No current reserve study

What a reserve study is, and what it is not

A reserve study is a budget-planning document. It answers two questions: what major components will the association have to repair or replace and when, and how much it should be setting aside now so the money is there then. It is not a structural inspection, not a code inspection, and not an opinion on whether the building is safe.

Every study prepared to the standards used across the industry has two halves, and a buyer should confirm both are present.

The physical analysis is the inventory and condition side: the component inventory, the list of what the association must reserve for, built from site observation, records, plans and prior studies; and the condition assessment, from which the preparer derives useful life, remaining useful life and an estimated current replacement cost.

The financial analysis is the money side: fund status, where the fund stands today against what an ideally funded association would hold, which is where percent funded is calculated; and the funding plan, the recommended contribution stream over a horizon commonly running twenty to thirty years, including assumed inflation and interest rates and the projected year-by-year balance.

A document that does only the physical side is a condition assessment, not a reserve study. A document that does only the financial side is a funding projection built on somebody else's component list. Both circulate under the name "reserve study", so confirm which one you are holding.

The three levels, and the two clocks

Reserve-study practice recognises three service levels. The distinction is not about the quality of the arithmetic. It is about how much of the underlying data is freshly observed rather than carried forward.

• Full study. The component inventory is built from scratch and there is a site visit. Used for a first study, after a major change to the property, or when prior data is stale.
• Update with site visit. The inventory is verified against the site, and there is a site visit. This is the periodic re-grounding of an existing study.
• Update without site visit, also called an off-site or desktop update. The inventory is carried forward from the prior study and nobody visits. Used for an interim-year refresh of costs, balances and assumptions.

An update without a site visit is only as good as the study it updates. A long chain of desk updates with no site visit in many years is a warning sign rather than a compliance record, and it is the most common way an association arrives at a milestone or structural inspection with a reserve study that bears no relationship to the building.

This is where the two clocks matter. Many statutes and governing documents set a maximum interval between studies and a separate maximum interval between site visits. California states it most clearly: the board must cause a reasonably competent and diligent visual inspection of the major components at least once every three years, and must review the study annually. A study one year old and a site visit eleven years old can sit inside the same document, and only the second date tells you whether anyone has looked at the building.

Where a study is actually required

There is no federal reserve requirement for community associations. Mandates are a matter of state law and vary along four axes: whether a study is required at all; how often, and whether a site visit is required; whether the association must actually fund the reserves the study recommends or merely disclose the position; and whether owners can vote to waive or reduce funding. The last two are where the real difference lies. A state can mandate a study and still allow owners to vote to fund nothing, and historically that was the norm.

The Community Associations Institute's published summary identifies California, Colorado, Delaware, Hawaii, Nevada, Oregon, Utah, Virginia and Washington as study states, noting that Washington's requirement is framed as statutory encouragement subject to a hardship exception rather than a hard mandate. That list predates the wave of mandates enacted between 2022 and 2024 and is a starting point, not a current answer. New Jersey's structural integrity legislation, effective 8 January 2024, requires a study within one year where the association has none from the prior five years and studies no more than five years apart after that, with an obligation to fund in accordance with the funding plan the board selects. Maryland enacted a study mandate in 2022; Tennessee and Hawaii legislated on reserves in 2023. Confirm any state's current position directly; this area has moved in every recent session.

Florida is a special case, and the terminology trips people up. Florida's Structural Integrity Reserve Study is not a conventional reserve study. It is a statutory instrument covering a prescribed list of structural and life-safety components — roof, structure, fireproofing and fire protection, plumbing, electrical, waterproofing and exterior painting, and windows and exterior doors — plus any other item whose deferred maintenance or replacement cost exceeds a statutory threshold and whose failure would affect those items. That threshold was raised from $10,000 to $25,000 by legislation effective 1 July 2025, and is adjusted annually for inflation using the Consumer Price Index, with the state regulator required to publish the revised amount by 1 February each year; the figure that applies is $25,000 or the adjusted amount, whichever is greater. The threshold governs only that catch-all category, and the listed component types go into the study regardless of cost. The study applies to residential condominium buildings three habitable stories or higher, and its visual inspection portion must be performed or verified by a licensed engineer, a licensed architect, or a person holding a reserve specialist or professional reserve analyst designation.

