Massachusetts HOA Reserve Studies

Section 1: Overview — Reserve study requirements in Massachusetts

Massachusetts does not require a reserve study. It does require something else: under the Massachusetts Condominium Act, every condominium has to maintain an "adequate replacement reserve fund." Here is the catch. No statute defines "adequate," none calls for a study, and none sets a funding formula.³ That pairing — a real funding duty with no study and no number behind it — makes Massachusetts an outlier among the no-study states.

The statute doing the work is the Massachusetts Condominium Act, Mass. Gen. Laws ch. 183A. The Legislature passed it in 1963, and it runs short — an enabling statute that sets a framework and leaves most of the operating detail to each condominium's governing instruments.¹⁰ Massachusetts condominiums usually take the form of a condominium trust: the unit owners organize as a trust, and trustees run the condominium under a declaration of trust. Some organize as corporations or unincorporated associations instead.¹¹ The state has no comprehensive planned-community or HOA statute, so non-condominium associations answer to their recorded covenants together with the Massachusetts nonprofit corporation law (ch. 180) or trust law.²

Look at the country as a whole, and the states sort into three groups: hard-mandate states with fixed study intervals and funding rules, disclosure-mandate states, and no-mandate states. Massachusetts sits in the no-mandate group on reserve studies. But its reserve-funding duty for condominiums lifts it above the thinnest no-mandate frameworks. The sections that follow lay out the statutory text, the governance structure, the role of the governing instruments and trustee fiduciary duty, the specific compliance obligations, and the recent moves in the Legislature and the courts.

Section 2: The reserve framework under Massachusetts law

2A. The Massachusetts Condominium Act and reserves

Chapter 183A runs exactly 23 sections (Mass. Ann. Laws ch. 183A, §§ 1–23) — a short enabling statute, passed in 1963, that predates the uniform condominium acts.¹⁰ Massachusetts courts call it an enabling statute that "sets out a framework for the development and operation of condominiums," and they leave the operational matters to the governing instruments.¹² The Act covers the organization of unit owners, the common areas, common expenses and assessments, and the powers and duties of the managing entity — that last group sits in Section 10.

Section 10 breaks the pattern. On financial management, it gets specific. Section 10(i) provides that "[a]ll condominiums shall be required to maintain an adequate replacement reserve fund, collected as part of the common expenses and deposited in an account or accounts separate and segregated from operating funds."³ Section 1 defines that replacement reserve fund as a separate, segregated portion of common funds used to replace, restore, or rebuild common areas and facilities.⁴ These provisions, along with the broader financial-management subsections and the modification mechanism in Section 10(m), arrived through St. 1992, c. 400, "An Act Relative to the Protection of Condominium Residents," approved January 14, 1993. The Legislature acted in response to a documented crisis: during the early-1990s recession, condominium foreclosures climbed sharply and absentee ownership reached high levels.¹³

What the Act leaves out matters just as much. It does not require a reserve study. It does not define "adequate." It does not set a funding percentage or a dollar floor, prescribe a component or useful-life methodology, or fix a study or inspection interval.¹ The funding duty is real, but its content rests with trustee judgment and the governing instruments.

2B. Condominium-trust governance and the absence of a planned-community statute

The operation of a Massachusetts condominium rests with the organization of unit owners, which Section 1 defines as "the corporation, trust or association owned by the unit owners and used by them to manage and regulate the condominium."⁴ In practice, the trust form wins out: a declaration of trust creates the managing entity, and trustees — not a corporate board of directors — run the condominium. Some condominiums take corporate or unincorporated-association form instead, and there directors or managing-board members do the same job.¹¹ The reserve duty in Section 10(i) reaches the organization of unit owners no matter which form it takes.

There is no comprehensive Massachusetts planned-community or HOA statute. Non-condominium associations — usually single-family-home or townhome communities — answer to their recorded covenants and, depending on how they organize, to the Massachusetts nonprofit corporation law (Mass. Gen. Laws ch. 180) or to trust law, alongside common-law contract and property principles.² Chapter 183A does not touch them, and no statutory reserve-funding duty reaches them. Whatever reserve obligations they carry come entirely from their governing documents and the fiduciary duty of their boards.

