Texas HOA Reserve Fund Laws and Reserve Study Requirements (2026 Guide)
Texas boards often hear conflicting messages about “Texas HOA reserve fund laws,” “condo reserve fund requirements,” or “Texas reserves certification.” Some sources imply strict rules, while others say there are almost none. The truth sits in between: Texas law does not mandate reserve studies or a specific reserve balance, but it does regulate how associations budget, disclose reserves, and meet their fiduciary duties to owners.
This guide explains the current legal landscape for reserves and reserve studies in Texas-including what the Texas Property Code requires for condominiums, the framework that applies to other HOAs and property owners’ associations, and why best-practice capital planning still matters even without a statutory mandate. It is written for board members, association managers, and condo boards who want clarity and a practical roadmap, not legal jargon.
Legislation Link
Texas Property Code, Chapter 82 - Uniform Condominium Act
Texas Property Code, Section 82.157 - Resale of Unit
Texas Property Owners’ Associations
Are reserve studies legally required for HOAs or condos in Texas? No. Texas law does not currently require HOAs or condominium associations to commission reserve studies. However, associations are allowed-and strongly encouraged-to adopt budgets that include reserves and to use periodic reserve studies as a planning tool.
Does Texas law require a minimum reserve fund balance? No. There is no statutory minimum reserve percentage or dollar amount for Texas HOAs or condos. State law gives condo associations explicit authority to budget for reserves and restricts certain uses of those reserves, but it does not set a target funding level. Boards must rely on their governing documents, professional reserve studies, and fiduciary duties when deciding how much to set aside.
What does Texas Property Code 82.157 require about reserves? For condominiums governed by Chapter 82, the association must issue a resale certificate that includes the current operating budget and statements about the amount of reserves for capital expenditures and any portions of those reserves earmarked for specific projects. This disclosure gives buyers and lenders a clear picture of the association’s financial health.
What is “Texas reserves certification,” and is it a state requirement? “Texas reserves certification” usually refers to lender or investor questionnaires (for example, for Fannie Mae or Freddie Mac) or to an engineer’s or reserve professional’s certification that a project’s reserve funding meets those lender guidelines. It is not a separate Texas statute. Instead, it is part of the financing and underwriting process, which often expects regular reserve studies and adequate reserve contributions even though Texas law does not mandate them.
PropFusion connects you with a vetted network of Reserve Study experts in your state, ensuring best industry standards.
Legal overview: No mandated reserve studies, but clear statutory context
Texas stands out because, unlike states such as California, Nevada, or Oregon, it does not impose a statutory requirement to conduct reserve studies or to fund reserves at any particular level.
Multiple legal and industry summaries confirm that there is “no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves” in Texas.
That does not mean reserves are optional in practice. The Texas Uniform Condominium Act (Property Code Chapter 82) expressly authorizes condominium associations to adopt and amend budgets for revenues, expenditures, and reserves, and to collect assessments from unit owners. (Justia Law)
In addition, Chapter 82 requires very specific financial disclosures in resale transactions, including disclosure of reserve fund amounts.
For non-condo HOAs and property owners’ associations, Chapters 202, 207, and 209 govern topics such as restrictive covenants, disclosure packets, records, and owner protections-but they still do not mandate reserve studies.
The result is a three-layer framework for Texas associations:
- State statutes set baseline powers, disclosure obligations, and owner protections.
- Governing documents (CC&Rs, bylaws, policies) may add specific reserve study or funding requirements.
- Industry standards and lender expectations push boards toward regular reserve analyses and consistent long-term funding.
How Texas law treats condos versus other associations
Condominiums recorded after January 1, 1994, are generally governed by Chapter 82. Under Section 82.102, a condo association’s board may adopt and amend budgets that explicitly include reserves, and then collect assessments to fund those reserves.
Section 82.157 addresses what must be shown to buyers when a unit is resold: the association has to provide a resale certificate that includes the current operating budget, the amount of reserves for capital expenditures, and any portions of those reserves earmarked for particular projects.
Section 82.112 adds another layer: while the declarant is still in control of the association, reserves set aside for capital expenditures generally cannot be used to pay routine operating expenses. (Graham Management) This is designed to prevent short-term budget manipulation that would leave future owners with underfunded reserves once control transitions to the owners.
