Tennessee HOA Reserve Studies

Section 1: Overview — Reserve study requirements in Tennessee

Tennessee aims a narrow statutory reserve-study mandate at condominiums. It does not require reserve funding, and it does not reach traditional homeowners' associations. Under the Tennessee Condominium Act of 2008, a condominium board that oversees common elements with an aggregate replacement cost above $10,000 must obtain a reserve study and update it at least every five years. Public Chapter 205 added that requirement in 2023, and it took effect January 1, 2024.¹ The Act sets no minimum reserve balance and no funding formula, so the level of funding stays a matter for the recorded declaration and the board's judgment, with a disclosure touchpoint when a unit changes hands.

The Tennessee Condominium Act of 2008 (Tenn. Code Ann. § 66-27-201 et seq.) rests on the 1980 Uniform Condominium Act, not the later Uniform Common Interest Ownership Act. It governs condominiums created on or after January 1, 2009, and a handful of its provisions reach older condominiums.^6,7 Condominiums created before that date still answer mainly to the older Tennessee Horizontal Property Act (Tenn. Code Ann. § 66-27-101 et seq.).⁸ Tennessee has no comprehensive planned-community statute, so non-condominium HOAs run on their recorded CC&Rs, the Tennessee Nonprofit Corporation Act, and common-law contract and property principles.⁹ Within the national picture, Tennessee lands among the study-mandate states for condominiums while staying a no-funding-mandate state, and it puts no reserve requirement on single-family HOAs. The sections below lay out the framework, the compliance obligations by community type and vintage, and the recent legislative and judicial activity.

Section 2: The reserve framework under Tennessee law

2A. The Tennessee Condominium Act of 2008 and reserves

The Tennessee Condominium Act of 2008 occupies Parts 2 through 5 of Title 66, Chapter 27 (Tenn. Code Ann. § 66-27-201 et seq.), and it is built on the 1980 Uniform Condominium Act.⁶ That lineage matters. The 1980 model predates the reserve provisions that later showed up in the Uniform Common Interest Ownership Act, and Tennessee has not adopted UCIOA. The Act applies to condominiums created on or after January 1, 2009, and a defined list of provisions reaches condominiums created before that date — but only as to events occurring after January 1, 2009, and, with one exception, without superseding existing recorded documents.⁷ The Act folds allocations to reserves into common expenses and lets the association adopt budgets and levy assessments for those expenses, but it does not by itself set a reserve target.^10,11

The 2008 Act did not originally mandate a reserve study. That changed in 2023. Public Chapter 205 amended § 66-27-403 to add subsection (g), which requires a board overseeing common elements with an aggregate replacement cost above $10,000 to obtain and periodically update a reserve study.¹ The amendment took effect January 1, 2024. The statute requires the study itself and an annual board review of reserve funding for adequacy, but it stops short of a funding mandate: it prescribes no minimum reserve balance, no funding percentage, and no preparer credential. The adopted floor amendment deleted the reserve-study definition and the list of structural components that the introduced bill had carried, so the codified text leaves preparer qualifications and study scope to board judgment.¹ Separately, the Act's resale-disclosure provisions require an association, on request from an owner, purchaser, or lender, to provide budget and reserve information — including a statement of the amount budgeted as a reserve for repairs and replacements and whether a study of its adequacy exists.^2,3 The plain reading, checked against the codified text, is straightforward: Tennessee mandates the reserve study for qualifying condominiums but leaves funding to the declaration and board judgment.

2B. Older condominiums and the absence of a planned-community statute

Condominiums created before January 1, 2009 were established under the older Tennessee Horizontal Property Act (Tenn. Code Ann. § 66-27-101 et seq.), enacted in 1963, and they remain governed primarily by it.⁸ The dividing line is the recording date of the master deed or declaration. The 2008 Act does list specific sections that apply to pre-2009 condominiums as to post-2009 events — the association's powers, lien priority, recordkeeping, and the emergency assessment power — but § 66-27-403(g) is not among them.⁷ The practical consequence: the reserve-study mandate does not bind pre-2009 horizontal-property-regime condominiums unless they amend and restate their documents to opt into the 2008 Act in full.⁷

Tennessee has no comprehensive planned-community statute to match the condominium Act. Non-condominium homeowners' associations — most single-family subdivisions and townhome communities that are not organized as condominiums — answer to their recorded CC&Rs, to the Tennessee Nonprofit Corporation Act (Tenn. Code Ann. § 48-51-101 et seq.) where the association is incorporated, and to a narrow set of provisions in Title 66, Chapter 27, Parts 6 through 8.⁹ None of those provisions imposes a reserve-study or reserve-funding requirement. For these communities, the governing documents and board judgment set reserve practice entirely.

