Current through the 2026 regular session, this page covers HOA reserves and financial reporting under section 720.303(6) and (7), plus capital contributions and estoppel certificates. The honest headline is that almost nothing has happened here since 2021, and that the most damaging errors come from importing condominium rules that were never written for a homeowners association. Four years of Surfside legislation changed condominium finance completely and left Chapter 720 where it was.
2026 and 2025: nothing, and why that matters more here than anywhere
No 2026 bill changed HOA reserves or financial reporting. Section 720.303 carries a 2026 citation at s. 47, ch. 2026-14, the reviser's bill, effective May 12, 2026, and a 2025 citation at s. 84, ch. 2025-6. Neither is substantive.
The 2025 session is where the confusion starts. HB 913, Ch. 2025-175, was a large act and it was covered accordingly. It raised the condominium reserve threshold from $10,000 to $25,000, restricted reserve waiver for associations required to have a structural integrity reserve study, authorized a line of credit or loan to fund milestone and SIRS capital work on a majority of total voting interests, allowed a pause or reduction of reserve contributions for up to two consecutive annual budgets for a budget adopted on or before December 31, 2028, made the 115 percent substitute budget a board duty, and extended the condominium financial report delivery window from 120 to 180 days.
It amended Chapters 468, 553, 718, 719 and 721. It did not amend Chapter 720. Every one of those rules is unavailable to a homeowners association, including the ones a board would want.
2024, 2023 and 2022: what reached section 720.303, and what did not
Section 720.303 was amended in each of those sessions: s. 20, ch. 2022-269, the post Surfside act; s. 2, ch. 2023-228; and s. 3, ch. 2024-221 with s. 1, ch. 2024-202. What those amendments did was records, website posting, retention and governance. They did not create an HOA reserve study, an HOA reserve threshold, or an HOA reserve funding mandate.
So the list of things a homeowners association does not have is long and worth stating in one place, because owners ask about all of them:
- No structural integrity reserve study. The SIRS is section 718.112(2)(g) for condominiums and section 719.106(1)(k) for cooperatives. Chapter 720 has no equivalent obligation.
- No statutory reserve threshold. The $25,000 figure is a condominium concept from section 718.112(2)(f)2.a. and has no HOA counterpart.
- No 115 percent substitute budget rule. Section 718.112(2)(e)2.a. makes it a board duty for condominiums and Chapter 719 uses an owner petition. Chapter 720 has neither.
- No statutory authority to borrow against a reserve or to pause reserve contributions. Those are the section 718.112(2)(f)2.c. and (2)(f)2.e. provisions from HB 913.
- No Division online account. Sections 718.501(3) and 719.501(3) reach condominiums and cooperatives only.
An HOA that owns a building of three habitable stories or more may still have a milestone inspection obligation under section 553.899, which is in the building construction chapter and does not run on association type. That is a question worth asking counsel rather than assuming either way.
How HOA reserves actually become mandatory
Section 720.303(6) is short and its logic is often read backwards. Start with paragraph (b): in addition to annual operating expenses, the budget may include reserve accounts for capital expenditures and deferred maintenance for which the association is responsible. May, not must.
Paragraph (d) supplies the switch. An association is deemed to have provided for reserve accounts upon the affirmative approval of a majority of the total voting interests. That approval may come by vote at a duly called meeting of the membership or by written consent of a majority of the total voting interests. The approving action must state that reserve accounts will be provided for in the budget and must designate the components for which they are established. The board then includes those reserve accounts in the budget in the next fiscal year and each year after.
The second route to mandatory reserves is the developer. Where reserves were established before turnover and the association has carried them since, the analysis is not the same as a community that has never had them, and it is a question for counsel on the declaration and the developer's budgets. While a developer is in control, section 720.303(6)(i) says the developer may, but is not required to, include reserves in the budget.
Paragraph (e) sets the calculation: the amount reserved in any account established is computed by a formula based on estimated remaining useful life and estimated replacement cost or deferred maintenance expense of each reserve item. Paragraph (g) then requires the formula to produce a balance where the opening balance plus projected annual inflows over remaining useful life is equal to or greater than projected annual outflows.
The waiver vote is easier than a condominium's, and shorter
This is the difference that catches boards moving between chapters. A condominium waives reserves on a majority of the total voting interests. An HOA does not.
Section 720.303(6)(f): after one or more reserve accounts are established, the membership, upon a majority vote at a meeting at which a quorum is present, may provide for no reserves or less reserves than required by this section. If a meeting called to determine whether to waive or reduce reserve funding does not achieve that result, or a quorum is not present, the reserves as included in the budget go into effect. After turnover, the developer may vote its voting interests to waive or reduce reserves. Any vote to waive or reduce is applicable only to one budget year.
