The state of Florida recently passed a law requiring condominium associations to maintain a reserve account to cover the cost of future repairs. The law requires that the reserve account must be funded with 50% of the estimated cost of future repairs. This new law is aimed at ensuring that condominium complexes are prepared for unexpected expenses, such as the replacement of a roof or the repair of elevators.
The purpose of the law is to provide a way for condominium associations to pay for future repairs without having to assess unit owners for additional fees. By requiring that a portion of the cost of future repairs be placed into a reserve account, the law ensures that the condominium complex will have the funds available to pay for the work when it is needed. This will help to avoid assessments or special assessments that can be disruptive to unit owners and create a financial burden.
Under the new law, the condominium association must establish a reserve account that is funded with 50% of the estimated cost of future repairs. The estimate must be based on a study of the complex, including an assessment of the condition of the common areas and a projection of the costs for future repairs. The study must be performed by a qualified professional, such as an engineer or architect.
Once the reserve account is established, the condominium association must fund it on a regular basis. The association must also provide unit owners with an annual report on the status of the reserve account, including the balance, any contributions or expenditures, and a projection of future contributions.
Unit owners also have the right to access the reserve account information and to participate in the decision-making process regarding the reserve account. They can attend meetings of the condominium association to ask questions and provide input on how the funds should be used.
In conclusion, the new Florida law requiring condominium associations to maintain a reserve account to cover the cost of future repairs is an important step in ensuring the financial stability of condominium complexes. The law provides a way for the associations to pay for future repairs without the need for additional assessments, which can be a financial burden on unit owners. By requiring that a portion of the cost of future repairs be placed into a reserve account, the law helps to ensure that the condominium complex will be prepared for unexpected expenses.
