Colorado Law · Reserves & Capital · § 38-33.3-209.5(1)(b)(IX)

Colorado’s Reserve Study Policy: What § 38-33.3-209.5 Requires and What It Doesn’t

Colorado’s reserve statute is a disclosure rule, not a funding mandate. CCIOA requires a written policy on when the association has a reserve study prepared and whether it has a funding plan, and since August 12, 2026 makes the declarant pay for a study before turnover. After that, study updates and reserve levels are board budget decisions, subject to the owners’ budget veto. (Florida’s SIRS mandate, discussed only as contrast, works differently.)

Educational notice. This information is educational in nature and should not be construed as legal advice. Statutory language is quoted from the Colorado Revised Statutes and enrolled bills as published by the Colorado General Assembly at the time of writing. Consult qualified association counsel regarding legal interpretation specific to your jurisdiction.

Version note: verified against the 2024 Colorado Revised Statutes (Office of Legislative Legal Services printout) and enrolled bill HB 26-1099 (effective August 12, 2026); later amendments are possible. Nothing here is engineering, reserve-study, or investment advice.

The Bottom Line

In the 2024 text of the Colorado Common Interest Ownership Act (CCIOA), a search for “reserve study” returns only three provisions: the reserve-study policy in § 38-33.3-209.5(1)(b)(IX), a section heading in § 303, and the records list in § 317(1)(k). CCIOA contains no statutory mandate for an association to commission a reserve study or to fund reserves at a set level. What it requires is a set of policies and disclosures:

• a written reserve-study policy addressing when the association has a reserve study prepared, whether there is a funding plan for the work it recommends and the projected sources of funding, and whether the study rests on a physical and a financial analysis (an internally conducted study is sufficient) (§ 209.5(1)(b)(IX));
• a written reserve-investment policy (§ 209.5(1)(b)(VI));
• the § 7-128-401 prudent-person standard for reserve investment decisions (§ 303(2.5));
• disclosure of amounts held in reserve in the annual financial statements made available to owners (§ 209.4(2)(d));
• retention of the most recent reserve study as an association record (§ 317(1)(k)); and
• from August 12, 2026, a declarant-paid 30-year reserve study before transfer of control (new § 209.2, HB 26-1099).

Operational Context: A Disclosure Regime, Not a Funding Mandate

By way of contrast only, Florida requires a structural integrity reserve study for qualifying condominium buildings (see Florida SIRS: Structural Integrity Reserve Study Compliance Timeline); that Florida rule does not apply in Colorado. The 2024 CCIOA text contains no comparable mandate. Its approach is to have the association state its reserve approach in writing and show reserve balances to owners.

This matters when a Colorado board reads a national article about “required” reserve studies and assumes the rule applies. In the 2024 CCIOA text, the statutory requirements are the policy and the disclosure. Whether the association has a study, how often it is updated, and how much is reserved are governance decisions, informed by reserve-study practice and qualified professionals rather than by CCIOA. See Reserve Funding Adequacy Standards and Anatomy of a Reserve Plan.

What the Reserve-Study Policy Must Address: § 209.5(1)(b)(IX)

Section 209.5(1)(b) lists nine subjects on which associations are to adopt policies, procedures, and rules. Item (IX) covers reserves. In the statute’s terms, the policy addresses:

The statute states that an internally conducted reserve study is sufficient for item (IX). The 2024 text sets no preparer qualification, component list, or funding target for post-turnover associations.

Which communities it reaches

• Communities created on or after July 1, 1992 that are subject to CCIOA, other than small cooperatives and planned communities limited to §§ 105–107 under § 116.
• Pre-1992 communities: § 117(1.7) lists item (IX) from July 1, 2010, and § 117(1.5)(c) lists §§ 209.4–209.7 (including item (VI)) from January 1, 2006, subject to § 119. Confirm applicability with counsel.

The Reserve-Investment Policy and Standard of Care

Item (VI) of § 209.5(1)(b) calls for a policy on investment of reserve funds. Section 303(2.5) then provides that, with regard to investment of reserve funds, officers and board members are subject to the standards in § 7-128-401 of the Colorado Revised Nonprofit Corporation Act: good faith, the care an ordinarily prudent person in a like position would exercise under similar circumstances, and a manner reasonably believed to be in the association’s best interests. Section 7-128-401(2) describes when reliance on officers, counsel, accountants, and committees is permitted, and § 7-128-401(4) provides that a director or officer who performed the duties in compliance with the section is not liable as such for that action. No published Colorado decision CICSC has verified applies § 7-128-401 to an HOA reserve decision.