Single-family HOAs, townhome communities, and broader property owners’ associations are typically governed by Chapters 202 and 209, plus Chapter 207 for resale disclosures. These chapters regulate restrictive covenants, notice and meeting rules, records access, and resale certificates.
They do not prescribe minimum reserve balances, but the resale documentation still puts a spotlight on the association’s financial condition. A chronically low reserve balance will be obvious to buyers and their lenders even if there is no statute spelling out a required dollar amount.
Are reserve funds or reserve studies required in Texas?
Several reputable Texas association management firms and national industry overviews all confirm there is no legal obligation to perform a reserve study or allocate funds to reserves under state law.
However, most CC&Rs give the board broad authority-sometimes an explicit obligation-to adopt an annual budget that “reasonably” provides for long-term maintenance and replacement of common elements.
Some declarations and bylaws go further, requiring the board to commission a reserve study every few years or to maintain a separate reserve account funded at specific levels. Boards that ignore those internal requirements can still face claims of breach of fiduciary duty, even if they have technically complied with state statutes.
Best practice in Texas mirrors national standards:
- Commission a full reserve study at least once, then update it every 3-5 years, with more frequent updates after major storms or capital projects.
- Maintain funding levels that cover the projected 20-30-year capital plan without relying on frequent special assessments.
- Treat the reserve contribution as a core line item in the annual budget, not a “leftover” after operating expenses.
Condo reserve fund expectations and “reserves certification”
For condominium projects, lenders, investors, and insurers increasingly demand:
- Evidence that the association is reserving at least a certain percentage of its annual budget (often around 10 percent for condos seeking conventional financing).
- Confirmation that no significant deferred maintenance or structural issues are being ignored.
- A recent reserve study or engineering report supporting the budget assumptions.
None of this is spelled out in the Texas Property Code. Instead, these expectations are embedded in lender questionnaires, project approval processes, and insurer underwriting standards. Failing to meet them can make it harder for owners to sell or refinance, even if the association is technically compliant with Texas statutes.
For condo boards, practical implications are clear:
- Even without a statutory mandate, a documented reserve study and a realistic reserve funding plan make it easier to satisfy lender questionnaires and keep the project “warrantable.”
- Condo resale certificates under Section 82.157 will show buyers exactly how much is in the reserve fund and whether major capital expenditures are on the horizon.
“New Texas HOA laws 2023” and what changed (and what did not)
Many Texas boards search for “new Texas HOA laws for 2023” expecting to find a new reserve study requirement. The legislative changes from the recent sessions, however, have focused on topics like rental restrictions, religious displays, records access, and meeting procedures-not on mandating specific reserve funding levels or reserve studies.
What has changed is scrutiny. Open-records rules, more robust resale disclosure expectations, and growing owner awareness mean that chronically underfunded reserves now carry more reputational and legal risk, even without a precise statutory formula.
Boards that treat reserves as an afterthought increasingly find themselves defending special assessments, explaining deferred maintenance, or addressing pressure from lenders and buyers.
Recommended reserve study and funding practices for Texas boards
In this legal landscape, an effective Texas reserve strategy usually includes:
Reviewing governing documents first
Before you budget, confirm whether your declaration or bylaws require a reserve study, specify a funding formula, or define which components must be reserved for. Some documents distinguish between “operating” and “capital” expenses in ways that affect how you structure the budget.
Commissioning a professional reserve study
A qualified reserve study professional or engineer will inventory common elements, estimate remaining useful life, and project replacement costs. The resulting report becomes the basis for a long-range funding plan and is valuable evidence of good-faith decision-making if owners ever challenge the board’s budgeting choices.
Setting a realistic funding target
Because Texas law does not impose a numeric target, boards should adopt a funding philosophy that balances risk and affordability. Many associations aim to keep their reserves at a level sufficient to cover most anticipated capital projects over a 20-30-year horizon without frequent special assessments. Underfunding may seem attractive in the short term, but it tends to produce bigger political and financial problems later.
Updating the study regularly
Costs, interest rates, and construction realities change. Even where there is no legal requirement, a 3-5-year update cycle (with an earlier update after a major storm, large project, or significant change in amenities) keeps your funding plan credible and defensible. (southernpmg.com)
Communicating reserves clearly to owners
Because reserves are visible in resale certificates and financial statements, boards should explain the reserve strategy during budget meetings, in annual letters, and in owner FAQs. Owners who understand why reserve contributions are necessary are less likely to resist modest, predictable dues increases than sudden special assessments.
