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SB 787

Cooperative Housing Corporations and Condominiums - Funding of Reserve Accounts and Timing of Reserve Studies

2025 Regular Session Introduced by J.B. Jennings

SB 787 tightens reserve studies by focusing on major components over $10,000, extends update and funding timelines, and allows more licensed trades to prepare the reports.

Hearing 2/25 at 1:00 p.m.
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Bill Summary · SB 787

SB 787 — Cooperative Housing Corporations and Condominiums:

Funding of Reserve Accounts and Timing of Reserve Studies
(Introduced Feb 21, 2025; Hearing scheduled Feb 25, 2025 at 1:00 p.m.)

Purpose / Intent

SB 787 revises Maryland law governing required reserve studies for cooperative housing corporations and residential condominiums. The bill narrows which components must be identified in reserve studies, lengthens timelines for study updates and for achieving recommended funding levels, and expands who may prepare those studies. The stated intent is to tailor reserve-study requirements to higher‑cost components and to reduce administrative burdens for smaller communities while enabling additional licensed contractors and small business vendors to perform studies.

Key provisions and changes

  • Limits component identification: For cooperatives and condominiums, a reserve study must identify only structural, mechanical, electrical, plumbing, and other components whose repair or replacement cost exceeds $10,000 (previously all such components).
  • Applicability exception: The statute (as amended) applies only to cooperatives/condominiums that either (a) consist of a building containing four or more stories used for habitation, or (b) contain four or more single‑family units — smaller properties are effectively excluded.
  • Update frequency: After an initial reserve study, updated reserve studies are required every 10 years instead of every 5 years.
  • Attainment of funding targets: If an initial reserve study recommends an annual reserve funding level, the governing body must attain that level within 10 fiscal years (was 3 years).
  • Qualified preparers: Expands who may prepare reserve studies to include persons licensed by the State Board of Electricians, State Board of Plumbers, or the Maryland Home Improvement Commission, in addition to existing qualifications (architects, engineers, reserve specialists, analysts, or experienced preparers).
  • Budget disclosure: Annual budgets must include replacement cost for capital components when the estimated replacement cost (per the most recent reserve study) exceeds $10,000, plus standard reserve accounting disclosures. Reserve studies must remain available for inspection and be summarized with the annual proposed budget.

Who is affected

  • Primary: Governing bodies and unit owners of cooperative housing corporations and residential condominiums meeting the size criteria (4+ stories or 4+ units).
  • Secondary: Small business vendors and contractors (electricians, plumbers, home improvement contractors) who may become newly eligible to prepare reserve studies.
  • Fiscal: The Department of Legislative Services reports no direct state or local fiscal impact; potential meaningful benefit for qualified small businesses.

Procedural / timeline notes

  • Introduced Feb 21, 2025; hearing set for Feb 25, 2025 (1:00 p.m.).
  • Fiscal note prepared by the Department of Legislative Services (First Reader Feb 23, 2025) indicates no direct state/local cost and highlights small‑business effects.

If you want, I can:
- Draft a side‑by‑side comparison of current law vs. the bill,
- Extract the exact statutory text changes for insertion into a memo, or
- Summarize likely compliance steps for condominium/cooperative boards.

Compiled from official sources — confirm details with the bill’s official record.

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