Colorado Builders Must Now Fund a 30-Year HOA Reserve Study Before Handover. Here’s Why New Construction Buyers Should Care.

By Prerna Kapoor, CLHMS | REAL Brokerage | August 27, 2026

A couple I’m working with right now put a contract on a new townhome in a Castle Rock community that’s maybe two-thirds built out. Great floor plan, builder incentive on the rate, the whole thing. When they asked the sales rep how the HOA reserve fund was looking, the answer was a shrug and “the builder’s association handles all that right now.” That answer used to be the end of the conversation. As of this month, it isn’t anymore.

Colorado just changed what builders owe buyers before they ever hand the community over to its homeowners, and if you’re shopping new construction in Parker, Castle Rock, Aurora, or anywhere else in the metro right now, this is worth five minutes of your attention.

What Actually Changed on August 12

HB26-1099, signed April 13, 2026 and effective August 12, 2026, requires the declarant, which is the legal term for the builder or developer who controls a new community before homeowners take over, to commission and pay for an independent reserve study before handing control of the HOA to the association. The study has to project capital costs (roofs, pavement, clubhouse systems, whatever the community’s common elements include) over a full 30-year window, and it has to be done by a professional with no financial ties to the builder. Once owners elect a majority of the board, the declarant has 60 days to hand over that reserve study along with every other piece of association property, financial accounts, contracts, insurance policies, records of every kind. Colorado’s Division of Real Estate, which oversees this, also confirmed the association has an ongoing duty to give owners its most recent reserve study within 90 days of that handover and again within 90 days after the end of every fiscal year afterward.

None of that existed as a hard requirement before this year. A builder could turn a community over to its homeowners without ever having paid for a real look at what the roofs, streets, and shared systems were going to cost to maintain over the next few decades.

Why This Law Exists

I wrote a while back about a buyer of mine who nearly closed on a Cherry Creek condo where the reserve study came back 22 percent funded with a roof and parking deck both near the end of their life. She walked. Six months later the other owners in that building got a $15,400 per-unit special assessment. That building had been through its reserve study process, so at least the numbers existed for someone to find. The gap HB26-1099 is trying to close is upstream of that: newer communities where the builder never had to produce a real 30-year study at all, so nobody, not the future board, not the buyers moving in during the declarant-control years, had anything to check against. A shrug from a sales rep isn’t a data point. A funded, professionally prepared reserve study is.

What to Ask if You’re Buying New Construction Right Now

If you’re under contract or shopping in a community that’s still builder-controlled, ask directly when the declarant expects to turn the HOA over to homeowners, and whether that will happen before or after August 12, 2026. Communities that already completed turnover before that date aren’t required to go back and produce a study retroactively, so if you’re buying resale in an older new-build community, the general reserve-study questions I covered in my guide to reading a Colorado HOA reserve study still apply, and you should request whatever study the association already has on file rather than assume one exists. For anything still under builder control, ask your buyer’s agent to request the reserve study directly once it’s commissioned, and don’t take “the builder handles that” as a full answer. This is exactly the kind of document a buyer’s agent who isn’t on the builder’s payroll should be pushing for on your behalf, which is the whole reason I wrote my guide to using your own agent in a builder’s model home.

It’s also worth asking what happens to management company records if the HOA switches management firms down the road. HB26-1099 puts real teeth behind that handoff too. Any outgoing management company now has 45 days to deliver every piece of association property, money, financial records, contracts, insurance policies, even account passwords, and can face $250 a day in fines plus triple damages for a willful violation. That’s not a buyer-facing detail, but it tells you the state is treating HOA financial recordkeeping as a real compliance issue this year, not paperwork nobody checks.

This Sits on Top of Federal Lending Changes Too

Colorado’s new law lands the same year Fannie Mae and Freddie Mac tightened their own condo and townhome lending rules. Starting January 1, 2027, associations need to fund at least 15 percent of their annual budget into reserves, up from 10 percent, unless a reserve study less than 36 months old justifies a lower number at the highest recommended funding level, and lenders are already retiring the faster “Limited Review” loan process in favor of full financial review on most projects, per Fannie Mae’s Lender Letter LL-2026-03. A brand-new 30-year reserve study required by Colorado law is a good start, but it doesn’t automatically mean a building clears the federal funding bar too. If the building you’re considering has already run into financing trouble over this, I broke down what a non-warrantable building actually means for your loan options in my guide to non-warrantable condo financing in Colorado, and my Colorado Buyer Financing Playbook walks through how those alternative loan types compare if you end up needing one.

Quick answers

Does HB26-1099 apply to a community I’m buying into that already transferred to homeowner control?
Not retroactively for the one-time declarant study requirement. If turnover already happened before August 12, 2026, ask the association directly whether a reserve study exists and request the most recent one on file rather than assume the new law covers your building.

Who pays for the reserve study the builder is now required to get?
The declarant does. It’s a cost the builder absorbs before handing the community over, not something billed separately to the first wave of homeowners.

Does a new reserve study automatically mean my HOA dues will go up?
Not automatically, but it’s possible. If the study shows the community needs to be funding more aggressively than it has been, expect the board to phase in higher contributions over time rather than an immediate jump, though every association handles that differently.

Prerna Kapoor | REALTOR® | Luxury Home Specialist
REAL Brokerage | 720-949-5450 | info@prernakapoor.com
CLHMS • RENE • PSA • ABR | International Sterling Society Award Winner

Prerna specializes in residential real estate across Parker, Aurora, Lone Tree, Castle Pines,
Highlands Ranch, Cherry Creek, Greenwood Village, and Centennial. She speaks English, Japanese,
and Hindi.