How PropFusion supports Texas boards and managers
PropFusion’s reserve study marketplace and software platform are designed for exactly this environment-where Texas law sets a flexible framework but lenders, buyers, and best practice demand disciplined planning.
Through PropFusion, Texas HOAs and condo associations can:
- Request proposals from vetted reserve study professionals who understand both Texas statutes and national reserve standards.
- Store completed studies online, track key assumptions, and document updates over time.
- Build funding plans aligned with your reserve study and test what-if scenarios before you finalize the annual budget.
- Generate clear, board-ready reports that make it easier to explain reserve decisions to homeowners, buyers, and lenders.
Texas law gives you room to design that plan-PropFusion helps you execute it.
FAQ
Are reserves or reserve studies optional if our CC&Rs say nothing about them?
From a technical legal standpoint, state law does not force you to maintain a reserve fund or commission a reserve study. But as a practical matter, ignoring reserves entirely exposes your board to accusations of poor financial stewardship and makes it harder for owners to sell or refinance. If your documents are silent, treat reserves and reserve studies as a best-practice obligation rather than a legal “optional extra.”
How much should a Texas HOA or condo keep in reserves?
There is no statutory percentage or dollar amount in Texas law. Many professionals suggest targeting a funding level that will cover the 20-30-year capital plan while avoiding frequent special assessments. For condos, you should also confirm whether lenders financing your owners’ units expect at least a certain percentage of the annual budget to be dedicated to reserves.
Can our association borrow from reserves to cover operating shortfalls?
For condos governed by Chapter 82, reserves set aside for capital expenditures generally cannot be used to pay operating expenses while the declarant is still in control, and boards must always act consistently with their fiduciary duties to owners. After turnover, occasional temporary use of reserves may be possible, but it should be carefully documented, repaid on a defined schedule, and disclosed to owners and your CPA. Chronic reliance on reserves to plug operating deficits is a red flag.
Do the 2021-2023 changes to Texas HOA law add new reserve requirements?
No. Recent legislative changes for HOAs and property owners’ associations address issues such as rentals, security devices, religious displays, records, and meeting procedures. They did not add a statutory formula for reserve funding or a mandate to obtain reserve studies. That said, these reforms increase transparency, which makes underfunded reserves more visible and more likely to draw owner criticism.
Are condo reserve rules stricter than single-family HOA rules in Texas?
They are more specific, not necessarily stricter. Chapter 82 explicitly authorizes condo associations to budget for reserves, restricts some uses of those reserves, and requires disclosure of reserve amounts in resale certificates. Single-family HOAs under Chapters 202 and 209 operate under a more general framework, but resale and disclosure requirements still put their financial condition under a spotlight.
How often should a Texas HOA or condo update its reserve study?
Most Texas management and reserve professionals recommend a full study at least once, with updates every 3-5 years depending on the size and complexity of the community and whether major projects or storms have occurred. Updating more frequently signals good governance to owners and lenders and helps you stay ahead of major capital expenses.
Find a Reserve Study Company in Florida with PropFusion
Once you know what Florida law expects from your HOA, the next step is hiring the right reserve study firm. Through PropFusion’s Reserve Study Companies marketplace, your board can:
- Submit one request describing your community and scope.
- Get multiple proposals from vetted Florida reserve study providers.
- Compare pricing, scope, and timelines side by side and choose who to work with.
We don’t give legal advice or pick a vendor for you - we simply make it faster and easier to find qualified reserve study companies that understand Florida HOAs.
The information contained on this page is provided for informational purposes only, and should not be construed as legal advice on any subject matter. You should not act or refrain from acting on the basis of any content included on this page without seeking legal or other professional advice. The contents of this page contain general information and may not reflect current legal developments or address your situation. We disclaim all liability for actions you take or fail to take based on any content on this report.
PropFusion connects you with a vetted network of Reserve Study experts in your state, ensuring best industry standards.
Get proposals from multiple reserve study companies
If your board is planning big projects, worried about reserves, or simply wants a clear long-term funding plan, this is the time to bring in a professional reserve study company.
