Why Reserve Studies & SIRS

September 2023, Governor Ron DeSantis passed a bill SB-4D and SB-154 glitch bill and Florida Statute 718.112 requires Condo Associations who manage buildings 3+ stories be required to have reserve accounts for capital expenditures and deferred maintenance for the building envelope properly funded. Reserve accounts also include other items within the reserve accounts included but the structural components or building envelope must meet the minimum requirements set forth in the bill.  

For years, associations opted to waive reserves partially or totally to keep the dues low; however, doing so places the residents at risk physically and financially as improperly funded accounts can result in large assessments to the residents to maintain the structural integrity of the building and other components that the residents rely on the association to support with their budgets.  Unfortunately, these budgets are not properly maintained, and in the end, the assessments occur because the association members are not good stewards of the collected funds.  Furthermore, now that there are laws and minimal requirements in place, underfunded associations will be unable to buy or sell units within the development unless proper funding is in place and if not met, the building or buildings will be uninsurable.  Of course, some associations require loans from outside sources which places the budget deeper in debt and further at risk.

The reserve study and the SIRS report are not just recommendations, they are legal requirements. The reserve study establishes the remaining economic life of the components, while the SIRS report is a comprehensive assessment of the building's condition.  Additionally, a structural inspection by a certified engineer firm must be conducted every 10 years, known as the Milestone Study. Depending on the age and condition of the building, the SIRS report should be done every 3-5 years, in addition to the annual reserve study. Adhering to these guidelines will ensure proper funding of the building association.

Reserve Studies are a legal requirement, so they cannot be put off.  One thing to remember is when 2021 came rushing in, and there was a feeding frenzy for property, the values were rising 4%-6% per month; that being said, Insurance needs to be adjusted.  JNB Appraisal Services and Reserve Studies can meet your needs for the reserve, SIRS, which are requirements, the insurance appraisal is something to consider, and given the number of lightning strikes in the area, hurricanes, and storms, keeping ahead of the insurance game is crucial for proper coverage, but JNB Appraisal Services also provides Insurance valuations. 

Best of all we are local and members of the CAI.  We provide easy-to-read reports that are very comprehensive and meet all legal obligations. We will initially provide a SIRS and Reserve Study, review your insurance to make sure you have enough coverage, and the follow-up years can provide the updated reserve study at half the cost of the initial report.  Call for pricing!