Ohio is one of relatively few states that puts a reserve-funding mandate directly in statute. On paper, that sounds protective: the board must budget reserves adequate to repair and replace major capital items without forcing owners into special assessments. In practice, two features of the Ohio law turn the mandate into something much weaker — an annual waiver that lets owners vote the requirement away, and the absence of any required reserve study. Together they produce what Ohio practitioners have long called condominium roulette: aging buildings, thin reserves, and surprise five-figure assessments.

This article explains how the Ohio reserve mandate actually works, where the loophole sits, and what a buyer should check before closing on an Ohio condo or planned-community home.

The mandate: ORC §5311.081 and §5312.06

Ohio is a two-statute state. Condominiums are governed by the Ohio Condominium Property Act (ORC Chapter 5311) and HOAs and planned communities by the Ohio Planned Community Law (ORC Chapter 5312). Both carry the same reserve language. Under ORC §5311.081 for condos and §5312.06 for planned communities, the board must annually adopt and amend an estimated budget for revenues and expenditures that includes reserves in an amount adequate to repair and replace major capital items in the normal course of operations without the necessity of special assessments.

Read literally, that is a strong requirement — stronger than states with no reserve mandate at all. The catch is in what the statute does not do. It does not define adequate. It does not prescribe a methodology, a percent-funded target, or an update frequency. And, as discussed below, it does not require a study to support the board's judgment. The word adequate is effectively self-assessed by the board, and no Ohio case law sets a numeric benchmark for it.

The loophole: two exceptions and an annual waiver

The reserve requirement comes with two exceptions written into the same statute. It does not apply if either:

1. The declaration or bylaws limit the board's ability to increase common-expense assessments without an owner vote; or
2. The owners, by at least a majority of voting power, waive the reserve requirement in writing annually.

The second exception is the one that matters most. Senate Bill 61, effective September 13, 2022, modernized the language and replaced an older fixed-percentage formula with this annual waiver. Because the waiver lapses each year and must be re-voted, it is a documentable governance event — and a buyer can and should ask whether it has happened.

The practical effect is that an association can remain fully legal while deliberately underfunding its reserves. A board proposes a waiver, a majority of owners — often eager to keep monthly dues low — approve it, and the statutory funding obligation evaporates for that year. Repeat annually, and the building accumulates deferred maintenance with no reserve cushion behind it.

No required reserve study

The second weakness compounds the first. Ohio does not require a formal reserve study by an engineer or reserve specialist. Many states that mandate funding also mandate a study to define what adequate funding looks like; Ohio mandates the funding but not the analysis. Because no study is required, its absence is common and is not, by itself, a statutory violation.

For a buyer, that changes the diligence question. In a study-mandate state, you read the study's percent-funded figure and funding plan. In Ohio, you often have no study to read, so you have to assess the reserve picture yourself: read the reserve balance directly against the building's age and the realistic schedule of its major components. A 1970s building on its original elevators, with an aging roof and a concrete parking deck, needs a robust reserve. A thin balance against those components is a warning regardless of whether a study exists.

Why the loophole produces special assessments

Ohio's condo stock skews old. The 1960s–1990s condo boom left Cleveland, Columbus, Cincinnati, Dayton, Akron, and Toledo with large inventories of buildings whose roofs, parking decks, elevators, plumbing, and masonry are now reaching end-of-life. Layer on a hardening severe-storm insurance market — Ohio set a record 74 tornadoes in 2024, and homeowner premiums rose roughly 36 percent from 2019 through 2024 — and the capital demands on these buildings are rising just as reserves are being waived.

When a major component fails and the reserve is thin, the money has to come from somewhere. The mechanism is a special assessment. Ohio imposes no statutory cap on the size of a special assessment; the only limits come from the declaration, and many declarations require an owner vote or supermajority for specials above a threshold. That vote requirement can stall needed funding and deepen the deferral, which is its own risk. The reserve mandate was designed precisely to reduce the need for specials — but the annual-waiver loophole means they remain common.

The first exception adds a related trap. If the declaration limits the board's authority to raise assessments without an owner vote, the board may be statutorily excused from full reserve funding under exception (1). That shifts future capital costs toward special assessments that themselves need owner approval — a structure that can stall repeatedly and worsen deferral.

What to check before you buy

Because no Ohio statute forces an existing-unit seller or the association to hand you the association's finances on resale, you have to request these items, ideally through a documentation requirement in the purchase contract:

• The current annual budget and the reserve line item.
• Whether reserves have been waived — and, critically, for how many consecutive years.
• Whether the declaration limits the board's assessment authority (the first exception).
• Any reserve study, recognizing that none is required in Ohio.
• The reserve balance read against the building's age and major components.
• The special-assessment history over the last several years.
• The board and owner meeting minutes — though note that ORC §5311.091 and §5312.07 cap owner records access at five years, so request them early.

A multi-year reserve waiver, a thin balance against an aging roof or deck, or a recurring special-assessment history are the patterns that most reliably precede an out-of-pocket surprise. None is automatically disqualifying. All are reasons to slow the close and ask follow-up questions before you commit.

What CondoSignal surfaces

CondoSignal pulls the available budget, reserve balance, any reserve-waiver history, the special-assessment record, and the master-policy renewal trail into a single Ohio-specific risk summary. We flag multi-year reserve waivers, reserve balances that look thin against a building's age and components, and declarations that cap board assessment authority. In a state that mandates reserve funding but leaves an annual escape hatch and requires no study, the goal is to give buyers a clear read on whether the building is on a sustainable trajectory — and what to budget for if it is not.