A residential condominium needs an independent reserve study at least every five years, and its budget must fund the contribution the study recommends. New condominiums need one at least 30 days before owners take over from the developer.
Who is covered
The section applies to residential condominiums only. A purely commercial condominium (an office park, for example) is outside it. Mixed-use buildings are worth raising with counsel, because the answer can turn on how the declaration describes the regime.
Deadlines
A condominium that existed on its county's cutoff date (October 1, 2020 in Prince George's, October 1, 2021 in Montgomery, October 1, 2022 everywhere else) needed a study by October 1, 2021, 2022 or 2023 respectively, unless it already had one done on or after October 1, 2016, 2017 or 2018. The phase-in ladder shows the dates side by side.
The transition study
A condominium set up after the cutoff needs its first independent study at least 30 calendar days before the meeting where the council of unit owners takes control from the developer. That study is a useful check on the developer's budget: if the contributions it recommends are far above what owners have been paying, the new board knows early.
What condominium studies tend to include
- Roofs, gutters and roof drains, and any rooftop mechanical equipment.
- Facades: brick repointing, sealants, siding, balconies and railings.
- Windows and doors in common elements, which the declaration may or may not assign to owners.
- Elevators, boilers, chillers, fire alarm and sprinkler systems.
- Garages and parking decks, paving, sidewalks and retaining walls.
Where the declaration makes an item an owner's responsibility, the study should leave it out; where it is unclear, the preparer should say what was assumed.
Budget and funding
Under 11-109.2 the condominium's budget must carry the reserve amount the most recent study recommends, deposited by the last day of the fiscal year, with five fiscal years to reach it after an initial study. A two-thirds board vote finding hardship allows a one-year shortfall, renewable once. More on funding to the study.
Owners' access
Any unit owner can inspect and copy the study. A summary goes out with the proposed annual budget, so expect questions at the budget meeting and have the preparer's funding plan to hand.