Maine HOA Reserve Fund Requirements and Reserve Study Laws (2026 Guide)

Overview: Maine reserve fund and reserve study laws

Maine is in the group of states that recognise the importance of reserves but do not heavily regulate them. For HOAs and condominium associations, there is:

• No statutory requirement to perform reserve studies.
• No statutory requirement to fund reserves to any particular level.
• Clear statutory authority for condominium associations to adopt budgets that include reserves and to levy assessments to fund common expenses. (Justia Law)

That combination gives boards a great deal of discretion. Used wisely, it allows communities to tailor their funding strategies to their specific buildings, amenities, and demographics. Used poorly, it leaves owners exposed to sudden special assessments and deferred maintenance.

What Maine law actually says about reserves

The primary statute governing reserve decisions for modern condominiums is the Maine Condominium Act, codified in Title 33, Chapter 31 of the Maine Revised Statutes. 

Among other things, the Act:

• Requires the formation of a unit owners’ association and an executive board.
• Empowers that association to adopt and amend budgets for revenues, expenditures, and reserves.
• Authorises the association to collect assessments for common expenses from unit owners.

Authoritative national summaries of state reserve fund laws distil Maine’s position in a single sentence: there is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. 

That means there is no Maine-specific mandate that you update a reserve study every three years, maintain a “fully funded” balance, or devote a fixed percentage of your annual budget to reserves.

For HOAs that are not condominiums, Maine relies on a mix of general association law, nonprofit corporation statutes, and governing documents rather than a dedicated HOA act with reserve provisions. Resources that summarise Maine HOA law consistently highlight the Maine Condominium Act and the Maine Nonprofit Corporation Act as the core framework, but they do not identify reserve study mandates or minimum reserve requirements. (HOA-USA)

Legal baseline vs. best practice

Because Maine law does not impose hard reserve rules, it is easy for boards to confuse “not required” with “not necessary.” In reality:

• The statutory baseline is permissive. Associations are allowed to adopt budgets that include reserves and to collect assessments to fund those reserves.
• Boards still owe fiduciary duties to act reasonably and prudently in maintaining common property, even without detailed reserve statutes.
• Mortgage lenders, buyers, and insurers increasingly expect to see documented reserve planning, even where not mandated by law.

In other words, a Maine board can technically operate with minimal reserves and no formal reserve study, but doing so is risky. 

It increases the likelihood of large special assessments, may depress property values, and can make it harder to sell units when buyers or their lenders dig into the community’s financials.

Best practice reserve study approach for Maine communities

Without statutory instructions, Maine communities should borrow from national best practice standards that work in similar “light regulation” states:

1. Treat reserve studies as essential, not optional - Commission a professional reserve study that inventories your common components, estimates their useful lives and replacement costs, and projects reserve needs over a 20- to 30-year horizon. Even though Maine does not require this, national guidance emphasises that such studies are critical to avoiding deferred maintenance and surprise assessments.
2. Repeat a full study every 3 to 5 years - Maine statutes do not set a frequency, but many experts recommend a full on-site reserve study every three to five years, with annual “desk-update” reviews in between. Faster cycles make sense for older buildings, coastal properties, or communities with complex amenities such as elevators, pools, and marinas.
3. Target a safe funding band, not a fixed number - In the absence of a legally defined “fully funded” requirement, boards can adopt a policy target, such as maintaining reserves within 70 to 100 percent of the fully funded level calculated in the study. This gives room for real-world fluctuations while keeping the association away from the danger zone of near-zero reserves.
4. Align assessments with long term plans - Budgeting should start from the reserve study’s long range funding plan, not from last year’s assessment plus a small percentage. In Maine, where many communities are used to modest dues, this may mean phasing in increases over several years to close a funding gap in a manageable way.
5. Put the approach in writing - Because Maine law does not spell out reserve standards, boards should document their chosen reserve funding policy in board resolutions and, if appropriate, in updated governing documents. This shows owners, lenders, and courts that funding decisions are deliberate and grounded in expert analysis, not guesswork.

