Vermont HOA Reserve Study Requirements & Reserve Fund Laws (2026 Guide)

Overview of Vermont’s reserve fund laws

Vermont regulates common interest communities through the Vermont Common Interest Ownership Act (VCIOA), codified in Title 27A of the Vermont Statutes. The Act applies to most modern condominiums, planned communities, and other common interest communities formed in the state, with some exceptions for older projects and small associations.

Two provisions are especially important for reserve planning:

• 27A V.S.A. § 3-102 gives the association the power to “adopt and amend budgets for revenues, expenditures, and reserves” and to levy and collect assessments to fund them. This is enabling language: it authorizes, but does not compel, boards to maintain reserves.
• 27A V.S.A. § 4-103 requires a developer’s public offering statement for a new community to state the amount included in the budget as a reserve for repairs and replacement, or explicitly disclose that no amount is included.

Separately, 27A V.S.A. § 4-109 requires an association to provide a resale certificate when an owner sells a unit. That certificate must disclose any anticipated capital expenditures for the current fiscal year and the next two, the amount held in reserves for capital expenditures, and any portions of those reserves designated for specific projects.

The key takeaway: Vermont law expects transparency about reserve funding and capital plans, but leaves decisions about conducting reserve studies and how much to fund reserves to each board.

Are reserve studies or reserve funding legally required in Vermont?

According to the Community Associations Institute’s (CAI) most recent summary of state reserve fund laws, Vermont has:

• No statutory requirement to conduct a reserve study; and
• No statutory requirement to fund reserves at any particular level.

This places Vermont in the same category as many other states where boards have discretion but also bear full responsibility for the consequences of underfunding. The law grants budget authority and mandates disclosure, but it does not provide a simple “checklist” of what constitutes adequate reserves.

For boards, that means:

• You will not be fined or sanctioned by the state simply for failing to order a reserve study or set aside a specific percentage of your budget.
• You can still face serious financial and reputational consequences if chronic underfunding leads to large special assessments, deferred maintenance, or disputes with owners and buyers.
• Your decisions about reserves will be evaluated under general fiduciary standards, not a detailed reserve statute.

How fiduciary duty intersects with reserves

Like boards in other states, Vermont association directors must act in good faith and with the care an ordinarily prudent person would exercise under similar circumstances. 

That standard, combined with VCIOA’s expectation that boards manage common property responsibly, effectively pushes boards toward prudent reserve planning even without an explicit mandate.

In practice, a Vermont board that ignores long-term capital needs, fails to plan for obvious future replacements, and repeatedly relies on emergency special assessments will find it difficult to argue that it exercised ordinary prudence. 

Conversely, a board that commissions a professional reserve study, reviews it regularly, and incorporates its recommendations into the budget can demonstrate that it made informed, documented decisions.

What buyers and lenders see in Vermont

Vermont’s disclosure framework amplifies the importance of reserve planning even though it stops short of mandating specific funding. The resale certificate must disclose:

• Any capital expenditures anticipated in the current and next two fiscal years.
• The dollar amount held in reserves for capital expenditures.
• Any portions of those reserves earmarked for particular projects.

Those disclosures matter because:

• Buyers and their real estate agents will see, in black and white, whether the association has real reserves or is running close to empty.
• Many mortgage lenders evaluate an association’s financial health, including reserve levels, as part of underwriting. Weak reserves can make financing harder or narrow the pool of eligible buyers.
• Low reserves or an obvious mismatch between upcoming capital needs and available funds can depress sale prices and increase the time it takes to sell units.

So even without a mandate, Vermont’s disclosure rules create market pressure for boards to build and maintain credible reserve plans.

Best-practice reserve planning for Vermont associations

Because state law does not prescribe a formula, Vermont boards should lean on national standards and professional guidance. Common best practices include:

1. Commissioning an initial reserve study
   
   • Engage a qualified reserve study professional (for example, someone holding CAI’s Reserve Specialist (RS) designation or APRA’s Professional Reserve Analyst (PRA)) to perform a full, on-site Level I study.
   • Ensure the scope covers all major common components for which the association is responsible: roofs, siding, windows, pavement, mechanical systems, amenities, and major site features.
2. Updating the study regularly
   
   • Update the study with a site visit approximately every 3-5 years, depending on the age and complexity of the community.
     
     
   • Perform “no site visit” updates in off years when major events (large projects, storms, or unexpected failures) significantly change the financial picture.
3. Selecting a funding goal
   
   • Use the reserve study to evaluate “percent funded” and choose a funding strategy (full, threshold, or conservative baseline).
   • For most Vermont communities, aiming to keep reserves at a “strong” or at least “fair” funding level (rather than chronically underfunded) will reduce the risk of special assessments and lender concerns.
4. Integrating reserves into the annual budget
   
   • Treat reserve contributions as a non-negotiable line item, similar to insurance, rather than a “plug” that gets cut to keep dues low.
   • Consider gradual annual increases rather than long periods of flat dues followed by a sharp spike.
5. Using the study in board decision-making
   
   • Rely on the study when prioritizing projects and timing replacements.
   • Document how the board reviewed and used the study-minutes showing the board discussed and acted on the recommendations can be important evidence of prudence.

Practical guidance for Vermont HOAs and condo boards

For a Vermont board starting from limited reserves, a realistic improvement plan might look like this:

• Year 1: Commission a full reserve study, adopt a funding goal, and implement a multi-year contribution schedule. Begin modest dues increases rather than relying on special assessments.
• Years 2-3: Follow the funding plan, adjust as needed based on actual project costs and inflation, and communicate clearly with owners about why contributions are increasing.
• Years 4-5: Order an update with site visit, confirm assumptions, and adjust long-term contributions if major components are aging faster or slower than expected.

Throughout, the board should link its decisions back to its fiduciary duty: protecting the association’s assets, avoiding deferred maintenance, and preserving property values. That story plays well not only with owners but also with buyers, lenders, and anyone reviewing the association’s financial health.

How PropFusion and Vermont reserve study professionals can help

Vermont boards do not need to navigate this alone. PropFusion’s Vermont marketplace connects associations with established reserve study professionals who understand both local construction costs and national reserve standards. From a single request, boards can:

• Receive multiple competitive proposals from qualified providers who already work with Vermont communities.
• Compare scopes, timelines, and deliverables to choose the right level of study for their needs.
• Move from a static PDF report to ongoing planning tools that let boards model different funding scenarios and track progress over time.

For boards that already have a study but are unsure how to implement it, PropFusion’s platform can help turn recommendations into actual budgets, what-if scenarios, and clear communication materials for owners.

In short, even though Vermont law does not force your association to commission a reserve study or fund reserves to a specific level, the combination of fiduciary duties, disclosure requirements, and market expectations makes reserve planning essential. 

A professional study, backed by modern planning tools, is the most reliable way to prove your board is acting prudently and protecting the community’s long-term financial health.