Three consequences. First, the vote is a majority of those present at a quorate meeting, which in a 30 percent quorum community can be a small number of owners. Second, failure is the default in the association's favor: no vote, no quorum, or a failed vote all mean the budgeted reserves take effect. Third, it expires annually. A waiver adopted in 2024 does nothing for the 2026 budget, and boards that treat a waiver as permanent accumulate an unfunded position and an unfundable one.
Diversion is the same standard. Section 720.303(6)(h) provides that reserve funds and interest accruing on them remain in the reserve accounts and must be used only for authorized reserve expenditures unless their use for other purposes is approved in advance by a majority vote at a meeting at which a quorum is present. In advance is the operative phrase. Ratifying a diversion after the money has moved is not what the paragraph describes. See annual budget planning for how this sits in the budget calendar.
Where reserves are not fully funded, paragraph (6)(c) requires a conspicuous statement in the financial report, in capital letters, that the budget does not provide for fully funded reserve accounts for capital expenditures and deferred maintenance that may result in special assessments regarding those items. There is a second version of the statement for budgets that provide limited voluntary deferred expenditure accounts subject to funding limits in the governing documents.
Financial reporting: 90, 21 and 120
Section 720.303(7) sets one sequence and one set of thresholds. Within 90 days after the end of the fiscal year, or annually on the date provided in the bylaws, the association must prepare and complete, or contract for the preparation and completion of, a financial report for the preceding fiscal year. Within 21 days after that report is completed or received, but not later than 120 days after the end of the fiscal year or other date provided in the bylaws, the association must give each member a copy of the report or a written notice that a copy is available on request at no charge.
The level of report is set by total annual revenues, with one override:
| Total annual revenues | Report required |
|---|---|
| Less than $150,000 | Report of cash receipts and expenditures |
| $150,000 to less than $300,000 | Compiled financial statements |
| $300,000 to less than $500,000 | Reviewed financial statements |
| $500,000 or more | Audited financial statements |
| At least 1,000 parcels, any revenue | Audited financial statements |
The 1,000 parcel override is the provision most often missed in large master associations that run lean budgets. Revenue does not save you: at 1,000 parcels the statute requires an audit notwithstanding total annual revenues.
Members have a say in the level. If 20 percent of the parcel owners petition the board for a level of financial reporting higher than the section requires, the association must notice and hold a meeting of members within 30 days of receiving the petition to vote on raising the level of reporting. There is also a limit on repeating a reduced level in consecutive fiscal years, which should be checked against the specific paragraph before a board votes one in. Our guide to reviewing association financial reports covers what a director should be reading in each of these.
Capital contributions have no statutory home
Boards ask about this every year, usually after a sale closes and the buyer disputes the charge. Chapter 720 does not authorize a capital contribution, a working capital contribution, an initiation fee or a transfer fee. Section 720.308 has not been amended since Ch. 2007-173, and its only reference to a capital contribution appears in the developer guarantee provisions, stating that any portion of the parcel assessment budgeted for designated capital contributions may not be used to pay operating expenses.
What section 720.308(1) does say, for any community created after October 1, 1995, is that the governing documents must describe the manner in which expenses are shared and specify the member's proportional share, and that assessments levied under the annual budget or a special assessment must be in the member's proportional share as described in the governing documents.
So the authority for a one time charge on sale has to be in the declaration, and it has to be drafted to survive being read as an assessment outside the proportional share rule. Chapter 718 by contrast caps a condominium transfer fee at section 718.112(2)(k). Chapter 720 has no cap because it has no authorization. Our page on capital contributions and owner charges takes up the drafting and the collection question.
Estoppel certificates, unchanged since 2017
Section 720.30851 is the HOA estoppel statute and its history line ends at s. 3, ch. 2017-93. Nine sessions have passed it.
- Delivery is due within 10 business days after receiving a written or electronic request.
- A certificate hand delivered or sent by electronic means has a 30 day effective period. One sent by regular mail has a 35 day effective period.
- The preparation and delivery fee may not exceed $250 where no delinquent amounts are owed.
- If a delinquent amount is owed for the parcel, an additional fee of up to $150 may be charged.
- For delivery within 3 business days, an additional fee of up to $100 may be charged.
Those figures are statutory maximums and are subject to adjustment provisions in the section, so a management agreement that sets a higher flat fee should be reviewed. An estoppel that goes out late or wrong is a title problem rather than a governance problem, which is why it tends to surface at the worst moment in a closing.
What to confirm before the next budget
- Check whether reserves were ever established under section 720.303(6)(d), and if so, which components the approving action designated.