This matters for two reasons:

• It is a different standard from the rest of board service. Section 303(2)(b) provides that a board member or officer not appointed by the declarant is not liable for actions or omissions except “wanton and willful” ones, “except as otherwise provided in” § 303(2.5). Reserve investment is where CCIOA expressly imports the nonprofit act’s standard. How the two standards interact is not settled in a published decision CICSC has verified, and § 117 does not list § 303(2) or (2.5) among the sections reaching pre-1992 communities; both are questions for counsel. See the Colorado director standard of care article.
• It reaches whoever the board delegates to. For this purpose § 303(2.5)(c) defines “officer” to include any person to whom the board delegates responsibilities under CCIOA, including a managing agent, attorney, or accountant employed by the board.

CICSC’s treasury guidance on reserve investment is educational and general; see Safety, Liquidity, Yield: Reserves Are a Treasury, Not a Portfolio. Investment selection is a decision for the board with qualified financial advisors.

Where Reserves Show Up Elsewhere in CCIOA

• Annual disclosure (§ 209.4(2)(d)). The annual financial statements made available to owners must include amounts held in reserve. See Colorado’s Annual Disclosure.
• Records (§ 317(1)(k)). The most recent reserve study is an association record owners may inspect and copy under § 317(2).
• Fidelity coverage (§ 313(10)). Where an owner or employee of an association with 30 or more units controls or disburses its funds, § 313(10) generally calls for fidelity insurance, to the extent reasonably available, of not less in aggregate than two months’ current assessments plus reserves, calculated from the current budget. Section 313 is not among the sections § 117 lists for pre-1992 communities. Coverage questions belong with the association’s insurance professional and counsel.
• Budget (§ 303(4)(a)). Reserve contributions are funded through the budget. Section 303(4)(a) generally provides that the board delivers a budget summary within 90 days after adopting a proposed budget and sets an owners’ meeting, and that, unless the declaration requires otherwise, the budget is deemed approved absent a veto by a majority of all owners (or a larger percentage the declaration specifies), whether or not a quorum is present; if vetoed, the last non-vetoed budget continues. Section 117(1.8) lists § 303(4)(a) for pre-1992 communities from July 1, 2017, and § 303(4)(a)(II)(B) excepts certain pre-1992 communities with capped assessments.

The 2026 Change: The Declarant Reserve Study (§ 209.2)

HB 26-1099 (signed April 13, 2026; Session Laws 2026, ch. 42; effective August 12, 2026) added § 38-33.3-209.2. It generally requires the declarant of a planned community or condominium, before transferring control to the association, to commission and pay for a reserve study that:

• covers the components the association maintains, repairs, or replaces under the declaration;
• projects costs over a 30-year period; and
• is prepared by an independent reserve-study professional or other qualified professional with knowledge of industry standards, with no business relationship with or financial interest in the declarant (other than the engagement) and no affiliation with the declarant.

The study is added to the annual disclosure (§ 209.4(2)(j)) and to the declarant’s turnover deliverables (§ 303(9)(n)). See Declarant Control and Turnover in Colorado.

Colorado and Florida at a Glance

The Florida column is a summary for contrast; the Florida article states the current Florida rules and dates.

Why This Matters

Without a state-set funding floor, the reserve decision sits with the board, in front of owners who can veto the budget. Three situations come up often:

• The policy that was written once. A 2010 policy may no longer describe the study in hand. Section 209.5(1)(b)(VII) calls for a policy on adopting and amending policies; boards commonly review the reserve policy when the study is updated.
• The reserve increase that meets the veto. A board proposes a reserve increase based on a new study; owners veto the budget, and the prior budget continues. Boards commonly share the study and its basis before the budget meeting.
• The first owner board after 2026. A board receiving control after August 12, 2026 may receive a declarant study it did not commission. Whether to adopt a funding plan from it, update it, or commission a new one is a board decision made with qualified reserve professionals and counsel.

Best-Practice Guidance

The following are educational practices drawn from CICSC standards, not statutory requirements:

• Keep the § 209.5(1)(b)(IX) policy dated, and amend it when the study, the funding plan, or the study’s basis changes.
• State plainly in the policy whether the funding plan has been adopted by the board, not only whether a study exists.
• Pair the reserve-investment policy with the § 303(2.5) standard, and document who the board has delegated investment duties to.
• Review fidelity coverage with the association’s insurance professional as reserves grow.
• Publish the study basis and funding plan before the budget ratification meeting, so owners vote with the same information the board had.

