Florida's vibrant condo market is home to millions of residents who enjoy the benefits of shared living in managed communities. However, with shared ownership comes shared responsibility—especially when it comes to the long-term maintenance and financial planning of these communities. One of the most important aspects of this planning is the reserve study.

Reserve studies are financial tools used by condominium associations to assess the long-term capital needs of the property and to ensure that funds are available for major repairs and replacements. In recent years, Florida has made significant changes to its reserve study requirements, especially in response to the tragic 2021 Surfside condominium collapse. These changes aim to increase safety, transparency, and financial accountability among condominium associations.

What Is a Reserve Study?

A reserve study is a detailed assessment of a condominium’s common elements—such as roofs, elevators, plumbing systems, pools, and structural components—and an evaluation of the funds needed to maintain or replace them over time. The goal is to avoid large special assessments or emergency repairs that can catch residents off guard.

Typically, a reserve study includes:

• A physical inspection of the property to identify the condition and expected life of major components.
• A financial analysis to determine the amount of money needed to repair or replace those components when they reach the end of their useful life.
• A funding plan that outlines how much money should be contributed annually to the reserve account to meet future needs.

Florida Law and Reserve Requirements

Florida law requires condominium associations to maintain reserve accounts for certain major components. These requirements are outlined in Florida Statutes Chapter 718 (The Condominium Act). Key points include:

• Associations must budget reserves for roof replacement, building painting, paving, and any other items with a replacement cost over $10,000.
• Owners may vote to waive or reduce reserves, but this is subject to strict procedural requirements.
• Reserve funds must be used only for their intended purpose unless a majority of the association members approve a different use.

Senate Bill 4-D: Major 2022 Legislative Changes

Following the Surfside tragedy, Senate Bill 4-D was enacted in 2022, introducing significant reforms to Florida’s condo reserve requirements. These changes include:

1. Mandatory Structural Integrity Reserve Studies (SIRS)
• All buildings three stories or higher must undergo a SIRS by the time they reach 30 years of age, or 25 years if the building is within three miles of the coast.
• The study must be updated every 10 years thereafter.
• A licensed architect or engineer must perform the study.
2. No Waiver of Certain Reserves
• Associations may no longer waive or reduce funding for certain structural components identified in the SIRS. These include foundations, load-bearing walls, floors, roofs, fire protection systems, plumbing, and electrical systems.
• Full funding of reserves for these items is mandatory starting by the year 2025.
3. Increased Transparency
• Associations are required to distribute SIRS reports to unit owners and include reserve study information in estoppel certificates (which are provided to potential buyers during condo resale).

These reforms are intended to prevent deferred maintenance, which can lead to catastrophic structural failures.

Who Conducts the Reserve Study?

Reserve studies in Florida must be conducted by qualified professionals, especially under the new SIRS guidelines. This typically includes:

• Professional Reserve Analysts (PRA)
• Licensed Engineers
• Licensed Architects

Using a qualified professional ensures accurate evaluations, legal compliance, and peace of mind for both boards and residents.

Practical Implications for Condo Boards

For condo boards and property managers, complying with Florida’s reserve study requirements means taking a proactive approach:

• Budgeting for Studies: Make sure reserve studies are included in the annual budget.
• Scheduling Inspections: Don’t wait until the last minute. Start planning at least a year before the deadline for your building’s first SIRS.
• Educating Owners: Help residents understand why these funds are necessary and how they contribute to long-term financial health and property value.

Implications for Condo Owners

For owners, the financial impact of these changes could include:

• Higher monthly fees: As associations are required to fully fund reserves, many owners may see increased assessments.
• Increased property values: On the flip side, well-maintained buildings are more attractive to buyers and may retain or increase in value over time.
• More transparency: Owners will have better insight into the financial and structural health of their communities.

Conclusion

Florida’s new condo reserve study requirements represent a significant shift in how condominium communities plan for their future. While the upfront cost of compliance may be challenging for some associations and owners, the long-term benefits—safer buildings, fewer surprises, and more stable finances—are well worth the investment.

Condo boards should act now to ensure their communities are in compliance by the 2025 deadline. Working with qualified professionals, budgeting for necessary reserve contributions, and keeping owners informed will go a long way in preserving both the structural integrity and financial health of Florida’s condominiums.

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