How Maine HOAs and condos should use reserve studies

A reserve study is not just a number in the budget. Used correctly, it is a decision-support tool that helps Maine boards manage risk and communicate clearly with owners.

Key uses include:

• Long term capital planning: mapping major projects (roofs, siding, paving, mechanical systems) across 20-30 years so that no single year becomes unmanageable.
• Scenario analysis: testing what happens to reserve balances if inflation spikes, a project is delayed, or the association decides to upgrade rather than merely replace a component.
• Communication and transparency: showing owners the link between monthly assessments and predictable upcoming work, which is critical in a state where there is no external mandate forcing reserves.

With software such as PropFusion’s Reserve Planner and Reserve Manager, Maine communities can turn a static reserve study into an ongoing planning environment. 

Instead of filing the report away, boards can update actual balances, adjust assumptions, and generate updated funding scenarios as conditions change. 

Special considerations for Maine communities

Several characteristics of Maine communities make disciplined reserve planning especially important:

• Harsh climate: Freeze-thaw cycles, snow loads, and coastal exposure accelerate wear on roofs, siding, pavement, and decks compared with milder climates.
• Smaller associations: Many Maine associations are relatively small, which means fewer owners to share the cost of large capital projects; this magnifies the impact of inadequate reserves.
• Mixed statutory regimes: Older condominiums may still be governed by the Unit Ownership Act, while newer ones fall under the Maine Condominium Act; either way, there is no detailed reserve funding framework.

These factors argue for more conservative funding and more frequent updates than the bare legal minimum (which, for reserves, is effectively zero).

Step-by-step action plan for Maine boards and manager

 For a practical approach, Maine boards and association managers can work through the following steps:

1. Map your legal and document framework
   
   • Identify whether your community is a condominium governed by the Maine Condominium Act, an older condominium under the Unit Ownership Act, or another form of HOA or common interest community.
   • Review your declaration, bylaws, and rules for any existing reserve or funding requirements.
2. Assess your current financial position
   
   • Gather current reserve and operating fund balances.
   • List major common components and their approximate ages and conditions.
   • Note any looming projects (e.g., roof replacements, paving, envelope repairs).
3. Commission or update a reserve study
   
   • Engage a qualified reserve study professional familiar with Maine conditions and regional construction costs.
   • Work with them to develop a funding plan that meets your community’s risk tolerance and demographic realities (for example, whether owners prefer stable dues or are resigned to occasional special assessments).
4. Adopt a formal reserve funding policy
   
   • Decide on your target funding band and contribution strategy.
   • Integrate reserve contributions into the annual budget based squarely on the reserve study, not on last year’s dues plus an arbitrary percentage.
5. Communicate the plan to owners
   
   • Share a straightforward summary explaining why changes in assessments are needed, what projects they will fund, and how the plan reduces the risk of large special assessments.
   • Revisit this communication annually so that owners see consistent follow-through.
6. Use software to monitor and adjust
   
   • Load your reserve study into a system like PropFusion so you can track progress, update assumptions, and generate what-if scenarios without rebuilding spreadsheets from scratch.
   • Use dashboards and reports to keep the board and owners aligned on the association’s long term financial health. (propfusion.com)

How PropFusion and its provider network support Maine communities

PropFusion maintains a network of reserve study professionals who serve Maine and other New England states. These specialists understand the Maine Condominium Act, local construction costs, and the realities of operating in a challenging climate. When you request proposals through PropFusion, you can:

• Receive multiple bids from established providers who know Maine law and best practices.
• Ensure your reserve study is structured in a way that aligns with both your governing documents and national standards.
• Import the completed study directly into PropFusion’s planning tools to manage it over time instead of treating it as a one-off report.

Even though Maine law does not force you to conduct reserve studies or fund reserves to a prescribed level, communities that take this proactive, data-driven approach tend to avoid crisis assessments, maintain stronger property values, and provide a more stable experience for their owners.