South Carolina HOA Reserve Fund Requirements and Reserve Study Laws (2026 Guide)

Legal framework for HOAs and condos in South Carolina

South Carolina has joined a growing group of “no-mandate” states when it comes to reserve studies and reserve fund laws. There is no statute that explicitly compels HOAs or condo associations to commission a reserve study, adopt a particular funding model, or maintain reserves at a minimum percentage of the budget. Instead, the legal framework centers on governance, budgets, disclosures, and access to information. Boards that understand that framework can still build disciplined reserve programs even without a state mandate. 

Two main statutes shape community association governance in the state:

• The South Carolina Homeowners Association Act, found in Title 27, Chapter 30 of the South Carolina Code, sets baseline rules for HOAs, including definitions, recording requirements for governing documents, rules for adopting and increasing annual budgets, and homeowner access to association records. 
• The South Carolina Horizontal Property Act, in Title 27, Chapter 31, provides the legal structure for condominium and other horizontal property regimes, defining apartments, common elements, and the powers of the council of co-owners.

Neither statute mentions the phrase “reserve study,” and neither establishes a mandatory reserve funding formula. That is fundamentally different from states like Nevada, Hawaii, or Florida, where statutes explicitly tie budgets to reserve studies and require boards to maintain reserves at a “reasonable” or calculated level.

What the law actually says about reserve studies and reserve funds

Authoritative surveys of state reserve study laws are explicit: South Carolina has no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. 

Industry commentary reinforces the same point; multiple professional management and reserve firms note that neither North Carolina nor South Carolina requires associations to commission professional reserve studies, though they strongly recommend doing so as a matter of good governance. (CAMS Management)

That does not mean reserves are irrelevant. The Horizontal Property Act requires condominium apartment owners, acting through their council of co-owners or association, to maintain common elements such as roofs, structural components, elevators, and shared infrastructure. 

Those obligations inevitably create long-term capital expenses even if the statute does not prescribe exactly how to budget for them. 

Similarly, the Homeowners Association Act focuses on transparency and process: governing documents must be recorded; rules and regulations must be accessible; annual budget increases require advance notice to owners; and homeowners have the right to inspect the annual budget and certain records. 

When owners can see that little or nothing is being set aside for roof replacements, paving, or clubhouse systems, boards quickly feel the pressure to explain their long-term capital plan.

Governing documents: where reserve obligations usually live

Because state law is silent on exact reserve funding levels, the real obligations often live in the association’s own declaration, master deed, and bylaws. These documents may:

• Require the association to maintain “adequate reserves” or a “capital reserve fund.”
• Specify that annual budgets must include a line item for reserves.
• Authorize the board to levy special assessments when reserves are inadequate.
• Set procedural hurdles (such as owner votes) for borrowing or using reserves for non-capital purposes.

Boards in South Carolina should treat their governing documents as the primary source of reserve funding requirements, and the state statutes as the framework that governs how they adopt budgets, communicate decisions, and keep records accessible.

Why reserve studies still matter in a no-mandate state

Even though the law does not force reserve studies, the financial and operational logic is the same as in mandated states. Reserve studies help boards:

• Identify every major component the association must maintain or replace over a multi-decade horizon (roofs, siding, elevators, pools, asphalt, mechanical systems, etc.).
• Estimate remaining useful life and replacement cost for each component, using professional engineering or reserve-specialist input.
• Translate those cost curves into an annual reserve contribution that spreads the burden fairly across current and future owners.
• Demonstrate to owners, lenders, and buyers that the community has a plan and is not relying on constant special assessments.

In practical terms, that means reserve studies are often the difference between a community that can handle a million-dollar roof project without panic and one that has to scramble for loans or emergency assessments.

Recommended reserve study frequency for South Carolina associations

Without a statutory schedule, the safest approach is to follow industry norms. Most professional reserve planners recommend: 

• A full, on-site reserve study every 3 to 5 years.
• Interim updates in the years between full studies, at minimum reviewing inflation, construction costs, and any components that have significantly aged or been replaced.
• An annual check-in during the budget process to confirm that reserve contributions still align with updated cost and timing assumptions.

For rapidly aging communities, those with extensive amenities (complex pools, elevators, garages, high-rise systems), or associations that have historically underfunded reserves, the shorter end of the range (every 3 years) is more appropriate.

Budgeting, assessments, and disclosures: practical implications

South Carolina’s Homeowners Association Act requires boards to prepare an annual budget, give owners proper notice before raising that budget, and allow access to annual budgets and membership lists. 

The state’s Department of Consumer Affairs also maintains educational materials and law outlines that highlight the HOA Act, Horizontal Property Act, and Nonprofit Corporation Act as key legal anchors for HOA governance. 

In practice, this means:

• Boards should incorporate reserve contributions directly into the annual budget rather than treating them as an afterthought.
• When proposing a budget increase, boards should clearly explain how much of the change is driven by reserve funding needs versus day-to-day operating costs.
• Owners who inspect the budget should be able to see a line item for reserves, backed by an explanation of how the amount was calculated (ideally referencing a recent reserve study or at least a documented internal analysis).
• When real estate is sold, buyers, lenders, and their advisors will often ask for financial statements and budgets. Even though South Carolina’s disclosure framework focuses on HOA status and governing documents rather than reserves, sophisticated buyers will scrutinize reserve balances and capital plans.

Underfunded reserves do not violate a specific statute, but they create real risk: deferred projects, emergency assessments, reputational damage to the community, and potential disputes over whether the board fulfilled its fiduciary duties.

Best-practice funding strategies for South Carolina HOAs and condos

In a state with no statutory benchmarks, boards need internal targets. Common best-practice approaches include:

• Setting a long-term “percent funded” goal, aiming to be at least 70-100 percent funded for major components over time, based on a professional reserve analysis.
• Avoiding the habit of balancing the budget by cutting reserve contributions; instead, treating reserves as a non-negotiable cost of responsible ownership.
• Adopting clear policies for when reserves may be used (for capital repairs and replacements only, not day-to-day operating expenses).
• Planning for inflation and construction cost volatility rather than assuming today’s prices will hold.

Boards should document these policies in board resolutions, budget notes, or governance guidelines so that future boards understand the rationale and owners can see the long-term plan.

How PropFusion helps South Carolina associations manage reserves

While South Carolina does not dictate how you must handle reserves, the expectations from owners, buyers, and lenders increasingly resemble those in mandated states. PropFusion’s reserve management tools are designed to close that gap by giving boards and managers:

• A clear asset inventory, useful life assumptions, and cost projections for major components.
• Funding plan tools that let you compare different contribution strategies and see their impact on cash flow and “percent funded” status.
• Scenario planning to test the effect of deferring a project, phasing a major replacement, or smoothing assessment increases over several years.
• Reporting and dashboards that make it simple to communicate your plan to owners and prospective buyers.

When combined with a professionally prepared reserve study, these tools help South Carolina communities operate as if the state had a mandate-without waiting for the legislature to act. The result is fewer surprises, more stable assessments, and better-maintained neighborhoods.