Michigan HOA Reserve Studies
Michigan HOA Reserve Studies
| Reserve study factor | Michigan treatment |
|---|---|
| Statutory reserve study required | No. Michigan does not require a formal reserve study on a fixed schedule, and it does not require a credentialed preparer. The administrative rules set a reserve-fund floor, not a study obligation.1,2 |
| Communities covered | The Condominium Act covers condominiums, including site condominiums. It does not reach true non-condominium HOAs — planned communities that run on recorded CC&Rs.3,4 |
| Initial study deadline | Not required by statute. No study mandate exists, so the bylaws and the board's judgment govern the timing of any voluntary study.1 |
| Study update interval | Not required by statute. No study mandate exists.1 |
| On-site / physical inspection interval | Not required by statute. No inspection mandate exists.1 |
| Preparer qualification | Not required by statute. With no study mandate, the state requires no credentialed preparer.1 |
| Reserve funding required | Yes for condominiums, including site condominiums — they must maintain a reserve fund for major repairs and replacement of common elements. The statute does not require it for non-condominium HOAs.1,4 |
| Funding standard | The association must keep a minimum reserve fund equal to at least 10% of its current annual budget, measured on a noncumulative basis, and the bylaws must warn that the minimum may fall short. This comes from administrative rule R 559.511 under the Condominium Act.2 |
| Component / useful-life scope | No statute sets a component inventory or a useful-life schedule. The rules restrict reserve funds to major repairs and replacement of common elements.2 |
| Annual member disclosure | The association must give each co-owner an annual financial statement, and it must open its books and records to co-owner examination. No statute requires a reserve-specific annual disclosure.5,6 |
| Resale / buyer disclosure | When a buyer asks at least five days before sale, the association must provide a written statement of unpaid assessments and related charges. No statute requires a reserve-balance disclosure at resale.7 |
| Reserve account protections | The association may use reserve funds only for major repairs and replacement of common elements, and the developer must cover any shortfall in the minimum at the transitional control date.2 |
| Waiver or underfunding mechanism | No statute lets an association waive the floor or vote to fund below it. The 10% minimum is mandatory and noncumulative.2 |
| Enforcement / penalty | No agency oversees HOA operations, and LARA does not enforce against associations. Co-owners and associations enforce their rights by suing in circuit court.8,9 |
| Primary statutory citation(s) | MCL 559.205; Mich. Admin. Code R 559.511; Condominium Act, MCL 559.101 et seq.1,2,10 |
Section 1: Overview — Reserve study requirements in Michigan
Michigan requires condominium associations to keep a minimum reserve fund for major repairs and replacement of common elements. It does not, however, require a formal reserve study on a fixed schedule, and it does not require a credentialed preparer. The Michigan Condominium Act, Act 59 of 1978, MCL 559.101 et seq., governs here — a Michigan-specific statute that does not follow the Uniform Common Interest Ownership Act.10
The statute states the reserve-fund obligation in bare form at MCL 559.205, and the administrative rules under the Act fill in the numbers, chiefly Michigan Administrative Code R 559.511. That rule sets a minimum funding level, not a study requirement.1,2
Michigan developers commonly build detached single-family neighborhoods as site condominiums under the Condominium Act, so many communities that act like traditional homeowner associations are in fact condominiums under the Act — and the reserve-fund requirement reaches them.3
Place Michigan in the national picture and it lands in the funding-mandate group: it requires associations to fund reserves to a floor, but unlike fixed-interval-study states such as California it prescribes no formal study, and unlike disclosure-mandate states it imposes no detailed reserve-disclosure regime.11 The sections that follow lay out the statutory and administrative framework, the treatment of site condominiums and non-condominium HOAs, the compliance obligations by community type, recent legislative and judicial activity, and where Michigan stands against other states.
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Related Michigan HOA Topics
- Michigan Condominium Act, MCL 559.205 (Reserve fund), Michigan Legislature ↩
- Mich. Admin. Code R 559.511 (Reserve fund for major repairs and replacement of common elements), Michigan Administrative Rules (LARA / Office of Administrative Hearings and Rules) ↩
- The Condominium Buyer's Handbook (site condominium described as a development of single-family detached housing that must comply with the Condominium Act), Michigan Department of Licensing and Regulatory Affairs ↩
- Michigan Nonprofit Corporation Act, MCL 450.2101 et seq., Michigan Legislature ↩
- Michigan Condominium Act, MCL 559.154 (bylaws; books and records; annual financial statement), Michigan Legislature ↩
- Michigan Condominium Act, MCL 559.157 (books, records, contracts, and financial statements; examination), Michigan Legislature ↩
- Michigan Condominium Act, MCL 559.211 (sale or conveyance of condominium unit; statement of unpaid assessments), Michigan Legislature ↩
- Condominium Act FAQ (role of LARA's Office of Policy & Legislative Affairs; Condominium Buyer's Handbook; distribution of Act and rules), Michigan Department of Licensing and Regulatory Affairs ↩
- Condominium Act FAQ ("LARA has no authority to take complaints or enforce any requirements of the Condominium Act regarding the actions of condominium associations … Only a court can order an association to comply"; Section 107 / MCL 559.207 circuit-court action), Michigan Department of Licensing and Regulatory Affairs ↩
- Condominium Act, Act 59 of 1978, MCL 559.101 et seq., Michigan Legislature ↩
- California Civil Code § 5550 (reserve study; visual inspection at least once every three years), California Legislative Information ↩
- Tilchin & Hall, P.C., "Budgeting and Assessments for Community Associations" ("'Noncumulative' means only for a single year"), cross-reference to R 559.511(1) ↩
- Newport West Condominium Ass'n v Veniar, 134 Mich App 1, 6-7; 350 NW2d 818 (1984) (board must provide for an adequate reserve fund to cover depreciation of capital assets), discussed in connection with MCL 559.205, Michigan Legislature ↩
- Institute of Continuing Legal Education, "Chapter 10: Condominiums" (site condominiums; all Michigan condominium projects under jurisdiction of LARA; deregulation of the department's regulatory role) ↩
- House Bill No. 5019 (2023-2024), text amending Section 105 of 1978 PA 59 (MCL 559.205), Michigan Legislature ↩
- House Bill 5019 of 2023, bill status and history, Michigan Legislature ↩
- CAI Michigan, "Updates from the MI LAC" (LAC seeking a sponsor to reintroduce legislation amending MCL 559.205 to require a reserve study every five years; co-chairs Matthew W. Heron and Todd Skowronski) ↩
- Farmington Square Condominium Ass'n v Mitan, unpublished per curiam opinion of the Court of Appeals, issued August 11, 2025 (Docket No. 366035), Michigan Courts ↩
- Florida Senate Bill 4-D (2022 Special Session) (Structural Integrity Reserve Studies; milestone inspections for condominium and cooperative buildings three stories or more), Florida Senate ↩
- Maryland House Bill 107 (2022) (reserve study requirement; updates at least every five years), Maryland General Assembly ↩
- Fannie Mae Lender Letter LL-2026-03 (March 18, 2026) (raising the minimum reserve-funding requirement to 15 percent of budgeted annual income for loan applications dated on or after January 4, 2027); see also Freddie Mac Bulletin 2026-6 (May 6, 2026) ↩
- Freddie Mac Single-Family Seller/Servicer Guide Bulletin 2026-C (Mar. 18, 2026), Freddie Mac (Streamlined Review retired and Exempt from Review expanded; baseline reserve-funding method no longer accepted, effective Aug. 3, 2026) ↩
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