Kentucky HOA Reserve Studies

Section 1: Overview — Reserve study requirements in Kentucky

Kentucky imposes no statutory reserve-study or reserve-funding mandate on community associations. Reserves answer instead to the recorded declaration and to the board's fiduciary duty, and the statute steps in at a single point — a condominium resale.¹ Condominiums created on or after January 1, 2011 fall under the Kentucky Condominium Act, KRS 381.9101 to 381.9207, which lawmakers modeled on the 1980 Uniform Condominium Act rather than the later Uniform Common Interest Ownership Act (UCIOA).¹³ Condominiums created before that date stay under the older Horizontal Property Law, KRS 381.805 to 381.910, except where the 2010 Act expressly reaches back.² Non-condominium HOAs answer to the Planned Community Act, KRS 381.785 to 381.801, which the General Assembly enacted in 2023, along with recorded covenants, conditions, and restrictions (CC&Rs) and the Kentucky Nonprofit Corporation Act for corporate governance.³ Within the national picture, Kentucky sits among the no-mandate states. It does not require periodic reserve studies on fixed intervals, the way California, Florida, and Maryland do, and it does not compel broad reserve disclosure beyond the condominium resale certificate.¹⁴ The sections that follow lay out the statutory framework, the obligations that apply by community type and vintage, recent legislative activity, and where Kentucky stands against the mandate states.

Section 2: The reserve framework under Kentucky law

2A. The Kentucky Condominium Act of 2010 and reserves

The Kentucky Condominium Act, KRS 381.9101 to 381.9207, took effect January 1, 2011, and it governs every condominium created in the Commonwealth after that date.¹⁵ Lawmakers modeled it on the 1980 Uniform Condominium Act, and that choice matters for reserve analysis: the 1980 uniform act predates the reserve-study provisions later tied to UCIOA, and Kentucky never adopted UCIOA.¹³ The Act covers condominium creation, common elements, association powers, assessments, and purchaser protection. On budgets, KRS 381.9167 lists the powers of the unit owners' association and says the association "may" adopt and amend "budgets for revenues, expenditures, and reserves" and collect assessments for common expenses.⁵ That word — "may" — is permissive. It authorizes reserves; it does not require a reserve study or any reserve-funding level. The budget-ratification provision, KRS 381.9169, calls a member meeting to consider the budget only when a proposed budget raises assessments more than fifteen percent over the prior year.¹⁰ The Act addresses reserves head-on in just one place: the resale certificate. KRS 381.9203 requires a seller of a condominium unit to furnish a certificate that states "the amount of any reserves for capital expenditures, if any," any portion of those reserves designated for specified projects, the current operating budget, the most recent balance sheet and financial report, anticipated capital expenditures, and insurance information.⁸ The certificate discloses what reserves exist; it does not require that any reserve be funded. Put it together, and the Act recognizes reserves and forces their disclosure on resale, but it sets no reserve-study or reserve-funding mandate.

2B. Pre-2010 condominiums and the Planned Community Act

Condominiums created before January 1, 2011 remain under the Horizontal Property Law, KRS 381.805 to 381.910, which dates to 1962.² One fact controls which act applies: the date the regime was created. KRS 381.9103 keeps pre-2011 condominiums under the older law but reaches several Condominium Act sections back to them for events after January 1, 2011, including the resale-certificate section (KRS 381.9203) and the financial-records section (KRS 381.9197).¹⁵ The Horizontal Property Law covers maintenance and pro rata contribution to common expenses (KRS 381.870), but it carries no reserve-study or reserve-funding mandate.² And contrary to a common assumption, Kentucky does not lack a planned-community statute. The Planned Community Act, KRS 381.785 to 381.801, arrived as 2023 Kentucky Acts chapter 23 (Senate Bill 120), signed March 20, 2023, and effective June 29, 2023; it now supplies a statutory framework for non-condominium HOAs, covering declarations, boards, budgets, assessments, records, and liens.³ It excludes condominiums by definition, and by its own terms it does not reach developments that lack an established homeowners' association.¹⁶ Associations organized as nonprofit corporations still answer to the Kentucky Nonprofit Corporation Act, KRS Chapter 273, for corporate governance.¹² And here is what matters for reserves: the Planned Community Act keeps reserve funding permissive — the budget "may include reserves to fund the future repair and replacement of capital goods."⁶

2C. The declaration, corporate law, and fiduciary backstop

In Kentucky, the recorded declaration is the primary source of any binding reserve obligation. Because neither the Condominium Act nor the Planned Community Act sets a funding standard, an association's duty to fund reserves — if it has one — comes from its CC&Rs.⁴ Precedence runs statute first where it speaks, then the declaration, then the bylaws and rules; the Condominium Act provides that the declaration prevails over the bylaws except where the declaration conflicts with the Act.⁵ At the corporate level, associations organized as nonprofit corporations answer to the Kentucky Nonprofit Corporation Act, KRS Chapter 273, and their directors meet its standards of conduct, which the Planned Community Act incorporates for board directors.¹⁷ The Condominium Act sets a director-liability standard at KRS 381.9170.⁹ Board members exercise their reserve judgment inside that fiduciary frame. A board that underfunds reserves and then reaches for special assessments may face questions about whether it met its duty of care — even though no statute fixes a reserve number. The implication is direct: in Kentucky, the declaration and prudent board judgment set reserve practice, not a statutory formula, which makes an independent reserve study a documentation tool rather than a compliance filing.

