Navigating Wisconsin HOA laws can be complex for community associations, reserve study providers, and industry professionals alike. While Wisconsin statutes outline specific requirements for establishing and maintaining statutory reserve accounts, there is no legal mandate to conduct a reserve study. This makes it especially important for HOAs, condominium boards, and their partners to fully understand the nuances of state legislation, including Section 703.163, in order to make informed decisions about long-term financial planning and property maintenance.
The declarant of a condominium that is created on or after November 1, 2004, shall establish a statutory reserve account when the condominium is created and shall execute a statutory reserve account statement. The declarant shall determine the annual amount to be assessed unit owners for reserve funds. The declarant may elect not to establish a statutory reserve account at the time the condominium is created or, at any time thereafter, may elect to terminate a statutory reserve account during the period of declarant control. If a declarant has elected not to establish a statutory reserve account or to terminate an account, establishment of a statutory reserve account shall be addressed at the first annual meeting of the association held after, or at a special meeting of the association held within one year after, the expiration of any period of declarant control under. An association may, with the written consent of a majority of the unit votes, create or terminate a statutory reserve account. Section 703.163.
There is no statutory requirement to conduct a reserve study.
Source: Community Associations Institute Summary of State Reserve Fund Laws
Note: This information is for informational purposes and is not intended to provide legal advice.
What do Wisconsin HOA laws say about reserve funding?
Under Wisconsin HOA laws, associations are not required to fund reserves, but HOA boards are legally obligated to act responsibly when managing community finances and property maintenance. Reserve funding is considered a best practice to demonstrate sound financial governance and reduce the need for special assessments.
Why should an HOA follow reserve study recommendations if not required by law?
Even though Wisconsin HOA laws don’t require reserve studies, following reserve study guidance helps boards:
Do Wisconsin HOA laws limit special assessments?
Wisconsin HOA laws do not prohibit special assessments, and boards may issue them when needed to cover major repairs. However, strong reserve planning helps significantly reduce how often special assessments are needed and keeps costs more predictable for homeowners.
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