Oregon Statutes 100.175 – Reserve account for maintaining, repairing and replacing common elements; reserve study; information required; maintenance plan
(1) The declarant, on behalf of the association of unit owners, shall:
Terms Used In Oregon Statutes 100.175
- Assessment: means any charge imposed or levied by the association of unit owners on or against a unit owner or unit pursuant to provisions of the declaration or the bylaws of the condominium or provisions of this chapter. See Oregon Statutes 100.005
- association: means the association provided for under ORS § 100. See Oregon Statutes 100.005
- Common elements: means the general common elements and the limited common elements. See Oregon Statutes 100.005
- Conversion condominium: means real property that a declarant intends to submit to the condominium form of ownership under this chapter on which there is a building, improvement or structure that was occupied prior to any negotiation and that is:
(a) Residential in nature, at least in part; and
(b) Not wholly commercial or industrial, or commercial and industrial, in nature. See Oregon Statutes 100.005
- Declarant: means a person who records a declaration under ORS § 100. See Oregon Statutes 100.005
- Declaration: means the instrument described in ORS § 100. See Oregon Statutes 100.005
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Flexible condominium: means a condominium containing variable property that may be redesignated, reclassified or withdrawn from the condominium pursuant to ORS § 100. See Oregon Statutes 100.005
- Limited common elements: means those common elements designated in the declaration, as reserved for the use of a certain unit or number of units, to the exclusion of the other units. See Oregon Statutes 100.005
- majority of unit owners: means more than 50 percent of the voting rights allocated to the units by the declaration. See Oregon Statutes 100.005
- Person: includes individuals, corporations, associations, firms, partnerships, limited liability companies and joint stock companies. See Oregon Statutes 174.100
- Recorded: means to cause to be recorded by the county officer in the real property records for each county in which the condominium is located. See Oregon Statutes 100.005
- Sale: means any disposition or transfer of a condominium unit, or an interest or estate therein, by a developer, including the offering of the property as a prize or gift when a monetary charge or consideration for whatever purpose is required by the developer. See Oregon Statutes 100.005
- Staged condominium: means a condominium that provides for annexation of additional property pursuant to ORS § 100. See Oregon Statutes 100.005
- Successor declarant: means the transferee of any special declarant right. See Oregon Statutes 100.005
- Turnover meeting: means the meeting provided for under ORS § 100. See Oregon Statutes 100.005
(a) Conduct an initial reserve study as described in subsection (3) of this section;
(b) Prepare an initial maintenance plan as described in subsection (4) of this section; and
(c) Establish a reserve account if required under subsection (2) of this section.
(2)(a) An association of unit owners shall establish a reserve account to fund:
(A) Major maintenance, repair or replacement of those common elements or other property to be maintained by the association under the declaration or bylaws, all or part of which will normally require major maintenance, repair or replacement in more than one and less than 30 years;
(B) Exterior painting if the common elements or other property required to be maintained by the association under the declaration or bylaws include exterior painted surfaces; and
(C) Any other items for which a reserve is required under the declaration or bylaws.
(b) The reserve account required under paragraph (a) of this subsection need not include:
(A) Items that can reasonably be funded from the general budget or other funds or accounts of the association; or
(B) A reserve for limited common elements for which maintenance and replacement are the responsibility of one or more, but less than all, unit owners under the provisions of the declaration or bylaws.
(c) The reserve account must be established in the name of the association of unit owners. The association is responsible for administering the account and for making periodic payments into the account.
(d) The reserve portion of the initial assessment determined by the declarant must be based on:
(A) The reserve study described in subsection (3) of this section;
(B) In the case of a conversion condominium, the statement described in ORS § 100.655 (1)(h); or
(C) Other reliable information.
(e) The reserve account must be funded by assessments against the individual units for the purposes for which the reserve account is established.
(f) The assessment under this subsection accrues from the time of the conveyance of the first individual unit assessed as provided in ORS § 100.530.
(3)(a) The board of directors of the association shall annually determine the reserve account requirements by conducting a reserve study or reviewing and updating an existing study using the following information:
(A) The starting balance of the reserve account for the current fiscal year;
(B) The estimated remaining useful life of each item for which reserves are or will be established, as of the date of the study or review;
(C) The estimated cost of maintenance and repair and replacement at the end of the useful life of each item for which reserves are or will be established;
(D) The rate of inflation during the current fiscal year; and
(E) Returns on any invested reserves or investments.
