Legal News You Can Use: 2025 - 2026 Community Association Legislative Update

2025-2026 COMMUNITY ASSOCIATION LEGISLATIVE UPDATE

Structural Integrity Reserve Studies (Section 718.112 of the Florida Statutes)

A structural integrity reserve study (“SIRS”) is a study of an association’s reserve funds required for future major repairs and replacement of the condominium property. Among other things, a SIRS provides a reserve funding schedule with a recommended annual reserve amount so that the association can afford the estimated replacement cost or deferred maintenance expense of each item of condominium property by the end of the estimated remaining useful life of the item. The intended goal of a SIRS is to help an association plan for future capital projects so that the association can afford the projects when they become necessary. Generally, a SIRS must be completed at least every 10 years after the condominium’s creation.

This year’s new legislation implements the following changes to the procedures and requirements governing a SIRS: » Associations existing on or before July 1, 2022, which are controlled by unit owners other than the developer, must have a SIRS completed by December 31, 2025. ▪ Note – Under previous law, associations falling within this category were required to complete a SIRS by December 31, 2024. The new legislation extends the deadline for certain associations to complete a SIRS. » If an association completes a milestone inspection, or an inspection completed for a similar local requirement, the association may delay performance of a required SIRS for no more than the 2 consecutive budget years immediately following the milestone inspection in order to allow the association to focus its financial resources on completing the repair and maintenance recommendations of the milestone inspection. ▪ Note – This new provision appears intended to provide some relief, even if only temporary, for associations which have fulfilled their milestone inspection requirements. » A SIRS is required for each building on the condominium property that is three habitable stories or higher in height, as determined by the Florida Building Code. ▪ Note – Previous law required a SIRS for every building that is three stories or higher in height, regardless of whether each story is habitable. Under the revised law, buildings with three stories that include non-habitable levels (such as a garage) now appear to be excluded from the SIRS requirement. ▪ Note – Other sections of the statutes concerning SIRS requirements were not similarly changed and still specify that a SIRS must be conducted for each building that is “three stories or higher in height,” without referencing whether those stories must be

“habitable.” This inconsistency creates potential ambiguity which may need to be addressed and clarified in future legislative sessions. » A SIRS is not required for single-family, two-family, three-family, or four-family dwellings with three or fewer habitable stories above ground. ▪ Note – Previous law only provided exemptions for single-family, two-family, and three-family dwellings. » A SIRS must include any item that has a deferred maintenance expense or replacement cost exceeding $25,000 (or an inflation-adjusted amount annually determined by the Division of Condominiums, whichever is greater) if the failure to replace or maintain such item would negatively affect other SIRS related items as determined by the visual inspection portion of the SIRS. ▪ Note – Under previous law, a SIRS was required to include items having a cost exceeding $10,000, and there was no provision for inflation-based adjustments. » The SIRS must include a recommendation for a reserve funding schedule based on a baseline funding plan that provides a reserve funding goal in which the reserve funding for each budget year is sufficient to maintain the reserve cash balance above zero. The SIRS may recommend other types of reserve funding schedules, provided that each recommended schedule is sufficient to meet the association’s maintenance obligation. ▪ Note – This imposes an additional layer of responsibility on the professional performing the SIRS. » The SIRS must take into consideration the funding method or methods used by the association to fund its maintenance and reserve funding obligations through regular assessments, special assessments,

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