Michigan bill would force condominium reserve studies every five years — filed twice, heard never
Michigan bill would force condominium reserve studies every five years — filed twice, heard never
2026-09-12 · Michigan · Legislation · Pending — not yet law
What happened. A bill that would give Michigan its first statutory reserve-study mandate has been sitting in the House Regulatory Reform Committee since 14 April 2026 without a hearing. House Bill 5784, sponsored by Rep. John Fitzgerald (D-83) with Reps. Jason Hoskins (D-18) and Stephen Wooden (D-81), would amend section 105 of the Condominium Act, MCL 559.205.1
It is not law. Michigan today has no statutory requirement that a condominium association ever commission a reserve study.
Who would be covered
An association of co-owners that (a) is responsible under the condominium documents for maintaining, replacing and repairing common elements, and (b) either has an annual budget over $20,000 or operates a project with more than 20 units. That is a low threshold; most Michigan condominium associations of any size clear it.
What it would require
- New projects: an initial reserve study no later than 30 days before the transitional control date, and the developer must require the association to conduct it.
- Existing projects: a study within three years of the effective date, unless the association has done or updated one in the preceding five years. Alternatively, sign a contract with a qualified preparer within three years and complete the study within one year of signing.
- Thereafter: a new study or an update at least once every five years.
- A segregated account: “A reserve fund must be held in a separate account that is different from the operating fund account.”
The bill also defines “reserve study” for the first time in Michigan law: it must identify each structural, mechanical, electrical and plumbing component of the common elements, state each component's normal and estimated remaining useful life, state the estimated current cost of repair or replacement, and state the estimated annual reserve contribution needed.
Who may prepare it
This is the provision that would reshape a market. A study would have to be prepared by someone who meets at least one of four tests:
- participated in preparing at least 30 reserve studies in the past three calendar years while employed by a firm that prepares them;
- personally prepared at least 30 in the past three years;
- holds a current licence from the Michigan board of architects or the Michigan board of professional engineers; or
- is currently designated a Reserve Specialist by the Community Associations Institute or a Professional Reserve Analyst by the Association of Professional Reserve Analysts.
A management company producing a spreadsheet would not qualify. Neither would a board treasurer with a background in construction.
The disclosure that would land on every budget
Subsection (8) would require an annual written notice with the budget stating the reserve balance, and it prescribes the language in capital letters — including that if a major repair exceeds the reserve fund, the association “MAY NEED TO FUND THE REPAIR OR REPLACEMENT OF THE COMMON ELEMENTS THROUGH INCREASED OR ADDITIONAL ASSESSMENTS, SPECIAL ASSESSMENTS, OR BORROWING.”
Statutory all-caps disclosures are unusual in Michigan association law, and they exist to be read by purchasers. The study, the funding plan and the notice would all be available for inspection and copying by a unit owner, a prospective purchaser, or a mortgagee — which is, incidentally, the only document-access provision in any Michigan bill this session.
Why this bill is stuck, and the number that explains it
HB 5784 is a refile. Rep. Fitzgerald introduced the identical subject line, amending the identical section, as House Bill 5019 on 19 September 2023. It was referred to the Committee on Economic Development and Small Business and died at sine die in December 2024 without a hearing.
So the count is two legislatures, two committees, zero hearings. Three Democratic sponsors in a House with a 58–52 Republican majority is the arithmetic. The House returns 15 September 2026 and no committee has posted a meeting notice; everything not enacted dies at the end of December.
The part that is easy to miss
Whether HB 5784 passes has become the less important question, because the requirement it would impose already exists in a different form. Fannie Mae and Freddie Mac now require, for conventional financing, that a project's budget carry at least 15% of annual budgeted assessment income in replacement reserves for loan applications dated on or after 4 January 2027, that the budget reflect the reserve study's highest recommended allocation, and that the study not use a baseline funding method.
A Michigan association that ignores reserves because Lansing never acted will find the secondary mortgage market imposing the discipline instead — not through a fine, but by making units in the project harder to sell.
What to watch next
A hearing notice from House Regulatory Reform. That committee also holds Senate Bill 272, the developer-side condominium bill that has already passed the Senate 34–1. Which of the two moves first, if either does, will say a good deal about whose problems the committee is prioritising.
Related Michigan HOA Topics
Stay on top of Michigan HOA law
Every week: new Michigan legislation, court rulings, and regulatory developments affecting condos, planned communities, and property managers. Free.
No spam. Unsubscribe anytime.