Arizona Does Not Mandate Reserve Studies. Here Is What the Law Actually Requires of HOA Boards

Ask ten Arizona board members whether state law requires their association to have a reserve study and you will get ten different answers. Here is the accurate one: Arizona does not mandate reserve studies, and it does not set a minimum reserve funding level. That surprises boards that have served in Nevada or California, where reserve studies are a statutory requirement on a fixed cycle. But the absence of a mandate is not the absence of accountability. Arizona law exposes your reserve position to every prospective buyer through the resale disclosure statute, a brand new 2026 law just made that exposure significantly bigger, and director fiduciary duty fills whatever gap the statutes leave. This article walks through what Arizona law actually requires, what changed in 2026, and why a current reserve study is still the smartest document an Arizona board can own.

1. The Mandate That Does Not Exist

Search the Arizona Planned Communities Act and the Condominium Act and you will not find a reserve study requirement. There is no statute telling an Arizona association how often to commission a study, what it must contain, or how much money must sit in the reserve account. Industry references confirm the gap: as hoareserves.com summarizes, Arizona does not require HOAs to conduct reserve studies or fund reserves, but it does mandate reserve disclosure in resale documents. That last clause is where the real obligation lives.

2. A.R.S. 33-1806: Where Your Reserve Balance Becomes Public

A.R.S. 33-1806 governs resale disclosure for planned communities, with a parallel section, A.R.S. 33-1260, for condominiums. Every time a home in your community sells, the buyer receives a disclosure package on a ten day clock, and that package includes the total amount of money held by the association as reserves. In other words, Arizona did not order you to fund reserves. It ordered you to tell every single buyer exactly how funded you are, transaction after transaction, forever. An underfunded reserve account is not a private problem in Arizona. It is a disclosure that follows the community into every escrow, every appraisal conversation, and every lender review.

3. HB 2397 Just Raised the Stakes (Effective September 12, 2026)

In June 2026, Governor Hobbs signed House Bill 2397, which amends both resale disclosure statutes effective September 12, 2026. The Senate fact sheet and the CHDB Law legislative summary lay out the changes, and three of them matter enormously for reserve planning:

• The packet gets bigger. Along with the most recent reserve study, the disclosure package must now include income and expense statements for both the operating account and the reserve account, plus the minutes of the three most recent open board meetings. Buyers will see not just the reserve balance, but whether contributions are actually being made and what repairs the board has been debating.
• The clock moves up. For communities under 50 units, delivery is due within ten days of offer acceptance. For larger communities, the association delivers within ten days of written notice of the pending sale.
• There is now a damages remedy. A buyer can pursue damages when an association knowingly or recklessly withholds required information or provides materially false information. A reserve picture that was quietly fudged is no longer just embarrassing. It is actionable.

Put simply, starting this fall the financial story of your association, deferred repairs and all, is handed to every buyer with legal teeth behind it.

4. How Arizona Compares to Nevada and California

The contrast with neighboring states explains why so many board members assume a mandate exists. Nevada requires associations to conduct a reserve study at least every five years under NRS 116.31152 and to fund reserves adequately, a framework we covered in detail in our guide to Nevada HOA painting and reserve studies under NRS 116. California requires a diligent visual site inspection at least every three years and annual funding plan updates under Civil Code 5550. Arizona chose a different lever: instead of mandating the study, it mandates the sunlight. The practical result is similar pressure arriving from a different direction. In Nevada, the regulator can cite you. In Arizona, the market does it, one disclosure packet at a time.

5. Fiduciary Duty Fills the Gap

Arizona directors also cannot hide behind the missing mandate. Board members of an Arizona nonprofit corporation owe the association a duty of good faith and reasonable care under A.R.S. 10-3830. Deciding not to know the condition and remaining life of the community's paint, roofs, decks, and asphalt is difficult to square with that standard, especially when the industry norm is well established. Reserve professionals classify a reserve fund at 0 to 30 percent funded as weak and 70 percent or above as strong, and Association Reserves has found that roughly three quarters of association governed communities sit below the strong line. When an underfunded community finally faces a major repaint or reconstruction project, the options narrow to special assessments, loans, or deferral, and deferral is the option that ends up in litigation. A current reserve study is the board's best evidence that it met its duty, and it is the planning document that lets big exterior projects be scheduled and funded years in advance rather than discovered in a crisis.

6. What a Well Run Arizona Board Does Anyway

• Commission a professional reserve study on a regular cycle, even though no statute requires it, and update it after major projects.
• Fund reserves against the study's recommendations and document the funding decision in the minutes each budget season.
• Treat the reserve study and reserve account statements as public documents, because under HB 2397 they effectively are.
• Sequence major exterior work, repaints, deck and balcony repairs, and waterproofing, against the study so projects are funded before they are urgent.
• Keep board meeting minutes clean and accurate, since the last three sets now ride along in every disclosure packet.

Conclusion

Arizona law never tells your board to do a reserve study. It just guarantees that everyone who might buy into your community will see the consequences of not doing one. With HB 2397 expanding the disclosure packet and adding a damages remedy in September 2026, the associations that plan, fund, and execute their capital projects on schedule will look dramatically better in escrow than the ones that deferred. EmpireWorks has helped HOA and multifamily communities across the Southwest turn reserve studies into funded, phased repaint and reconstruction programs for decades. If your Arizona community's reserve study is pointing at a big project, talk to EmpireWorks about scoping and phasing it before the disclosure packet tells the story for you.

Sources

• A.R.S. 33-1806, Resale of units; information required; fees (Arizona Legislature)
• A.R.S. 33-1260, Resale of units, condominiums (Arizona Legislature)
• Arizona HB 2397, full bill text (57th Legislature, 2026)
• HB 2397 Senate Fact Sheet (Arizona Legislature)
• CHDB Law, HB 2397 Legislative Update (signing date, effective date, remedies)
• A.R.S. 10-3830, General standards for directors (Arizona Legislature)
• hoareserves.com, Arizona HOA Reserve Requirements
• Association Reserves, Three Quarters of Association Governed Communities Are Underfunded
• California Civil Code 5550 (California Legislative Information)

This article is for general information and is not legal or financial advice. Consult an Arizona community association attorney or reserve professional about your association's specific obligations.