For several years, the Florida Legislature has made condominium reserve issues a priority, continuously revising laws to address and clarify the requirements. With House Bill 913, which has now been in effect for a few months, new reserve mandates and options have been introduced for condominium associations. Some of the new provisions of law include:
- Previously, condominium associations were required to budget for reserves components if the deferred maintenance or replacement cost exceeded $10,000. The latest revision raises this threshold to $25,000, with an inflationary component allowing for future increases.
- While prior laws did not explicitly address pooled reserves for structural integrity reserve components, the new law allows the pooling, although non-structural reserves must remain in a separate pool. Additionally, the law now states that a vote of the members is not required for the board to change the “accounting method” for reserves. However, it is unclear what the legislature meant by changing the “accounting method”. Therefore, you should reach out to your attorney if you are converting existing reserve funds from straight-line to pooled reserves (or from pooled reserves to straight-line).
- The deadline for condominium associations to complete their required structural integrity reserve study has been extended from 2024 to 2025. Furthermore, if an association completes a milestone inspection under Section 553.899, it may delay the study for up to two consecutive years, allowing time to address repair recommendations first.
- Condominium associations now have more options for funding reserves, including regular assessments, special assessments, lines of credit, and loans. However, approval from a majority of voting members is required to fund reserves with special assessments, lines of credit or loans.
- For budgets adopted by December 31, 2028, associations that have completed a milestone inspection in the previous two years may, with the approval of a majority of the total voting interests of the association, pause reserve contributions for up to two consecutive budgets to fund repairs recommended by the milestone inspection.
- Previously, associations needed membership approval to temporarily pause reserve funding when a local building official deemed a condominium uninhabitable due to a natural emergency. Now, boards can make this decision without member approval.
Although some of these new options provide greater flexibility, associations must assess their financial strategies carefully to ensure long-term sustainability and compliance. For further guidance, association members are encouraged to seek legal counsel and other professional advice tailored to their specific needs.
