New Hampshire HOA Budget Approval

Section 1: Overview, how HOA budgets are approved in New Hampshire

New Hampshire governs condominium budgets through its own state statute — the New Hampshire Condominium Act (RSA chapter 356-B, enacted 1977) — and the Act itself, not just the bylaws, prescribes how budget adoption works.¹ Since 2016, RSA 356-B:40-c has established a negative-option — or ratified-unless-rejected — budget model: the board adopts a proposed budget, sends a summary to all unit owners, and the budget takes effect unless a supermajority of owners rejects it at a ratification meeting.¹ That model corrects a common assumption — that New Hampshire leaves condominium budget adoption entirely to the bylaws. The Act supplies the operative mechanics; the bylaws and declaration fill in the gaps and may raise the rejection threshold.² For non-condominium associations, New Hampshire has no comprehensive planned-community statute, so those HOAs adopt budgets under their recorded declarations (CC&Rs) and the state's nonprofit corporation law, RSA chapter 292.³ The Act imposes no reserve-study mandate, no minimum reserve-funding level, and no percentage cap on assessment increases.¹ New Hampshire is a non-UCIOA, bespoke-statute state, though its 2016 budget-ratification provision drew on uniform-act language.⁴ The table and subsections below lay out the statutory mechanics for condominiums and the declaration-governed approach for planned communities.

Section 2: The budget approval mechanism

The table below reflects the New Hampshire Condominium Act (RSA 356-B) and the condominium bylaws structure for condominiums. Planned communities are not covered by a condominium-style budget statute and are declaration-governed; they are addressed in the prose that follows.

2B. The budget process

For condominiums, RSA 356-B:40-c prescribes the budget process directly. The board of directors must adopt a proposed budget at least annually for unit owner consideration. Within 30 days of adopting the budget, the board must send all unit owners a summary — including any reserves and the basis on which those reserves are calculated and funded. Simultaneously, the board must schedule a ratification meeting no fewer than 10 days and no more than 60 days after distributing that summary.¹ The decisive feature is the negative-option rule: unless 2/3 of all unit owners — or any larger number the declaration specifies — reject the budget at that meeting, the budget is ratified, whether or not a quorum is present. If owners do reject a proposed budget, the last ratified budget stays in place until owners approve a new one.¹ This is a ratified-unless-rejected design — not a board-discretion model, and not one requiring an affirmative vote — and it has been in effect since August 1, 2016.⁴

Special assessments follow the same framework. The board may propose a special assessment at any time, but the assessment takes effect only if the board follows the budget ratification procedure and owners do not reject it. The Act does carve out an emergency exception: if the board determines by a 2/3 vote that a special assessment is necessary to address an emergency, it takes effect immediately, notice goes out promptly to all unit owners, and the funds may be spent only for the purposes the vote described.¹ The association assesses common expenses against units in proportion to their votes in the unit owners' association, and it holds a lien on each unit for unpaid assessments.⁷

Planned communities operate under a different framework. New Hampshire has no comprehensive planned-community statute, so a non-condominium homeowners' association adopts its budget under its recorded declaration (CC&Rs) and its bylaws — with the corporate overlay of RSA chapter 292 if the association is organized as a voluntary nonprofit corporation. No statutory negative-option budget mechanism applies to these communities; the governing documents control.³

2C. Variation and the corporate-law overlay

For condominiums, the Act makes the core budget mechanics mandatory. The annual proposed budget, the 30-day summary, the 10-to-60-day meeting window, the 2/3 rejection threshold, and the rollover of the last ratified budget all derive from statute — and apply regardless of what the bylaws say, because when the declaration or bylaws conflict with RSA 356-B, the Act controls.² The declaration may set a rejection threshold above 2/3, and the bylaws supply meeting notice, voting, quorum, and assessment-collection procedures — but neither can displace the statutory ratification structure.¹ Running alongside the Act, RSA chapter 292 governs the corporate formalities of any association incorporated as a voluntary corporation — covering bylaws, directors, and dissolution — but it supplies no budget-approval threshold of its own for condominiums.³ For planned communities, where no condominium-style statute applies, common law and the recorded declaration govern budget adoption. Courts resolve disputes by reference to the governing documents — particularly where those documents are silent or ambiguous.³

Section 3: Budget-adjacent obligations

A. Reserves in the budget

The Condominium Act contains no reserve-study mandate and no minimum reserve-funding requirement; the declaration and bylaws set reserve practice. As a 2026 New Hampshire reserve guide puts it, "New Hampshire law does not currently require associations to commission reserve studies, either at the time of creation or under homeowner control. Reserve studies are an industry best practice rather than a statutory obligation."⁸ RSA 356-B:40-c does require the budget summary to disclose any reserves and the basis on which they are calculated and funded — a disclosure obligation, not a funding obligation.¹

B. Special assessments

For condominiums, special assessments go through the same negative-option ratification process as the annual budget, with one exception: a board-declared emergency, approved by a 2/3 board vote, takes effect immediately. For planned communities, special assessments are declaration-governed, with no statutory ratification requirement.¹

C. Assessment increase limits

New Hampshire imposes no statutory percentage cap on assessment increases — for condominiums or planned communities. The governing documents control any limits that exist. New Hampshire HB 1306 (2024), sponsored by Rep. Notter (Hills. 12), would have prohibited condominium boards from imposing a capital-improvement special assessment above 5 percent of budgeted gross expenses without unit owners association approval — but it died in committee, with a last action of October 17, 2024.⁹

