Texas Property Code and HOA Reserves

No Texas statute requires a reserve study

Texas is one of the states with no reserve study law. Single-family associations fall under Chapter 209 of the Property Code, the Texas Residential Property Owners Protection Act, and condominiums under Chapter 82, the Texas Uniform Condominium Act. Neither tells a board to commission a study, to update one on a cycle, or to hold a minimum balance. The Community Associations Institute’s June 2026 summary of state reserve laws reads Texas the same way.

That leaves the decision with your board and your governing documents. Read the declaration and bylaws before assuming you are free of any duty: some Texas declarations require a reserve fund, an annual reserve line in the budget or a periodic study. If yours does, that clause binds the board even though the statute is silent.

Where reserves do appear in Texas law

The resale certificate

When a home in a Texas HOA is sold, the buyer can receive a resale certificate under Chapter 207. Among other items it lists the association’s reserves for capital expenditures, the current operating budget and balance sheet, and any special assessments already approved. Condominium resale certificates under section 82.157 do the same, and add any part of the reserves the association has set aside for a named project. The Texas Real Estate Commission publishes promulgated forms used for both.

In other words, buyers and their agents see your reserve figure. A study gives the board a way to explain that figure, and to show it rests on a plan rather than habit.

Owner access to records

Section 209.005 gives HOA owners the right to inspect or copy the association’s books and records, including financial records, after a written request. The association has a set number of business days to respond, and it must adopt a records retention policy under which financial records are kept for seven years. If the association has a reserve study, an owner can ask to see it like any other record.

For condominiums, section 82.114 covers the books and records an association keeps and owners’ access to them. The exact procedure differs from Chapter 209; check it with the association’s attorney before you answer a request.

The power to budget for reserves

Section 82.102 lists adopting budgets for revenues, expenditures and reserves among a condominium association’s powers. It is a power, not a duty. Chapter 209 associations draw the same power from their declarations.

Lenders: the rule that bites for condos

The rule that most often forces the question in Texas is a lender rule, not a statute. Under the Fannie Mae Selling Guide (section B4-2.2-02, full project review), a condominium project’s budget is expected to put at least 10 percent of assessment income into replacement reserves. FHA’s condominium project approval rules use the same 10 percent test; HUD’s list of documents for approval includes the budget. Both accept a recent reserve study as another way to show reserves are adequate.

When a condo project falls short and has no study, buyers can struggle to get conventional or FHA financing, which hits resale values for every owner. For single-family HOAs these project reviews rarely apply, so the pressure comes from buyers and boards instead.

Why Texas boards order a study anyway

• To avoid special assessments. A big item failing with too little in reserve leaves the board choosing between a loan, a special assessment and putting off the work.
• To set dues with a reason. Owners accept an increase more readily when the board can show the component list and the year each item comes due.
• For insurance and storms. Hail, freeze and flood claims go more smoothly when the board knows the age and condition of roofs, fences and mechanical systems.
• For the resale certificate. The reserve figure is in front of every buyer.

A sensible Texas cycle

With no state interval to follow, we suggest the cycle in CAI’s reserve study standards: start with a full study on site, have the provider walk the community again at least every third year, and order a quick desk update in the years between. Communities with few components can stretch the visit cycle to five years; those with towers, elevators or large amenity centers should not.

General information, not legal advice. Statutes are amended in most legislative sessions; confirm current wording with the association’s attorney.