Tennessee guide
Tennessee reserve studies
Tennessee changed its reserve picture on January 1, 2024. A 2023 law (SB863/HB750) added T.C.A.
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§66-27-403(g), requiring a condo board overseeing common elements with an aggregate replacement cost over $10,000 to obtain a reserve study, update it at least every five years, and make it available to owners. That is the first hard reserve line in Tennessee law. But the mandate has two important limits: it does not require the board to fund reserves to any level, and it applies only to condominiums — not to planned-community HOAs. The result is a state where a current reserve study can sit alongside a near-zero reserve balance, which makes reading the funded balance against the study the central task.
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What §66-27-403(g) requires of condos
Effective January 1, 2024, a condo board overseeing common elements worth more than $10,000 to replace must obtain a reserve study. If a study was done on or after January 1, 2020, it must be updated within five years of the original and at least every five years thereafter; if no study was done since January 1, 2020, one had to be obtained by January 1, 2025, then updated every five years. The board must make the study available to owners by email or website posting. A missing or overdue study is now a likely statutory non-compliance for a covered condo.
The study is required; the funding is not
Tennessee does not require the board to fund reserves to the study's recommendation, or at all. Funding remains a budget decision subject to the declaration, and the §66-27-503(4) budget disclosure must state the reserve amount or that there is none. The most common Tennessee trap is a condo that satisfies the study mandate while the reserve line is minimal — the study exists, the money does not. Always read the funded balance separately from whether a study exists.
HOAs are excluded
The mandate lives in the Condominium Act, so planned-community HOAs are not covered. An HOA with no reserve study and no reserve funding is entirely legal in Tennessee. For an HOA, you must infer reserve adequacy from the CC&Rs, the budget, and the age and condition of the common elements the association maintains, since no study is owed and none may exist.
Read the study against Tennessee's hazards
Because §66-27-413 makes any repair cost above insurance proceeds plus reserves a common expense, a Tennessee reserve study should explicitly model the state's hazard mix: roof and cladding cycles (hail and wind), glazing and envelope (storms), HVAC and moisture systems (heat and humidity), and — in West Tennessee — seismic vulnerability for older masonry. A study that ignores these region-specific drivers can technically satisfy §66-27-403(g) while still understating funding needs.
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Tennessee legal references
- T.C.A. §66-27-403(g) — Reserve-study requirement (SB863/HB750, effective Jan 1, 2024)
- T.C.A. §66-27-503(4) — Budget disclosure of reserve amount and study availability
- T.C.A. §66-27-413 — Repair costs above proceeds + reserves are a common expense
Informational only. Not legal advice. Always confirm against current statute and counsel.
Need help applying these Tennessee statutes to your specific situation? We can connect you with state-licensed counsel and specialists familiar with this exact regulatory environment.
Find a Tennessee specialist →Reviewer's checklist
- Confirm a reserve study exists for the condo (required over $10,000 common-element replacement cost)
- Confirm the study is current and on the five-year update cycle (§66-27-403(g))
- Confirm the study was distributed to owners by email or website
- Read the §66-27-503(4) budget disclosure of the reserve amount
- Compare the funded reserve balance to the study's recommendation
- Identify large near-term components — roof, cladding, glazing, garage, elevators
- Confirm the study models Tennessee storm and (West TN) seismic exposure
- Read the minutes for any reserve-funding or special-assessment discussion
- For an HOA, infer reserve adequacy from the CC&Rs, budget, and component age
- Weigh a thin reserve balance as a special-assessment signal even where a study exists
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Critical
Under 10%
Weak
10–30%
Fair
30–70%
Healthy
70%+
- Under 10%:
- Assessment likely imminent
- 10–30%:
- Elevated assessment risk
- 30–70%:
- Common, manageable middle
- 70%+:
- On track to fund replacements
Source documents
- Declaration & bylawsthe rules
- Budget & financialsthe money
- Reserve studythe big repairs
- Meeting minuteswhat the board fears
Cross-reference
The risk lives in the contradiction between documents.
An assessment in the minutes but not the estoppel; a reserve the budget never funds.
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Severity-graded across 8 categories.
Every finding cites the document, page number, and quoted text.
How CondoSignal reviews this
We read the reserve study, operating budget, and 24 months of meeting minutes together — tennessee reserve studies risk usually lives in the contradiction between documents, not in any single one of them. Every finding cites the source document, the page number, and the quoted text behind it.
See our 8-category framework →Risk Intelligence
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- Reserve fund engineer
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Related risk areas
Read these next to round out your due diligence
Special assessments
Special assessments are the single largest source of financial surprise in condo and HOA ownership.
Condo document review
A condo document review is the structured analysis of every disclosure document your seller or association has provided — declaration, bylaws, rules, reserve study, budgets, financials, meeting minutes, insurance summary, estoppel or resale certificate, and any pending special assessment notices.
Insurance risk
The association's master insurance policy determines what your personal HO-6 policy needs to cover — and what it does not.
Related reading
Guides for Tennessee buyers and owners
Tennessee's Condo Reserve Study Law: What §66-27-403(g) Means for Buyers
As of January 1, 2024, Tennessee requires condo reserve studies — but not reserve funding, and not for HOAs. Here's what the law covers and why a study can sit alongside an empty reserve account.
How to Read a Reserve Study Before Buying: Is the Funding a Red Flag?
Reserve studies are dense engineering-financial documents. Learn what percent funded and baseline funding mean, how to spot unfunded repairs, and when the numbers are a special-assessment red flag — before you buy.
Special Assessment Red Flags: How to Spot One Before You Buy
A special assessment rarely arrives without warning. The clues show up in the reserve study, budget, and meeting minutes months before the vote — here are the red flags to check before you buy.
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Reviewed by Kirk Hasley, Founder. Every claim here is checked against current Tennessee statute and primary sources, using the same documented review framework we run on every file. Last reviewed June 13, 2026.
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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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Most buyers get 7–14 days to review condo documents. Upload the packet — we read the reserve study, budget, minutes, and insurance summary and flag the risks, every finding linked to the exact page. Free.
Expert Matching
Need a real estate lawyer or mortgage specialist?
We can connect you with vetted real estate lawyers, mortgage brokers, and insurance brokers familiar with the specifics of condo and HOA transactions.
- Reserve fund engineer
- Property manager
- Building envelope consultant
- Restoration contractor