Pennsylvania HOA Reserve Fund Requirements (2026 Guide)

Pennsylvania HOA and Condo Reserve Study Laws: What Is Actually Required

From a legal standpoint, Pennsylvania is a “no mandate” state for reserve studies. There is no statute that explicitly requires an HOA, condominium association, or other community association to commission a formal reserve study or to contribute a fixed percentage of its budget to reserves.

However, that does not mean reserves are optional or unregulated. Pennsylvania’s framework for condominiums, planned communities, and cooperatives - primarily through the Uniform Condominium Act, the Uniform Planned Community Act, and the Real Estate Cooperative Act - establishes how associations are organized, how boards act on behalf of the association, and how reserve funds and disclosures must be handled.

Key statutory themes that affect reserve planning in Pennsylvania include:

• Board fiduciary duty and prudent management of funds.
• Authority to adopt budgets and collect assessments, including reserves.
• Restrictions and expectations for investing reserve funds.
• Required disclosure of reserve balances in resale certificates.
• Recordkeeping obligations that support those disclosures.

Understanding these duties is critical for any Pennsylvania board that wants to avoid underfunded reserves, surprise special assessments, and potential claims of mismanagement.

Board Fiduciary Duty and the Prudent Investor Rule

Under the Uniform Condominium Act and Uniform Planned Community Act, board members and officers stand in a fiduciary relationship to the association. They are required to act in good faith, in the best interests of the association, and with the care that an ordinarily prudent person would use under similar circumstances.

Section 5303 of the Uniform Planned Community Act, which is mirrored in the condominium framework, goes further for reserve funds specifically. In managing an association’s reserve funds, the officers and executive board members must invest those funds in investments permissible for trust funds and are governed by the prudent investor rule at 20 Pa.C.S. § 7203. This means:

• Reserve funds must be treated as long-term, fiduciary assets, not as excess cash.
• Investment decisions must balance risk and return in a prudent, diversified way.
• Boards should be able to document their rationale for how reserve funds are invested.

These statutory duties create a strong expectation that boards will understand the community’s long-term capital needs and will plan ahead - even though the statutes do not spell out a formal reserve study requirement.

Resale Certificates and Reserve Fund Disclosure

Another critical piece of Pennsylvania law is the resale certificate requirement. For condominiums, 68 Pa.C.S. § 3407 requires that, on resale, the unit owner provide a certificate containing a statement of the amount of any reserves for capital expenditures and of any portions of those reserves designated for specific projects. Planned communities follow a parallel requirement in 68 Pa.C.S. § 5407. (Justia)

In practice, that means:

• The association must know its reserve balance and how much of that balance is earmarked for particular capital projects.
• The association’s financial records must be detailed and current enough to support accurate disclosures in resale certificates.
• If reserves are poorly tracked or misrepresented, the association and board could face disputes with buyers, sellers, or lenders.

Section 3316 of the Uniform Condominium Act reinforces this by requiring associations to keep financial records sufficiently detailed to enable compliance with the resale certificate obligations. (FindLaw Codes) 

For boards, this is a clear statutory nudge toward disciplined reserve accounting.

What Pennsylvania Law Does Not Require

It is just as important to understand what Pennsylvania law does not currently require:

• No mandated reserve study: There is no statute that says “you must commission a reserve study” on a specific schedule.
• No statutory minimum reserve percentage: Pennsylvania does not set a minimum contribution such as “10 percent of the annual budget” or a required “percent funded” threshold.
• No legislated update cycle: Unlike some states that require reserve study updates every 2-5 years, Pennsylvania leaves the frequency to the association.

Because of this, boards cannot simply “tick a box” by citing compliance with a specific reserve study law. Instead, they must show that they acted prudently, collected enough information, and made decisions consistent with their fiduciary obligations and the community’s long-term needs.

Best Practices for Reserve Studies in Pennsylvania

Given this legal landscape, Pennsylvania HOAs and condos increasingly rely on best practices and national standards rather than statutory checklists. Common best practices include:

Commission a full reserve study every 3-5 years

Boards typically commission a Level I or full reserve study at least once every 3-5 years, with financial updates in the intervening years. This cadence helps keep the component inventory, useful life estimates, and funding plan accurate without overspending on studies.

Include all major common elements in the component list

A Pennsylvania reserve study should capture roofs, building exteriors, paving, mechanical systems, elevators, clubhouses, pools, and other significant shared assets. The goal is to include any component that is:

• The association’s responsibility.
• Predictable in its eventual replacement.
• Material in cost relative to the budget.

Use the study to inform funding, not to justify inaction

Once the study is complete, boards should adopt a funding plan that gradually moves the association to a stable reserve position over the next 20-30 years. Common targets include:

• Maintaining at least a “fair” or better percent funded level (often referenced as 70 percent or more in industry guidance).
• Avoiding scenarios where reserves routinely approach zero, which raises the risk of special assessments.

Document decisions and communicate with owners

Because Pennsylvania law focuses on fiduciary duty and disclosure, documentation is crucial:

• Keep board resolutions that adopt the reserve study and funding plan.
• Record any decisions to deviate from the study’s recommended contributions and explain why.
• Communicate the rationale to owners in budget letters and annual meetings.

This documentation becomes important if a major component fails and owners question past decisions.

How Pennsylvania’s Framework Impacts HOAs, Condos, and Co-ops

While the statutory frameworks differ slightly for condominiums, planned communities, and cooperatives, the themes are consistent:

• Associations can and should budget for reserves.
• Boards are fiduciaries who must treat reserve funds as trust-type assets.
• Resale transactions trigger disclosure obligations that rely on accurate reserve accounting.

In older communities created under the Unit Property Act, governing documents may predominate, but many have been brought under or aligned with the Uniform Acts. Boards should review their specific declaration, bylaws, and any amendments to see whether the community has internal requirements for reserve funds or studies that go beyond state law.

Why Commission a Reserve Study in a Non-Mandate State

For a Pennsylvania board, the question is not “What is the minimum the law requires?” but “What would a prudent, informed board do?” A professional reserve study:

• Provides the “reasonable inquiry” and objective data that support board decisions if they are challenged.
• Helps avoid large, politically painful special assessments.
• Protects property values by ensuring that common assets are maintained.
• Improves transparency for owners and buyers, which aligns with resale certificate disclosure obligations.

In litigation or disputes, having a credible reserve study is strong evidence that the board acted prudently, even though the study itself is not mandated by statute. 

How PropFusion Supports Pennsylvania Communities

PropFusion’s marketplace connects Pennsylvania HOAs, condo associations, and managers with vetted reserve study professionals who understand both the legal context and local building conditions. Boards can:

• Request multiple proposals from qualified reserve study providers.
• Compare scopes, pricing, and timelines.
• Store completed studies in one place and keep them updated.

Beyond commissioning the study, PropFusion’s tools help model funding scenarios, stress-test contributions, and document the funding plan that the board ultimately adopts. This makes it easier to demonstrate prudent planning, support accurate resale disclosures, and communicate clearly with owners about why reserve contributions are set at current levels.