The NC Condominium and Planned Community Acts on Reserves

1Which Act applies to your community

Start with the date the community was created, which is the date its declaration was recorded.

Townhome communities are usually planned communities, not condominiums, even when the homes share walls. What decides it is whether owners hold undivided shares of the common elements (a condominium) or the association owns the common areas (a planned community). The recorded declaration says which. If it is unclear, check with the association's attorney.

2What the Acts say about reserves

Very little, and that is the point. Among the powers the association holds, both Acts list the power to adopt and amend budgets "for revenues, expenditures, and reserves" and to collect assessments for common expenses (G.S. 47F-3-102; G.S. 47C-3-102).

There is no minimum balance, no percent-funded target, no required study and no required interval. The Community Associations Institute's summary of state reserve laws (June 2026) places North Carolina among the states with no study or funding requirement.

So the binding rules are usually in your declaration and bylaws. Read the articles on assessments, the budget and maintenance. Some North Carolina declarations require a reserve for named items such as roofs or private streets; a few require a study on a cycle. Those clauses bind the board.

3Budgets and the ratification meeting

This is where reserves meet owners. Under G.S. 47F-3-103(c), after the board adopts a proposed budget it sends every owner a summary and notice of a meeting to consider ratification. The budget stands unless a majority of all the owners in the association, or a larger vote the declaration sets, rejects it, and no quorum is needed. The Condominium Act has a similar procedure in G.S. 47C-3-103; check with the association's attorney which version applies to an older condominium.

Two practical points follow. First, a reserve increase is far easier to ratify when the summary shows where it comes from: a component, a remaining life and a cost. Second, if owners do reject a budget, the last ratified budget carries on until a new one is ratified, so an underfunded reserve line can stay frozen for a year or more.

4What buyers are told

When a developer first sells condominium units, the public offering statement under G.S. 47C-4-103 must include the budget, with the amount in it set aside as a reserve for repairs and replacement, or a statement that there is none.

On resales, G.S. 47C-4-109 deals with the information a selling owner gives a buyer about assessments. The text does not appear to require a reserve balance or a study to be handed over. Lenders and buyers' attorneys often ask anyway, so most managers keep the latest study and the current reserve balance ready for resale packages.

5Changes to watch

Bills about association governance come up in most sessions. In the 2025 session, House Bill 993, titled the HOA Organization and Reporting Act, was filed; you can follow it on the General Assembly's bill page. We have not confirmed that it, or any reserve study requirement, has become law, and nothing on this site assumes it. Florida's post-2022 rules on condominium structural reserves do not apply in North Carolina.

6What we would do in your place

• Read the declaration and bylaws for any reserve or study clause, and follow it.
• Commission a full study before the next budget if you have never had one, or if the last one is more than five years old.
• Put the study's recommended contribution, and its reasons, in the budget summary owners receive before the ratification meeting.
• Update after a named storm or a major repair, not only on the calendar.

When you are ready, get a quote or see what studies cost.