Texas HOA Reserve Studies

Section 1: Overview — Reserve study requirements in Texas

Texas imposes no statutory reserve-study or reserve-funding mandate on condominiums or on property owners' associations. Instead, three things govern reserves: the recorded declaration, the board's fiduciary duty, and a resale-certificate disclosure that reports whatever reserves exist.¹ The Texas Uniform Condominium Act, Tex. Prop. Code Ch. 82, governs condominiums. It draws on the uniform condominium framework and applies to condominiums whose declarations were recorded on or after January 1, 1994, with specified sections reaching back to older condominiums.² The Texas Residential Property Owners Protection Act, Tex. Prop. Code Ch. 209, governs non-condominium planned communities. It addresses assessments, liens and foreclosure, records, elections, and fining, but it does not work as a comprehensive code and does not mandate reserves.⁹ Reserves surface at a single point: disclosure at resale. The condominium resale certificate under § 82.157 and the property owners' association resale certificate under Chapter 207 each require the association to state the amount of reserves, if any, along with budget and financial information.⁶ Within the national picture, Texas sits among the no-mandate states that still carry a resale-disclosure touchpoint — distinct from hard-mandate states such as California and Florida, which require periodic studies and funding.¹⁰ The sections that follow separate the two statutory frameworks and identify each obligation by chapter.

Section 2: The reserve framework under Texas law

2A. The Uniform Condominium Act (Chapter 82) and reserves

The Texas Uniform Condominium Act, Tex. Prop. Code Ch. 82, governs condominiums and draws on the uniform condominium framework that informs the broader Uniform Common Interest Ownership Act.¹¹ Section 82.002 applies the chapter to all condominiums whose declaration was recorded on or after January 1, 1994. It also applies a defined set of sections — including § 82.112 (assessments), § 82.114 (records), § 82.116 (management certificate), and § 82.157 (resale of unit) — to condominiums recorded before that date.² Pre-1994 condominiums otherwise stay under Chapter 81, the older Texas Condominium Act, which by its own terms applies only to a condominium regime created before January 1, 1994.¹²

On budgets, § 82.112 requires that, after an initial assessment, the association make assessments at least annually and base them on a budget it adopts at least annually.⁵ The same section says a declaration may allow reserve funds to accumulate for an unspecified period to provide for any anticipated expense — framing reserves as a permissive matter the declaration sets, not a statutory duty.⁴ The condominium resale certificate under § 82.157 must come from the association and must contain the current operating budget. It must state the amount of reserves, if any, for capital expenditures and the portions of those reserves the association has designated for a specified project, the capital expenditures approved for the next 12 months, and the association's current operating budget and balance sheet.¹³

Chapter 82 sets no reserve-study or reserve-funding mandate. It requires a budget and disclosure of any reserves at resale, but it neither sets a study interval nor compels a funding level. The reserve provisions of the 2008 revisions to the Uniform Common Interest Ownership Act, which some states have used to mandate studies, are not part of Texas law, and nothing in Chapter 82 imports them.⁴

2B. The Residential Property Owners Protection Act (Chapter 209) and reserves

The Texas Residential Property Owners Protection Act, Tex. Prop. Code Ch. 209, applies to a residential subdivision subject to a declaration that authorizes a property owners' association to collect regular or special assessments.⁹ Its provisions cover assessments and alternative payment schedules; assessment liens and foreclosure, including a right of redemption; association records; open board meetings and elections; and the notice-and-hearing process before fining or other enforcement.¹⁴ Chapter 209 does not govern condominiums; condominium associations fall under Chapter 82, with older regimes under Chapter 81.²

Chapter 207 governs the resale disclosure for a property owners' association. Section 207.003 requires the association, after a written request, to deliver the restrictions, the bylaws and rules, and a resale certificate. That certificate must state, among other items, the amount of reserves, if any, for capital expenditures; capital expenditures approved for the current fiscal year; the current operating budget and balance sheet; and amounts due and unpaid.¹⁵ Section 207.003 also provides that, unless a dedicatory instrument requires it, neither the association nor its agent must inspect a property before issuing a resale certificate.³

Chapter 209 mandates no reserve study and no reserve funding. Its budget-related rule is procedural: § 209.0051 requires the association to approve the annual budget, or an amendment to it, in an open meeting, as one of the matters it must vote on in open session.¹⁶ Separately, § 209.004 requires a property owners' association to record a management certificate with the county clerk and to file it electronically with the Texas Real Estate Commission. That filing is a transparency and contact-information mechanism, not reserve regulation.¹⁷

