Texas • Reserve study / underfunding
Is your Texas condo's reserve underfunded — and does the state require funding?
A reserve study can read as reassuring while quietly showing your Texas building is years behind on saving for its roof, elevators, or façade. What matters is how funded the reserves actually are — and what Texas requires.
The short answer
Texas does not require a reserve study and does not require the association to fund it. Texas mandates no reserve study or reserve funding. The § 82.157 resale certificate only discloses the reserve amount if one exists. 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 Texas's rules. Free.Texas at a glance
Reserve study
Not required
No state mandate
Reserve funding
Not required
Underfunding is legal here
Super-lien
None
None — the association lien is junior to a first mortgage recorded before delinquency
Resale disclosure
Cancellation right
6 days after receiving the resale certificate, if it wasn't delivered before signing (§ 82.156)
What Texas requires
Texas mandates no reserve study or reserve funding. The § 82.157 resale certificate only discloses the reserve amount if one exists. 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. Because reserves aren't mandated, special assessments are the main way major repairs get funded. The § 82.157 resale certificate must disclose unpaid special assessments and capital expenditures approved for the next 12 months; borrowing for major projects needs 67% owner consent unless the declaration says otherwise (§ 82.102). 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
Texas is not a super-lien state (§ 82.113); the first mortgage and property-tax liens prime the association. The § 82.157 resale certificate must disclose unpaid and approved special assessments. HOAs under Ch. 209 have no statutory resale certificate.
Your rights in Texas
As a Texas owner, your reserve information and any approved special assessments should appear in the association's budget and resale disclosures (6 days after receiving the resale certificate, if it wasn't delivered before signing (§ 82.156)). 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 Texas 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
- Tex. Prop. Code § 82.102 — powers; borrowing; 67% vote(High)
- Tex. Prop. Code § 82.113 — association's lien (no super-lien)(High)
- Tex. Prop. Code § 82.157 — resale certificate disclosures(High)
Educational only — not legal, financial, or engineering advice. Confirm against the current statute and, where it matters, a Texas-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.