Question 1

What is a reserve study for a Florida owners association?

Accepted Answer

A reserve study is an analysis of a community association’s reserve fund to determine whether sufficient funds are being set aside for future major repairs and replacements. In Florida: Section 718.112(2)(f) (condos) and Section 720.303(6) (HOAs) address reserve requirements. A reserve study includes: a physical analysis (identifying all major components: roof, HVAC, painting, paving, elevators, pools), a financial analysis (calculating the current cost of each component, the remaining useful life, and the annual contribution needed to fund the replacement), and a funding plan (determining the annual reserve assessment for each component).

Question 2

Are reserve studies required in Florida?

Accepted Answer

Requirement: after the Surfside condo collapse (2021), Florida enacted SB 4-D (2022) and SB 154 (2024) significantly strengthening reserve requirements: structural integrity reserve studies (SIRS) are mandatory for condos 3+ stories (by December 31, 2024, for condos 25+ years old), reserves for structural components cannot be waived (previously, condo associations could vote to waive reserves; this is no longer permitted for structural items), and the SIRS must include: roof, structure, load-bearing walls, floor, foundation, fireproofing, plumbing, electrical, waterproofing, and windows/exterior doors. HOAs are not subject to the mandatory SIRS requirement but should still conduct regular reserve studies.

Question 3

What are the consequences of inadequate reserves in Florida?

Accepted Answer

Consequences: special assessments (when a major repair is needed and reserves are insufficient, the association must levy a special assessment on all unit owners; this can be tens of thousands of dollars per unit), deferred maintenance (insufficient reserves lead to deferred maintenance, which can: accelerate deterioration, increase repair costs, and create safety hazards), reduced property values (buyers and lenders review the reserve fund; underfunded reserves reduce property values and may prevent financing), and liability (the board of directors can face personal liability for: failure to maintain adequate reserves, failure to conduct required studies, and failure to maintain the building).

Owners Association Reserve Study

Reserve Studies for Florida Owners Associations

Components

Post-Surfside Requirements

Consequences of Inadequacy

Related Terms

Barnes Walker Condo/HOA Law

Ready to Get Started?