Condo Due Diligence, Part 2: The Structural Integrity Reserve Study

Florida Statute 718.112 requires a structural integrity reserve study, or SIRS, for every residential condominium building of three or more habitable stories, at least every 10 years. It is the budget side of the milestone inspection. The inspection looks at the building's condition; the SIRS estimates what its major components will cost to repair or replace, and how much the association must set aside each year to pay for them.

For associations that existed on or before July 1, 2022 and are run by unit owners, the first study was due by December 31, 2025. An association with a milestone inspection due by December 31, 2026 could do both together, and the statute says no study may be completed after December 31, 2026. The study must be performed or verified by a licensed engineer or architect, or by a certified reserve specialist or professional reserve analyst.

What the study must cover

• Roof and structure, including load-bearing walls and primary structural members.
• Fireproofing and fire protection, plumbing and electrical systems.
• Waterproofing and exterior painting, windows and exterior doors.
• Anything else costing more than $25,000 to repair or replace whose failure would harm the items above.

Reserves for it can no longer be waived

For budgets adopted on or after December 31, 2024, owners in an association that must have a SIRS can no longer vote to fund less than the study requires for those items. The association can pay with regular assessments, special assessments, lines of credit or loans, and a special assessment, line of credit or loan needs a majority of all voting interests. After a recent milestone inspection, a board may, with that same majority, pause reserve contributions for no more than two consecutive annual budgets adopted on or before December 31, 2028, so the money goes to the repairs first.

How to read it as a buyer

On a resale, Florida Statute 718.503 makes the seller give you the association's most recent SIRS, or a statement that one has not been completed. Read three things. First, the funding plan: the yearly reserve contribution the study calls for, against what this year's budget actually collects. Second, the near-term items: anything due in the next few years is money the association needs soon. Third, how it will be raised: a special assessment, a loan or higher dues all land on owners, including the one who just bought.

My read

A low monthly fee in an older building used to look like a bargain. Under this law it can mean the bill is still coming. I would rather show a buyer a building with higher dues and a funded study than one with low dues and a study that says the money is not there. If you are selling, have the SIRS and the budget ready on day one, because buyers now ask for them first.