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

Under both frameworks, the recorded declaration — the CC&Rs — is the primary source of any reserve obligation. Because neither Chapter 82 nor Chapter 209 mandates reserves, a duty to study or fund reserves exists only where the declaration creates one, and Chapter 82 confirms that a declaration "may allow" reserve accumulation.⁴ In the order of precedence, a state statute controls over a conflicting provision in the governing documents, while the declaration — and then board judgment — governs the matters the statutes leave open.¹⁸

At the corporate level, Texas associations typically organize as nonprofit corporations under Chapter 22 of the Texas Business Organizations Code. That chapter sets director standards of conduct, including the ordinary-care standard, at the entity level rather than imposing HOA-specific reserve rules.¹⁹ The practical implication is this: in Texas, the declaration and prudent board judgment set reserve practice. The Property Code requires a budget for condominiums and disclosure of any reserves at resale for both community types, but it does not require a funded reserve.¹

Section 3: Compliance obligations

A. Study and inspection obligations

No statute creates a reserve-study obligation or a reserve-inspection interval under Chapter 82 (condominiums), Chapter 209 (property owners' associations), or Chapter 81 (pre-1994 condominiums). Any study or inspection duty is contractual, arising from the recorded declaration.¹ For property owners' associations, § 207.003 states affirmatively that no property inspection is required before issuing a resale certificate unless a dedicatory instrument requires it.³

B. Funding obligations

Neither Chapter 82 nor Chapter 209 imposes a reserve-funding obligation; funding is contractual under the declaration and a matter of board fiduciary judgment.⁴ Chapter 82's only funding-adjacent rule bars an association from using its reserves and unit owners' working-capital contributions to pay operational expenses until declarant control ends (§ 82.112).⁴

C. Disclosure obligations

The condominium resale certificate (§ 82.157, Chapter 82) must state the amount of reserves, if any, for capital expenditures and the portions designated for a specified project, the operating budget, and the balance sheet, and the association must deliver it within 10 days of a unit owner's written request.¹³ The property owners' association resale certificate (§ 207.003, Chapter 207) must state the amount of reserves, if any, for capital expenditures, the approved capital expenditures, the current operating budget and balance sheet, and amounts due, delivered within 10 business days of a verified request.¹⁵ The management-certificate filing (§ 209.004 for property owners' associations; § 82.116 for condominiums) requires recording with the county and electronic filing with the Texas Real Estate Commission, as a disclosure mechanism.¹⁷ For the budget itself, condominium assessments must rest on an annually adopted budget (§ 82.112), while a property owners' association must approve its annual budget in an open meeting (§ 209.0051).⁵

D. Account and governance obligations

Adopting and amending budgets for revenues, expenditures, and reserves, and collecting assessments, is a power of a condominium unit owners' association under § 82.102, which the board exercises.²⁰ The broader duty to manage association funds prudently is fiduciary and corporate; it arises from the board's role and from Chapter 22 of the Business Organizations Code, not from a reserve-specific statute.¹⁹ No statute requires a segregated reserve account or imposes anti-raiding restrictions under either chapter; the declaration and board policy govern account controls.⁴

Section 4: Recent legislative and judicial activity

A. Recent bills

One bill from the 89th Regular Session reaches Texas condominium associations, and it points toward transparency rather than reserves.

B. Recent appellate rulings

A review of Texas Courts of Appeals and Supreme Court of Texas opinions found no published decision in the past 36 months that squarely construes reserve adequacy, the reserve content of the condominium resale certificate (§ 82.157) or the property owners' association resale certificate (Chapter 207), or board fiduciary duty specifically in the reserve context.²² The closest recent matter sits in the financial-governance context, and we lay it out below.

C. Active legislative debates

In the 89th Regular Session, Texas legislative attention concentrated on property owners' association transparency, architectural review, foreclosure safeguards, and lifestyle restrictions — not reserves.²⁴ The session enacted no reserve-study or reserve-funding mandate.

Section 5: National positioning and related coverage

Texas belongs to the second of three national groups. The first group is the hard-mandate states, which set fixed study intervals or funding rules. California is one: Civil Code § 5550(a) requires the board to cause a reasonably competent and diligent visual inspection of major components at least once every three years where the replacement value of those components equals or exceeds one-half of the gross budget. Florida is another: Fla. Stat. § 553.899, created by Senate Bill 4-D and signed in May 2022, requires a structural integrity reserve study and a milestone inspection for residential condominium and cooperative buildings three or more habitable stories tall. States including Maryland, New Jersey, Oregon, Utah, and Virginia sit in this group as well.¹⁰ The second group is the no-mandate states that keep a resale-disclosure touchpoint. Texas sits here, because its condominium resale certificate (§ 82.157) and its property owners' association resale certificate (Chapter 207) each disclose reserve and financial information without compelling a study or funding.⁶ The third group is the no-mandate states with no disclosure touchpoint at all. Texas stands out for two features: its two-statute structure — Chapter 82 for condominiums and Chapter 209 for property owners' associations — and its split court of last resort, with the Supreme Court of Texas as the civil court of last resort and the Texas Court of Criminal Appeals confined to criminal matters, above fourteen intermediate appellate districts.²⁵ For multi-state operators, the practical implication is concrete: a Texas condominium portfolio and a Texas property-owners'-association portfolio run under separate chapters with distinct resale-disclosure rules, even though neither requires a funded reserve.