2C. The declaration, corporate law, and fiduciary backstop

For any obligation the statute does not impose, the recorded declaration is the primary source of reserve duties. Where the declaration or bylaws require a reserve fund, a funding level, or a study, those provisions bind the board as a contract among the owners. The order of precedence runs from statute, to the recorded declaration and bylaws, to board rules — statutes control over conflicting documents, and the declaration controls over bylaws and rules.⁷

At the corporate level, an incorporated association answers to the Tennessee Nonprofit Corporation Act, which requires directors to discharge their duties in good faith and with the care an ordinarily prudent person in a like position would exercise.⁹ Under the Condominium Act, declarant-appointed directors owe the care of fiduciaries and elected directors owe ordinary and reasonable care.¹ These duties form the backstop for reserve decisions: even where no statute or declaration sets a funding figure, a board that ignores predictable capital deterioration risks a breach-of-duty claim. The reality in Tennessee is that, outside the condominium study mandate, the declaration and prudent board judgment set reserve practice rather than statute — and even the condominium mandate fixes the study cadence while leaving funding to that same mix of contract and fiduciary duty.

Section 3: Compliance obligations

A. Study and inspection obligations

For condominiums under the 2008 Act, a board overseeing common elements with an aggregate replacement cost above $10,000 must have a reserve study conducted and updated at least every five years; a board with no study since January 1, 2020 had to obtain one by January 1, 2025.¹ That is a statutory obligation under § 66-27-403(g). The statute prescribes no on-site inspection method, cadence, or preparer credential, so those choices fall to board judgment and the standards of the chosen professional.¹ For older condominiums and non-condominium HOAs, no statute requires a study or an inspection; any such duty is contractual under the recorded declaration.^7,9

B. Funding obligations

No Tennessee statute requires a condominium, an older condominium, or a non-condominium HOA to fund reserves to any level. The condominium Act requires only that the board review reserve funding annually for adequacy; it sets no minimum balance and no funding formula.¹ For every community type, an enforceable funding obligation arises only from the recorded declaration or bylaws, backstopped by the board's fiduciary duty under the Condominium Act and the Nonprofit Corporation Act.^1,9

C. Disclosure obligations

For condominiums under the 2008 Act, the association must, on request from an owner, purchaser, or lender, provide the information specified in § 66-27-503 within ten business days, and the requesting party may rely on it.² That information includes the most recent balance sheet, income statement, and approved or projected budget, and within the budget a statement of the amount budgeted as a reserve for repairs and replacements, whether any study of its adequacy has been done, and where that study is available.³ The board must also make the reserve study itself available to all owners by email or website posting.¹ For older condominiums and non-condominium HOAs, these specific statutory disclosure duties do not apply, and the declaration and general law govern disclosure.⁷

D. Account and governance obligations

The Condominium Act imposes no reserve-account segregation or anti-commingling requirement; the declaration and board fiduciary duty control account handling.¹ Governance obligations that bear on reserves include the board's authority to adopt budgets and levy assessments for common expenses, and, for residential condominiums, the power to levy assessments to preserve the physical integrity of the condominium notwithstanding contrary declaration language.¹¹ For incorporated HOAs of every type, the Nonprofit Corporation Act supplies the governing duty-of-care standard.⁹

Section 4: Recent legislative and judicial activity

A. Recent legislation

The operative reserve mandate traces to a single 2023 enactment. No bill in the 2024, 2025, or 2026 sessions has amended Tenn. Code Ann. § 66-27-403 or otherwise changed the condominium reserve, budget, or resale-disclosure provisions.

B. Recent appellate rulings

No published decision of the Tennessee Court of Appeals or the Tennessee Supreme Court in the past 36 months has squarely addressed the § 66-27-403(g) reserve-study requirement or reserve-funding adequacy. Covenant, assessment, and lien disputes of the kind that bear on reserves typically start in Chancery Court and reach the Court of Appeals on equitable grounds.⁵

C. Active legislative debates

No pending Tennessee bill would extend the reserve-study mandate to non-condominium HOAs or add a funding standard. The 2023 enactment followed the June 24, 2021 partial collapse of Champlain Towers South in Surfside, Florida, which killed 98 people and traced in part to deferred structural repairs; if Tennessee activity resumes, it would most plausibly track that theme.¹³

