Virginia HOA & Condo Reserve Study Requirements (2026 Law Guide)

Overview of Virginia reserve study law

Virginia is not a “suggested only” state when it comes to reserve planning. Under Virginia Code § 55.1-1826 (Property Owners’ Association Act) and § 55.1-1965 (Virginia Condominium Act), the board of an HOA or POA and the executive board of a condominium association must treat reserve studies and reserve funding as part of their core annual budget process.(law.lis.virginia.gov) 

The statutes explicitly require a five year reserve study cycle, annual review of the latest study, and specific reserve disclosures in the yearly budget.

These rules apply to most common interest communities that fall under the Acts. If an association’s declaration or bylaws impose more stringent reserve requirements, those governing documents control. Boards should always read their documents and the statutes together and obtain legal advice where there is any doubt.

Who must conduct a reserve study in Virginia

The “who” question is straightforward in Virginia. If your association is a:

• Property owners’ association or HOA that is subject to the Property Owners’ Association Act; or
• Condominium association that is subject to the Virginia Condominium Act,

then the governing board is required to ensure that a reserve study is conducted. The statutes do not prescribe a specific license or credential for the person performing the study. Technically, a board member, manager, or outside professional could prepare it. 

However, because the study drives long term funding decisions and is now closely scrutinized by regulators, owners, lenders, and buyers, most associations rely on independent reserve specialists or engineering firms.

For practical and risk reasons, boards should select a preparer with experience in Virginia associations, a clear methodology, and professional coverage (for example, an engineer or Reserve Specialist). This helps show that the board exercised due diligence if the study or funding plan is ever challenged.

How often reserve studies are required

Both § 55.1-1826 and § 55.1-1965 impose the same core cadence:

• Conduct a full reserve study at least once every five years to determine the necessity and amount of reserves required to repair, replace, and restore capital components.
• Review the results of that study at least annually to determine whether reserves are sufficient.
• Adjust the annual budget and assessments as needed to maintain reserves “as appropriate.”

The “five year” rule is a maximum interval, not a recommendation. Major changes in components, unexpected failures, or large capital projects may justify an earlier update. Boards that leave a study untouched for more than five years, or that never revisit the recommended funding plan, run a high risk of noncompliance and financial shortfalls.

What counts as “capital components”

Both Acts tie the reserve study requirement to “capital components” as defined in the statutes. In simple terms, these are the major common elements that the association is obligated to maintain, repair, replace, or restore, such as roofs, paving, siding, elevators, building systems, and significant site improvements.(Woods Rogers)

A proper reserve study in Virginia must identify the relevant capital components, estimate their remaining useful life and replacement cost, and project the contributions required to meet those future costs without excessive reliance on additional assessments or loans. For many associations, this list will change over time as assets are added, retired, or substantially upgraded.

Required reserve disclosures in the annual budget

Virginia law goes further than many states by specifying what must appear in the annual budget when the reserve study shows that reserves are needed. If the reserve study indicates a need to budget for reserves, the association’s budget must include:

• The current estimated replacement cost, estimated remaining life, and estimated useful life of the capital components.
• As of the beginning of the fiscal year, the current amount of accumulated cash reserves set aside for those components and the expected contribution to the reserve fund for that year.
• A statement describing the procedures used to estimate and accumulate cash reserves.
• A statement of the amount of reserves recommended in the study and the amount of current cash for replacement reserves.

In practice, associations often satisfy these requirements by including the full reserve study or a clear summary as an exhibit to the budget package. 

The key is that owners must be able to see not only the numbers, but also how the board is funding or deviating from the study’s recommendations.

Funding tools and 2024 legislative updates

The statutes give boards discretion in how they actually meet repair and replacement requirements. Section 55.1-1826(D) and § 55.1-1965(D) allow boards to use a combination of replacement reserves, additional assessments, and borrowed funds to cover capital needs.

Recent amendments (including 2024 legislation often cited as HB 1209) clarified and strengthened board authority to impose additional assessments and to borrow against assessment income where needed to fund recommended reserves and critical structural work.

For boards, this means that “we cannot increase dues because owners might vote it down” is no longer a safe position where capital components are underfunded. Instead, directors are expected to use the tools the statutes provide to resolve reserve shortfalls in a timely way.

Consequences of noncompliance

Failing to comply with Virginia reserve study and budget disclosure requirements carries both legal and practical risk. Repeated Ombudsman determinations and law firm guidance emphasize:

• Associations that do not conduct timely reserve studies or do not include the required reserve disclosures in the budget may face complaints, enforcement proceedings, or litigation.
• Chronic underfunding increases the likelihood of large additional assessments, deferred maintenance, and disputes with owners.
• Poor reserve practices can undermine lender confidence and affect the ability of owners to obtain conventional financing if a community is seen as financially unstable.

Directors are generally protected from personal liability unless they engage in willful misconduct. However, deliberately ignoring statutory requirements or refusing to act on a clearly underfunded reserve study can create exposure, especially if serious damage or financial losses result.

Practical steps for Virginia boards

To manage risk and stay compliant, Virginia boards should treat reserve studies as a recurring process rather than a one time event:

1. Confirm applicability. Verify that your association is subject to the Property Owners’ Association Act or Condominium Act and check for any more stringent requirements in your governing documents.
2. Calendar the five year cycle. Maintain a clear schedule for when the next full reserve study is due and when the board will perform its yearly review.
3. Hire a qualified preparer. Engage a reserve professional or engineering firm with experience in Virginia common interest communities and ask for a clear scope, methodology, and deliverables.
4. Integrate the study into the budget. Use the latest study to drive your annual budget, including all required disclosures and a realistic contribution level.
5. Document decisions. When the board deviates from the study’s recommended funding level, document why and how you will manage the associated risk.
6. Communicate with owners. Provide clear, plain language explanations of what the study says, what you are funding, and why it matters for maintenance and property values.
   
   

How PropFusion helps Virginia associations comply

PropFusion’s platform is built to support exactly the type of disciplined reserve planning that Virginia law expects. Associations and managers can store their reserve studies online, track capital components and useful lives, model different funding plans, and see how changes in assessments or project timing affect long term reserves. 

PropFusion also connects boards and managers with a network of established reserve study professionals who understand Virginia’s statutory requirements and local market conditions, making it easier to order compliant studies and keep the five year cycle on track.