Condo Q&A: What Are Florida Law Requirements for Reserves?

STUART, Fla. – Question: My condominium is currently working on its 2022 budget. I know we have a reserve budget with multiple items. It looks like the replacement costs for several of the items on the reserve budget has skyrocketed.

What are the requirements regarding reserves under Florida law, and is there a possibility of lowering the reserve contribution for the next year to ease the financial burden of the higher replacement costs? – E.T., Stuart

Answer: This is a great question and one that I have been answering quite a lot in the last month as budget season is upon most of the condominium associations.

Florida law requires condominiums to include a reserve budget in addition to an operating budget. The items on the reserve budget must include roof replacement, building painting and pavement resurfacing, regardless of the amount of deferred maintenance or replacement cost, and any other item that has a deferred maintenance cost or replacement cost that exceeds $10,000. This means that if your condominium is large with many amenities, the reserve budget is likely pretty long.

You are correct that several, if not all, reserve item replacement costs have increased over the last few years. However, Florida law requires condominium associations to fully fund the reserve budget each year unless the membership, through a vote at a membership meeting, approves either the partial funding or the full waiver of funding of the reserves.

The threshold for the approval of partial funding or full waiver of funding of the reserves is approval from a majority of those voting, in person or by proxy, at a membership meeting, assuming that a quorum has been obtained. This means that you will need to know the quorum requirement for your association meetings.

This percentage is usually found in the bylaws. This is the minimum number of owners that must be present, either in person or by proxy, at a membership meeting to actually hold the meeting. At that point, you will need to determine how many owners actually voted, in person or by proxy.

Out of that number, a majority of those who actually voted must approve either the partial funding or full waiver of funding of the reserves. If the vote passes, then your condominium association is no longer required to fully fund the reserve budget for that year. If the vote does not pass, then the full funding of the reserve budget is required.

I strongly recommend that you speak to your condominium association’s legal counsel regarding the implications of this vote. Further, there is specific language that must be included on the proxy/ballot regarding this vote, as consistent partial funding or waiver of the reserves could lead to unanticipated special assessments.

Question: I am at board member at my homeowner’s association. We have just recently implemented electronic voting. We also asked that owners provide us with consent to send official association notices via email so we could save on postage and mailing. Our annual meeting is scheduled for December and a very contested election will be occurring.

We just received an official records request from one of the candidates for the owners’ email addresses. I know that the candidate is going to use the email addresses to send candidacy information to the owners. Are the email addresses confidential or should the association provide access to this list? – Q.M., Dania Beach

Answer: This is also a very good question and deals with the intricacies of the official records portions of the HOA Act, Chapter 720, Florida Statutes.

First, it is important to note that your homeowner’s association’s obligation when it receives an official records request for non-confidential information is only to provide access to the official records. It is not obligated to spend hours combing through and locating specific official records.

It is also not obligated to email these records to the owners. The only obligation under the Florida Statutes is to provide access to the non-confidential official records within 10 business days of receipt of the request.

To answer your particular question, email addresses are usually considered confidential official records. However, if an owner has provided consent to receive official association notices via email, including, but not limited to, notices of annual or special member’s meetings or notices of special assessment meetings, then the email address is converted to a non-confidential official record.

This means that the requesting owner is entitled to have access to that owner’s email addresses. The distinction here is the consent to receive official notices from the homeowner’s association. If an owner provides his or her email address to the association for non-official notices such as notices of social events or the community newsletter, then the email address is still a confidential record and your association is not required to provide access to this record.

However, if the owner has provided consent to receive electronic notice, then the association is required to provide access to the email address within 10 business days of receipt of the request for access. I advise my associations to keep two sets of email lists – one list for owners who have provided electronic notice consent and another for owners who have not.

The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Goede, DeBoest & Cross, or any of our attorneys. Readers should not act or refrain from acting based upon the information contained in this article without first contacting an attorney, if you have questions about any of the issues raised herein. The hiring of an attorney is a decision that should not be based solely on advertisements or this column.

© 2021 Journal Media Group. S. Kyla Thomson, Esq., is a partner of the law firm Goede, DeBoest & Cross.