The common interest ownership act requires an association to include in its annual budget’s replacement reserves projected by the board to be adequate, together with past and future contributions to replacement reserves, to fund the replacement of common elements. The act also requires the association to reevaluate the adequacy of its budgeted replacement reserves at least every third year after the recording of the declaration creating the common interest community. Section515B.3-1441. Unit owners associations have the power to adopt and amend budgets for revenues, expenditures and reserves and collect assessments for common expenses from unit owners. Section515B.3-101. Communities must distribute an annual report with a statement of the association's total replacement reserves, the components of the common interest community for which the reserves are set aside, and the amounts of the reserves, if any, that the board has allocated for the replacement of each of those components. Section 515B.3-106. Disclosure statements must include the amount in the budget as replacement reserves and a statement of any other reserves.
There is no statutory requirement to conduct a formal reserve study.
Source: Community Associations Institute Summary of State Reserve Fund Laws (Oct 2022)