Massachusetts Condominium Rules Are Changing: What Boards and Owners Need to Know for 2026 and 2027

Massachusetts condominium communities are heading into a period of significant change.

Some changes are already here. Others are scheduled to take effect in 2027. And a sweeping proposal currently before the Massachusetts Legislature could eventually change how associations handle everything from records requests and reserve funding to board meetings and owner complaints.

Before we go any further, there is an important distinction:

Not every change being discussed is currently Massachusetts law.

The new reserve and project-review requirements coming from Fannie Mae and Freddie Mac are confirmed lending standards. The proposed Massachusetts “Condominium Owners’ Rights” legislation, House Bill H.4826, remains a bill and has not yet been enacted.

Still, boards should be paying attention to both.

The Immediate Change: More Scrutiny From Mortgage Lenders

In March 2026, Fannie Mae announced several updates to its condominium project standards. These changes affect whether units within a condominium community may qualify for conventional mortgage financing.

Although these are not Massachusetts statutes, they can have a very real effect on Massachusetts condo owners.

A condominium can technically comply with Massachusetts law and still have trouble qualifying for conventional financing.

That can affect:

• An owner’s ability to sell
• A buyer’s ability to obtain a mortgage
• Refinancing applications
• Unit values
• The association’s reputation with lenders
• The number of buyers able to purchase within the community

That is why these rules should not be dismissed as “just a lender issue.”

August 3, 2026: Full Reviews and Stronger Reserve Documentation

For loan applications dated on or after August 3, 2026, Fannie Mae retired its Limited Review process. Condominium projects that previously qualified for that abbreviated review must generally undergo a Full Review unless they qualify for a separate waiver.

This means lenders may look more closely at association finances, insurance, deferred maintenance, special assessments, and reserve funding.

Fannie Mae also strengthened its treatment of reserve studies.

When an association relies on a reserve study instead of meeting the standard reserve-allocation percentage, the association’s budget must include the highest reserve contribution recommended by the study.

The former “baseline funding” approach—which allowed reserve balances to approach zero without becoming negative—is no longer acceptable for this purpose.

Put plainly: having a reserve study sitting on a shelf is not enough. The association must actually budget according to it.

January 4, 2027: The Reserve Standard Rises From 10% to 15%

Beginning with Full Review loan applications dated on or after January 4, 2027, Fannie Mae will increase its minimum replacement-reserve allocation from 10% to 15% of annual budgeted assessment income.

For example, if an association collects $200,000 annually in regular assessments:

• A 10% reserve allocation would be $20,000.
• A 15% reserve allocation would be $30,000.

That is an additional $10,000 annually that must be incorporated into the association’s budget unless the community qualifies through an acceptable reserve study and funds the contribution recommended by that study.

This does not mean Massachusetts has passed a law requiring every condominium to place exactly 15% of its budget into reserves.

It means an association that does not meet applicable Fannie Mae and Freddie Mac project standards may create financing problems for owners attempting to sell or refinance their units.

That difference matters—but so does the practical result.

What Massachusetts Law Currently Requires

Massachusetts General Laws Chapter 183A currently requires condominium associations to maintain an adequate replacement reserve fund, collected as part of the common expenses and held separately from operating funds.

The statute does not currently establish one mandatory reserve percentage for every condominium.

It also does not presently require every association to obtain a professional reserve study.

That leaves boards with considerable discretion—but discretion does not eliminate responsibility.

Boards still need to consider:

• The age and condition of the property
• Expected roof, siding, paving, mechanical, drainage, and structural work
• Current construction and labor costs
• Insurance deductibles
• Existing reserve balances
• Anticipated capital projects
• The financial impact of special assessments
• Mortgage-market requirements affecting owners

An association may believe its reserve contribution is “adequate” because it has contributed the same amount for years. That does not mean the amount is adequate today.

Construction costs, insurance premiums, utility rates, vendor pricing, and financing standards have all changed.

A budget created for yesterday’s costs cannot responsibly fund tomorrow’s repairs.

A Major Massachusetts Proposal Is Also Pending

Massachusetts House Bill H.4826, titled An Act Relative to the Condominium Owners’ Rights, proposes extensive amendments to Chapter 183A.

As of September 17, 2026, the Legislature’s official bill history shows that the proposal was referred to the Joint Committee on the Judiciary and received a public hearing in April 2026. It has not been enacted into law.

If passed in its current or similar form, the bill could significantly change condominium governance and management practices.

Proposed changes include the following.

Faster Access to Association Records

The bill would establish specific deadlines for providing requested financial records:

• Five business days for associations with an appointed managing agent
• Ten business days for qualifying self-managed associations

Electronic delivery would generally be preferred and provided at no cost to the requesting owner.

The proposal also contains a potential $100-per-day penalty for failing to provide records within the required timeframe unless an extension has been agreed to in writing.