Section 3: Compliance obligations

A. Study and inspection obligations

No Kentucky statute requires a reserve study, a study update on a fixed interval, or a periodic on-site physical inspection for any community type.¹ For condominiums under the 2010 Act, pre-2011 condominiums under the Horizontal Property Law, and non-condominium HOAs under the Planned Community Act, any duty to commission or update a reserve study is contractual — set by the recorded declaration — or fiduciary, a function of the board's duty of care. It is not statutory.⁴

B. Funding obligations

No statute sets a reserve-funding level, a percent-funded target, or a dollar threshold. For condominiums, KRS 381.9167 authorizes reserves in the budget but does not require funding them.⁵ For non-condominium HOAs, the Planned Community Act says the budget "may include reserves," and its common-expense provision includes "reserves for replacement of the common areas" — but neither compels a funding level.⁶ Funding obligations therefore arise, if they arise at all, from the declaration or from the board's fiduciary duty.

C. Disclosure obligations

For condominiums — created before or after 2011, because KRS 381.9203 reaches pre-2011 regimes through KRS 381.9103 — the seller's resale certificate must disclose the amount of any capital-expenditure reserves, reserves designated for specific projects, the current operating budget, and the date of the most recent financial report. The association must furnish the certificate within ten business days of a written request, and the Kentucky Real Estate Commission publishes the Condominium Seller's Certificate (KREC Form 404) that practitioners use.^8,18 KRS 381.9201 exempts certain transfers.¹⁹ Condominium associations must also prepare an annual financial report scaled to revenue under KRS 381.9197.⁷ For non-condominium HOAs, the Planned Community Act requires an annual financial report scaled to revenue and requires the adopted budget to go to owners; there is no statutory resale certificate for planned communities.⁶

D. Account and governance obligations

No statute requires associations to hold reserves in a segregated account or bars commingling, for any community type. The governance obligations that bear on reserves are fiduciary and corporate: KRS 381.9170 subjects condominium directors to a liability standard, and the Planned Community Act and KRS Chapter 273 set the standards for planned-community directors.^9,17 Budget process is statutory in part — a condominium budget that raises assessments more than fifteen percent over the prior year triggers a member ratification meeting (KRS 381.9169), and the Planned Community Act applies a parallel ratification process.¹⁰

Section 4: Recent legislative and judicial activity

A. Recent bills

No bill enacted in the past twenty-four months imposed a reserve-study or reserve-funding mandate on Kentucky associations. The most relevant recent enactment touching common-area maintenance is the planned-community receivership provision, KRS 381.803.

A separate 2025 enactment that amended KRS 381.800 — political yard signs in planned communities, 2025 Acts ch. 32, signed March 18, 2025 — does not touch budgets, reserves, or financial disclosure.²⁰

B. Recent appellate rulings

We identified no published decision of the Kentucky Court of Appeals or the Kentucky Supreme Court in the past thirty-six months that turns on reserves, budget adequacy, or board fiduciary duty in the reserve-funding context.²¹

C. Active legislative debates

Kentucky's HOA-specific legislative activity stays low, and the 2023 Planned Community Act has drawn follow-on amendments on narrow topics — yard signs, municipal receivership — rather than reserve mandates. No active proposal to require reserve studies or reserve funding has advanced.

Section 5: National positioning and related coverage

Kentucky sits in the no-mandate group of states for reserve studies. The hard-mandate states fix study intervals and funding rules. California requires, "[a]t least once every three years," a "reasonably competent and diligent visual inspection" of major components as part of a reserve study, plus a reserve funding plan for components with a remaining life of thirty years or less (Civ. Code § 5550).²² Florida requires a structural integrity reserve study "at least every 10 years" for condominium and cooperative buildings three stories or higher, with the initial study due by December 31, 2024 for older buildings, under Senate Bill 4-D (2022), codified at Fla. Stat. § 718.112(2)(g).²³ Maryland's House Bill 107 (2022, effective October 1, 2022) created a statewide reserve-study mandate that requires updates every five years and full funding of the recommended level within the third annual budget cycle after the initial study.²⁴ Disclosure-mandate states such as Colorado require associations to disclose reserve information — the amount of reserves and whether any reserve study rested on physical and financial analysis — without dictating a funding percentage (C.R.S. § 38-33.3-209.4).²⁵ Kentucky falls in the third group, the no-mandate states, alongside Indiana, Georgia, and Iowa, where the declaration and board judgment govern reserves. Kentucky's 2010 Condominium Act rests on the 1980 Uniform Condominium Act, and the state now has a 2023 Planned Community Act for non-condominium HOAs. For multi-state operators entering Kentucky, the practical point is plain: compliance turns on each association's recorded declaration and on prudent board practice, not on a state reserve statute.

