TLDR
Before the Surfside building collapse in June 2021, roughly 8 states mandated reserve studies. By early 2026, at least 12 states have enacted new or strengthened reserve fund legislation, with 5+ more bills pending. Florida's requirements are the strictest, but California, Maryland, Hawaii, and New Jersey have also passed significant reforms. Enforcement remains the weak point -- only Florida, California, and Maryland impose explicit monetary penalties. Fannie Mae's increase from 10% to 15% reserve allocation (effective August 2026) may ultimately do more to drive compliance than state legislation alone.
What happened at Surfside
On June 24, 2021, Champlain Towers South, a 12-story beachfront condominium in Surfside, Florida, partially collapsed, killing 98 people. Investigations revealed years of deferred maintenance on structural components, an underfunded reserve, and a board that had been warned about deteriorating conditions but delayed action due to the cost.
The collapse became the catalyst for the most significant wave of HOA and condo reserve fund legislation in decades.
The legislative landscape before Surfside
Before June 2021, roughly 8 states mandated reserve studies for HOAs or condo associations. Requirements were generally weak: most states allowed homeowner votes to waive reserve contributions, few specified minimum funding levels, and enforcement mechanisms were limited to fiduciary duty claims after the fact.
The prevailing approach was disclosure-based: boards had to tell homeowners about reserve fund status, but were not required to maintain any specific funding level. Homeowners could — and frequently did — vote to waive or reduce reserve contributions to keep assessments low.
What changed after Surfside
By early 2026, at least 12 states have enacted new or strengthened reserve fund legislation, with 5+ additional states considering bills. The reforms follow a common pattern: mandatory studies, restricted waivers, and (in a few states) actual penalties for non-compliance.
Florida: the strictest requirements
Florida moved the fastest and the furthest.
SB 4-D (2022) required condominium and cooperative associations in buildings three stories or higher to complete Structural Integrity Reserve Studies (SIRS) and banned reserve waivers for structural components. Milestone inspections became mandatory at 30 years (25 years for buildings within 3 miles of the coast).
HB 913 (2025) extended the SIRS completion deadline to December 31, 2025, and raised the deferred maintenance threshold to $25,000. The law applies to condos and co-ops only — single-family HOAs are not covered by SIRS requirements, though general reserve study obligations may still apply under other Florida statutes.
Penalties: $5,000 per violation. Florida is one of only three states with explicit monetary penalties for reserve fund non-compliance.
California: layered reforms
California has taken an incremental approach with multiple bills:
SB 900 (2024) strengthened reserve study requirements and enhanced disclosure obligations. AB 2114 (2024) added further requirements around reserve funding and board reporting. SB 410 (2025) continued the trend with additional mandates.
AB 2050 is pending and would add further reserve funding requirements.
Penalties: $100-500 per day for non-compliance. California is one of three states with explicit monetary penalties.
Hawaii: long-horizon requirements
Act 62 (2022) and Act 296 (2025) established a 30-year reserve study horizon and a minimum 50% funded requirement. Hawaii’s approach focuses on ensuring associations plan far enough ahead to avoid surprise assessments.
Maryland: mandatory funding with teeth
HB 107 (2022) and HB 292 (2025) established mandatory reserve funding and minimum baseline requirements. Maryland is notable for its $10,000 fine for non-compliance — the highest explicit monetary penalty of any state.
New Jersey: baseline protections
S2760 (2024) and S3992 (2025) established baseline funding requirements with a notable provision: reserve fund balances can never drop below $0. This prevents the practice of spending reserves down to nothing and relying on special assessments.
Tennessee: study without funding
SB 863 (2023) requires reserve studies but does not mandate specific funding levels. This is the weakest form of post-Surfside reform — boards must assess their reserve needs but are not legally required to fund them.
Virginia: formalized definitions
HB 1209 (2024) formalized reserve study definitions and strengthened board authority over reserve fund management. The law clarifies what constitutes a reserve study and gives boards clearer legal footing for maintaining reserve fund adequacy.
