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Subject: Reserves
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Author Messages
NattyM
(Florida)

Posts:8


07/17/2021 5:20 AM  
Does Florida required the condominium to have reserves?

My condominium does not have a reserves and is assessing us for $1.3 million for repairs.
AugustinD


Posts:961


07/17/2021 7:08 AM  
Posted By NattyM on 07/17/2021 5:20 AM
Does Florida required the condominium to have reserves?

My condominium does not have a reserves and is assessing us for $1.3 million for repairs.
FS 718.112 (2) (f) 2. a. requires a Florida COA's annual budget to include reserve funding pursuant to a formula "based upon estimated remaining useful life and estimated replacement cost or deferred maintenance expense of each reserve item" and so on.

But I see nothing requiring the COA Board to actually fund the reserves.

Furthermore FS 718 (2) (f) 2. b. gives the COA membership the right to vote to waive or reduce reserves that are budgeted. This has to be done by a vote at a properly noticed meeting of the members.

In the wake of the Florida Champlain Towers South collapse, your question is being asked a lot lately. There is chatter about the Florida legislature requiring the full funding of reserves down the road. You might be interested in the video linked at https://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/307638/view/topic/Default.aspx

Under FS 718, Florida COA Boards have the right to impose a special assessment to pay for needed repairs. A vote of the ownership is not needed. Undoubtedly many COA attorneys and many COA insurers, are now advising, and possibly demanding, that their client-COA Boards to fix anything identified as being broken.

For at least the next few years, I believe Florida COA owners need to get used to paying a lot more to the COA as the price of continued ownership.
MelissaP1
(Alabama)

Posts:10364


07/17/2021 8:27 AM  
As I recently found out, in Florida this may be left up to your county or maybe even city. Until the recent collapse situation, did not know that Miami-Dade county has different rules for their condo's versus others. So this is a good thing to have set up reserves IF needed. Not every HOA needs a reserve if they are not responsible for large capitol replacement items like roofs or roads. A special assessment may suffice instead.

Former HOA President
MaxB4
(Maine)

Posts:701


07/17/2021 9:00 AM  
Posted By MelissaP1 on 07/17/2021 8:27 AM
As I recently found out, in Florida this may be left up to your county or maybe even city. Until the recent collapse situation, did not know that Miami-Dade county has different rules for their condo's versus others. So this is a good thing to have set up reserves IF needed. Not every HOA needs a reserve if they are not responsible for large capitol replacement items like roofs or roads. A special assessment may suffice instead.



You should start doing much more research between what an HOA and a Condo is. Also what components that might be in an HOA and what are in a Condo.

For this discussion, an HOA is characterized as a single family detached homes and a Condo is attached, townhome style or stacked units.
KellyM3
(North Carolina)

Posts:1735


07/18/2021 7:36 PM  
Posted By NattyM on 07/17/2021 5:20 AM
Does Florida required the condominium to have reserves?

My condominium does not have a reserves and is assessing us for $1.3 million for repairs.




Natty,

Your condo complex certainly as a "Reserve," whether nor not your HOA ever established one.

Right now, that reserve fund balance sits at -$1.3 million dollars. The special assessment will fill the "hole," which is really deferred maintenance throughout your community.

I'm sorry you're facing this as you've not been served by your HOA leadership.
SheliaH
(Indiana)

Posts:4062


07/19/2021 6:17 AM  
As others have noted, you may not be required to have reserves, but things do were out eventually, and saving for that eventuality is a good idea. You don't say how large your condo is and I understand $1.3 million isn't something to sneeze at, but you've also seen what happened at Surfside - for ANYONE to ponder the need for reserves after that is really strange in my mind.

If these repairs are necessary, you may have no choice but to pony up - hopefully, not everyone has to hand over $1.3 million each. This would also be a good time for your board to get a reserve study to get a handle on how much to save and how soon you might need it for various components. After the study is done,I would also suggest the board have the reserve specialist give a presentation at a special homeowners' meeting so they can ask questions and the board can discuss how it plans to use the information.
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