Tennessee Condo Reserve Study Law: 66-27-403(g)

Who it covers

The duty falls on the board of directors of a unit owners' association that oversees common elements with an aggregate replacement cost of more than $10,000. In practice that is nearly every Tennessee condominium with a shared roof, a parking lot or a pool.

Three cases are left out:

a board still controlled by the declarant (the developer);
a condominium titled to a single owner;
a husband and wife who own the condominium as tenants by the entirety.

When a study is due

5 yearsThe longest gap allowed between studies, once the first is done.

Jan 1, 2025Deadline for associations with no study dated January 1, 2020 or later.

If the association had a reserve study conducted on or after January 1, 2020, the board must have it updated within five years of that study's date, and at least every five years after that. If it had none in that window, the board had to require one on or before January 1, 2025, then keep the same five-year rhythm.

Who may prepare it

The act adds a definition of "reserve study" to section 66-27-203. The study has to follow the latest edition of the Reserve Study Standards published by the Community Associations Institute, or comparable standards of another national organization, and it has to be prepared by either:

a reserve specialist credentialed through the Community Associations Institute or a similar recognized organization; or
a licensed engineer or architect.

The definition also describes what the study contains: an estimate of the remaining useful life and the replacement cost of each common element component. CAI explains the three levels of study (full, update with a site visit, update without one) in its reserve study standards.

What owners are owed

The board must make a copy of the reserve study available to all owners, either by email or by posting it on the community website. It must also review reserve funding every year for adequacy.

The law asks for a study and an annual look at the money. It does not set a funding target or a minimum contribution.

Homeowners associations are a separate question

Subsection (g) sits in the Condominium Act. A planned community of houses or townhomes that is not a condominium is usually a nonprofit corporation governed by its declaration and the general rules of the Tennessee Nonprofit Corporation Act. We know of no Tennessee statute that requires such an association to have a reserve study; check with the association's attorney. See our page for homeowners associations.

Sources

This page summarizes the amended bill text for SB 863 of the 113th General Assembly and the codified wording of 66-27-403(g). Treat it as a summary, not legal advice, and confirm details with the association's attorney.

Questions about the rule

Our condominium was created before 2008. Does the rule still apply?

Many parts of the 2008 act reach older condominiums, but how far depends on the declaration and on which provisions the act applies to them. If your association was set up under the older Horizontal Property Act, check with the association's attorney before relying on either answer.

We missed the January 1, 2025 date. What now?

The act does not set out a penalty in subsection (g). The practical answer is to commission a study now, record the decision in the minutes and share the finished report with owners. Lenders and buyers increasingly ask for it, so the cost of waiting tends to show up at resale.

Does the board have to fund the amount the study recommends?

Subsection (g) asks the board to review reserve funding every year for adequacy. It does not fix a contribution level or a percent funded target. Your declaration and bylaws may say more.

Can a board member or the manager prepare the study?

Only if they hold the qualifications in the definition: a reserve specialist credential through CAI or a similar organization, or a license as an engineer or architect.

The Tennessee condominium reserve study law