(b) Subject to subsection (10) of this section, after a review of the reserve study or the reserve study update, the board may, without any action by the unit owners:
(A) Adjust the amount of payments in accordance with the study or review; and
(B) Provide for other reserve items that the board of directors, in its discretion, may deem appropriate.
(c) The reserve study must:
(A) Identify all items for which reserves are or will be established;
(B) Include the estimated remaining useful life of each item, as of the date of the reserve study; and
(C) Include for each item, as applicable, an estimated cost of maintenance and repair and replacement at the end of the item’s useful life.
(4)(a) The board of directors shall prepare a maintenance plan for the maintenance, repair and replacement of all property for which the association has maintenance, repair or replacement responsibility under the declaration or bylaws or this chapter. The maintenance plan must:
(A) Describe the maintenance, repair and replacement to be conducted;
(B) Include a schedule for the maintenance, repair and replacement;
(C) Be appropriate for the size and complexity of the maintenance, repair and replacement responsibility of the association; and
(D) Address issues that include but are not limited to warranties and the useful life of the items for which the association has maintenance, repair or replacement responsibility.
(b) The board of directors shall review and update the maintenance plan described under this subsection as necessary.
(5)(a) Except as provided in paragraph (b) of this subsection, the reserve study requirements under subsection (3) of this section and the maintenance plan requirements under subsection (4) of this section do not apply to a condominium consisting of one or two units, excluding units used for parking, storage or other uses ancillary to a unit:
(A) After the sale of the first unit to a person other than a successor declarant, if the condominium is created on or after September 27, 2007; or
(B) If the condominium was created before September 27, 2007, notwithstanding any requirement in the declaration or bylaws.
(b) The reserve study requirements under subsection (3) of this section and the maintenance plan requirements under subsection (4) of this section apply to a flexible condominium or a staged condominium created on or after September 27, 2007, if the condominium might in the future consist of more than two units.
(6)(a) If the declaration or bylaws require a reserve account, the reserve study requirements of subsection (3) of this section and the maintenance plan requirements of subsection (4) of this section first apply to the association of a condominium recorded prior to October 23, 1999:
(A) Upon adoption of a resolution by the board of directors in accordance with the bylaws providing that the requirements of subsections (3) and (4) of this section apply to the association; or
(B) Upon submission to the board of directors of a petition signed by a majority of unit owners mandating that the requirements of subsections (3) and (4) of this section apply to the association.
(b) The reserve study and the maintenance plan must be completed within one year of the date of adoption of the resolution or submission of the petition to the board of directors.
(7)(a) Except as provided in paragraph (b) of this subsection, the reserve account is to be used only for the purposes for which reserves have been established and is to be kept separate from other funds.
(b) After the individual unit owners have assumed administrative responsibility for the association under ORS § 100.210, if the board of directors has adopted a resolution, which may be an annual continuing resolution, authorizing the borrowing of funds:
(A) The board of directors may borrow funds from the reserve account to meet high seasonal demands on the regular operating funds or to meet unexpected increases in expenses.
(B) Not later than the adoption of the budget for the following year, the board of directors shall adopt by resolution a written payment plan providing for repayment of the borrowed funds within a reasonable period.
(8) The reserve account is subject to the requirements and restrictions of ORS § 100.480 and any additional requirements or restrictions imposed by the declaration, bylaws or rules of the association of unit owners.
(9) Assessments paid into the reserve account are the property of the association of unit owners and are not refundable to sellers of units.
(10)(a) Except as provided under paragraph (b) of this subsection, unless the board of directors under subsection (3) of this section determines that the reserve account will be adequately funded for the following year, the board of directors or the owners may not vote to eliminate funding a reserve account required under this section or under the declaration or bylaws.
(b) Following the turnover meeting described in ORS § 100.210, on an annual basis, the board of directors, with the approval of all owners, may elect not to fund the reserve account for the following year. [Formerly 94.072; 1997 c.816 § 7; 1999 c.677 § 44; 2001 c.756 § 34; 2003 c.569 § 27; 2005 c.543 § 2; 2007 c.409 § 23; 2009 c.641 § 23; 2011 c.532 § 7; 2017 c.111 § 3; 2019 c.69 § 41]
WARRANTIES ON NEW UNITS