Massachusetts HOA & Condo Reserve Fund Requirements (2026 Guide)

Reserve studies vs. reserve fund laws in Massachusetts

A key source of confusion in Massachusetts is the difference between “reserve study requirements” and “reserve fund requirements.” Multiple national and Massachusetts-specific sources confirm that:

• There is no Massachusetts statute that requires HOAs or condominium associations to commission reserve studies.
• All condominiums in Massachusetts are legally required to maintain an adequate replacement reserve fund, collected as part of the common expenses and deposited in a separate, segregated account. 

For HOAs that are not structured as condominiums, there is no parallel statewide reserve statute. Their obligations come from declarations, bylaws, and the board’s fiduciary duty to manage common property prudently.

In practice, most larger Massachusetts HOAs adopt reserve policies and studies similar to condominiums, even though they are not explicitly required to do so by statute.

What Chapter 183A actually requires for condos

Chapter 183A is the Massachusetts Condominium Act. Section 10(i) states plainly that “all condominiums shall be required to maintain an adequate replacement reserve fund, collected as part of the common expenses and deposited in an account or accounts separate and segregated from operating funds.” 

Section 1 defines “replacement reserve fund” as a separate and segregated portion of the common funds of the organization of unit owners, used to replace, restore, or rebuild common areas and facilities and certain limited common areas for which the organization is responsible. 

The statute does not specify:

• a minimum percentage of the operating budget that must be contributed to reserves;
• a required dollar amount per unit; or
• a mandatory schedule for reviewing reserve adequacy.

Instead, it leaves “adequate” to be interpreted in context. Massachusetts condominium law firms and commentators consistently advise that trustees must take the requirement seriously, treat reserves as a core fiduciary duty, and keep funds in a genuinely separate account rather than co-mingled with operating funds. (mbmllc.com)

Reserve study requirements: current status and proposed changes

Because of tragedies like Surfside and tightening standards in states such as Florida and Hawaii, many Massachusetts boards assume similar reserve study mandates already exist here. They do not - at least not yet. CAI’s multi-state summary and multiple reserve study providers list Massachusetts as a state where reserve funding is required for condos, but reserve studies are not legally mandated. (CAI)

There have been periodic legislative proposals - such as past Senate Bill 980, which would have required capital reserve fund studies for larger condominium associations - but these have not been enacted as of late 2025. (Massachusetts General Court)

For now, “Massachusetts reserve study requirements” are best understood as best practices and lender expectations, not statutory mandates. However, the trend nationally is toward more regulation, not less.

Boards that implement regular reserve studies now will be better positioned if Massachusetts eventually codifies study requirements, and they will be more defensible if challenged by owners about financial planning.

How much should Massachusetts associations keep in reserves?

Because the law does not assign a percentage, boards often ask for a simple rule of thumb. Many New England reserve professionals and articles aimed at Massachusetts associations suggest:

• using a professional reserve study to estimate long-term capital needs;
• avoiding reliance on a flat “10% of budget” rule unless it has been confirmed by a study; and
• targeting funding levels that keep the community out of crisis - i.e., reserves are sufficient to handle predictable major projects without constant large special assessments. (FSR)

The popular “10-20% of budget” guideline is only a starting point. A small two-building garden-style condo with minimal amenities might need less; a large high-rise with elevators, a garage, and complex mechanical systems might need much more. Adequacy depends on components, age, and risk tolerance - exactly the factors a reserve study is designed to quantify.

Are reserve studies necessary if they are not required?

Legally, you can be a Massachusetts condo trustee with no reserve study on file and still be in technical compliance with Chapter 183A if your reserve fund is somehow “adequate.” Practically, that position is difficult to defend.

Without a study, trustees are making judgment calls on:

• expected remaining useful lives of roofs, boilers, siding, windows, and pavement;
• realistic replacement costs in a high-inflation, high-construction-cost environment; and
• how to spread contributions fairly among current and future owners.

Massachusetts-focused guidance from industry and legal sources repeatedly recommends reserve studies as the best way to show that trustees exercised informed judgment. (New England Condominium) 

In the event of a dispute - for example, after a large special assessment or a major building failure - having a professional reserve study and evidence that the board followed it is far more defensible than relying on informal estimates.

Recommended frequency for reserve studies in Massachusetts

With no statutory cadence, the industry standard fills the gap. Most experts recommend:

• a full reserve study with site visit every 3-5 years; and
• internal review and minor updates annually as part of the budget process. (FSR)

For newer communities with straightforward components and strong initial funding, a five-year cycle may be adequate. Older buildings, complexes with significant structural or mechanical systems, or associations that are clearly underfunded benefit from more frequent reviews.

For HOAs, this cycle is just as relevant. Even though there is no Chapter 183A equivalent for HOAs, roads, clubhouses, pools, and stormwater systems still age. Reserve studies help HOA boards show they are fulfilling their fiduciary duty and can support long-term capital planning even without a specific statute.

Practical roadmap for Massachusetts boards

A practical, non-disruptive approach for Massachusetts associations that want to solidify their position is:

Confirm your structure and obligations: If you are a condominium, Chapter 183A applies and you must maintain an adequate replacement reserve fund in a segregated account. If you are a non-condo HOA, review your declaration and bylaws for any reserve obligations. 

Assess your current reserves: Compare your current reserve balance and annual contributions against upcoming major projects (roofs, paving, siding, mechanicals). If upcoming needs significantly outstrip reserves, adequacy is doubtful.

Commission or update a professional reserve study: Even though it is not mandated, a study from a qualified professional gives you a defensible basis for contribution decisions and helps you explain funding needs to owners.

Build a funding plan that owners can live with: Use the study to move gradually toward adequate funding, rather than trying to fix everything in one budget year. The goal is to avoid both chronic underfunding and shock assessments.

Communicate clearly: Explain Chapter 183A’s reserve requirement, share key findings from the reserve study, and show how the funding plan protects both the buildings and property values. Owners are far more likely to accept increases when they understand the legal and practical reasons behind them.