HOA Reserve Study: When the Law Requires One

• Who: each residential condo building "three habitable stories or higher in height", at least every 10 years (s. 718.112(2)(g)1.).
• What it covers: roof, structure, fireproofing and fire protection, plumbing, electrical, waterproofing and exterior painting, windows and exterior doors, and other items over the $25,000 threshold that affect those.
• Who may do it: a Florida-licensed engineer or architect, or a reserve specialist or professional reserve analyst certified by the Community Associations Institute or the Association of Professional Reserve Analysts.
• Deadline: owner-run associations existing on or before July 1, 2022 had to finish one by December 31, 2025, and never later than December 31, 2026 (s. 718.112(2)(g)7.).
• Exempt: buildings under three stories, and single-family to four-family dwellings with three or fewer habitable stories above ground (s. 718.112(2)(g)5.).
• No waiver: for budgets adopted on or after December 31, 2024, owners may not waive or cut reserves for SIRS items.

Every Florida condo budget must include reserve accounts for capital expenditures and deferred maintenance: roof replacement, building painting, pavement resurfacing, and any other item over $25,000 or the inflation-adjusted amount the state posts each year (s. 718.112(2)(f)2.a.). Outside the SIRS items, owners may vote, by a majority of all voting interests, for no reserves or less.

A building of three or more stories also needs a milestone inspection by December 31 of the year it turns 30, and every 10 years after (s. 553.899). The same small-building exemption applies.

• The budget "may include reserve accounts". Reserves become required once a majority of all voting interests approve them, or the documents require them (s. 720.303(6)(b) and (d)).
• Once created, reserves are figured from each item's "estimated remaining useful life and estimated replacement cost or deferred maintenance expense".
• Owners may vote for no or lower reserves at a meeting with a quorum. That vote covers one budget year only.
• An HOA without fully funded reserves must print a warning in capitals in its financial report that this "MAY RESULT IN SPECIAL ASSESSMENTS".

Texas: Chapter 209 has no section on reserves or reserve studies. For condos, the declaration "may allow the accumulation of reserve funds" (Tex. Prop. Code 82.112(f)). Both resale certificates must state the reserves, if any (207.003(b)(6) and 82.157(a)(5)).

California: the Department of Real Estate's booklet says the regular assessment funds "long-term reserves for maintenance and replacement" and tells buyers to check that the association has "a sufficient reserve account". The Civil Code sets a reserve study rule of its own, which we could not open on 31 October 2026, so we do not state its terms here.

• List each shared item the association must replace: roof, siding, paint, paving, fences, shared plumbing.
• For each one, write the remaining life in years and today's replacement cost.
• Divide the cost by the years left to get a yearly amount, and add the items together.
• Put the total in the budget, or record the owners' vote to save less.
• Review the list each year, and redo it when a big item is replaced.