Is an HOA required to have a reserve fund?
Reviewed by the OurHOA team · Updated July 2026
Whether reserves are legally mandatory varies by state: many require a reserve study but not a funding minimum, though condos, lenders, and your own governing documents increasingly force the issue.
Study required, funding often not
The single most useful distinction here is between being required to study reserves and being required to fund them. A number of states mandate a reserve study on a schedule - California Civil Code section 5550 requires one at least every three years, Nevada NRS 116.31152 at least every five - and require the board to disclose the funding status to owners. But many of those same states stop short of setting a minimum funding level. In other words, the board often must find out how underfunded it is and tell the members, yet the decision of how much to actually set aside remains a matter of board judgment and fiduciary duty rather than a hard legal floor. Our guide on what a reserve study is covers that process in more detail.
The places that do require funding
Some jurisdictions go further. Nevada NRS 116.3115 directs associations to establish adequate reserves for the repair and replacement of major components. Florida, after the Surfside collapse, now requires covered condominium and cooperative buildings three stories or higher to complete a structural integrity reserve study and to fund those structural reserves, and as of the end of 2024 largely removed the long-standing ability to vote to waive them (Florida Statutes section 718.112). It is worth being precise, though: that mandatory-funding regime sits in Florida's condominium law. Florida's separate homeowners' association statute, Chapter 720, treats reserves differently - under section 720.303(6) reserves are generally required only once they are established in the budget, and members can often vote to reduce or waive them. Condos and HOAs are not governed by the same rules.
Your governing documents can require it even if the state does not
State law is only one source of the obligation. Many declarations, bylaws, and CC&Rs independently require the association to maintain a reserve fund and to contribute to it each year. Where they do, funding reserves is contractually mandatory for that community regardless of whether the state imposes a minimum - and a board that ignores its own documents is exposed to an enforcement action by owners. Always check what your specific governing documents say before assuming reserves are optional.
Why zero reserves is risky even where it is legal
In many states an association could, in theory, run with little or no reserve fund. That does not make it wise. With nothing saved, every major repair becomes a special assessment or a loan, which falls hardest on whoever owns when the component fails - see our guide on who pays when an HOA underfunds its reserves. It also affects financing: mortgage investors such as Fannie Mae generally expect a condominium budget to allocate at least ten percent to reserves, so a community that saves nothing can become non-warrantable and harder to buy or sell into. And a board that skips reserves to keep dues low may be breaching the duty of care it owes the community. Legal and prudent are not the same thing.
How OurHOA helps
Whether reserves are mandatory for your community is ultimately answered by two documents most owners never read together: your state's statute and your own CC&Rs. OurHOA helps small self-managed communities keep their governing documents, budgets, and reserve studies organized and easy to find, so the board can see what it is actually obligated to do and owners can hold it to that. OurHOA is record-keeping and communication software, not a law firm or reserve specialist - for what your state and your documents require, confirm with a qualified reserve provider and a professional familiar with your state's community-association law.
OurHOA is the friendly, affordable way self-managed communities keep dues, records, and reminders in one place. See how it works.
These guides are general education for HOA boards and residents, not legal, tax, or financial advice. Rules vary by state and by your community's governing documents - check with a professional for your situation.