FLORIDA RESERVE STUDY GUIDELINES & REQUIREMENTS
Florida state law governs when and how often an association must have a reserve study performed. Chapter 718 of the Florida Statutes governs condominium associations and Chapter 720 governs homeowners’ associations.
Condominium associations are required to budget for capital expenditures and deferred maintenance (Florida Statute 718.112). The statute requires reserves for roof replacement, building painting, pavement resurfacing, and for any other item for which the deferred maintenance expense or replacement cost exceeds $10,000.
Even though Florida law does not specifically state the need for a reserve study, reserve contributions must be established using a formula which is based upon the remaining useful life and estimated replacement cost of the reserve items. In short, condominium associations need to annually review and amend their reserve fund and ongoing fund contributions.
Florida Statutes do not require homeowners’ associations to have a reserve study completed. Reserve funds are not required unless the association’s governing documents call for the study. In which case, association budgets may include reserve accounts for capital expenditures and deferred maintenance. The amount to be reserved is to be computed by means of a formula based on estimated remaining useful life and estimated replacement cost or deferred maintenance expense of each reserve item.
If the association’s budget does not provide for reserve accounts, then the association’s financial report for the preceding fiscal year must contain the following statement in conspicuous type:
THE BUDGET OF THE ASSOCIATION DOES NOT PROVIDE FOR RESERVE ACCOUNTS FOR CAPITAL EXPENDITURES AND DEFERRED MAINTENANCE THAT MAY RESULT IN SPECIAL ASSESSMENTS. OWNERS MAY ELECT TO PROVIDE FOR RESERVE ACCOUNTS PURSUANT TO SECTION 720.303(6), FLORIDA STATUTES, UPON OBTAINING THE APPROVAL OF A MAJORITY OF THE TOTAL VOTING INTERESTS OF THE ASSOCIATION.
FLORIDA STATE RESERVE STUDY PROFESSIONALS
Our team of reserve study professionals work with associations throughout Florida State.
TOP 10 CITIES SERVICED
¹ U.S. Census Bureau