D. Financial review, audit, and disclosure tied to the budget cycle

The Act imposes disclosure obligations on condominiums, not audit requirements. RSA 356-B:37-e requires financial information on a profit and loss statement to be available to unit owners 30 days before the annual meeting, requires a final year-end accounting within 90 days of the fiscal year close, and gives owners access to specified financial records within 15 days of a request. The Act does not require an independent audit.⁶

Section 4: Recent legislative and judicial activity

A. Recent bills

No bill enacted by the New Hampshire General Court in the past 24 months has amended the budget, assessment, or reserve provisions of RSA 356-B. The 2024 condominium enactment, HB 1172 (Chapter 118), amended board and committee meeting rules at RSA 356-B:37-c but left budget and assessment provisions untouched.¹⁰ Because no qualifying budget, assessment, or reserve amendment cleared the legislature in that window, no legislation table appears here.

B. Recent rulings

The most significant New Hampshire Supreme Court decision in the past 36 months is AZNH Revocable Trust & a. v. Spinnaker Cove Yacht Club Association, Inc. (Docket No. 2021-0385). The case turned on how far an association's spending power extends and what "assessment" funds can pay for under the Condominium Act. The Court affirmed dismissal of unit owners' suit that sought to stop the association from using assessment monies to purchase land outside the condominium for guest parking. It held that RSA 356-B:42, I authorizes an association to acquire real property and that assessment funds are not limited to maintaining existing property.¹¹ No New Hampshire Supreme Court opinion in that window directly interpreted the budget-ratification provision (RSA 356-B:40-c) or the lien and common-expense provisions.¹²

C. Active legislative debates

One bill is moving. New Hampshire SB 415 (2026) would raise the RSA 356-B Attorney General oversight exemption threshold for small condominium developments. The Senate set the threshold at 20 units; the House Housing Committee amended it to 25 units and voted 14-0 to pass it with that amendment. LegiScan records it as engrossed as of February 26, 2026. The recurring — though so far unsuccessful — proposals to cap capital-improvement special assessments show that legislative interest in assessment limits remains active.¹³

Section 5: National positioning and related coverage

New Hampshire occupies a middle position — between the light-touch approach and the uniform-act model. It is a non-UCIOA, bespoke-condominium-statute state, yet its 2016 budget-ratification provision (RSA 356-B:40-c) adopts a negative-option, ratified-unless-rejected design that resembles the UCIOA family more than the older board-discretion approach. That puts it in contrast to California. California's Davis-Stirling Act, at Civil Code section 5605(b), bars a board from imposing a regular assessment more than 20 percent above the prior year's rate, or special assessments that in aggregate exceed 5 percent of the association's budgeted gross expenses for that fiscal year, without approval of a majority of a quorum of members — a cap New Hampshire does not impose.¹⁴ California also requires, under Civil Code section 5550(a), that boards conduct a reasonably competent and diligent visual inspection of accessible major components at least once every three years as part of a reserve study — a requirement New Hampshire does not share.¹⁵ New Hampshire's planned communities, by contrast, fall outside any comprehensive statute and remain declaration-governed under recorded CC&Rs and RSA chapter 292. For a multi-state operator entering New Hampshire, the practical takeaway is this: the Condominium Act controls condominium budget adoption through a statutory ratification process the bylaws cannot override, while planned communities follow their declarations.¹

1. N.H. Rev. Stat. Ann. § 356-B:40-c, Adoption of Budgets and Special Assessments ↩
2. N.H. Rev. Stat. Ann. § 356-B:35, Contents of the Bylaws ↩
3. N.H. Rev. Stat. Ann. ch. 292, Voluntary Corporations and Associations ↩
4. 2016 N.H. Laws ch. 311 (HB 353), eff. Aug. 1, 2016, enacting RSA § 356-B:40-c ↩
5. N.H. Rev. Stat. Ann. ch. 356-B, Condominium Act (table of contents and application) ↩
6. N.H. Rev. Stat. Ann. § 356-B:37-e, Disclosure of Financial Information and Meeting Minutes to Unit Owners ↩
7. N.H. Rev. Stat. Ann. §§ 356-B:45, Liabilities for Common Expenses; 356-B:46, Lien for Assessments ↩
8. PropFusion, New Hampshire Reserve Study Requirements (2026) ↩
9. N.H. HB 1306 (2024), relative to special assessments for capital improvements in condominiums (Introduced — Dead) ↩
10. 2024 N.H. Laws ch. 118 (HB 1172), relative to meetings of condominium boards and committees ↩
11. AZNH Revocable Trust & a. v. Spinnaker Cove Yacht Club Ass'n, Inc., No. 2021-0385 (N.H. Aug. 3, 2023) ↩
12. N.H. Rev. Stat. Ann. § 356-B:42, Control of the Common Areas ↩
13. N.H. SB 415 (2026), relative to a certain exemption in interest in condominium units ↩
14. Cal. Civ. Code § 5605(b) (Davis-Stirling Common Interest Development Act) ↩
15. Cal. Civ. Code § 5550(a) (reserve study inspection requirement) ↩