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

1. Tex. Prop. Code Ch. 82 (Uniform Condominium Act) and Ch. 209 (Residential Property Owners Protection Act); neither imposes a reserve-study or reserve-funding mandate. ↩
2. Tex. Prop. Code § 82.002 (Applicability; recorded on or after January 1, 1994, with listed sections applying to pre-1994 condominiums). ↩
3. Tex. Prop. Code § 207.003(e) (no inspection required before issuing a resale certificate unless a dedicatory instrument requires it). ↩
4. Tex. Prop. Code § 82.112 (Assessments for Common Expenses; declaration "may allow" reserve accumulation; reserves not used for operational expenses until declarant control ends). ↩
5. Tex. Prop. Code § 82.112 (assessments based on a budget adopted at least annually); Tex. Prop. Code § 209.0051 (annual budget approval in open meeting). ↩
6. Tex. Prop. Code § 82.157 (condominium resale certificate; reserves "if any"); Tex. Prop. Code § 207.003(b) (property owners' association resale certificate; amount of reserves "if any"). ↩
7. Tex. Prop. Code § 207.004(b) (judgment against a property owners' association for not more than $5,000 plus court costs and reasonable attorney's fees for failure to deliver a resale certificate; cap and 5-business-day deadline set by S.B. 1588, 87th Leg. (2021)). ↩
8. Tex. Prop. Code Chs. 81, 82, 207, and 209. ↩
9. Tex. Prop. Code §§ 209.002–209.003 (definitions and applicability of the Residential Property Owners Protection Act). ↩
10. Cal. Civ. Code § 5550(a) (visual inspection of major components at least once every three years; amended by Stats. 2024, Ch. 288 (SB 900), eff. Jan. 1, 2025); Fla. Stat. § 553.899, created by SB 4-D (signed May 2022), structural integrity reserve studies for buildings three or more habitable stories. ↩
11. Tex. Prop. Code § 82.001 (Short Title, Uniform Condominium Act). ↩
12. Tex. Prop. Code § 81.0011 (Applicability; chapter applies only to a condominium regime created before January 1, 1994). ↩
13. Tex. Prop. Code § 82.157 (Resale of Unit; reserve and budget content; 10-day delivery). ↩
14. Tex. Prop. Code §§ 209.004–209.011 (management certificates, records, enforcement notice, foreclosure, redemption). ↩
15. Tex. Prop. Code § 207.003 (Delivery of Subdivision Information to Owner; resale certificate content including reserves "if any"). ↩
16. Tex. Prop. Code § 209.0051 (Open Board Meetings; budget approval in open session). ↩
17. Tex. Prop. Code § 209.004 (Management Certificates; recording with county and electronic filing with the Texas Real Estate Commission); § 82.116 (condominium management certificate). ↩
18. Tex. Prop. Code § 82.004 (Variation by Agreement) and § 82.053 (Construction and Validity of Declaration and Bylaws). ↩
19. Tex. Bus. Orgs. Code Ch. 22 (Nonprofit Corporations), including the ordinary-care standard at § 22.001(6) and director provisions. ↩
20. Tex. Prop. Code § 82.102 (Powers of Unit Owners' Association; adopt and amend budgets for revenues, expenditures, and reserves). ↩
21. Tex. S.B. 711, 89th Leg., R.S. (2025), effective September 1, 2025 (adds Tex. Prop. Code § 82.1142 and amends § 82.116). ↩
22. Texas Judicial Branch opinions (no published 2023–2026 opinion squarely construing reserve adequacy or resale-certificate reserve content identified). ↩
23. Beach Club Condominiums v. Shoreline on Lake Conroe Condominium Ass'n, No. 09-24-00304-CV (Tex. App.—Beaumont May 29, 2025). ↩
24. Texas Legislature Online, 89th Regular Session (2025) bill history. ↩
25. Texas Judicial Branch, court structure (Supreme Court of Texas, Court of Criminal Appeals, fourteen Courts of Appeals). ↩