Massachusetts put a reserve fund in its condo law. New York still hasn't.

Massachusetts enacted its condominium statute, Chapter 183A of the General Laws, in 1963. New York enacted the Condominium Act, Real Property Law Article 9-B, in 1964. The Massachusetts law required condo boards to maintain a separate replacement reserve fund. The New York law did not. Sixty-two years later, New York's equivalent bills are still in committee.

What Massachusetts Chapter 183A requires.

Massachusetts General Laws Chapter 183A, Section 10(i) reads: "The organization of unit owners shall collect as part of the common expense charges a reasonable amount to be deposited in a replacement reserve fund, which shall be a fund separate from operating funds." The statute does not specify a minimum dollar amount, a minimum percentage of annual operating budget, or a funding schedule. It sets a floor, not a ceiling. The floor is: there must be a reserve account, it must be separate from operating funds, and it must be funded as part of the regular common expense assessment.

Section 10(f) adds a second layer. A managing agent engaged by a Massachusetts condo board is required to render written reports to the board of trustees at least quarterly. Those reports must include the beginning and ending balances for the period, copies of all relevant bank statements, and a reconciliation for the replacement reserve fund. The reports are not optional. They are not triggered by an owner request. They are a baseline obligation the managing agent owes the board under the state statute.

Neither provision is a licensure requirement. Massachusetts does not license community association managers. But together, §10(i) and §10(f) create an accountability loop: the board must maintain a reserve account, the managing agent must document its status in writing each quarter, and the documentation must be backed by actual bank statements.

What New York's Condominium Act says instead.

New York Real Property Law Article 9-B does not require condo boards to maintain a reserve fund. It does not require a reserve study. It does not require managing agents to file any periodic report on building finances.

The documents that govern most NYC condo boards are the offering plan and the condominium declaration, drafted by the sponsor's attorneys and approved by the Attorney General's Real Estate Finance Bureau before the first unit sells. Those documents may include reserve provisions. Some do. Some do not. The underlying state statute sets no floor. A declaration that omits a reserve requirement is not in violation of any New York law.

Under New York law, a board can vote to reduce its reserve allocation to zero. It can transfer reserve funds to operations. It can revise its reserve policy without notice to unit owners. No state statute requires the managing agent to produce a reserve fund reconciliation on any schedule. The managing agent in New York needs no license, appears in no state registry, and owes no periodic reporting obligation to the board on the question of reserves unless the management contract says otherwise.

The bills that would have closed the gap.

New York Senate Bill S7600 and Assembly Bill A8945 were introduced in January 2026. Both would have amended New York law to require reserve studies for co-ops and condominiums. The study under those bills would have had to include a physical inspection of all common elements, an estimate of useful life and replacement cost for each component, and a 30-year funding plan consistent with the study's findings.

S7600 and A8945 are not the same as Massachusetts Chapter 183A §10(i). They would have required more: a full commissioned reserve study and an explicit funding schedule, not merely a separate account. But they would also have been, to our knowledge, the first broadly applicable reserve-study mandate in New York law for condominiums and co-ops generally — existing requirements cover only conversion buildings and certain preservation plans.

Albany adjourned June 5, 2026, without scheduling either bill for a floor vote. No companion bill to S7600 was advanced on the Assembly side; A8945 was referred to committee and held there. The reserve study bills join S.71 (managing-agent licensure), S5089 (condo owner bill of rights), and S7745 (condo ombudsperson) in the record of 2025-26 session bills that did not receive a committee hearing.

The financing floor the statute doesn't provide.

In the absence of a state reserve requirement, the first actor to set a reserve floor for NYC condo buildings seeking conventional financing has been Fannie Mae.

Fannie Mae Lender Letter LL-2026-03, effective August 3, 2026, prohibits lenders from accepting baseline-funded reserve studies as evidence of adequate reserves. For any mortgage originated on or after January 4, 2027, the minimum reserve allocation is 15 percent of annual assessment income. Buildings that fall below that threshold without a qualifying full-funded reserve study are ineligible for conventional financing and appear on Fannie Mae's unavailable list. At least 66 NYC condo and co-op buildings currently appear on that list.

That standard is real. But it is set by a private secondary-market entity, applies only when conventional financing is sought in a transaction, and has no enforcement mechanism beyond removing financing eligibility for that transaction. A board whose reserve allocation is 8 percent and in which no unit sale is pending faces no consequence under New York law. Massachusetts boards face a statutory obligation regardless of transaction activity.

Why the reporting requirement matters separately.

Massachusetts Section 10(f) is worth separating from the reserve fund requirement itself. The quarterly report obligation is not about the fund's size. It is about who knows what the fund contains, and how often, and in what form.

A managing agent who handles building finances and is required by statute to produce quarterly bank-statement reconciliations to the board operates in a documented environment. The board has a paper record of reserve fund activity each quarter. A managing agent who diverts reserve funds leaves a paper trail in that record. A managing agent who fails to produce the reports is in violation of a statutory obligation, not merely a contractual one.

In New York, there is no equivalent paper trail by default. Owners who want to see their building's reserve fund status must either trust what the managing agent tells them, invoke their inspection rights under BCL §624 or RPL §339-w to request records, or file a court proceeding to compel access. No state statute requires the managing agent to produce the information on a schedule. The Attorney General's Real Estate Finance Bureau, whose enforcement scope the blog has documented in detail, cannot compel that reporting under the Martin Act.

Bottom line.

Massachusetts Chapter 183A, Section 10(i) requires condo boards to maintain a separate replacement reserve fund collected as part of regular common expense assessments. Section 10(f) requires managing agents to report on that fund quarterly with bank statements. New York's Condominium Act requires neither. Bills S7600 and A8945 would have added a reserve study mandate to New York law for the first time; they did not advance before Albany adjourned in June 2026. S.71 would have created a managing-agent registration system; it has not received a committee hearing in any session. The gap between what Massachusetts requires and what New York requires is not new. What is new is another session in which the bills that would reduce it received no floor vote.

Primary sources: Massachusetts General Laws Chapter 183A (malegislature.gov) · New York Real Property Law (nysenate.gov) · NY Senate S7600, 2025-26 session (nysenate.gov) · NY Assembly A8945, 2025-26 session (nysenate.gov)

Companion resources: New Jersey mandated reserve studies. New York hasn't. · HOA reserves are running out. New York has no mandate. · The condo industry's own trade organization backs mandatory reserve studies. · Fannie Mae's 15% reserve floor arrives in January. · What your reserve study's funding method means after August 3. · S.71: what the managing-agent licensure bill would require. · Why the AG can't help with most condo governance disputes.