Florida condo budget requirements are set by Chapter 718 of the Florida Statutes, which tells every association’s board what the annual budget must contain, how it gets adopted, and how reserves must be funded. The budget has to show estimated revenues and expenses for the coming fiscal year, split between operating costs and reserve accounts. Since the post-Surfside reforms, associations with buildings three stories or taller face much stricter reserve rules, and owners can no longer vote away the reserve funding tied to a structural integrity reserve study.
What the Budget Must Contain
Every annual budget has two parts: operating expenses and reserves.
Operating expenses are the recurring costs of running the community. Typical line items include property management fees, insurance premiums, maintenance and landscaping, utilities for common areas, legal and accounting fees, and administrative costs. When an exact amount isn’t known at drafting time (insurance renewals are the classic example), the board must still include a good-faith estimate rather than leave the line blank.1Florida Legislature. Florida Statutes 718.112 – Bylaws
Reserves are the second required piece. Reserves set aside money each year for major future repairs so the association isn’t forced into a large special assessment when a roof or elevator finally fails. Florida law devotes an entire subsection to how reserves must be calculated and funded, and for larger buildings those rules were rewritten in recent years.
Associations that use a professional management company should budget the full contract, not just the base per-unit monthly fee. Setup charges, transition fees, and services outside the standard scope are common and belong in the budget.
Reserves and the Structural Integrity Reserve Study
Associations with any building three stories or taller must obtain a structural integrity reserve study (SIRS) at least every 10 years. The study is performed by a licensed engineer or architect and evaluates the condition and remaining useful life of specific building components, then calculates the annual funding required for each.
At a minimum, the SIRS must address reserves for the roof, foundation, floor, load-bearing walls, fireproofing and fire protection systems, plumbing, electrical systems, waterproofing, exterior painting, and windows.1Florida Legislature. Florida Statutes 718.112 – Bylaws
The target is “fully funded” reserves for each component. The math is simple: divide the estimated replacement cost by the component’s remaining useful life. A $200,000 roof with 20 years of life left means $10,000 per year set aside for that one item.
The SIRS connects to a separate rule requiring milestone structural inspections. Buildings three stories or taller must have an initial milestone inspection at 30 years, or 25 years if they sit within three miles of the coastline. Findings from the milestone inspection feed directly into the reserve study’s numbers, so the two documents work together.
When Owners Can and Cannot Waive Reserves
This is where the rules changed hardest. For any association that must obtain a SIRS, unit owners in an owner-controlled association may not vote to waive or reduce funding for the components covered by that study, and they cannot vote to divert those reserve funds to other purposes. The prohibition applies to budgets adopted on or after December 31, 2024.1Florida Legislature. Florida Statutes 718.112 – Bylaws
Boards that used to keep assessments artificially low through annual owner waivers no longer have that option for SIRS items. Regular assessments have risen at many associations as a result, but the exposure to catastrophic special assessments later has dropped.
