New York HOA Reserve Fund Requirements (2026 Guide)

Legal overview: New York’s fragmented approach to reserves

New York law does not have a single “HOA Reserve Study Act” that tells every board exactly what to do. Instead, it creates several overlapping pieces:

• Condominium Act reserves framework: Real Property Law § 339-V sets out what condo bylaws must and may cover, including provisions for the payment, collection, and disbursement of funds “including reserves” for major and minor maintenance, repairs, improvements, working capital, bad debts, and other expenses. The statute allows but does not compel a particular reserve level or study schedule.
• Co-op reserve expectations: New York’s cooperative corporation rules and related guidance require co-op boards to “periodically set aside reasonable sums for reserves,” meaning that for co-ops there is at least a statutory expectation that reserves exist and are maintained, even though the exact percentage is not defined.
• NYC condominium conversion reserve funds: For certain affordable-housing preservation conversions in New York City, Real Property Law § 339-MM and local code require the sponsor to establish a condominium reserve fund and a separate dedicated capital fund within 30 days after the consummation of the preservation plan, with formulas based on percentages of total price and ongoing contributions, and with mandatory reporting and penalties.

For typical HOAs and condos outside these conversion contexts, there is still no statewide rule that says “you must have X percent of your budget in reserves” or “you must commission a reserve study every Y years.” That is where industry standards, lender expectations, and your own governing documents step in. 

Proposed reserve study mandates: S7600 and A8945

Bills S7600 and A8945, introduced in the 2025-2026 legislative session, would materially change the landscape if enacted. Both bills would require condominium and cooperative housing associations to complete capital reserve studies that:

• Include a 30-year funding plan.
• Analyze capital components, their condition, useful lives, and replacement costs.
• Review reserve fund balances, anticipated income and expenses, and the costs of future studies and corrective work.
• Are prepared or overseen by a credentialed reserve specialist, architect, or engineer in good standing.

The bills also contemplate timelines to catch up underfunded reserves and ongoing review of studies by boards and management, with the studies filed with the Attorney General. 

As of the latest published actions, S7600 had been reported out of committee but not yet adopted into law, and no final floor vote had been recorded. 

For your board, this means two things:

• Do not assume these obligations are in force yet; verify current status with counsel before treating them as binding.
• Designing your reserve study and funding plan around these standards now is a smart way to future-proof your community and reassure owners, lenders, and buyers.

Are reserve studies required in New York today?

For most HOAs, condos, and co-ops, the answer is still “no, not by statewide statute.” CAI’s national summary and multiple legal commentary sources confirm that New York does not currently impose a statutory requirement to perform reserve studies or to fund reserves at a specific level for all associations, outside of the special NYC conversion rules noted above.

However, boards can still be effectively “forced” into reserve planning by:

• Governing documents that require reserve budgets, long-term capital plans, or periodic engineering reports.
• Lender guidelines, such as Fannie Mae’s expectation that condos maintain reserves of at least 10 percent of the operating budget and avoid significant deferred maintenance, which directly affects buyers’ ability to get financing.
• Fiduciary duties: failing to plan for predictable capital projects can lead to large special assessments, rising arrears, and potential claims that the board breached its duty of care.

Bottom line: even without a statutory mandate, New York boards ignore reserve studies and funding at their peril.

Reserve funds in condos, co-ops, and HOAs

New York’s rules and norms differ slightly by community type:

• Condominiums: Under Real Property Law § 339-V, condo bylaws may and usually do include detailed provisions on reserve funding, including how contributions are calculated, how funds are segregated, and how they may be used. There is no mandated minimum percentage, but many boards target at least 10 percent of the annual budget, matching lender expectations, or tailor contributions to a professional reserve study’s recommended funding plan. 
• Co-ops: Co-op boards are expressly required to “periodically set aside reasonable sums” for reserves, and market practice expects a visible, stable reserve fund on the balance sheet. Underfunded co-ops can find it difficult to refinance underlying mortgages or maintain share values.
• Planned communities/HOAs: Many New York HOAs are organized under not-for-profit corporation statutes or as condos; their governing documents, not a special HOA statute, define reserve contributions. Boards typically follow the same reserve study and funding best practices as condos, because buyers, lenders, and insurers assess their financial health in similar ways.

