Nebraska HOA Reserve Study Requirements & Reserve Fund Laws

Nebraska’s legal framework for reserves

In Nebraska, there is no single “HOA Act” that sets reserve funding rules. Instead, community associations operate under a combination of:

• The Nebraska Condominium Act (Neb. Rev. Stat. §§ 76-825 to 76-894) for condominium properties, which governs creation, management, common expenses, and association powers. 
• The Nebraska Nonprofit Corporation Act (Neb. Rev. Stat. § 21-1901 et seq.) for most incorporated HOAs and condo associations, which defines director duties and general corporate governance but does not mention reserve studies specifically.

Under the Nebraska Condominium Act, “common expenses” are defined to include expenditures and financial liabilities of the association, together with any allocations to reserves. (FindLaw Codes) 

Section 76-860 then gives unit owners associations broad authority to adopt and amend budgets for revenues, expenditures, and reserves and to collect assessments for common expenses from unit owners.

The key takeaway is that Nebraska law expects associations to be able to budget for reserves and to levy assessments to fund them, but it does not dictate how much must be set aside or how often a reserve plan must be updated.

What “no reserve law” really means in Nebraska

Multiple authoritative surveys of state law confirm that Nebraska has no statutory requirement to conduct reserve studies and no statutory requirement to fund reserves at a particular level. 

Boards sometimes misinterpret that as “we do not need reserves.” In reality, the absence of a specific reserve statute shifts responsibility back to the board’s general fiduciary duty under the Nonprofit Corporation Act and the governing documents. 

Directors are expected to manage the association’s financial affairs prudently. Running a community with aging roofs, roads, mechanical systems, or amenities and no plan to fund their replacement is hard to reconcile with that duty, even if the statutes never mention the word “reserves.” 

Practically, this means:

• Owners will still expect the board to have a long-term plan.
• Lenders and insurers may review reserve balances and planning in their risk assessments.
• Sudden large special assessments can damage owner trust and property values.

So while the law does not mandate reserve studies, the risk of not having one is very real.

How Nebraska’s Condominium Act shapes reserve planning

For condos created after January 1, 1984, the Nebraska Condominium Act applies. It does not contain a reserve funding formula, but several provisions matter for reserve planning:

• Common expenses expressly include allocations to reserves.
• The declaration must allocate shares of common expenses (and therefore reserve responsibilities) to each unit. (Justia Law)
• The association’s powers include adopting and amending budgets for revenues, expenditures, and reserves and collecting assessments from unit owners.

In plain language, the Act:

• Confirms that reserves for common elements are part of “common expenses.”
• Confirms that the board is the body expected to budget for and collect money to cover those expenses.

The Act is silent on how the board should determine reserve needs. That is where reserve studies and industry standards come in.

HOAs versus condos: similar funding challenge, different structures

Most detached-home or townhome HOAs in Nebraska are not created under the Condo Act but still share a similar challenge: they maintain private streets, entry features, clubhouses, pools, fences, stormwater infrastructure, or other common facilities. 

They are often organized as nonprofit corporations governed by their declaration, bylaws, and the Nonprofit Corporation Act. 

For these HOAs:

• The declaration and bylaws typically authorize the board to levy assessments and sometimes mention “replacement reserves” or “capital reserves.”
• The statutes again do not specify reserve formulas.
• Lenders and buyers may still ask for budgets and financials, and underfunded reserves can make sales and refinances harder.

In both condos and HOAs, Nebraska’s statutory silence means the board must proactively set a reserve policy rather than waiting for a legal requirement.

Best-practice reserve study standards for Nebraska

To move from general recommendations to a concrete plan, Nebraska boards can adopt the following standards:

• Commission an initial full reserve study - For any community that has never had a reserve study, this is the starting point. A full study includes a site inspection, component inventory, condition assessment, and long-term funding projections (typically 20 to 30 years).
• Update the study every 3 to 5 years - State law does not specify a frequency, but national reserve specialists and managers typically recommend a full update every 3 to 5 years, with interim updates if costs or projects change significantly.
• Choose a funding objective - Instead of running reserves close to zero, boards should adopt a target “percent funded” range. For many Nebraska communities, aiming to move toward 70 to 100 percent funded over time is realistic and materially reduces the risk of emergency assessments.
• Use contributions, not special assessments, as the primary tool - Heavy reliance on special assessments is risky and unpopular. Predictable reserve contributions, built into the annual budget, are far easier for owners to handle and easier to explain to buyers and lenders.
  

How much should Nebraska associations set aside in reserves?

Because no statute provides a formula, Nebraska boards must combine professional advice with local judgment. Common rules of thumb include:

• Setting aside 10 to 20 percent of the total annual budget for reserves as a starting point, then refining based on a formal study.
• Paying particular attention to big-ticket items such as roofs, roads, siding, elevators, pools, and mechanical systems.
• Recognizing that communities with heavier infrastructure (for example, private roads, garages, or extensive amenities) will require higher contributions than minimalist communities with only a sign and some landscaping.

Reserve study providers that work in Nebraska frequently emphasize that the actual contribution level should follow the funding plan that comes out of the study, not a generic percentage. 

A practical reserve planning roadmap for Nebraska boards

Boards and managers in Nebraska can follow a straightforward process to move from “no reserve statute” to “robust reserve plan”:

Step 1: Inventory assets and documents

• Gather your declaration, bylaws, prior budgets, and bank statements for operating and reserve accounts.
• Map which components are association responsibilities versus individual owner responsibilities.

Step 2: Commission or refresh a reserve study

• Use a qualified reserve professional who has experience with Nebraska’s building types and climate.
• Ask for multiple funding scenarios so you can see the tradeoffs between higher contributions now and potential special assessments later.

Step 3: Adopt a reserve funding policy

• Decide on how often you will update the study and what funding objective (such as a target percent funded) you will pursue.
• Approve this policy via board resolution and document it in meeting minutes.

Step 4: Align the annual budget

• Translate the funding recommendations into reserve contribution line items in the annual budget.
• If you cannot reach the recommended contribution level in one year, approve a multi-year plan to ramp up contributions.

Step 5: Communicate with owners

• Share key findings of the reserve study in clear language.
• Explain the risks of underfunding and the benefits of predictable contributions over surprise assessments.

Step 6: Monitor and adjust

• Review reserve balances and major projects each budget cycle.
• Adjust contributions and project timing as inflation, construction costs, or community priorities change.

How PropFusion helps Nebraska communities implement best practice

PropFusion’s Nebraska reserve fund guide already introduces boards to these concepts. The platform extends that by providing practical tools and a marketplace for getting reserve work done: 

• Connect with established reserve study professionals who serve Nebraska, request proposals, and compare scopes and pricing in one place.
• Store reserve studies, budgets, and maintenance histories so board transitions do not erase institutional knowledge.
• Run what-if funding scenarios to understand how different contribution levels and project timings affect future reserve balances and the likelihood of special assessments.
• Generate clear reports that show owners, buyers, and lenders that the association has a credible plan, even in a state with no statutory reserve mandate.

In a legal environment where the statutes give you the power to budget for reserves but do not tell you how to use it, PropFusion helps Nebraska boards turn that power into a disciplined, transparent, long-term funding strategy.

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