Why the gap matters more in Rhode Island than it sounds

Because the components the statute names are the ones that fail on a predictable schedule, and because Rhode Island's condominium stock is old. Roof shingles, exterior wood, decks and roadways in a coastal New England climate have life-spans a developer can be made to itemise in an offering statement and an association can then decline to fund for twenty years without breaking any law.

The disclosure regime is asymmetric in the same direction. The resale certificate at § 34-36.1-4.09(a) requires a seller to disclose “any capital expenditures anticipated by the association for the current and two (2) next succeeding fiscal years” and “the amount of any reserves for capital expenditures and of any portions of those reserves designated by the association for any specified projects.” So a buyer gets the numbers. A buyer does not get an engineering assessment of whether the numbers are enough, because no such assessment is required to exist. Our Rhode Island reserve studies page covers what the Act does and does not require.

Three separate 2026 bills tried to close it. All three died.

This is the news the standing law sits inside.

S 2692 Substitute A / H 7851 would have required a conditions survey of every condominium twenty years or older, a reserve study every five years with engineer review, certification by a CAI-credentialed reserve study specialist or a Rhode Island professional engineer, and a separate reserve account “funded by at least fifteen percent (15%) of the monthly assessment fee by January 1, 2027.” It passed the Senate 37-0 on May 19, 2026 and was never scheduled in House Corporations.

H 7609, a separate bill by Representative Fellela, would have written its own § 34-36.1-3.22 requiring reserve studies and, per the Legislative Council's explanation, “one hundred percent (100%) funding of all items identified in the reserve study”, prohibiting use of reserve funds for anything else, and requiring the reserve account to be held at a financial institution with a physical branch in the county where the condominium is located. It applied to condominiums with common elements costing at least $20,000 to maintain, repair or replace, required a statement from a Rhode Island-licensed engineer or architect that the study “has been reviewed and recommended as reasonable”, and limited a study's useful life to three years. Held for further study March 26, 2026.

S 2910, a third identical reserve bill, was withdrawn at the sponsor's request on April 28, 2026 without ever being scheduled.

So Rhode Island considered a 15% funding floor, a 100% funding requirement, and a withdrawn duplicate, and enacted none of them. What it enacted instead was a commission.

The market is now imposing what the statute does not

An association that reads “no statutory requirement” as “no requirement” is about to be corrected by its owners' lenders rather than by the General Assembly.

Freddie Mac's Bulletin 2026-C, issued March 18, 2026 in consultation with the Federal Housing Finance Agency and in alignment with Fannie Mae, raises the replacement-reserve floor for condominium project eligibility “from a minimum of 10% to a minimum of 15% of the annual budgeted assessment income” for mortgages with application received dates on or after January 4, 2027. From August 3, 2026 it also requires that a project's budget include “the highest recommended reserve allocation amount in the reserve study” and that the amount “must not be based on a baseline funding method where the reserve cash balance approaches but never falls below zero.”²

Fifteen percent is the same figure the Rhode Island Senate passed unanimously and the House did not take up. It arrives anyway, as a condition of conforming financing rather than a statutory duty — which means it binds through the resale market instead of through an enforcement action.

A Rhode Island board's options

Find the original offering statement. It contains, by law, an itemised component list with life-spans and per-unit costs prepared when the building was new. For an association that has never had a reserve study, that document is the closest thing to one it already owns, and it establishes what the developer told the first buyers the reserves were for.

Treat fifteen percent as the operative number. Not because Rhode Island law requires it — it does not — but because a Senate passed it 37-0 and the secondary market adopted it. A board arguing for underfunded reserves is now arguing against both.

Understand what the baseline prohibition means before January. A reserve plan designed so the balance dips toward zero and recovers is a recognised funding method and it is the one the secondary market will stop accepting. If your study offers a baseline and a threshold figure, the budget will need to carry the higher one.

Commission a study voluntarily, and specify it properly. The dead 2026 bills are a usable specification: a licensed professional, a component-by-component analysis, engineer review every five years, and the result shared with owners. Every element of that is available to a board by resolution today.

What to watch next

The sixteen-member condominium law commission reports by December 31, 2027, and long-term capital cost is squarely inside its mandate. Watch also for reintroduction in the January 2027 session — a reserve bill returning with a 37-0 Senate record behind it is a different proposition from a first attempt, and the January 2027 secondary-market deadline will have arrived by the time the session sits.