2C. The governing instruments and fiduciary backstop

For condominiums, the master deed, the declaration of trust, and the bylaws supply the operating detail the statute skips — how reserves get budgeted, funded, and spent. Where statute and instrument collide, Chapter 183A controls on the points it addresses. But on reserve methodology the statute stays largely silent, so the instruments and prudent trustee judgment take over. Many condominiums adopt reserve-contribution requirements or reserve-funding bylaw amendments to give the statutory "adequacy" duty some concrete content.¹⁴

Fiduciary duty is the practical enforcement backstop. Massachusetts trustees and board members owe a fiduciary duty to the organization of unit owners, not to individual owners — a rule set in Cigal v. Leader Development Corp. and reaffirmed in Office One, Inc. v. Lopez.¹⁵ Because "adequate" has no definition, a trustee who funds reserves in good faith and on a reasoned basis stands on solid ground, while a board that ignores the reserve duty invites a derivative claim brought by or for the association. The bottom line: in Massachusetts, statute sets whether a reserve fund exists, but the governing instruments and trustee judgment set its size, its methodology, and its study practice.

Section 3: Compliance obligations

A. Study and inspection obligations

• No reserve study is required — not for condominiums (any duty is contractual or fiduciary; Chapter 183A imposes none) and not for non-condominium associations (no statute applies). A study is the standard professional way to show that a condominium's fund is "adequate" under Section 10(i), but the statute does not demand one.¹
• No statutory on-site or physical inspection interval applies to either community type.¹

B. Funding obligations

• Condominiums must maintain an "adequate replacement reserve fund," collected as part of common expenses, under Mass. Gen. Laws ch. 183A, § 10(i). The obligation is statutory; the standard is undefined.³
• After declarant control ends, owners may modify the reserve-funding duty by an annual vote of 67 percent in beneficial interest under § 10(m), and a majority may rescind that modification. This is statutory and applies to condominiums only.⁸
• Non-condominium associations carry no statutory reserve-funding duty; any obligation is contractual (recorded covenants) or fiduciary (board duty).²

C. Disclosure obligations

• Condominiums must prepare a financial report within 120 days of fiscal year-end — a balance sheet, an income and expense statement, and a statement of funds available — and make it available to all unit owners within 30 days and to mortgagees on request, under § 10(d). Statutory; condominiums only.⁵
• Condominiums of 50 or more units must obtain an independent CPA review of that report at least every two years under § 10(d); smaller condominiums may get one by owner vote. Statutory; condominiums only.⁵
• The Section 6(d) certificate, issued on request within 10 business days, states only unpaid common-expense assessments and related charges against a unit. It does not disclose reserve adequacy or fund balances. Statutory; condominiums only.⁶
• Non-condominium associations have no statutory financial-disclosure obligation; disclosure runs through the recorded covenants and ch. 180.²

D. Account and governance obligations

• Condominium reserve funds must stay segregated from operating funds under § 10(i), and where a managing agent holds them, they must sit in separate, distinct accounts shielded from the agent's creditors under § 10(f). Statutory; condominiums only.⁷
• Reserve-account checks require a board member's signature in addition to the managing agent's, unless the parties agree otherwise in writing, under § 10(g). Statutory; condominiums only.⁷
• A managing agent must give the trustees written reports at least quarterly, including reserve-fund balances, statements, and reconciliations, under § 10(f). Statutory; condominiums only.⁷
• Trustees and board members owe a fiduciary duty to the organization of unit owners as they carry out these duties (Cigal v. Leader Development Corp.). The duty holds whether the organization is a trust, a corporation, or an association.¹⁵

Section 4: Recent legislative and judicial activity

A. Recent bills

One pending bill would turn the open-ended "adequate reserve" duty into a hard number and a study requirement. It has not become law.

B. Recent appellate rulings

No Massachusetts Appeals Court or Supreme Judicial Court decision in the past 36 months has squarely addressed reserve-fund adequacy or trustee fiduciary duty in the reserve context. The most recent notable appellate decision on condominium finances points in a different direction. Real-property condominium disputes can start in the Superior Court, the Land Court, or the Housing Court, with appeals to the Massachusetts Appeals Court and final review by the Supreme Judicial Court.

C. Active legislative debates

The main live debate is whether Massachusetts should convert its open-ended "adequate reserve" standard into a numeric funding floor paired with a periodic engineer-prepared study — the approach the CORA bills take. That effort has not reached enactment.

