory for condominium associations in 12 states: Connecticut, Delaware, Florida, Hawaii, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Nevada, Ohio, and Oregon.
Developers are required to conduct reserve studies in five states: California, Delaware, Florida, Nevada, and Oregon. Oregon specifically mandates that developers, on behalf of homeowners associations, perform an initial reserve study, develop a maintenance plan, and set up a reserve account.
Reserve funding obligations for developers exist in six states: Arizona, Delaware, Florida, Nevada, Oregon, and Wisconsin. In Wisconsin, developers of condominiums established after November 1, 2004, must create a statutory reserve account and decide the yearly reserve fund assessments for unit owners.
Following the Champlain Towers South collapse in Surfside, FL, in June 2021, changes to state laws have been observed in Florida, Maryland, and Tennessee, as highlighted in italics in this document.
It’s important to note that community associations are subject to state laws, which can significantly differ. This information serves as a general guide and may not be up-to-date or comprehensive. The publisher does not claim that this content conforms to the specific legal requirements of any state. It should not replace professional advice from legal, management, accounting, insurance, reserve specialists, lenders, or other experts.
- ALABAMA
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. - 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. - 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. Condominiums 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. - 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). - GEORGIA
Condominium resale disclosure statement must include the estimated or actual operaxxting 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. - 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. A condominium’s reserve study must be reviewed
by an independent reserve study preparer and updated every three years. 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. Cash flow plans must
be based on thirty year projections. 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. Italicized text effective 1/1/23 per HB 2272. - 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.
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 a requirement for the inclusion of any reserve studies performed in an association’s records, as
outlined by the Condominium Act. 765 ILCS 160/1-30, 1-90.
There is no statutory requirement to conduct a reserve study. - 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. - 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. - 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. - 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. - 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. - 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. - 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.
There is no statutory requirement to conduct a reserve study and no statutory requirement to fund
reserves. - 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. - 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, provided that the amount set aside annually for reserves
shall not be less than 10% of the budget for that year unless the reserve requirement is waived annually
by the unit owners exercising not less than a majority of the voting power of the unit owners
association. 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. - 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. - 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. - 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. An updated reserve
study must be prepared 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.
All common interest communities (condominiums, cooperatives, and planned communities) created
within Washington after the effective date of July 1, 2018, must have an updated reserve study prepared
annually. An updated reserve study must be prepared at least every third year by a reserve study
professional and based upon a visual site inspection conducted by the reserve study professional. RCW
64.90.545.
There is no statutory requirement to fund reserves. - 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. - Note: This information is for informational purposes and is not intended to provide legal advice.
Source: Community Associations Institute Summary of State Reserve Fund Laws (As of October 2023)