The Florida deadline position as of August 2026 is worth stating precisely. Associations existing on or before 1 July 2022 and controlled by owners rather than the developer had to complete a study by 31 December 2025, a date already passed. An association required to complete a milestone inspection on or before 31 December 2026 may complete the structural study at the same time, and in no event later than 31 December 2026. An association that has completed a milestone inspection may defer the study for up to the two budget years following it. Outside those routes, a qualifying association without a study is out of compliance now.

What it means for financing

Neither Fannie Mae nor Freddie Mac requires a reserve study. Their reserve test is the budget line: the replacement-reserve allocation as a proportion of budgeted assessment income, currently at least 10 percent and rising to 15 percent for Fannie Mae Full Reviews on applications dated on or after 4 January 2027. An association with no study at all can pass on the arithmetic of its budget.

The study matters as the alternative. Fannie Mae permits a lender to substitute an acceptable reserve study showing funded reserves that meet or exceed the study's recommendations, where the study was completed within three years of the project approval. The three-year window means an old study cannot be used for it: an association relying on its study to clear a review needs a current one.

The study also matters as documentation. The post-Surfside requirements, made permanent in Fannie Mae's Selling Guide for applications dated on or after 18 September 2023, require the lender to obtain inspection and engineering reports from the past five years along with six months of association meeting minutes; Freddie Mac applies a three-year inspection lookback. An association that cannot produce budgets, studies, reports or minutes is not failing a numeric test. It is leaving the lender unable to certify anything, which reaches the same destination by a different road.

Since 3 August 2026, when Fannie Mae's Limited Review and Freddie Mac's Streamlined Review were both retired, more projects go through a full examination of exactly these documents.

What people get wrong

"We have a reserve study" is not an answer. Ask which level, and ask the date of the last site visit rather than the date of the report. Those two questions separate a live document from a spreadsheet rolled forward for a decade.

A reserve study is not a structural inspection. Neither Florida's milestone inspection nor California's exterior elevated element inspection is a reserve study, and none of them substitutes for an inspection of the unit being purchased. Florida allows one narrow overlap: a milestone inspection completed within the past five years that satisfies the structural study requirements may substitute for that study's visual inspection.

A missing study is not automatically a scandal. In most of the country no study is required, and plenty of well-run associations of modest size have never commissioned one. What makes the absence significant is context: an older building, a large component list, a thin budget line, a history of waived reserves, or a state that requires one.

There is no national licence to prepare a reserve study. Who is qualified is set by state statute where one exists, by the association's governing documents, and otherwise by market practice. Two designations dominate, and both are named in Florida statute and among Maryland's qualification tests: the Reserve Specialist and the Professional Reserve Analyst.

Independence is not usually a legal requirement. The most useful studies are prepared by a party with no financial interest in the repair work recommended, but outside specific statutory contexts that is best practice rather than law. Florida legislates in that direction for milestone inspections, requiring design professionals and contractors to disclose in writing any intention to bid on the work they recommend.

What to ask for

The request list is short and every item is answerable from documents the association already holds.

• The most recent reserve study in full, both halves, not the summary page.
• Its level, the date of the last site visit, and the two prior studies for the trend in percent funded.
• In Florida, the structural study with its date, the preparer's licence or designation, and the split between mandatory and other reserve items, which the statute now requires the study to differentiate.
• The current annual budget showing the reserve line, and whether any waiver vote has been taken.
• Whether the association has paused or reduced reserve contributions under any statutory mechanism, when the pause began and when it ends.

Where a state mandates a study and none exists, that is a legal question for a real estate attorney licensed there. Where the study and the building's visible condition contradict each other, the reconciliation requires a licensed engineer or architect. A buyer's own inspection covers the unit and what is visible of the common elements; it does not reach the roof assembly, the risers or the structure.

Common questions

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