When most people hear about increasing condominium fees or reserve fund contributions, their first reaction is often, "Why are my dues going up?"

The answer can be traced back to one tragic event that forever changed condominium ownership across America.

On June 24, 2021, the Champlain Towers South condominium in Surfside, Florida, partially collapsed in the middle of the night. The devastating structural failure claimed the lives of 98 people, making it one of the deadliest building collapses in United States history. (The Florida Senate)

As investigators began piecing together what happened, one issue became increasingly clear: years of deferred maintenance, aging infrastructure, engineering reports identifying significant deterioration, and insufficient reserve funding had combined to create a perfect storm.

While every building is unique, the Surfside tragedy became a wake-up call for lawmakers across the country. States recognized that many condominium and homeowner associations were postponing expensive repairs or keeping monthly assessments artificially low without adequately preparing for major future expenses.

Maryland responded.

In 2022, the Maryland General Assembly passed House Bill 107 (HB107), officially titled:

Cooperative Housing Corporations, Condominiums, and Homeowners Associations – Reserve Studies – Statewide.

The law became effective on October 1, 2022, expanding reserve study requirements from only a few counties to associations throughout the entire state. (Maryland General Assembly)

The legislation was specifically developed following the Surfside disaster and was supported by community association professionals who recognized the need for stronger financial planning. (CAI)

Under HB107, most Maryland condominium associations and many homeowner associations are now required to:

Rather than waiting until a roof fails, balconies deteriorate, elevators wear out, or building components reach the end of their useful lives, associations are expected to save gradually over time.

Think of a condominium association like maintaining your own home.

Most homeowners know they'll eventually need to replace a roof, HVAC system, windows, or siding. Responsible homeowners save for those future expenses.

Condominium associations work the same way—but on a much larger scale.

Reserve studies evaluate the expected life and replacement cost of common elements such as:

The study estimates when each item will likely require replacement and recommends annual reserve contributions so the association is financially prepared.

While many owners initially see increased assessments as a burden, HB107 offers significant long-term advantages.

One of the biggest complaints condominium owners have historically faced is receiving an unexpected assessment of thousands—or even tens of thousands—of dollars.

Proper reserve funding greatly reduces the likelihood of these financial surprises.

Communities with healthy reserves can proactively maintain their buildings instead of constantly reacting to emergencies.

Deferred maintenance often becomes exponentially more expensive over time.

Today's buyers are increasingly reviewing reserve studies, budgets, engineering reports, and financial statements before purchasing a condominium.

Communities with well-funded reserves generally inspire greater buyer confidence because purchasers know the association has planned for future repairs.

Financially healthy associations often enjoy stronger marketability and more stable property values.

Mortgage lenders pay close attention to an association's financial health.

Well-funded reserves may improve financing opportunities for future buyers, helping support resale values over time.

HB107 has also changed the conversation between boards and homeowners.

Instead of asking:

"Can we keep dues low?"

Boards are now asking:

"What funding level is actually necessary to protect everyone's investment?"

That's an important shift.

Monthly condominium dues should not simply reflect today's operating expenses—they should also account for tomorrow's inevitable capital repairs.

Here on Maryland's Eastern Shore, many condominiums are exposed to harsh coastal conditions.

Salt air, wind-driven rain, UV exposure, hurricanes, nor'easters, and freeze-thaw cycles all accelerate the aging of:

Proper reserve funding is even more important for communities along the Atlantic Ocean and coastal bays because the environment is simply tougher on buildings.

No legislation can prevent every future structural problem.

However, Maryland House Bill 107 represents an important step toward protecting homeowners, preserving property values, and encouraging responsible stewardship of some of the state's most valuable residential communities.

While higher condominium fees are never popular, they often represent an investment—not just an expense.

Well-funded reserve accounts help ensure that future owners inherit communities that are financially stable, structurally sound, and prepared for the decades ahead.

Ultimately, HB107 isn't just about budgets or reserve studies.

It's about protecting lives, safeguarding investments, and ensuring that the lessons learned from Surfside are never forgotten.

As real estate professionals specializing in coastal Maryland and Delaware condominiums, we encourage every buyer to review an association's reserve study, financial statements, capital improvement plans, meeting minutes, and budget before purchasing.

A beautiful view is important—but a financially healthy association may be just as valuable.

If you're considering buying or selling a condominium in Ocean City, Ocean Pines, Berlin, West Ocean City, or Delaware's coastal communities, we're happy to help you understand what reserve studies, association finances, and HB107 mean for your investment.

This article would also make an excellent companion piece to a second blog titled "How to Read a Condominium Reserve Study Before You Buy", which would educate buyers on evaluating HOA financial health during the purchase process.