Michigan Reserve Study Laws

Helpful information for Michigan Reserve Study Companies & HOA Industry Professionals

Michigan Reserve Study Legislation & HOA Reserve Fund Laws

Condominiums must have a reserve fund for major repairs and replacement of common elements shallvbe maintained by the associations of co-owners. The administrator may by rule establish minimum standards for reserve funds. Section 559.205.

The state administrative code requires the co-owners’ association to maintain a reserve fund which, at a minimum, shall be equal to 10% of the association’s current annual budget on a noncumulative basis.The funds shall only be used for major repairs and replacement of common elements. Additionally, the following statement shall be contained in the bylaws: “The minimum standard required by this section may prove to be inadequate for a particular project. The association of co-owners should carefully analyze their condominium project to determine if a greater amount should be set aside, or if additional reserve funds should be established for other purposes.” Rule 559.511.

There is no statutory requirement to conduct a reserve study.

Source: Community Associations Institute Summary of State Reserve Fund Laws (Oct 2022)

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