HOA Reserve Requirements in Florida

Hi Patrick,

According to the Florida Homeowners’ Association Act Section 720.303(6)(b), reserves may be included in the budget. If they are not established, funding is limited to the extent the governing documents limit increases in assessments. The governing documents may also require the HOA to create a reserve account. Kindly review them for verification.

Section 720.303(6)(d) states that an HOA is deemed to have provided for reserve accounts upon the affirmative approval of a majority of the total voting interests in the HOA. Approval must state that reserves shall be provided for in the budget and designate components for which the reserves are to be established.

Section 720.303(6)(e) states that reserves are computed through a formula based on the estimated remaining useful life and replacement cost or deferred maintenance expense of each reserve item. The HOA may adjust replacement reserve assessments annually to account for changes to estimates of cost and remaining useful life.

Section 720.303(6)(f) states that the members, upon a majority vote at a meeting with a quorum, may provide for no reserves or reduce reserves than required by the section. Approval to waive or reduce reserves is applicable to only one budget year.