What's Happening?
Effective July 1, 2025, Florida condominium associations are required to maintain Structural Integrity Reserve Study (SIRS) reserves for buildings with three or more habitable stories. This mandate aims
to ensure the structural integrity of taller buildings following recent legislative changes. However, buildings with fewer than three habitable stories, such as villas with only two stories, are exempt from this requirement. This distinction has raised questions among condominium associations about how to manage their reserve funds, particularly in communities with mixed building types. For instance, a community with a six-story tower and four two-story villas must maintain SIRS reserves for the tower but not for the villas. Associations are considering whether they can reallocate funds from combined reserves designated for villas to other non-SIRS components, and whether such decisions require a board vote or member approval.
Why It's Important?
The implementation of SIRS reserve requirements is significant for condominium associations as it directly impacts their financial planning and reserve management. Associations with mixed building types must navigate the complexities of maintaining separate reserves for different structures, which could lead to financial strain or require adjustments in budgeting strategies. This regulation is part of broader efforts to enhance building safety and prevent structural failures, reflecting increased scrutiny on building standards following high-profile incidents. The decision-making process regarding reserve allocations also highlights the governance challenges faced by associations, as they must balance compliance with state laws and the financial interests of their members.
What's Next?
Condominium associations will need to review their current reserve strategies and possibly consult legal or financial experts to ensure compliance with the new SIRS requirements. Boards may need to hold meetings to discuss potential reallocation of funds and determine whether such actions require member votes. Additionally, associations might explore options for increasing reserve contributions or adjusting budgets to accommodate the new requirements. As the July 2025 deadline approaches, associations will likely seek guidance from legal professionals to navigate these changes effectively.
