Maryland mandates updated reserve studies for condominiums every five years

The Maryland Legislature introduced House Bill 292 on January 9, 2025, aimed at enhancing financial transparency and accountability for condominium associations across the state. The bill mandates that governing bodies of condominiums conduct regular reserve studies to assess their financial health and maintenance needs.

The primary provisions of House Bill 292 require that all condominium associations complete an initial reserve study and update it every five years. Specific timelines are set based on when the condominium was established and the last reserve study conducted. For instance, condominiums established in Prince George’s and Montgomery Counties must adhere to different deadlines based on their respective establishment dates and previous studies. This structured approach aims to ensure that associations maintain adequate funds for future repairs and replacements, thereby protecting homeowners' investments.

Debate surrounding the bill has focused on its potential financial implications for condominium associations, particularly regarding the costs associated with conducting these studies. Proponents argue that regular assessments will lead to better financial planning and prevent unexpected special assessments for homeowners. Critics, however, express concerns about the burden of additional costs on associations, especially smaller ones that may struggle to meet the new requirements.

The bill's implications extend beyond financial management; it also addresses broader issues of governance and accountability within condominium communities. By enforcing regular reserve studies, the legislation seeks to promote responsible management practices and enhance the overall stability of condominium living in Maryland.

As House Bill 292 progresses through the legislative process, its supporters emphasize the importance of safeguarding homeowners' interests and ensuring that condominium associations are well-prepared for future maintenance needs. The outcome of this bill could set a precedent for similar legislation in other states, reflecting a growing trend towards increased oversight in community associations.