No. There is no part of statues 718, 719, 720 (condominiums, co-operatives, home owner associations, respectively) that mandates that associations get a reserve study. Not only do these associations not need a reserve study, but they can choose to waive funding of reserves with a majority vote. Clearly this is not the recommended route, but some older associations have never collected reserve funds–they just always issue a special assessment.
If I have a reserve study, how often do I have to update it in Florida?
Never. Once again there is no statutory requirement that you have to have a reserve study or update it. However, it is considered a good practice to update your reserve study every 3-5 years. Other reasons to update it would be after a natural disaster, change in ownership or management company, after annexing property, or after substantial renovations.
I thought that I had to update our reserve study every 3 years. Did It confuse this was something else?
You most likely confused this with an insurance appraisal. Condominiums are required to have an appraisal done for insurance purposes every 36 months by state statutes.
What are the mandatory items that reserves monies need to be collected for in Florida?
Once your association has decided to fund reserves, there are some specific items that you need to collect reserves for. They are roofing, painting, and paving, regardless of their cost. Additionally, associations are required to also collect reserve funds for any items over $10,000. The statutes do not specifically state whether the $10,000 is for one item or the summation of items. For example, pool furniture individually is inexpensive, but aggregately may cost more than $10,000.
Can the board of directors in our association just do their own reserve study?
Yes. The board has the right to estimate the cost and lifespan of the reserve items in their community. However, it is only advisable to do your own reserve analysis if someone has a real background in construction. Otherwise, the numbers use may not be realistic.
When we get assignments and look through previous budgets it is always interesting to see the numbers that were being used previously. Often times, the expected life, the remaining life, and the cost estimates are quite different than our conclusions. Sometimes boards or developers just re-use old numbers just to try to keep assessments down
Another reason you may want to consult a reserve study provider is to make sure you get the right items on the reserve schedule. Not getting the proper items on the reserve schedule is usually the biggest mistake association boards make when they try to develop the reserve schedule in-house.