Maryland • Reserve study / underfunding
Is your Maryland condo's reserve underfunded — and does the state require funding?
A reserve study can read as reassuring while quietly showing your Maryland building is years behind on saving for its roof, elevators, or façade. What matters is how funded the reserves actually are — and what Maryland requires.
The short answer
Maryland requires a reserve study and requires the association to fund it. Funding became mandatory Oct 1, 2025 (HB 107 / HB 292): the budget must fund the study's plan and deposit it — and the board can override a bylaw assessment cap to do so. New associations get a 5-year catch-up. 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 Maryland's rules. Free.Maryland at a glance
Reserve study
Required
Reserve study updated every 5 years (mandatory since Oct 1, 2022)
Reserve funding
Required
Funded to the study
Super-lien
Yes
Four months of regular assessments or $1,200, whichever is LESS (mortgages recorded on/after Oct 1, 2011)
Resale disclosure
Cancellation right
Condos: 7 days after the resale package (§ 11-135). HOAs: 5 days if info wasn't delivered 5+ days pre-signing, plus a 3-day right if mandatory fees rise over 10% (§ 11B-106)
What Maryland requires
Funding became mandatory Oct 1, 2025 (HB 107 / HB 292): the budget must fund the study's plan and deposit it — and the board can override a bylaw assessment cap to do so. New associations get a 5-year catch-up. 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. The reserve-funding mandate is driving a wave of catch-up assessments — Ocean City buildings commonly $5,000–$10,000+; specials are excluded from the super-lien. 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
Among the smallest super-liens in the country, and special assessments are excluded from the priority (Md. RP § 11-110). The package discloses assessments, reserve status, budget, insurance, litigation, and approved capital expenditures.
Your rights in Maryland
As a Maryland owner, your reserve information and any approved special assessments should appear in the association's budget and resale disclosures (condos: 7 days after the resale package (§ 11-135). hoas: 5 days if info wasn't delivered 5+ days pre-signing, plus a 3-day right if mandatory fees rise over 10% (§ 11b-106)). 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 Maryland mandates reserve funding — it does, so underfunding may be a compliance issue.
- Check the remaining life of the roof, elevators, and façade.
- Remember delinquent-owner debt carries a super-lien in Maryland (Four months of regular assessments or $1,200, whichever is LESS (mortgages recorded on/after Oct 1, 2011)), 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
- Md. Code RP § 11-114 — required insurance (owner deductible)(High)
- Md. Code RP § 11-135 — resale of unit (7-day cancellation)(High)
- Md. Code RP § 11-109.4 — reserves (condos)(High)
Educational only — not legal, financial, or engineering advice. Confirm against the current statute and, where it matters, a Maryland-licensed professional.
Related guide
Maryland reserve studies — the full guide →This page answers what to do right now. For how reserve studies works in Maryland — 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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