Arkansas HOA Reserve Study Requirements (2026 Legal Guide)

Arkansas reserve study requirements at a glance

The key legal point is simple and important: Arkansas statutes do not currently require community associations to perform reserve studies or to fund reserves at any particular level. 

The Community Associations Institute’s state law summary confirms that there is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves in Arkansas.

That lack of a mandate sets Arkansas apart from states like Florida, Hawaii, or Oregon, where reserve studies and funding are explicitly required in law. But it does not remove your board’s obligation to maintain common elements, keep the association solvent, or act with ordinary prudence and good faith under the Arkansas Nonprofit Corporation Act and general fiduciary duty principles. (hopb.co)

How Arkansas law actually governs associations

Arkansas law approaches HOAs and condominiums in a more general way:

• Horizontal Property Act - The Arkansas Horizontal Property Act establishes the legal framework for condominiums, including how horizontal property regimes are created and how common expenses and assessments are allocated among unit owners. It confirms that co owners are responsible for their share of common expenses, but it does not define reserve studies, minimum reserve levels, or funding formulas.
  
  
• Nonprofit corporation statutes - Many Arkansas HOAs and condo associations are formed as nonprofit corporations. Under the Arkansas Nonprofit Corporation Act, directors must discharge their duties in good faith, in the best interests of the corporation, and with the care that an ordinarily prudent person would exercise in a similar position. Failing to plan for predictable capital repairs can conflict with that duty of care, even if no reserve statute exists. (Justia Law)
  
  
• Governing documents - Your declaration, bylaws, and any board adopted policies often say more about reserves than state law. They may require the board to establish reserve accounts, adopt long term budgets, or maintain property in a particular condition. In disputes, courts look first at these documents. A reserve study is often the most efficient way to show that the board’s decisions align with its written obligations. 

Taken together, these rules mean that while Arkansas does not tell you exactly how to fund reserves, it does expect boards to act reasonably and to maintain the common property they control. A reserve study is one of the cleanest ways to meet that expectation.

Why reserve studies still matter in Arkansas

Even without a state mandate, reserve studies are highly relevant for Arkansas associations because:

Lenders care about reserves.

Fannie Mae and Freddie Mac increasingly expect condominium associations to budget at least 10 percent of their income into reserves or to have a current reserve study that supports a different funding level. FHA approval also typically requires that at least 10 percent of assessments flow into reserves. Projects that fail these tests can end up on ineligible lists, which makes it harder for buyers to obtain mortgages and depresses property values.

National best practices exist even if state law is silent.

CAI’s National Reserve Study Standards define what a professional reserve study should include and recommend regular updates as components age and costs change. Boards are expected to be aware of these standards and to use them as a benchmark, especially when they oversee significant assets like roofs, paving, siding, and mechanical systems.

Litigation and owner disputes are still a risk.

An Arkansas board that ignores obvious long term capital needs, keeps assessments artificially low, and then relies on surprise special assessments when things fail will struggle to show that it met its duty of care. A current reserve study, by contrast, is strong evidence that the board based its decisions on objective, professional information rather than guesswork.

Recommended best practices for Arkansas reserves

Because Arkansas law does not prescribe numbers, the smart approach is to follow conservative, industry based guidelines tailored to your community. For most Arkansas HOAs and condo associations, a solid reserve plan will include:

• Commissioning a professional reserve study at least every 3 to 5 years, with lighter internal updates in between.
• Keeping the reserve fund at a “percent funded” level that aligns with national standards, typically aiming for at least 70 percent funded over time to reduce special assessment risk. (CMA | Community Management Associates)
• Targeting annual reserve contributions that are realistically sufficient to cover upcoming projects, rather than relying on the 10 percent rule as anything more than a minimum lender threshold.
• Maintaining reserves in a separate account from operating funds, with clear internal controls over withdrawals and transfers.
• Documenting in meeting minutes how the board uses the reserve study in its annual budget and assessment decisions.

These are not legal requirements in Arkansas, but they are the practices that national lenders, buyers, and reserve professionals expect to see in a well managed association.

How often should Arkansas associations update a reserve study

In a state with no statutory schedule, the right frequency comes down to risk management and practicality. Industry standards and lender guidance point to the following pattern: (CAI)

• Full study every 5 to 10 years - A Level I or full reserve study with a complete site visit and component inventory is typically recommended when an association is new to reserve planning or when the existing study is more than 8 to 10 years old.
• Update with site visit every 3 to 5 years - A Level II update confirms the condition of components on site, recalibrates useful lives, and refreshes cost assumptions. Many boards treat this as the default cycle.
• Financial updates in between - In years without a physical inspection, a Level III financial update can adjust cash flow projections for inflation, completed projects, or changes in contributions, so the board always has an up to date funding plan.

For Arkansas boards, the safest message to owners and lenders is straightforward: “We commission a professional reserve study at least every 5 years, and we keep our funding plan updated yearly based on that study.”

Step by step reserve study process for Arkansas boards

An Arkansas association that has never done a reserve study should approach it as a structured project:

1. Define objectives and funding philosophy - The board should agree on the goal of the study: avoiding special assessments, maintaining property values, supporting loan approvals, or all three. It should also decide whether it prefers a more conservative full funding target or a balanced threshold funding approach.
2. Gather governing and financial documents -  Before hiring a professional, assemble declarations, bylaws, rules, recent budgets, financial statements, and records of major past projects. These define which components are the association’s responsibility and provide the data needed for accurate cost projections.
3. Hire a qualified reserve professional - Look for providers who follow CAI’s National Reserve Study Standards and hold designations such as Reserve Specialist or Professional Reserve Analyst, or who can show equivalent experience and a strong track record with Arkansas communities. Verify insurance, references, and sample reports.
4. Participate in the site visit and review draft results - A board member or manager who knows the property well should accompany the specialist during the site visit to confirm component responsibilities and flag any known conditions. When the draft report arrives, the board’s focus should be on factual accuracy, not second guessing engineering judgments.
5. Adopt and implement the funding plan - The last step is the most important: formally adopting the recommended funding plan and building it into the annual budget. Updating a reserve study without adjusting contributions is one of the most common and avoidable mistakes boards make. Document adoption and the reasoning in your minutes.

How PropFusion supports Arkansas HOAs and condos

For Arkansas boards and managers, the challenge is not only obtaining a high quality reserve study but also keeping it “alive” in day to day decision making. PropFusion helps in three ways:

Access to Arkansas reserve study providers

Through the PropFusion marketplace, you can request proposals from a network of established reserve study professionals who work with Arkansas communities, compare pricing and scopes, and select the provider that fits your needs and budget.

Reserve planning and scenario tools

Once your study is complete, PropFusion’s Reserve Planner and Reserve Manager tools help you track reserve balances, model “what if” scenarios, and see the long term impact of different contribution levels before you finalize the budget.

Portfolio level visibility for managers

For management companies overseeing multiple Arkansas communities, PropFusion provides a portfolio view of upcoming projects and funding gaps, making it easier to standardize best practices, avoid surprises, and keep boards aligned with national expectations even in a state with minimal statutory guidance.

In a jurisdiction like Arkansas, where the law leaves wide discretion to boards, the communities that take reserve planning seriously will stand out as better managed, more stable, and more attractive to both owners and lenders.

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