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MANDATORY RESERVES
By
Jan Bergemann
Published July 1, 2022
Finally
the Florida Legislature got the message they should have gotten
20 years ago: FULLY FUNDED RESERVES ARE MANDATORY!
And even
if the legislature gave condo owners a reprieve until December
2025, condo owners should start now to consider their options:
Will they be able to afford the much higher maintenance fees
they will have to pay monthly in the future or will these much
higher fees break their household budget?
Let’s
just face it: For most of the years past condo owners waived
reserves in order to keep maintenance fees artificially low –
meaning that many of the associations at this point don't have
any reserves worth talking about. Remember: According to media
reports the Champlain Tower South had only $700,000 in reserves,
but needed about $16M to pay for the necessary repairs.
That will
have to change real fast and the fact that many of the required
inspections will have to be followed up by costly repairs and
maintenance high special assessments are on the horizon for many
hi-rise buildings (buildings higher than three floors).
As much
as this change to the Florida statutes was long overdue it will
definitely price quite a few families out of their homes. But in
all reality there is really no other way around it and the fact
that many condo owners used the loophole in the statutes that
allowed waiving the funding of reserves is now coming back to
haunt the owners who in former times dismissed the idea of
funding reserves.
We
already see condo owners protesting against boards about the
problems that are visible in these buildings. The big question
in these cases: Does the association have the necessary funds to
take care of the needed maintenance and repairs or are the
owners willing and able to pay the special assessment the board
might have to levy in order to pay for the contractor?
The
mandatory funding of all the required reserve funds will make
living in these hi-rises very interesting in the next two years
– and we will have to see how strong the government agencies
tasked with overseeing these new provisions in FS 718 are
enforcing these provisions.
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Jan Bergemann is president of Cyber Citizens For Justice,
Florida
's largest state-wide property owners' advocacy group.
CCFJ works on legislation to help owners living in
community
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associations. He moved to
Florida
in 1995 - hoping to retire. He moved into a HOA, where the
developer cheated the homeowners and used the association dues
for his own purposes. End of retirement!
CCFJ was born in the year 2000, when some owners met in
Tallahassee
- finding out that power is only in numbers. Bergemann was a
member of Governor Jeb Bush's HOA Task force in 2003/2004.
The organization has two websites to inform interested
Florida
homeowners and condo owners:
News Website: http://www.ccfj.net/.
Educational Website: http://www.ccfjfoundation.net/.
We think that only owners can really represent owners, since all
service providers surely have a different interest! We are
trying to create owner-friendly laws, but the best laws are
useless without enforcement. And enforcement is totally lacking
in
Florida
!
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