North Dakota HOA Reserve Study & Fund Requirements (2026 Guide)

Snapshot: Reserve studies in North Dakota

From a legal perspective, North Dakota is a “no requirement” state for reserve studies and reserve funds. Recent national surveys of state reserve laws by Community Associations Institute show no statutory requirement in North Dakota to perform a reserve study, to maintain reserves, or to disclose reserve study results to owners or buyers. 

Third-party summaries aimed at HOAs echo this: there is no law that imposes HOA reserve study requirements in North Dakota, though governing documents may impose their own obligations.

In practice, this means two things. First, your board is not exposed to a specific statutory penalty for failing to conduct a reserve study.

Second, you also do not get any statutory “safe harbor” or checklist. If your association is underfunded and forced into special assessments or deferred maintenance, owners will judge the board on outcomes, not on whether the law forced you to do more.

What North Dakota statutes actually cover

Condominium associations in North Dakota are governed primarily by the Condominium Ownership of Real Property statute, N.D. Cent. Code Chapter 47-04.1. This chapter focuses on:

• How a condominium project is created and recorded.
• The content of the declaration and restrictions.
• Administration of the project, bylaws, rules, and enforcement.
• Common expense assessments, liens, and tax treatment.

There is no section in Chapter 47-04.1 that requires a board to create or fund a reserve account, commission a reserve study, or keep reserves at a particular percentage of fully funded needs.

Most HOAs (especially single-family or townhome communities) are organized as nonprofit corporations and fall under the North Dakota Nonprofit Corporations Act, N.D. Cent. Code Chapter 10-33. 

This statute governs corporate mechanics-board powers, duties, meetings, voting, and recordkeeping-but, again, it says nothing about reserve studies or minimum reserve levels.

In short: North Dakota statutes tell you how to form and run the corporate entity, but they do not tell you how to plan for long-term capital repairs. That burden falls on the board through its fiduciary duty and the association’s own governing documents.

No statutory reserve mandate - why boards still cannot ignore reserves

Even without a legal requirement, reserve planning is not optional if you want a stable community:

• Major components will eventually fail. Roofs, asphalt, siding, elevators, mechanical systems, and clubhouses all have predictable life cycles. If you do not plan and save, you are implicitly planning to levy special assessments.
• Buyers, lenders, and insurers care about reserves. Even though North Dakota law does not mandate reserve levels, underfunded reserves can lead to failed sales, stricter lending conditions, or higher insurance premiums when financial statements are reviewed.
• Board fiduciary duty extends beyond one budget year. Directors must act in the best interests of the association as a whole, which includes protecting long-term property values and avoiding foreseeable financial shocks.

Industry sources covering North Dakota explicitly recommend reserve studies as a best practice, even while confirming that no statute currently mandates them.

Recommended reserve study standards for North Dakota communities

Because state law is silent, North Dakota associations should align with widely accepted reserve study standards used in more heavily regulated states:

• Frequency: Commission a full reserve study every 3-5 years, with lighter “update” studies in the intervening years if your community is complex or aging.
• Scope: Include all common-area assets with a predictable remaining life and significant replacement cost (typically anything beyond normal operating expenses).
• Funding target: Many reserve professionals aim to keep the association at least 70 percent funded (or better) relative to fully funded needs, in order to avoid chronic special assessments and deferred maintenance.
• Contribution strategy: Instead of “whatever is left over,” set an annual reserve contribution based on the study’s funding plan and review it each budget cycle.

These guidelines are not law, but they are what lenders, buyers, and professionals increasingly view as “normal” for a well-run association.

Governing documents: the “law” that matters day to day

In the absence of reserve statutes, your declaration, bylaws, and rules become the primary legal framework for reserve planning:

• Some documents explicitly require maintaining a reserve fund or contributing a minimum amount each year.
• Others require the board to adopt a “reasonable” budget for common expenses, which can be interpreted to include prudent reserves.
• Many documents are silent on specific numbers but grant broad authority to “collect assessments necessary for the operation, maintenance, repair, and replacement” of common elements.

Boards should read these documents carefully with counsel to understand what is required versus what is discretionary. Even if your documents do not mention reserves by name, a pattern of underfunding that leads to frequent emergency assessments or deterioration can trigger disputes and accusations of mismanagement.

Practical framework for North Dakota boards

Here is a practical, law-informed framework for North Dakota HOAs and condo boards:

Step 1: Review statutes and governing documents

Confirm that there is no statutory reserve mandate (there is not), but document which statutes govern your entity-Chapter 47-04.1 for condos and Chapter 10-33 for nonprofits-and summarize any reserve-related obligations in your declaration and bylaws. 

Step 2: Commission a professional reserve study

Engage an experienced reserve study provider who can inventory your components, estimate remaining useful lives and replacement costs, and build long-term cash-flow projections. In a state with no legal template, you are buying expertise and discipline.

Step 3: Adopt a funding plan you can actually follow

Use the study to set target reserve contributions over the next 20-30 years. If the “ideal” plan is too aggressive for owners, work with your provider to phase in increases over several cycles, while still moving toward a healthier funding position.

Step 4: Communicate clearly with owners

Explain why reserves matter, how much you currently have, the funding path you chose, and the risks of not following it. In a state without statutory guardrails, communication often makes the difference between owner support and pushback.

Step 5: Revisit the study regularly

Treat the reserve study as a living document. Update it every 3-5 years, or sooner if you have major projects, cost shocks, or significant deviations from the original plan.

How this compares to states with strict reserve laws

In states like California, Washington, or Oregon, statutes outline reserve study frequency, disclosure obligations, or minimum funding behaviors for certain communities. North Dakota does none of this. 

That gives your board more flexibility-but also more room to either excel or fail:

• There is no automatic trigger forcing you to correct underfunded reserves.
• There is no statutory disclosure text that “forces” transparency; you must choose to tell owners the full story.
• Regulators are less likely to intervene, so governance quality is judged primarily by owners, buyers, and professionals who review your financials.

If your community aspires to be competitive with associations in more regulated states, copying their reserve standards (study frequency, disclosure, and funding discipline) is a straightforward way to get there.

How PropFusion and professional reserve study providers help North Dakota associations

Even without a legal mandate, a data-driven reserve plan is one of the most valuable tools your board can deploy. PropFusion connects North Dakota HOAs and condo associations with a network of established reserve study professionals who can:

• Conduct on-site inspections and build a detailed component inventory.
• Model multiple funding scenarios so you can choose between smoother fee increases and more aggressive catch-up plans.
• Provide reports that are easy to share with owners, lenders, and prospective buyers.
• Support you with periodic updates so your plan stays aligned with real-world costs and project timing.

When combined with PropFusion’s reserve planning tools, your association can move from reactive decision-making to proactive, long-range financial management-without relying on a statute to tell you what to do.

Key takeaways for North Dakota boards

• There is no statutory requirement in North Dakota to conduct a reserve study or fund reserves at a specific level.
• Your condominium or HOA is still governed by state statutes (Chapters 47-04.1 and 10-33) and your own governing documents.
• Best-in-class boards follow industry standards anyway: periodic reserve studies, realistic funding plans, transparent communication, and regular updates.
• The absence of a legal mandate is not a defense against poor financial outcomes; owners will judge results, not excuses.
• Partnering with qualified reserve professionals and using tools like PropFusion makes it substantially easier to meet your fiduciary obligations and protect property values.