% of dues in reserve

I know about the reserve study and such. Great info. But, I recently came across something on the web stating that different states have laws regarding what percentage of an HOA's total annual dues can be set aside for reserve. The state in the example was 20%.

Has anyone heard of that? I can't find the site I read it on and now I wonder if I was just dreaming it all up!! Right now, we have 50% of our annual HOA dues in reserve but we have a small community.

Michigan law doesn't have any requirement for HOA's. For condo's the law states that condo's must have reserves and the rules and regs behind the law state that associations must set aside 10% of their annual budget on a non-cumulative basis. This was put in to make sure developers contributed at least something to reserves. However the number has no real meaning as the final rule says that 10% might not be adequate and it is up to the board to determine what is adequate.

Prcentages mean nothing other thanif required as a minimum. At some point you need to determine the real number needed.

Joe