Pending legislation
Several states have bills in progress:
- Illinois: HB 2563 / SB 1703 would require reserve studies and minimum funding levels
- New York: S7600 / A8945 would require reserve studies for larger associations
- Connecticut: SB 212 would mandate reserve studies and funding plans
- Nevada: SB 56 would strengthen existing reserve requirements
- California: AB 2050 would add further reserve funding requirements
The enforcement gap
The most significant weakness across all post-Surfside legislation is enforcement. Only three states impose explicit monetary penalties:
- Florida: $5,000 per violation
- California: $100-500 per day
- Maryland: $10,000
In every other state, the primary enforcement mechanism is fiduciary duty exposure. Board members can be sued for breach of fiduciary duty if reserves are inadequate and the board failed to act, but there is no proactive enforcement — no inspector shows up, no agency audits compliance. The consequences come after something goes wrong.
This means compliance is largely self-enforced. Boards that track their reserve fund status and document their review process are protecting themselves. Boards that ignore reserve requirements are gambling on nothing going wrong.
Fannie Mae: the de facto national mandate
Fannie Mae currently requires associations to allocate at least 10% of their annual budget to reserves. That threshold rises to 15% effective August 3, 2026.
Associations that do not meet the threshold are classified as “non-warrantable.” Non-warrantable status means conventional mortgages (backed by Fannie Mae or Freddie Mac) cannot be used to purchase units in the community. Buyers are limited to portfolio loans, cash purchases, or FHA/VA loans (which have their own requirements).
The practical effect: unit sales slow dramatically or freeze entirely. Property values decline. The community enters a downward spiral where underfunding leads to non-warrantable status, which leads to declining property values, which makes it harder to collect assessments and fund reserves.
Fannie Mae’s requirement applies to every association in every state, regardless of whether the state has any reserve mandate. For communities in states with no reserve study law, Fannie Mae creates a de facto floor that may ultimately do more to drive reserve funding than state legislation alone.
What boards should do now
The legislative environment is shifting faster than most boards realize. Five or more states have pending bills. Fannie Mae’s threshold change takes effect in 2026. Boards that wait until a requirement becomes law to start tracking compliance are already behind.
Three actions matter most:
First, know your state’s current requirements. If your state has enacted post-Surfside legislation, understand what it requires and when compliance deadlines fall. If your state has not, watch for pending bills and plan for the Fannie Mae threshold increase.
Second, track your percent-funded status against both state requirements and Fannie Mae thresholds. You need to know whether your association meets the 15% allocation requirement well before August 2026. If you are below the threshold, your board needs to present the membership with a plan to increase contributions.
Third, document everything. In states where fiduciary duty is the enforcement mechanism, the board’s defense depends on demonstrating it monitored reserve adequacy and took reasonable action. Meeting minutes that show regular reserve fund review, board resolutions responding to reserve study recommendations, and system records showing compliance tracking create the audit trail that protects individual board members.
BoardStack tracks reserve fund status against both state-specific requirements and Fannie Mae thresholds. The software flags when funding levels approach non-compliance and maintains the documentation trail that demonstrates the board did its due diligence. In an environment where legislation is changing annually and enforcement depends on proving you tried, having a system that tracks and timestamps everything is not optional.
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See plans & pricing- Structural Integrity Reserve Study (SIRS)
- A specialized reserve study required by Florida law (SB 4-D, 2022) for condominium and cooperative associations in buildings three stories or higher. A SIRS must assess structural components (roof, load-bearing walls, foundation, plumbing, electrical, waterproofing, windows, and any item with a deferred maintenance cost exceeding $10,000) and provide a funding plan. Reserve waivers are prohibited for components covered by a SIRS.
DEFINITION
- Reserve waiver
- A vote by HOA or condo association members to waive or reduce the required contribution to reserve funds for a given budget year. Many states historically allowed a supermajority vote to waive reserves. Post-Surfside legislation in Florida banned reserve waivers for structural components in condos three stories or higher. Other states are following with restrictions.
DEFINITION
- Non-warrantable
- A classification applied by Fannie Mae and Freddie Mac to condo and HOA communities that do not meet their lending guidelines. Non-warrantable status means conventional mortgages cannot be used to purchase units in the community. Common triggers include insufficient reserve funding (below the 10% threshold, rising to 15% in August 2026), excessive commercial space, or high investor-ownership ratios.