For NYC conversions governed by Real Property Law § 339-MM and related NYC code, the sponsor must fund reserve and capital accounts according to statutory formulas, and the condo board must report on their use, with civil penalties for noncompliance.

How often should New York boards commission reserve studies?

Even without a statutory clock, reserve studies lose usefulness as costs, inflation, and building conditions change. Most New York associations should:

• Obtain a full “baseline” or “Level II” reserve study when a building is new, after a major renovation, or when the board realizes there is no current long-term plan.
• Update the study at least every three to five years to keep component inventories, remaining useful lives, and cost estimates current.
• Commission interim updates sooner if:
  
  • Significant capital projects are completed early or late.
  • Inflation, labor, or material costs move sharply.
  • The association falls materially behind its recommended funding trajectory.

For buildings likely to fall under any future implementation of S7600/A8945, aligning your update cycle with a 30-year forecast and annual board review (mirroring the bill language) will make compliance much easier if those bills become law. 

What a New York reserve study should include

A high-quality reserve study for a New York community should go beyond a simple spreadsheet and mirror both industry standards and the level of detail contemplated in S7600:

• Physical analysis of all common elements: roofs, façades and Local Law 11-sensitive exterior elements, elevators, boilers, chillers, garages, lobbies, corridors, windows where common, amenity spaces, and major site components.
• Condition assessment and remaining useful life estimates for each component.
• Current replacement cost estimates and inflation assumptions tailored to the New York market.
• Documentation of current reserve fund balance, anticipated reserve income (regular contributions, special assessments, and other sources), and projected capital outflows by year.
• A 20- to 30-year funding plan that shows annual contributions necessary to avoid reserve deficits while minimizing disruptive assessments, with sensitivity to reasonable maintenance of monthly charges.

Discussion of compliance with lender and insurer expectations (for example, the 10 percent rule of thumb and limits on deferred maintenance).

Boards should insist that the study be prepared or overseen by a credentialed reserve specialist, architect, or engineer familiar with New York building types, consistent with the language in S7600. 

Practical steps for New York boards

To put all of this into action, a New York HOA, condo, or co-op board can follow a straightforward sequence:

Confirm your legal baseline

• Review your declaration, bylaws, proprietary lease (for co-ops), and any existing engineering reports to see if reserve studies or funding levels are already required internally.
• Ask association counsel to confirm whether NYC conversion rules or Real Property Law § 339-MM apply to your building, especially if you are in an affordable-housing preservation context.

Commission or update a reserve study

• Engage a New York-experienced reserve professional, engineer, or architect.
• Provide prior studies, financial statements, capital project histories, and any Local Law 11 or other inspection reports.

Adopt a funding plan that aligns with both the study and market expectations

• Use the study’s recommended contribution range as your starting point.
• Check whether the plan keeps your reserve contributions at or above typical lender thresholds and avoids obvious shortfalls within the 10-20 year window.

Communicate clearly with owners

• Share key graphs and funding scenarios with owners before adopting the budget.
• Explain how the plan will reduce the risk of surprise assessments and protect property values.
  

Monitor legislation and adjust

• Have your managing agent or counsel track S7600, A8945, and any successor bills.
• If they pass, map your existing study and funding plan against the statutory requirements and update where needed.

How PropFusion supports New York communities

PropFusion’s Reserve Planner and Reserve Manager platforms help New York boards and managers turn static reserve studies into living financial tools. Instead of filing away a PDF, you can:

• Store and organize reserve studies, component lists, and capital projects in one place.
• Model different contribution levels and project timing to see how they affect your future reserve balances and owner assessments.
• Track progress against your chosen funding plan and flag when contributions fall below the path recommended by your reserve professional.
• Use PropFusion’s Reserve Study Companies marketplace to request competitive proposals from vetted reserve specialists who understand New York’s legal environment and building stock.

By combining sound legal and engineering advice with robust reserve planning software, New York communities can stay ahead of future legislation, satisfy lenders and buyers, and avoid the cycle of deferred maintenance and emergency assessments.