Condominium boards with no reserve study dated January 1, 2020 or later had until January 1, 2025 to commission one. Subsection (g) names no penalty, but the gap shows up with lenders, buyers and owners. The fix is simple: order a full study with a site visit, record the decision, and share the report.
Almost two years after the date passed, plenty of Tennessee condominium boards are still without a reserve study. Some never heard about the 2023 change. Some heard and meant to get to it. Some had a manager change hands, or a board turn over, and the item dropped off the list. If that describes your association, this note is for you.
What the deadline actually was
Public Chapter 205 of 2023 added subsection (g) to section 66-27-403 of the Tennessee Condominium Act. It took effect on January 1, 2024 and applies to the board of any unit owners’ association that oversees common elements with an aggregate replacement cost over $10,000.
The rule splits associations into two groups:
- Had a study on or after January 1, 2020. The next one is due within five years of that study’s date, then at least every five years.
- Had no study in that window. The board had to require one on or before January 1, 2025, then keep to the five-year cycle.
Boards still controlled by the declarant, condominiums titled to one owner, and a married couple owning a condominium as tenants by the entirety are outside the rule.
Is there a penalty?
Subsection (g) does not spell one out. That is not the same as saying nothing happens. Owners can raise the board’s compliance with the governing statute, and in an association dispute, a missed statutory duty is not where a board wants to start. Whether any particular remedy is open to an owner is a question for the association’s attorney, not for us.
The pressure most boards actually feel comes from elsewhere:
- Sales and refinancing. Buyers’ agents, lenders and insurers ask about reserves. “We don’t have a study” is an answer that slows deals and can lower prices.
- Budget arguments. Without a study, every dues increase is an opinion. With one, it is a schedule.
- Surprises. A roof or paving project that a study would have flagged five years ahead arrives as a special assessment instead.
A catch-up plan that takes about a quarter
Most boards can close the gap within three months. Here is the order we would suggest.
1. Put it on the next agenda
Ask the board to authorize the manager or a named director to request quotes. Minute the decision and the reason: the association had no study dated 2020 or later, and the law now requires one. A clear record that the board acted once it knew is worth having.
2. Gather what a specialist will ask for
A firm will price the job faster and more accurately if it can see:
- the recorded declaration and any amendments, so it knows what the association maintains;
- a site plan or plat, and the number of buildings, stories and units;
- the last two or three budgets and the current reserve balance;
- invoices or contracts for major work in the past ten years (roofs, paving, siding, elevators, pool);
- any older study, even if it predates 2020.
3. Order a full study with a site visit
For a first study, or one replacing a study that is more than five years old, a full Level I study is the right choice. The specialist inventories every component, measures quantities, estimates remaining life and replacement cost, and builds a funding plan. A desk update is not enough when there is no recent inventory to update.
Check the credentials. The act’s definition of a reserve study names a reserve specialist credentialed through the Community Associations Institute or a similar organization, or a licensed engineer or architect, working to CAI’s Reserve Study Standards or comparable national standards. Ask which person will sign the report.
For a typical association of 50 to 150 homes, a full study usually costs $2,000 to $8,000. Mid-rise and high-rise buildings with elevators and garages cost more.
4. Share the report with owners
When the study arrives, the board must make it available to every owner by email or by posting it on the community website. Do it promptly, with a short cover note explaining what the study is and what the board will do next.
5. Diary the next date
The next update is due within five years of the date the new study was conducted. Put it in the management calendar and the board’s annual planning document now, while everyone remembers.
What to tell owners
Owners tend to take a late study better than a hidden one. A short, factual message works:
- the 2023 law asks condominium boards to have a reserve study every five years;
- the association did not have one in time;
- the board has now commissioned one from a credentialed firm;
- the finished report will be shared with everyone, and the board will use it in setting next year’s budget.
Do not let the first study frighten the board
A first study often shows a funding gap, sometimes a large one. That is the point of having it. A gap does not mean dues must jump overnight; a specialist can model a phased plan that reaches a healthier level over several years. It also gives the board a firm footing for the yearly review of reserve funding that the same subsection asks for.
If you are not sure the rule applies
If the association was created before the 2008 act under the older Horizontal Property Act, or if the community is a planned development rather than a condominium, the answer may be different. Our law page and HOA page explain the distinction; for a definite answer, check with the association’s attorney.