Skip to main content

Surprise! ALL Florida Condominium Associations Must Fully Fund Reserves for Structural Components

When the additions to The Condominium Act requiring "Milestone" inspections and "Structural Integrity Reserves Studies" ("SIRS") were made last year, many condominium associations with buildings less than three stories in height breathed a sigh of relief as it appeared that they were not subject to these new obligations. That relief was short-lived. Not long after the new laws were enacted, The Division of Florida Condominiums, Timeshares & Mobile Homes took the position that condominium associations with buildings less than three stories in height are also obligated to fully-fund reserves for the statutory structural integrity and safety items of their buildings.

As a recap, beginning last year, the new SIRS obligations include list of structural integrity and safety reserve items added to the Condominium Act in Section 718.112(2)(g)1, Florida Statutes.Those items are:

Roof

Load-bearing walls or other primary structural members

Floor

Foundation

Fireproofing and fire protection systems

Plumbing

Electrical Systems

Waterproofing and exterior painting

Windows

Any other item that having a deferred maintenance expense or replacement that exceeds $10,000 AND the failure to maintain or replace it will negatively impact any of the items listed above.

In order to distinguish these items from other non-structural integrity and safety items which also require reserves, such as for example, the repaving of roads and parking areas, these items are now commonly referred to as the "paragraph (g)" structural reserve items.

As part of these new laws, condominium associations are prohibited from waiving or reducing reserve funding for the paragraph (g) items listed above beginning December 31, 2024.Specifically, Section 718.112(2)(f)2a, Florida Statutes states that, "Effective December 31, 2024, the members of a unit-owner-controlled association may not determine to provide no reserves or less reserves than required by this subsection for items listed [in paragraph (g)]," above.

When these new laws were released, there was a presumption by many that such "fully-funded" reserve requirements for the "paragraph (g)" items listed above were only for condominium associations with buildings three stories or higher in height, since the new laws only require buildings of those heights to obtain SIRS studies.However, The Division subsequently took an inapposite position, specifically providing this answer on the "Frequently Asked Questions Related to SB 4-D" section of its website, http://www.myfloridalicense.com/DBPR/condos-timeshares-mobile-homes/, as follows:

Q: I live in a 2-story condominium. Is our association still permitted to waive reserves?

A: The Division does not consider this provision to base an association's ability to waive reserves on the number of stories that an association's buildings have.

As a result, it is The Division's position that beginning December 31, 2024, ALL condominium associations, regardless of height, will be prohibited from waiving or reducing reserve funding for any of the structural integrity and safety item listed in paragraph (g), above, and instead have to fully-fund all such items.

While the Legislature could change the law on this issue, we have not seen any indication that it intends to do so.So, while each condominium association should consult its legal counsel for how best to address this issue, the conservative approach would be to begin planning for the fact that as of December 31, 2024, no condominium association, regardless of height, will be able to waive its reserve funding for the structural components paragraph (g) items listed above.