We have been notified that House Bill 107 passed in Maryland in this year’s legislative session requiring all multi-family residential properties to complete a reserve study by October 1, 2023.
This bill requires an updated study every five years of the reserves needed for future major repairs and replacement of the common elements of cooperative housing corporations or condominiums, or the common areas of a homeowner’s association (HOA). A reserve study is a study of the reserves required for future major repairs and replacements of the common elements that:
- -1. Identifies each structural, mechanical, electrical, and plumbing component of the common elements or common areas.
- -2. States the normal useful life and the estimated remaining useful life of each identified component.
- -3. States the estimated cost of repair or replacement of each identified component.
- -4. States the estimated annual reserve amount necessary for any identified future repair or replacement.
The governing body of the association must provide funds to the reserve in accordance with the most recent reserve study, must review the reserve study annually, and has the authority to increase an assessment levied to cover the reserve funding amount required – despite any provision of the articles of incorporation, declaration, bylaws, or proprietary lease, as applicable restricting assessment increases or capping the assessment that may be levied in a fiscal year. The bill specifies that the reserve study requirements apply only to residential communities.
If a property had a reserve study on or before October 1, 2018, an updated reserve study must be completed by October 1, 2023. Reserve studies must be reviewed annually, and a qualified reserve analyst must complete a statement of the amount of recommended reserves.
For additional information or to access the bill, please click HERE.
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