Expanded Owner Access to Documents

The proposal would expand the categories of documents available to owners, including architectural and engineering reports and studies.

Certain records involving legal advice, personnel matters, contract negotiations, or litigation strategy could remain protected while the reason for withholding them still exists.

Minimum Reserve Contributions

The bill proposes a statutory minimum contribution to replacement reserves based on the higher of 10% or applicable guidance identified through the proposed condominium ombudsman structure.

This portion of the bill should not be confused with the separate Fannie Mae and Freddie Mac lending standards. One is proposed state legislation; the other is a mortgage-eligibility requirement.

Written Preventive-Maintenance Programs

Every condominium governing body would be required to prepare a written preventive-maintenance program and update it at least every two years.

This could require boards to move away from informal or entirely reactive maintenance and toward documented inspection, service, and replacement schedules.

Reserve Studies for Larger Communities

Associations with 50 or more units would be required to obtain a capital reserve study from a registered engineer or architect at least once every ten years.

The study would then need to be updated every two years for accuracy and market-cost adjustments. The proposal also calls for a safety inspection and an energy audit.

More Detailed Accounting for Special Assessments

Managing agents responsible for association funds would be required to account for special-fee or special-assessment money by project.

That would provide clearer reporting on how collected assessment funds are being held and spent.

Internal Dispute-Resolution Procedures

Condominiums would be required to include an internal dispute-resolution process in their bylaws.

Owner complaints would need to be submitted in writing, and governing-body decisions would also need to be issued in writing within the proposed timeframe.

More Frequent and More Open Meetings

The proposal would establish minimum board-meeting frequencies depending on the association’s size and management structure.

It would also require regularly scheduled meetings to be open to owners, subject to limited executive-session exceptions for issues such as legal advice, litigation, contract negotiations, and personnel matters.

Final votes could not be taken secretly in executive session.

A Condominium Ombudsman

The bill proposes creating an Office of the Condominium Ombudsman within the Massachusetts Attorney General’s Office.

The office could receive and investigate complaints, develop educational materials, report on condominium disputes, and establish a mediation program.

If enacted, this would represent a significant new level of state involvement in condominium governance.

What Boards Should Be Doing Now

Boards should not wait for a failed sale, an urgent lender questionnaire, or a new statute before getting organized.

Every Massachusetts condominium should consider taking the following steps:

1. Calculate the current reserve percentage. Determine what percentage of annual budgeted assessment income is actually being contributed to reserves.

2. Review the 2027 budget. If the association is contributing less than 15%, discuss the potential financing consequences with management, counsel, the association’s accountant, and a qualified reserve professional.

3. Locate the most recent reserve study. Determine when it was completed, whether it remains current, and whether the budget follows its recommendations.

4. Review deferred maintenance. Identify projects that have been delayed and document how they will be funded.

5. Confirm insurance compliance. Review the master policy, replacement-cost information, deductibles, fidelity coverage, and any individual unit-policy requirements with a qualified insurance professional.

6. Organize association records. Even though the proposed five- and ten-day deadlines are not currently law, associations should be capable of responding to legitimate record requests promptly.

7. Create a preventive-maintenance schedule. Boards should document inspections, servicing, expected replacement dates, and responsible vendors before a statutory mandate forces them to do so.

8. Review meeting and complaint procedures. Associations should have clear rules for owner participation, executive sessions, written complaints, decision-making, and meeting minutes.

The Dahlia Hot Take

For too long, some communities have treated low condo fees as proof of successful management.

They are not.

Artificially low fees can simply mean that maintenance has been deferred, reserves have been underfunded, and future owners are being handed a bill for expenses the community should already have been planning for.

No board wants to raise fees. No owner wants to pay more.

But avoiding a necessary increase does not make the underlying cost disappear. It usually transforms a manageable annual adjustment into an emergency special assessment—and may now affect whether owners can sell or refinance their homes.

The real measure of responsible management is not whether fees stayed the same.

It is whether the community can maintain its property, protect unit values, withstand emergencies, meet current financial standards, and give owners a clear understanding of where their money is going.

Final Thoughts

Massachusetts condominium law itself has not yet undergone all of the sweeping changes described in the pending legislation.

The mortgage market, however, is already changing.

Boards should treat 2026 as the year to evaluate their financial and operational readiness—not as the year to wait and see.

The associations best positioned for 2027 will be the ones that begin reviewing their budgets, reserves, insurance, maintenance plans, records, and governance procedures now.

This article is provided for general educational purposes and does not constitute legal, accounting, lending, engineering, or insurance advice. Condominium boards should consult qualified professionals regarding the requirements applicable to their specific community.

Primary sources: Fannie Mae Lender Letter LL-2026-03, Massachusetts Bill H.4826 and current status, Legislative summary of H.4826, and current Massachusetts General Laws Chapter 183A.