Frequently Asked Questions

Does Colorado require an HOA to have a reserve study?

The 2024 CCIOA text contains no requirement for a post-turnover association to commission a study. Section 209.5(1)(b)(IX) calls for a policy addressing when a study is prepared, whether there is a funding plan and its sources, and whether the study rests on physical and financial analysis. From August 12, 2026, § 209.2 generally requires the declarant to pay for a 30-year study before turnover. How this applies to a particular community is a question for its counsel.

Does Colorado require reserves to be funded at a set level?

No such mandate appears in the 2024 CCIOA text. Funding is set through the § 303(4) budget process and owner veto; reserve levels are a decision for the board with qualified reserve and financial professionals.

What standard applies to reserve investment?

Section 303(2.5) applies the § 7-128-401 standards (good faith, ordinarily prudent care, and reasonable belief in the association’s best interests) to reserve investment, and defines “officer” to include a managing agent, attorney, or accountant the board delegates to. How it applies to a particular decision is a question for counsel.

Can a reserve study prepared by the board itself satisfy the policy?

Section 209.5(1)(b)(IX) states that, for that item, an internally conducted reserve study is sufficient. The declarant study under § 209.2 has separate independence requirements.

Does the reserve-study policy apply to pre-1992 communities?

Section 117(1.7) lists § 209.5(1)(b)(IX) for communities created before July 1, 1992, from July 1, 2010, subject to § 119. Whether a particular community is covered is a question for its counsel.

Key Takeaways

1. Section 209.5(1)(b)(IX) calls for a reserve-study policy covering study timing, funding plan and sources, and basis.
2. Section 209.5(1)(b)(VI) calls for a reserve-investment policy, and § 303(2.5) applies the § 7-128-401 standards to reserve investment.
3. Reserve balances appear in the annual financial statements disclosed to owners (§ 209.4(2)(d)), and the most recent study is a record (§ 317(1)(k)).
4. From August 12, 2026, the declarant study under § 209.2 is a turnover deliverable (§ 303(9)(n)); its reach to existing communities is a question for counsel.

Related CIC-SC Resources

• Reserve Funding Adequacy Standards
• Anatomy of a Reserve Plan
• Operating Fund vs. Reserve Fund
• Florida SIRS: Structural Integrity Reserve Study Compliance Timeline — the contrasting mandate.
• Colorado’s Annual Disclosure Under § 38-33.3-209.4

References & Sources

1. C.R.S. § 38-33.3-209.5(1)(b)(VI), (VII), (IX) — Responsible governance policies; reserve investment; reserve-study disclosure. Colorado Revised Statutes 2024, Title 38. content.leg.colorado.gov — crs2024-title-38.pdf
2. C.R.S. § 38-33.3-303(2), (2.5), (4) — Board standard of care; reserve investment standard; budget adoption and veto (same source).
3. C.R.S. § 38-33.3-209.4(2)(d) — Annual disclosure including reserves (same source).
4. C.R.S. § 38-33.3-313(10) — Fidelity coverage (same source).
5. C.R.S. § 38-33.3-317(1)(k), (2) — Reserve study as a record; owner inspection (same source).
6. C.R.S. § 38-33.3-117(1.5), (1.7), (1.8) — Pre-1992 communities (same source).
7. C.R.S. § 7-128-401 — General standards of conduct for directors and officers. Colorado Revised Statutes 2024, Title 7. content.leg.colorado.gov — crs2024-title-07.pdf
8. HB 26-1099, Protect Financial Condition of Homeowners’ Associations, Session Laws 2026, ch. 42 (adds § 38-33.3-209.2), effective August 12, 2026. leg.colorado.gov/bills/hb26-1099

Tags: Colorado reserve study · C.R.S. 38-33.3-209.5 · reserve-study policy · reserve investment policy · § 7-128-401 · HB 26-1099 · declarant reserve study · § 209.2 · CCIOA · SIRS comparison

Disclaimer. This article is published by the Common Interest Community Standards Council for educational and informational purposes only. It is not legal advice and does not establish an attorney-client relationship. Statutory references and procedural frameworks are intended to support informed governance, not to substitute for advice from qualified Colorado legal counsel. Boards and managers should consult their association’s attorney about the application of any statute, governing-document provision, or governance decision to their specific circumstances. CIC-SC, its authors, and its members assume no liability for actions taken in reliance on this content.

Published by the Common Interest Community Standards Council (CICSC). Part of the CICSC Member Education Library. © 2026 CICSC. Educational use permitted with attribution.