Arkansas • Reserve study / underfunding
Is your Arkansas condo's reserve underfunded — and does the state require funding?
A reserve study can read as reassuring while quietly showing your Arkansas building is years behind on saving for its roof, elevators, or façade. What matters is how funded the reserves actually are — and what Arkansas requires.
The short answer
Arkansas does not require a reserve study and does not require the association to fund it. No reserve study or funding mandate (the Horizontal Property Act, even as amended by Act 516, requires none). When a building is underinsured after a casualty, § 18-13-119 forces pro-rata reconstruction funding — a de facto special-assessment-by-statute. A thin reserve is the most common reason a special assessment lands later, so the study-versus-actual-balance gap is the number that matters. CondoSignal reads your reserve study and budget against Arkansas's rules. Free.Arkansas at a glance
Reserve study
Not required
None — no statutory study, account, target, or cadence
Reserve funding
Not required
Underfunding is legal here
Super-lien
None
Resale disclosure
Cancellation right
None — no statutory rescission
What Arkansas requires
No reserve study or funding mandate (the Horizontal Property Act, even as amended by Act 516, requires none). When a building is underinsured after a casualty, § 18-13-119 forces pro-rata reconstruction funding — a de facto special-assessment-by-statute. Whether a thin reserve is merely risky or actually out of compliance depends on that rule — which is the first thing to establish.
Why underfunding becomes an assessment
No statutory cap or budget-ratification process. The one mandatory mechanism is § 18-13-119 reconstruction cost-sharing on an underinsured loss. Act 516 added interest on past-due assessments (§ 18-13-116(b)(4)) for regimes under the amended Act. The 'percent funded' figure in the study, compared to the actual reserve balance, tells you how exposed you are.
What it means for collection and resale
Not a super-lien state — under § 18-13-116(c) past-due taxes and a recorded first mortgage prime the assessment claim. BUT the debt survives foreclosure: § 18-13-116(d) makes the purchaser jointly and severally liable for unpaid assessments, with no foreclosure exception (First State Bank v. Metro District Condominiums, 2014 Ark. 48) and no statutory estoppel. No statutory resale/disclosure packet and no buyer cancellation period; Arkansas is a caveat emptor state. Obtain a written statement of unpaid assessments before closing (survival risk, § 18-13-116(d)).
Your rights in Arkansas
As a Arkansas owner, your reserve information and any approved special assessments should appear in the association's budget and resale disclosures (none — no statutory rescission). None of this is legal advice — confirm against the current statute and a licensed professional in your state.
What to check
- Find the reserve study's 'percent funded' figure.
- Compare the recommended contribution to what's budgeted.
- Confirm whether Arkansas mandates reserve funding.
- Check the remaining life of the roof, elevators, and façade.
- Look for a reserve catch-up or a recent special assessment.
- Check the study's date — an old study understates today's costs.
Sources
- Ark. Code § 18-13-116 — Liability for expenses and assessments(High)
- Arkansas Code Title 18, Ch. 13 — Horizontal Property Act(High)
- Act 516 of 2025 (SB 323) — Horizontal Property Act modernization(High)
Educational only — not legal, financial, or engineering advice. Confirm against the current statute and, where it matters, a Arkansas-licensed professional.
FAQ
Frequently asked questions
Not sure what your documents are really telling you?
Get a free CondoSignal review of your situation — we read the paperwork against your state's rules and tell you what to do next. No cost, no obligation.