HOA Weekly's Kentucky Reserve Studies coverage updates quarterly as the General Assembly and the Kentucky appellate courts act. Federal frameworks — the Fair Housing Act, the Americans with Disabilities Act, the Fair Debt Collection Practices Act, the Servicemembers Civil Relief Act, and the FCC's OTARD rule — also apply to Kentucky associations regardless of the state framework.

1. Kentucky Revised Statutes Chapter 381 (Legislative Research Commission) — index showing the Condominium Act, Horizontal Property Law, and Planned Community Act; no statute imposes a reserve-study or reserve-funding mandate. ↩
2. KRS 381.810 and the Horizontal Property Law, KRS 381.805 to 381.910 (Legislative Research Commission). ↩
3. KRS 381.786, Planned Communities subject to KRS 381.785 to 381.801 (created 2023 Ky. Acts ch. 23, sec. 2, effective June 29, 2023). ↩
4. 2023 Ky. Acts ch. 23 (SB 120), Planned Community Act — text confirming reserves are discretionary and set by the declaration and board judgment. ↩
5. KRS 381.9167, Powers of unit owners' association — Emergency assessments (association "may" adopt and amend budgets for revenues, expenditures, and reserves). ↩
6. KRS 381.790, Budget — Assessments — Insurance — Financial records (Planned Community Act; budget "may include reserves"); see also 2023 Ky. Acts ch. 23, secs. 6, 10, 12, 13. ↩
7. KRS 381.9197, Association records — Financial report (revenue-scaled financial report for condominium associations). ↩
8. KRS 381.9203, Documentation to be furnished by seller of unit — Certificate (requires statement of the amount of any reserves for capital expenditures, designated reserves, operating budget, and date of most recent financial report). ↩
9. KRS 381.9170, Discharge of board member's duties — Standards for monetary damages and injunctive relief. ↩
10. KRS 381.9169, Executive board members and officers (member ratification meeting required where a proposed budget increase exceeds fifteen percent). ↩
11. KRS 381.803, Petition by city to appoint receiver where a planned community fails to maintain infrastructure or common areas (Created 2024 Ky. Acts ch. 150, sec. 1, effective July 15, 2024). ↩
12. Kentucky Nonprofit Corporation Act, KRS Chapter 273 (Legislative Research Commission). ↩
13. Stites & Harbison PLLC, "New Law Brings Changes to Kentucky's Condominium Laws" — the Kentucky Condominium Act was modeled on the Uniform Condominium Act (1980), with state-specific departures (used to corroborate the uniform-act basis; statute text per footnote 1). ↩
14. Comparison of mandate states: California Civ. Code § 5550 (reserve study), corroborating Kentucky's no-mandate position; see footnotes 22 to 25 for full comparison citations. ↩
15. KRS 381.9103, Application and construction of KRS 381.9101 to 381.9207 (applies to condominiums created after January 1, 2011; enumerated sections, including 381.9197 and 381.9203, reach pre-2011 regimes for post-2011 events). ↩
16. 2023 Ky. Acts ch. 23 (SB 120), sec. 1 (definition of "planned community" excludes condominiums) and sec. 2 (Act does not apply to developments without an established homeowners' association). ↩
17. KRS 381.793, Quorum — Open board meetings — Standards for board directors (incorporating the conduct standards of KRS 273.215 and 273.229). ↩
18. Kentucky Real Estate Commission, Condominium Seller's Certificate (KREC Form 404), implementing KRS 381.9203. ↩
19. KRS 381.9201, Applicability — Modification or waiver by agreement — Certificate not required in certain cases. ↩
20. 2025 Ky. Acts ch. 32 (HB 27), amending KRS 381.800 (political yard signs in planned communities), signed March 18, 2025. ↩
21. Kentucky Court of Appeals decisions index (2025) — reviewed; no qualifying reserve, budget-adequacy, or reserve-context fiduciary-duty opinion identified within the past thirty-six months. ↩
22. California Civil Code § 5550 (reserve study at least every three years with visual inspection; reserve funding plan for components with remaining life of thirty years or less). ↩
23. Florida Senate Bill 4-D (2022), creating the structural integrity reserve study and milestone inspection requirements (codified in part at Fla. Stat. § 718.112(2)(g)). ↩
24. Maryland House Bill 107 (2022, effective October 1, 2022), statewide reserve-study mandate (Md. Real Property §§ 11-109.4, 11B-112.3) with five-year updates and a funding timeline; verify against the Maryland General Assembly's enrolled text. ↩
25. Colorado Common Interest Ownership Act, C.R.S. § 38-33.3-209.4 (required disclosures, including amount of reserves and whether a reserve study was based on physical and financial analysis). ↩