DEFINITION
- Milestone inspection
- A structural inspection required by Florida law for buildings three stories or higher when they reach 30 years of age (25 years if within 3 miles of the coast). The inspection must be performed by a licensed engineer or architect and assesses the structural condition of the building. If the inspection identifies deficiencies, the association must fund repairs through reserves or special assessments.
DEFINITION
Q&A
Which states require HOA reserve studies after Surfside?
As of early 2026, at least 12 states mandate reserve studies: California, Colorado, Delaware, Florida, Hawaii, Maryland, Nevada, Oregon, Tennessee, Utah, Virginia, and Washington. Florida, California, Hawaii, Maryland, New Jersey, Tennessee, and Virginia have all enacted new or strengthened legislation since the 2021 Surfside collapse. Several additional states (Illinois, New York, Connecticut, Nevada) have bills pending.
Q&A
What are the penalties for not complying with HOA reserve fund laws?
Only three states impose explicit monetary penalties: Florida ($5,000 per violation), California ($100-500 per day), and Maryland ($10,000). In most states, the enforcement mechanism is fiduciary duty exposure, meaning board members can be personally liable if reserves are inadequate and they failed to act. The practical risk in all states is special assessments and potential litigation from homeowners.
Q&A
How does Fannie Mae's 15% reserve requirement affect HOA boards?
Starting August 3, 2026, Fannie Mae requires associations to allocate at least 15% of their annual budget to reserves, up from the current 10%. Associations that do not meet this threshold are classified as non-warrantable, meaning buyers cannot obtain conventional mortgages to purchase units. This effectively freezes unit sales and can depress property values. The requirement applies to all associations in all states, creating a de facto national minimum regardless of state law.
Q&A
What software helps boards track post-Surfside reserve compliance requirements?
Boards need software that tracks percent-funded status, monitors compliance against state-specific requirements, flags Fannie Mae threshold changes, and maintains an audit trail. BoardStack tracks reserve fund status against both state mandates and Fannie Mae requirements, alerting boards when funding levels approach non-compliance. The software maintains the documentation trail that demonstrates the board monitored reserve adequacy, which is critical for fiduciary duty defense.
| State | Key Bill | Year | What It Requires | Penalties |
|---|---|---|---|---|
| Florida | SB 4-D / HB 913 | 2022-2025 | SIRS every 10 years for condos 3+ stories; milestone inspections at 30 years (25 near coast); reserve waiver ban for structural components; threshold raised to $25K | $5,000 per violation |
| California | SB 900 / AB 2114 / SB 410 | 2024-2025 | Strengthened reserve study requirements; enhanced disclosure; reserve funding mandates; AB 2050 pending for additional requirements | $100-500 per day |
| Hawaii | Act 62 / Act 296 | 2022-2025 | 30-year reserve study horizon; minimum 50% funded requirement; strengthened board reporting obligations | Fiduciary duty exposure |
| Maryland | HB 107 / HB 292 | 2022-2025 | Mandatory reserve funding; minimum baseline requirements; enhanced board reporting | $10,000 fines |
| New Jersey | S2760 / S3992 | 2024-2025 | Baseline funding requirements; reserve fund balance can never drop below $0; new disclosure rules | Fiduciary duty exposure |
| Tennessee | SB 863 | 2023 | Reserve studies required; however funding levels are NOT mandated by statute | Fiduciary duty exposure |
| Virginia | HB 1209 | 2024 | Formalized reserve study definitions; strengthened board authority over reserve fund management | Fiduciary duty exposure |
| Illinois (pending) | HB 2563 / SB 1703 | Pending | Would require reserve studies and minimum funding levels | TBD |
| New York (pending) | S7600 / A8945 | Pending | Would require reserve studies for larger associations | TBD |
| Connecticut (pending) | SB 212 | Pending | Would mandate reserve studies and funding plans | TBD |
| Nevada (pending) | SB 56 | Pending | Would strengthen existing reserve requirements | TBD |
| California (pending) | AB 2050 | Pending | Would add further reserve funding requirements | TBD |
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