Maryland Reserve Study
Who needs to conduct a reserve study
Prince George’s County. Associations who have not conducted a reserve in the last five (5) years.
Montgomery County. Associations who have not conducted a reserve in the last five (5) years.
Maryland. All Associations established on or after October 1, 2022 or any associations that have not had a reserve study conducted on or after October 1, 2018.
Maryland Reserve Study Requirements
The Maryland Condominium Act and Maryland Homeowners Association Act require associations across the state to undertake a reserve study at least once every five (5) years.
The new Maryland law (Bill 107) was introduced to require condominiums, homeowner association and housing cooperatives in Maryland to undertake and update a reserve study at least once every 5 years. Introduced in 2022, the new law requires all new associations established after October 1, 2022 and those have had a reserve study conducted before October 1, 2018, to conduct a reserve study on or before October 1, 2023.
Quick Facts
Reserve Study
Condominiums
Cooperatives HOAs
update a Reserve Study
Every 5 years
Reserve Study.
HOAs with $10,000
or less in assets.
Providing reserve studies throughout VIRGINIA, MARYLAND, NORTH & SOUTH CAROLINA.
Serving the Northeast
Fredericksburg
1320 Central Park Blvd,
Suite 200,
Fredericksburg VA 22401
Fax 888.316.4587
Email mail@reservestudygroup.com
Legislation
The new legislation extends the need for reserve studies statewide. Previously only Montgomery and Prince George’s Counties were required to undertake a reserve study every five (5) years.
It should be noted that Homeowner Associations (HOAs) with common assets of $10,000 or less are exempt from the new law.
Member
Reserve Study Legislation
Maryland Homeowners Association Act | Title 11B
§ 11B-112.3. Reserve study of homeowners association common areas -- Criteria.
(a) In this section, “reserve study” means a study of the reserves required for future major repairs and replacement of the common areas of a homeowners association in Prince George’s County that:
(1) Identifies each structural, mechanical, electrical, and plumbing component of the common areas and any other components that are the responsibility of the homeowners association to repair and replace;
(2) States the estimated remaining useful life of each identified component;
(3) States the estimated cost of repair or replacement of each identified component; and
(4) States the estimated annual reserve amount necessary to accomplish any identified future repair or replacement.
(b)(1) This section applies only to a homeowners association in Prince George’s County that has responsibility under its declaration for maintaining and repairing common areas.(2) This section does not apply to a homeowners association that issues bonds for the purpose of meeting capital expenditures.
(c)(1) This subsection applies to a homeowners association established on or after October 1, 2020.
(2) The governing body of the homeowners association shall have an independent reserve study completed not more than 90 calendar days and not less than 30 calendar days before the meeting of the homeowners association required under § 11B-106.1(a) of this title.
(3) The governing body shall have a reserve study completed within 5 years after the date of the initial reserve study conducted under paragraph (2) of this subsection and at least every 5 years thereafter.
(d)(1) This subsection applies to a homeowners association established before October 1, 2020.
(2) If the governing body of a homeowners association has had a reserve study conducted on or after October 1, 2016, the governing body shall have a reserve study conducted within 5 years after the date of that reserve study and at least every 5 years thereafter.
(3) If the governing body of a homeowners association has not had a reserve study conducted on or after October 1, 2016, the governing body shall have a reserve study conducted on or before October 1, 2021, and at least every 5 years thereafter.
(e) Each reserve study required under this section shall:
(1) Be prepared by a person who:
(i) Has prepared at least 30 reservestudies within the prior 3 calendar years;
(ii) Holds a bachelor’s degree in construction management, architecture, or engineering or equivalent experience and education;
(iii) Holds a current license from the State Board of Architects or the State Board for Professional Engineers; or
(iv) Is currently designated as a reserve specialist by the Community Association Institute or as a professional reserve analyst by the Association of Professional Reserve Analysts;
(2) Be available for inspection and copying by any lot owner;
(3) Be reviewed by the governing body of the homeowners association in connection with the preparation of the annual proposed budget; and
(4) Be summarized for submission with the annual proposed budget to the lot owners.
Maryland Condominium Act | Title 11
§ 11-109.2. Annual proposed budget
(a) Preparation and submission. — The council of unit owners shall cause to be prepared and submitted to the unit owners an annual proposed budget at least 30 days before its adoption.
(b) Items required to be included. — The annual budget shall provide for at least the following items:
(1) Income;(2) Administration;(3) Maintenance;(4) Utilities;(5) General expenses;(6)Reserves; and(7) Capital items.
(c) Reserves in annual budget. — In Prince George’s County, the reserves provided for in the annual budget under subsection (b) of this section shall be the funding amount recommended in the most recent reserve study completed under § 11-109.4 of this title.
(d) Adoption. —
(1) The budget shall be adopted at an open meeting of the council of unit owners or any other body to which the council of unit owners delegates responsibilities for preparing and adopting the budget.
(2)
(i) The council of unit owners or other governing body of unit owners shall submit the adopted annual budget to the unit owners not more than 30 days after the meeting at which the budget was adopted.
(ii) The adopted annual budget may be submitted to each unit owner by electronic transmission, by posting on the condominium association’s home page, or by inclusion in the homeowners association’s newsletter.
(e) Certain expenditures in excess of 15 percent of budgeted amount to be approved by amendment. — Any expenditure made other than those made because of conditions which, if not corrected, could reasonably result in a threat to the health or safety of the unit owners or a significant risk of damage to the condominium, that would result in an increase in an amount of assessments for the current fiscal year of the condominium in excess of 15 percent of the budgeted amount previously adopted, shall be approved by an amendment to the budget adopted at a special meeting, upon not less than 10 days written notice to the council of unit owners.
(f) Authority of council to obligate itself for certain expenditures unimpaired. — The adoption of a budget shall not impair the authority of the council of unit owners to obligate the council of unit owners for expenditures for any purpose consistent with any provision of this title.
(g) Applicability to condominiums occupied and used solely for nonresidential purposes. — The provisions of this section do not apply to a condominium that is occupied and used solely for nonresidential purposes.
Maryland Reserve Studies
Our team of reserve study professionals works with associations throughout Maryland, Virginia, North & South Carolina.