Section 5: National positioning and related coverage

Massachusetts holds a distinctive middle position on reserves. It is not a hard-mandate state with fixed study intervals and funding rules — the group that includes California (Civ. Code § 5550), Florida (Structural Integrity Reserve Studies under SB 4-D), Maryland, New Jersey, Oregon, Utah, Virginia, and Washington — and it is not a disclosure-mandate state like Colorado. On reserve studies it is a no-mandate state, sitting among frameworks as thin as Wyoming's. Yet Massachusetts stands apart, because its skeletal condominium statute still imposes a genuine reserve-funding duty on every condominium, paired with a distinctive condominium-trust governance structure that trustees run rather than a corporate board. For a multi-state operator entering Massachusetts, the practical implication is direct: the declaration of trust, the bylaws, and trustee fiduciary judgment set the size and methodology of reserve funding, not a statutory formula — so due diligence belongs in the governing documents, not in a reserve-study statute.

HOA Weekly's Massachusetts Reserve Studies coverage updates quarterly as the General Court and the Massachusetts appellate courts act. Federal frameworks — the FHA, the ADA, the FDCPA, the SCRA, and OTARD — also apply to Massachusetts associations regardless of the state framework.

1. Mass. Gen. Laws ch. 183A, § 10 (full text; no reserve-study or inspection-interval requirement appears) ↩
2. Mass. Gen. Laws ch. 180 (nonprofit corporations); see also discussion that the Condominium Act does not apply to non-condominium homeowners' associations, which are governed by recorded covenants and ch. 180 or trust law ↩
3. Mass. Gen. Laws ch. 183A, § 10(i): "All condominiums shall be required to maintain an adequate replacement reserve fund, collected as part of the common expenses and deposited in an account or accounts separate and segregated from operating funds." ↩
4. Mass. Gen. Laws ch. 183A, § 1 (definitions of "Replacement reserve fund" and "Organization of unit owners") ↩
5. Mass. Gen. Laws ch. 183A, § 10(d) (annual financial report within 120 days; availability to owners and mortgagees; CPA review for 50-plus-unit condominiums at least every two years; prevailing-party attorneys' fees) ↩
6. Mass. Gen. Laws ch. 183A, § 6(d) (certificate of unpaid common-expense assessments and related charges; addresses arrears, not reserve adequacy) ↩
7. Mass. Gen. Laws ch. 183A, § 10(f) (managing-agent quarterly reports and segregated reserve accounts shielded from creditors) and § 10(g) (second-signature requirement on reserve-account checks) ↩
8. Mass. Gen. Laws ch. 183A, § 10(m) (after transfer of control from declarant, 67 percent in beneficial interest may modify the reserve-fund requirement; modification rescindable by majority) ↩
9. Mass. Gen. Laws c. 183A (annotated section list, Mass.gov / Trial Court Law Libraries) ↩
10. Mass. Gen. Laws ch. 183A (Condominiums), §§ 1–23 (Massachusetts Legislature codification) ↩
11. Condominium Ownership and Operation in Massachusetts (organization of unit owners may take the form of a trust, association, or corporation; trustees administer the condominium), citing Mass. Gen. Laws ch. 183A, § 10(b) ↩
12. Trustees of Beechwood Village Condominium Trust v. USAlliance Federal Credit Union, 95 Mass. App. Ct. 278, 285 (2019), quoting Queler v. Skowron, 438 Mass. 304, 312–13 (2002) (Chapter 183A is an enabling statute setting a framework for the development and operation of condominiums) ↩
13. St. 1992, c. 400, "An Act Relative to the Protection of Condominium Residents" (approved Jan. 14, 1993; added the replacement reserve fund mandate and financial-management subsections to § 10 and the "Replacement reserve fund" definition to § 1), Massachusetts State Archives ↩
14. Condominium Reserve Funding Amendments: A Legal Tool with Complications (discussing reserve-funding bylaw amendments to satisfy § 10(i)) ↩
15. Cigal v. Leader Dev. Corp., 408 Mass. 212, 219 (1990); Office One, Inc. v. Lopez, 437 Mass. 113, 125 (2002) (condominium board members owe a fiduciary duty to the association, not to individual unit owners) ↩
16. S.980, An Act relative to the condominium owners' rights (CORA), 194th General Court (filed by Sens. Edwards and Kennedy); see also S.2498 (193rd General Court) for predecessor text including the decennial capital reserve fund study for 50-plus-unit condominiums ↩
17. Geezil v. White Cliffs Condominium Four Association, 105 Mass. App. Ct. 103, No. 23-P-1103 (decided Nov. 13, 2024) (condominium association is not the "owner" of common areas under G. L. c. 151B) ↩