Notices
Legislation update
Posted on Jul 19, 2022
- Deadline of December 31, 2024 for any associations which do not already have structural integrity reserve studies. Failure to complete a structural integrity reserve study constitutes a breach of officers’ fiduciary duty
- Effective as of December 31, 2024, no unit owner-controlled condominium or cooperative will be permitted to fully waive or only partially fund reserves for items listed on the structural integrity reserve study. Condominiums and cooperatives will instead be required to fully fund those reserve items pursuant to the structural integrity reserve study required. It will also be prohibited to vote to use such reserves for any other purpose for which they were intended. This applies to all condominiums and cooperatives, regardless of size or location.
Please note that these provisions of this new legislation may result in increased insurance premiums for directors and officers insurance policies and may also result in insurance carriers demanding proof of compliance before issuing or renewing policies.
FLORIDA STATUE 718.112(2)(f)(2)(a)
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2.a. In addition to annual operating expenses, the budget must include reserve accounts for capital expenditures and deferred maintenance. These accounts must include, but are not limited to, roof replacement, building painting, and pavement resurfacing, regardless of the amount of deferred maintenance expense or replacement cost, and any other item that has a deferred maintenance expense or replacement cost that exceeds $10,000. The amount to be reserved must be computed using a formula based upon estimated remaining useful life and estimated replacement cost or deferred maintenance expense of each reserve item. The association may adjust replacement reserve assessments annually to take into account any changes in estimates or extension of the useful life of a reserve item caused by deferred maintenance. This subsection does not apply to an adopted budget in which the members of an association have determined, by a majority vote at a duly called meeting of the association, to provide no reserves or less reserves than required by this subsection."
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2.a. In addition to annual operating expenses, the budget must include reserve accounts for capital expenditures and deferred maintenance. These accounts must include, but are not limited to, roof replacement, building painting, and pavement resurfacing, regardless of the amount of deferred maintenance expense or replacement cost, and any other item that has a deferred maintenance expense or replacement cost that exceeds $10,000. The amount to be reserved must be computed using a formula based upon estimated remaining useful life and estimated replacement cost or deferred maintenance expense of each reserve item. The association may adjust replacement reserve assessments annually to take into account any changes in estimates or extension of the useful life of a reserve item caused by deferred maintenance. This subsection does not apply to an adopted budget in which the members of an association have determined, by a majority vote at a duly called meeting of the association, to provide no reserves or less reserves than required by this subsection."