Owners still have some flexibility outside SIRS. For buildings under three stories, or for reserve items not covered by the SIRS (clubhouse furniture, pool deck resurfacing, and the like), owners can vote to waive or reduce reserve funding by a majority of a quorum at a properly noticed meeting. The waiver lasts only one fiscal year, so it has to be renewed annually.1Florida Legislature. Florida Statutes 718.112 – Bylaws
How the Budget Gets Adopted
The board of directors adopts the annual budget at a board meeting. Owners can attend and be heard, but the vote belongs to the board, not the membership.1Florida Legislature. Florida Statutes 718.112 – Bylaws
Notice to Owners
At least 14 days before the budget meeting, the board must hand-deliver, mail, or electronically transmit a copy of the proposed budget to every unit owner. An officer or manager then signs an affidavit confirming compliance, and that affidavit goes into the association’s official records.2Florida Senate. Florida Statutes 718.112 – Bylaws The Florida Department of Business and Professional Regulation has confirmed these minimum notice requirements apply specifically to budget meetings.3Florida Department of Business and Professional Regulation. Minimum Statutory Requirements for Condominium Meetings
The 115 Percent Rule
If the adopted budget raises assessments more than 115 percent above the prior year, owners have a mechanism to force a second look. When at least 10 percent of all voting interests submit a written request within 21 days of adoption, the board must call a special meeting within 60 days to consider a substitute budget. The substitute passes only with approval from a majority of all voting interests. If quorum is not reached, or the substitute fails, the original budget stands.2Florida Senate. Florida Statutes 718.112 – Bylaws
Several categories are excluded from the 115 percent calculation because they tend to swing hard from year to year: required reserves, insurance premiums, irregular expenses the board doesn’t expect to recur, and assessments for capital improvements. A budget jumping from $500,000 to $700,000 might not trigger the rule at all if $150,000 of the increase is a new insurance premium and additional reserve funding.2Florida Senate. Florida Statutes 718.112 – Bylaws
Special Assessments When the Budget Falls Short
When the budget doesn’t cover an expense, the board can levy a special assessment. Unlike regular assessments, a special assessment is a one-time charge tied to a specific purpose.
Non-emergency special assessments require at least 14 days’ written notice to all unit owners, and the notice must describe the purpose and estimated cost.1Florida Legislature. Florida Statutes 718.112 – Bylaws Funds can only be used for the stated purpose. Any surplus after the project is complete can be returned to owners or applied as a credit toward future assessments.4Florida Senate. Florida Statutes 718.116 – Assessments, Liability, Lien and Priority, Interest, Collection
Florida law does not cap the dollar amount of a special assessment. Every unit owner is personally liable for assessments that come due during their ownership, and the association can place a lien on the unit for anything unpaid.5Florida Legislature. Florida Statutes 718.116 – Assessments, Liability, Lien and Priority, Interest, Collection
If the board prefers to fund a reserve shortfall through a loan or line of credit instead of a lump-sum assessment, that financing needs approval from a majority of all voting interests.1Florida Legislature. Florida Statutes 718.112 – Bylaws
Annual Financial Reporting
Separate from the forward-looking budget, Florida requires annual financial reports that look backward at what actually happened. The level of scrutiny scales with revenue. Associations with total annual revenues of at least $150,000 but less than $300,000 must prepare compiled financial statements.6Florida Legislature. Florida Statutes 718.111 – The Association Larger associations face progressively stricter requirements, with the highest-revenue tier required to obtain a full audit.
The three tiers differ in how much independent assurance they provide. A compilation is the most basic: an accountant assembles the association’s data into standard financial statement format without verifying accuracy or performing analysis. A review adds inquiries and comparisons with prior years to flag unusual trends, but does not independently confirm balances or test individual transactions. An audit is the most thorough, with the accountant verifying balances directly with banks, testing transactions, evaluating internal controls, and issuing a formal opinion on whether the statements accurately reflect the association’s finances.
Owners should know which tier applies to their association. A compilation offers essentially no independent assurance, so if a large association only produces compiled statements, that’s worth raising with the board.
Getting Copies of the Budget and Financial Records
Unit owners have a statutory right to inspect official records, including the annual budget, financial statements, and reserve studies. Submit a written request to the board or management company. The association must make the records available within 10 business days.6Florida Legislature. Florida Statutes 718.111 – The Association
Inspection has to happen within 45 miles of the condominium property, or the association can provide copies instead. The association may charge the actual cost of copying, but fees cannot be used to discourage inspection.
Florida treats records access seriously. Destroying official records or refusing inspection in connection with any crime can be prosecuted as tampering with physical evidence or obstruction of justice.6Florida Legislature. Florida Statutes 718.111 – The Association If a request is ignored past the 10-business-day window, document the request and the non-response in writing, and consider filing a complaint with the Division of Florida Condominiums, Timeshares, and Mobile Homes.