HOA Reserve Compliance Checklist

Why Reserve Fund Compliance Matters for Your Board

If you’re a volunteer HOA board member — treasurer, president, or any role that votes on budgets — reserve fund compliance is the single highest-liability area you manage. It’s also the one most likely to be handled poorly, because reserve accounting is genuinely confusing and the rules vary by state.

Here’s the short version: your HOA collects money from homeowners. Some of that money is for daily operations (landscaping, insurance, management fees). The rest is supposed to go into a reserve fund for future capital expenditures — roof replacements, parking lot resurfacing, elevator modernization, pool replastering. State law in many jurisdictions requires that you have a professional reserve study to determine how much money should be in that fund, and some states mandate minimum funding levels.

When the reserve fund is underfunded and a major repair comes due, the board has to levy a special assessment. Homeowners get hit with unexpected bills of $5,000, $10,000, or more. That’s when lawsuits happen. And in states with mandatory reserve study or funding laws, board members who failed to commission a required study can face personal liability.

This checklist covers the states with explicit mandatory reserve study or funding requirements, what compliance looks like in each, and the steps to get compliant if your board has fallen behind.

States With Mandatory Reserve Study or Funding Laws

Not every state requires HOAs to conduct reserve studies. Many leave it to the discretion of the board or the governing documents (CC&Rs). But the following states have statutory requirements that apply to some or all common-interest communities.

California — Civil Code Section 5550 requires associations with major components to conduct a reserve study at least every three years. The study must include a physical analysis and a financial analysis. The board must distribute an annual reserve funding disclosure (Form Pro 100) to all members. California also requires a 30-year funding plan. Non-compliance can expose board members to breach of fiduciary duty claims.

Florida — The Surfside condo collapse in 2021 led to significant legislative changes. SB 4-D (2022) created Structural Integrity Reserve Studies (SIRS) for condominium and co-op associations in buildings of three or more habitable stories. SIRS must cover eight mandatory components (roof, structure, fireproofing, plumbing, electrical, waterproofing, windows, and items costing more than $25,000). For budgets adopted after December 31, 2024, associations subject to SIRS cannot vote to waive or reduce reserves for those structural components. HOAs governed by Chapter 720 are not subject to SIRS requirements — this distinction is critical.

Nevada — NRS 116.31152 requires associations to conduct a reserve study at least once every five years. The study must be performed by a reserve study specialist. The board must fund reserves based on the study’s recommendations or explain in writing to homeowners why it’s deviating.

Virginia — The Virginia Property Owners’ Association Act (POAA) requires associations to maintain adequate reserves. While the statute doesn’t specify a study frequency, the Virginia Common Interest Community Board provides guidance that a professional study should be updated every five years.

Hawaii — HRS 514B-148 requires condominium associations to prepare a reserve study and maintain a reserve fund. The study must be reviewed by the board annually and updated as needed. Associations must disclose reserve funding status to prospective buyers.

Oregon — ORS 94.595 requires planned community associations to conduct a reserve study. The initial study must be completed within the first year of the association’s operation, with updates at least every three years for the physical analysis and annually for the financial analysis.

Washington — RCW 64.34.380 (condominiums) and RCW 64.90.545 (common interest communities under WUCIOA) require reserve studies. Washington specifies that the study must include a physical analysis, an inventory of components, and a financial analysis showing funding adequacy.

Utah — SB 57 (2023) introduced requirements for reserve studies in condominium and community associations. The law phases in requirements based on community size, with larger communities required to comply first.

New Jersey — S2760 (signed January 8, 2024) requires all condos, co-ops, and planned developments with $25,000 or more in common area capital assets to complete professional reserve studies every five years, prepared by a Reserve Specialist, licensed PE, or architect following CAI National Standards. S3992 (signed August 21, 2025) established baseline funding as the required standard — a 30-year plan that never projects a balance below $0. Existing associations may temporarily fund at 85% of baseline for up to five years with mandatory bold-font disclosure. After five years, full compliance is required. Applies to condos, co-ops, and large HOAs with 100 or more units.

Delaware — The Uniform Common Interest Ownership Act (UCIOA) adoption in Delaware requires associations to maintain reserve funds. Specific study requirements depend on the association’s governing documents and the size of the community.

Connecticut — Common Interest Ownership Act (CIOA) requires associations to maintain adequate reserves. Connecticut is notable for requiring disclosure of reserve funding levels during resale.

Illinois — The Condominium Property Act requires condo associations to maintain reserve funds. Amendments in recent years have strengthened disclosure requirements and pushed boards toward professional reserve studies.