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)
