In June 2021, the Surfside condominium community collapsed in Florida. In the wake of that disaster, many states and communities around the U.S. began implementing mandatory reserve studies.
Initially, Maryland passed legislation only requiring legislation in Prince George’s County and a year later in Montgomery County. However, in 2022, the state passed Maryland House Bill 107, requiring reserve studies and implementing funding requirements statewide.
If you are confused about the new regulation and how it affects your community, keep reading.
What are reserve studies?
A reserve study provides an in-depth analysis of your community’s assets. It also offers guidance on ways for your Board of Directors to improve the community.
The reserve study process begins with the initial reserve study. It involves an onsite inspection and an examination of your reserve fund status. Then it provides a schedule for the next 30 years that outlines capital improvement projects and your reserve funding plan. The reserve funding plan is what will pay for the improvement projects.
After the initial reserve study, you will have updated reserve studies. These are done every three to five years. They are less involved than the initial study and designed to help community leaders update their expenditure forecasts and adapt their reserve funds appropriately.
What are Maryland’s new reserve laws?
These laws affect all condominiums, HOAs, and housing cooperatives in Maryland. They require that these communities conduct regular reserve studies for common areas. For example, individual residences in an HOA are not subject to the law. But a community’s communal buildings, monuments, swimming pools, etc., do need to be part of the study.
House Bill 107 took effect on October 1, 2022. It states that all condominiums, HOAs, and housing cooperatives not in Montgomery County or Prince George’s County must have an initial reserve study by October 1, 2023. If your community had a reserve study on or after October 1, 2018, it did not need to plan a new one. However, all communities must schedule updated reserve studies every five years, so your community might be due for an update.
Because Montgomery County and Prince George’s County were part of the earlier legislation, their cut-off dates vary slightly. Both counties’ dates for the required initial reserve studies have already passed.
How can Majerle Management, Inc (MMI) help?
Obviously, any time the state government introduces new legislation, things can get confusing. At MMI, we are here to help your Board decipher the new Maryland reserve study requirements. Our experts can help your association navigate the new regulations with ease.
Contact MMI today to receive the best community management services in Central Maryland. We proudly serve Prince George’s, Montgomery, Howard, and Anne Arundel Counties. Let us help your condominium association or HOA improve the quality of your housing, increase the comfort of your residents, and understand Maryland’s House Bill 10