Florida HOA Reserve Requirements: What Chapter 720 Associations Need to Know

After Surfside, Florida rewrote the reserve rules for condominiums, including structural integrity reserve studies (SIRS) and limits on waiving reserves. Many HOA boards assume the same rules apply to them. Homeowners associations governed by Chapter 720 of the Florida Statutes operate under a different framework, and understanding the difference is the starting point for a sound reserve plan.

How Chapter 720 treats reserves

Under section 720.303(6), an HOA isn't generally required to maintain statutory reserves unless they were established by the developer, by the governing documents, or by a vote of the members. Once statutory reserves exist, the association must fund and use them according to the statute, and the budget has to present them properly. Associations without statutory reserves must include required disclosure language in the budget. Condominium SIRS requirements under Chapter 718 don't apply to Chapter 720 HOAs. Read the current text of section 720.303 and confirm your association's obligations with counsel.

Why boards should fund reserves anyway

Roads, gatehouses, pools, clubhouses, drainage, walls and landscaping all wear out on a schedule. When reserves aren't funded, the cost still arrives, usually as a special assessment owners didn't plan for. Lenders, buyers and insurers increasingly look at reserve health when evaluating a community.

Building a reserve plan

1. Commission or update a reserve study with a component inventory, remaining useful lives and replacement costs.

2. Choose a funding method. Component funding or pooled (cash flow) funding, with a target funding level the board can defend.

3. Set the annual contribution in the budget, with an inflation assumption.

4. Write an investment policy for reserve funds that protects principal and liquidity.

5. Update the plan annually and the study every few years or after major projects.

Common questions

Are Florida HOAs required to have a reserve study?

Chapter 720 doesn't generally mandate one, but it's the foundation of any credible reserve plan. Check your governing documents.

Do the condo SIRS rules apply to HOAs?

No. SIRS is a Chapter 718 condominium requirement.