Maryland guide
Maryland reserve studies
Maryland is one of the few states that mandate both a reserve study and actual funding of reserves — a far stronger regime than California or most states, which require a study but not funding. House Bill 107 (2022) required every association maintaining common areas (above a $10,000 component threshold) to obtain a professional reserve study and update it at least every five years.
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SB 63 / HB 292 (2025, effective October 2025) then required the budget to fund reserves to the study's recommended level, deposited by each fiscal year-end, with a formal funding plan and a five-year catch-up window for first studies. The result reshapes diligence: the red flags are no longer "is there a study" but "where is this association in its funding ramp, and what method did it choose.".
What HB 107 and HB 292 require
Under §11-109.4 (condo) and §11B-112.3 (HOA), associations must obtain a professional reserve study, itemizing components and their quantity, and update it at least every five years. Under §11-109.2 and §11B-112.2 (as amended by HB 292), the annual budget must include reserve contributions equal to the amount recommended by the most recent study and the funding plan, deposited into the reserve account by the last day of each fiscal year. The study and the funding are both mandatory — the gap many states leave between them does not exist in Maryland.
The funding plan and the five-year catch-up
Every association must adopt a formal funding plan, developed with a reserve specialist, engineer, or architect, using one of five recognized methods (component, cash flow, baseline, threshold cash flow, or any GAAP-consistent method). Associations obtaining their first study get five fiscal years to ramp up to the recommended level (extended from three years by the 2025 law). An association still in that window will have rising regular dues over the next several budget cycles — confirm where it stands, because the ramp-up is a near-certain future cost.
The funding-method and bylaw-cap traps
The chosen funding method matters: baseline and threshold cash-flow methods are less conservative, with lower contributions now and higher special-assessment risk later. Check which method the funding plan uses. Critically, HB 107 empowers a board to raise assessments to fund reserves even where the bylaws cap increases — so a bylaw cap will not protect a buyer from reserve-driven increases. Funding plans must also prioritize health, safety, and structural components, which must keep being funded even during a declared hardship.
Distress signals: hardship and borrowing
By a two-thirds governing-body vote with member notice, an association may deviate from full funding for up to two consecutive fiscal years on a documented financial hardship — a strong distress signal that the community cannot fund required reserves. Request the hardship documentation. Separately, since 2025 associations may borrow from their own reserve accounts if repaid within five years; confirm any reserve borrowing and its repayment status.
Maryland legal references
- Md. Real Prop. §11-109.4 — Reserve study and funding plan (HB 107; HB 292 method/itemization)
- Md. Real Prop. §11-109.2 — Mandatory reserve funding, five-year catch-up, hardship (HB 292)
- Md. Real Prop. §11B-112.2 / §11B-112.3 — HOA reserve study and funding requirements
Informational only. Not legal advice. Always confirm against current statute and counsel.
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Find a Maryland specialist →Reviewer's checklist
- Confirm a current reserve study exists and was updated within five years (§11-109.4)
- Request the full study and the formal funding plan, not just a summary
- Identify the funding method — component and cash-flow are more conservative than baseline/threshold
- Confirm whether the association is in its five-year initial-study catch-up window
- Compare actual reserve deposits to the funding-plan amount (must be funded by fiscal year-end)
- Check whether the board invoked HB 107 authority to exceed a bylaw assessment cap
- Ask whether a two-thirds financial-hardship vote is on file, and request the documentation
- Confirm any reserve borrowing and its five-year repayment status
- Identify large near-term components — roof, balconies, parking deck, envelope
- Weigh the reserve picture against the building's age and coastal or flood exposure
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FAQ
Frequently asked questions
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Find an engineer for your reserve study
We can introduce your board to vetted reserve fund engineers, HOA lawyers, property managers, building envelope consultants, and restoration contractors — free intros, no obligation.
- Reserve fund engineer
- Property manager
- Building envelope consultant
- Restoration contractor
Risk Intelligence
Get a Free Structured Read on Your Association's Documents
Reserve studies, audit findings, attorney memos, milestone inspections — CondoSignal produces a free, structured review with page citations your board can act on. No cost to the association.