Vermont • Reserve study / underfunding
Is your Vermont condo's reserve underfunded — and does the state require funding?
A reserve study can read as reassuring while quietly showing your Vermont building is years behind on saving for its roof, elevators, or façade. What matters is how funded the reserves actually are — and what Vermont requires.
The short answer
Vermont does not require a reserve study and does not require the association to fund it. VCIOA permits but doesn't require reserves; the resale certificate must disclose the reserve amount or state that none is included. 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 Vermont's rules. Free.Vermont at a glance
Reserve study
Not required
No state mandate
Reserve funding
Not required
Underfunding is legal here
Super-lien
Yes
Six months of regular assessments take priority over the first mortgage (27A V.S.A. § 3-116)
Resale disclosure
Cancellation right
5 days after the resale certificate (15 days for new construction) (§ 4-109)
What Vermont requires
VCIOA permits but doesn't require reserves; the resale certificate must disclose the reserve amount or state that none is included. 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 (§ 3-123). The emergency power was heavily used after the 2023 and 2024 floods. 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
A standard six-month super-priority covering regular budget assessments, not fines; foreclosure needs a 3-month delinquency and a board vote. The certificate discloses regular and unpaid special assessments, reserves, litigation, insurance, and code violations.
Your rights in Vermont
As a Vermont owner, your reserve information and any approved special assessments should appear in the association's budget and resale disclosures (5 days after the resale certificate (15 days for new construction) (§ 4-109)). 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 Vermont 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 Vermont (Six months of regular assessments take priority over the first mortgage (27A V.S.A. § 3-116)), 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
- 27A V.S.A. § 3-116 — lien for sums due (6-month priority)(High)
- 27A V.S.A. § 4-109 — resales of units(High)
- 27A V.S.A. § 3-113 — property & liability insurance (no flood)(High)
Educational only — not legal, financial, or engineering advice. Confirm against the current statute and, where it matters, a Vermont-licensed professional.
Related guide
Vermont reserve studies — the full guide →This page answers what to do right now. For how reserve studies works in Vermont — 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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