District of Columbia • Reserve study / underfunding
Is your District of Columbia condo's reserve underfunded — and does the state require funding?
A reserve study can read as reassuring while quietly showing your District of Columbia building is years behind on saving for its roof, elevators, or façade. What matters is how funded the reserves actually are — and what District of Columbia requires.
The short answer
District of Columbia does not require a reserve study and does not require the association to fund it. DC permits but doesn't mandate reserves (§ 42-1903.08) — zero funding is legal; the resale certificate must disclose the reserve status/amount. 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 District of Columbia's rules. Free.District of Columbia at a glance
Reserve study
Not required
No state mandate
Reserve funding
Not required
Underfunding is legal here
Super-lien
Yes
Six months of assessments — and foreclosing that six-month slice can EXTINGUISH the first mortgage entirely
Resale disclosure
Cancellation right
3 business days after the condo documents/certificate (15 days for new-construction/declarant sales)
What District of Columbia requires
DC permits but doesn't mandate reserves (§ 42-1903.08) — zero funding is legal; the resale certificate must disclose the reserve status/amount. 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
Approved-but-unbudgeted capital expenditures must be disclosed in the resale certificate (§ 42-1904.11) — and if the association doesn't furnish the certificate within 10 business days, its lien against the unit is extinguished. 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
Under § 42-1903.13 and Chase Plaza v. JPMorgan (D.C. 2014, reaffirmed 2018 & 2024), DC's super-lien is among the most severe in the nation. The certificate must disclose unpaid assessments, planned capital expenditures, reserves, financials, insurance, and litigation; late delivery extinguishes the lien.
Your rights in District of Columbia
As a District of Columbia owner, your reserve information and any approved special assessments should appear in the association's budget and resale disclosures (3 business days after the condo documents/certificate (15 days for new-construction/declarant sales)). 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 District of Columbia mandates reserve funding — it doesn't, so the board can legally run reserves thin.
- Check the remaining life of the roof, elevators, and façade.
- Remember delinquent-owner debt carries a super-lien in District of Columbia (Six months of assessments — and foreclosing that six-month slice can EXTINGUISH the first mortgage entirely), which raises everyone's risk.
- Look for a reserve catch-up or a recent special assessment.
- Check the study's date — an old study understates today's costs.
Sources
- D.C. Code § 42-1903.13 — assessment lien; priority; power of sale(High)
- Chase Plaza Condo Ass'n v. JPMorgan Chase, 98 A.3d 166 (D.C. 2014)(High)
- D.C. Code § 42-1903.10 — association insurance (90% RCV; HO-6 mandate)(High)
Educational only — not legal, financial, or engineering advice. Confirm against the current statute and, where it matters, a District of Columbia-licensed professional.
Related guide
District of Columbia reserve studies — the full guide →This page answers what to do right now. For how reserve studies works in District of Columbia — the law, the process, and what to check before you buy or sell — read the full state guide.
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“The board approved a $15,000-per-unit special assessment for façade repairs, payable over 12 months.”
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