Colorado required reserve studies at new condo turnover. New York still hasn't.

On April 13, 2026, Colorado Governor Jared Polis signed HB 26-1099 into law. Starting August 12, 2026, no Colorado condo developer may sell the first unit in a new or converted building without first commissioning an independent 30-year reserve study and delivering it to the first owner-elected board. New York Assembly Bill A8945 and its Senate companion S7600 proposed a broader mandate: directing all condo and co-op associations to complete capital reserve studies, not limiting the requirement to the developer-turnover moment. S7600 was reported out of the Senate housing committee; A8945 did not receive a committee hearing. Neither received a floor vote before Albany adjourned.

What HB 26-1099 requires.

Under Colorado's Common Interest Ownership Act, Title 38, Article 33.3 of the Colorado Revised Statutes, HB 26-1099 adds specific obligations at the developer-to-owner transition. The study must be prepared by a reserve professional who has no financial relationship with the declarant (developer) and who is not an employee or affiliate of the developer's management company. Independence, not just licensure, is the operative standard.

The projection horizon is 30 years, covering all common elements. Where construction occurs in phases, the developer must update the study after each phase. A final update is required upon substantial completion of the last phase. The developer must deliver the completed study within 60 days of the first board meeting at which owners hold a majority of votes. There is no size threshold: the requirement applies to associations with two units as much as to buildings with 500.

The bill also requires the developer to deposit into the reserve fund an amount equal to at least 1.5 percent of the amount required to fully fund the reserves, as set forth in the reserve study. The Colorado Department of Regulatory Agencies (DORA) receives enforcement authority. Primary source: leg.colorado.gov/bills/hb26-1099.

What Colorado attempted in 2022.

HB 26-1099 is Colorado's second attempt at reserve legislation in four years. In 2022, the legislature passed HB 22-1387, a broader bill that would have imposed a four-tier reserve-adequacy system on all existing associations statewide, not only new developments. Governor Polis vetoed that bill, citing cost concerns for small associations and the administrative burden on existing boards that had never operated under a reserve mandate.

The 2022 veto is instructive for Albany. Colorado's legislature accepted a narrower scope in 2026, targeting only the developer-turnover moment rather than the full universe of existing associations. The resulting bill drew less industry opposition and received bipartisan support. New York's A8945/S7600 took the broader approach, directing all condo and co-op associations to complete reserve studies rather than targeting only the developer-turnover moment. Those bills also did not advance.

Colorado's existing statute, CRS §38-33.3-209.5, contains a weak reserve policy floor: associations must adopt a reserve policy, but the policy need not meet any funding adequacy standard. That provision predates HB 26-1099 and remains in effect for existing associations. HB 26-1099 does not change it. Primary source for the 2022 veto: Governor's veto document, 2022 session.

What New York law says.

New York's Condominium Act, Real Property Law Article 9-B, contains no reserve study requirement at any point in a building's life. General Business Law §352-e gives the Attorney General authority to review offering plans and requires that a sponsor's first-year budget be "reasonable," but no statute defines what a reasonable reserve contribution looks like or requires a 30-year capital projection.

A8945 (Assembly, 2025) and its Senate companion S7600 would have required any condo or co-op association to complete a capital reserve study, including a 30-year funding plan — a broader mandate than a developer-turnover requirement. S7600 was reported out of the Senate housing committee. A8945 did not receive a committee hearing. Neither received a floor vote before Albany adjourned June 18, 2026. Primary sources: RPL Article 9-B and A8945 bill text.

The AG's Martin Act review of offering plans covers sales disclosure adequacy. It does not extend to evaluating whether a developer's reserve projection is sound on a 30-year basis. A plan that includes a year-one budget with a $50,000 reserve deposit passes Martin Act review regardless of whether the building's 30-year capital needs are $5 million or $50 million.

Colorado versus New York: a direct comparison.

Why the developer-turnover moment concentrates the risk.

The developer controls every variable that determines a building's opening reserve position. The developer sets the year-one budget, selects the managing agent, hires the engineer for the offering-plan cost estimate, and decides what construction corners to cut. All of those decisions are made before a single owner-elected board member takes a seat.

New York's offering plan includes a year-one operating budget with a reserve line. It does not include a 30-year capital schedule. The first owner-elected board typically receives a building in year two or three, inheriting whatever reserve balance the developer left. If that balance is thin relative to the building's actual capital needs, the board's first order of business is often a special assessment, a bank loan, or both.

HB 26-1099 closes this window by separating the preparer from the developer financially and requiring the study to be updated as-built, not as-designed. An as-built update after each construction phase captures substitutions and scope reductions that a pre-construction study would miss. New York has no equivalent requirement at any phase.

The Fannie Mae lens.

Fannie Mae Lender Letter LL-2026-03, effective August 3, 2026, requires lenders to conduct a full project review for all established condo projects before approving a mortgage. One trigger for heightened review is documentation of deferred maintenance or unfunded repairs exceeding $10,000 per unit. A 30-year reserve study at turnover would give a buyer's lender documented evidence of reserve adequacy at the time of contract signing.

Without that study, the first signal that a building's reserves are inadequate may arrive at mortgage application. A lender conducting LL-2026-03 review of a building with thin reserves may decline to underwrite. That outcome does not protect the buyer; it blocks their exit. See our earlier post on Fannie Mae's August 2026 full-review requirement for details on what lenders must now document. Primary source: Fannie Mae LL-2026-03.

Bottom line.

Colorado tried twice. The 2022 universal mandate was vetoed because it was broad. The 2026 developer-turnover bill passed because it was narrow. New York's 2025 bills took the broader approach — requiring all associations to maintain reserve studies rather than targeting only developer turnover — and still did not reach a floor vote before Albany adjourned. The gap between Colorado's August 12 effective date and New York's continued inaction now extends to the buildings that come to market this fall. Our 14,062-building universe carries this gap in full. Nothing in the current legislative calendar suggests it will close before the 2027 session. See also: the reserve fund requirement gap.

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Companion resources
How New Jersey's reserve fund mandate compares to New York's gap
Hawaii required audited financials and reserve studies in 2006. New York still hasn't.
Fannie Mae's August 2026 full-review requirement for established condos
Reserve study baseline funding under Fannie Mae's August 2026 guidelines
The business judgment rule and the absence of reserve standardization in NY
Issue: no reserve fund requirement in New York
National comparison: how other states regulate condo reserves