Section 5: National positioning and related coverage

Tennessee occupies a middle position in the national reserve-study landscape. It does not sit with the hard-mandate states that fix both a study interval and funding rules. California requires a reserve study built on a visual inspection of major components "[a]t least once every three years" under Civil Code § 5550(a), reviewed annually.¹⁴ Florida, under SB 4-D (codified at Fla. Stat. § 718.112(2)(g)), requires a Structural Integrity Reserve Study for any condominium or cooperative building three or more stories in height, repeated at least every ten years, and, after SB 154, prohibits waiving or reducing reserve funding for the identified structural components.¹⁵ Maryland, New Jersey, Oregon, Utah, and Virginia likewise set study intervals and varying funding expectations.¹⁶ Tennessee also stands apart from disclosure-mandate states such as Colorado, which lean on disclosure rather than a study cadence. Instead, Tennessee straddles the line: it mandates the reserve study for qualifying condominiums but, unlike the hard-mandate states, imposes no funding standard, and it leaves single-family HOAs entirely to their governing documents — which puts it closer to no-mandate Southeastern neighbors such as South Carolina and Mississippi for that segment.¹⁶ Its condominium statute is built on the 1980 Uniform Condominium Act, and disputes run through a bifurcated trial court in which Chancery Courts hear equity and Circuit Courts hear matters at law.^5,6 For a multi-state operator entering Tennessee, the practical move is to run the condominium study mandate on a five-year clock while recognizing that funding levels and all HOA reserve practice still answer to the declaration and fiduciary duty.

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

1. Tenn. Pub. Ch. 205 (2023) (amending Tenn. Code Ann. § 66-27-403 to add subsection (g); reserve-study requirement, $10,000 threshold, five-year cycle, January 1, 2025 deadline, exemptions, annual funding review, owner availability; effective January 1, 2024), Tennessee Secretary of State ↩
2. Tenn. Code Ann. § 66-27-502 (responsibility to provide § 66-27-503 information within ten business days on request from owner, purchaser, or lender), official Tennessee Code ↩
3. Tenn. Code Ann. § 66-27-503 (information content, including a statement of the amount budgeted as a reserve for repairs and replacements, whether a study of its adequacy has been done, and where the study is available), official Tennessee Code ↩
4. Tenn. Code Ann. § 66-27-505 (resale-information remedies, including buyer rescission and recovery of costs and attorney's fees), official Tennessee Code ↩
5. Tennessee Administrative Office of the Courts, About the Trial Courts (Chancery Courts hear equity, including injunctions and contract disputes; Circuit Courts are courts of general jurisdiction at law); see also Tenn. Code Ann. § 16-11-103 (exclusive original jurisdiction of equity causes) ↩
6. Tenn. Code Ann. § 66-27-201 (short title, Tennessee Condominium Act of 2008; based on the 1980 Uniform Condominium Act), official Tennessee Code (LexisNexis state portal) ↩
7. Tenn. Code Ann. § 66-27-202 (applicability; January 1, 2009 cutoff; enumerated sections reaching pre-2009 condominiums as to post-2009 events), official Tennessee Code ↩
8. Tenn. Code Ann. § 66-27-101 et seq. (Tennessee Horizontal Property Act; governs condominiums created before January 1, 2009), official Tennessee Code ↩
9. Tenn. Code Ann. § 48-51-101 et seq. (Tennessee Nonprofit Corporation Act; director duty of care), official Tennessee Code ↩
10. Tenn. Code Ann. § 66-27-203 (definitions; "common expenses" include allocations to reserves), official Tennessee Code ↩
11. Tenn. Code Ann. § 66-27-414 (assessments for common expenses; subsection (g) emergency assessment power to preserve the physical integrity of a residential condominium), official Tennessee Code ↩
12. S.B. 0863, 113th Gen. Assemb. (Tenn. 2023) (bill history and Public Chapter 205 assignment), Tennessee General Assembly (capitol.tn.gov) ↩
13. New Tennessee Law Impacts Condominium Reserve Study (documenting that SB 863 / HB 750 responded to the June 24, 2021 partial collapse of Champlain Towers South in Surfside, Florida), FirstService Residential ↩
14. Cal. Civ. Code § 5550(a) ("At least once every three years, the board shall cause to be conducted a reasonably competent and diligent visual inspection of the accessible areas of the major components..."), California Legislative Information ↩
15. Fla. Stat. § 718.112(2)(g) (Structural Integrity Reserve Study for condominium buildings three or more stories in height; ten-year cycle; structural-component funding may not be waived after enactment of SB 4-D and SB 154), Florida Statutes (flsenate.gov) ↩
16. Reserve Study Requirements by State (state-by-state summary noting Tennessee's $10,000 threshold and five-year study cycle with no funding mandate, and study/funding regimes in Maryland, New Jersey, Oregon, Utah, and Virginia), Reserve Advisors ↩