- If reserves are established, confirm the waiver or reduction vote was taken for this budget year, at a quorate meeting, and that it was not carried forward from a prior year.
- Confirm the conspicuous statement in section 720.303(6)(c) appears in the financial report where reserves are not fully funded.
- Set the financial report calendar to 90, 21 and 120 days. Remove any 180 day reference.
- If the community has at least 1,000 parcels, confirm the report is an audit regardless of revenue.
- Confirm any capital contribution charged on sale is authorized in the declaration, not in a policy or a management agreement.
For a community facing a large deferred maintenance item with no reserves, the alternative is a special assessment and the timing of one is a planning problem, not a vote problem. See special assessment planning.
Frequently Asked Questions About HOA Reserve and Financial Changes
Are reserves mandatory for a Florida HOA?
Not by default. Section 720.303(6)(b) says the budget may include reserve accounts. They become mandatory once established, which under paragraph (6)(d) happens on the affirmative approval of a majority of the total voting interests, by vote at a duly called meeting or by written consent. Reserves established by the developer before turnover raise a separate question that depends on the declaration and the developer's budgets.
What vote waives HOA reserves?
A majority vote at a meeting at which a quorum is present, under section 720.303(6)(f). That is a lower bar than the condominium rule, which requires a majority of the total voting interests. The waiver applies to one budget year only. If the meeting fails to reach that result, or a quorum is not present, the reserves as included in the budget go into effect.
Can we use reserve money for something else?
Only with advance approval by a majority vote at a meeting at which a quorum is present, under section 720.303(6)(h). Reserve funds and the interest on them must otherwise remain in the reserve accounts and be used only for authorized reserve expenditures. Approving the diversion after the money has already been spent is not what the paragraph provides for.
Is our financial report due in 120 days or 180?
120 days for an HOA, under section 720.303(7). The report must be prepared within 90 days after fiscal year end and delivered within 21 days of completion, and in no event later than 120 days after year end. The 180 day window came from HB 913 in 2025 and applies only to condominiums under section 718.111(13). Cooperatives are also still at 120 days.
Does our HOA need an audit?
If total annual revenues are $500,000 or more, yes. Separately, an association with at least 1,000 parcels must prepare audited financial statements regardless of revenue. Below those thresholds the level runs by revenue, from a report of cash receipts and expenditures under $150,000 up through compiled and reviewed statements. Twenty percent of parcel owners may petition to raise the level.
Can we charge a capital contribution when a home sells?
Only if your declaration authorizes it. Chapter 720 does not. Section 720.308 has not been amended since 2007 and contains no authorization for a capital contribution, working capital contribution or transfer fee, and the only mention of the term sits inside the developer guarantee provisions. Charges of this kind should be reviewed against the declaration before they are billed.
Contact Hamilton Mikes
Hamilton Mikes advises homeowners and master association boards in Lee, Collier and Charlotte Counties on reserves, budgets, financial reporting obligations and the charges an association may lawfully impose on a sale. Call 239-594-7227 or visit our Budgeting and Financial Reporting page.
Statutes and authorities referenced
- § 720.303(6)(b), Fla. Stat. (the budget may include reserve accounts for capital expenditures and deferred maintenance)
- § 720.303(6)(c), Fla. Stat. (conspicuous statements where reserves are not fully funded or are limited voluntary accounts)
- § 720.303(6)(d), Fla. Stat. (reserves deemed provided for on approval of a majority of the total voting interests; designation of components)
- § 720.303(6)(e), (6)(g), Fla. Stat. (reserve formula; remaining useful life and replacement cost)
- § 720.303(6)(f), Fla. Stat. (waiver or reduction by majority vote at a meeting at which a quorum is present; one budget year; default to budgeted reserves on failure)
- § 720.303(6)(h), Fla. Stat. (use of reserve funds for other purposes only on advance approval by majority vote at a quorate meeting)
- § 720.303(6)(i), Fla. Stat. (developer not required to include reserves while in control)
- § 720.303(7), Fla. Stat. (financial reporting; 90 days, 21 days, 120 days; revenue tiers; audit at 1,000 or more parcels; 20 percent petition and meeting within 30 days)
- § 720.308, Fla. Stat. (assessments and charges; proportional share; developer guarantees; not amended since Ch. 2007-173)
- § 720.30851, Fla. Stat. (estoppel certificates; 10 business days; 30 and 35 day effective periods; $250, $150 and $100 fee caps; not amended since Ch. 2017-93)
- § 718.111(13), § 719.104(4), Fla. Stat. (comparison of financial report deadlines; 180 days is condominium only)
- § 718.112(2)(f), § 718.112(2)(g), Fla. Stat. (condominium reserves and SIRS; $25,000 threshold; loan and pause provisions)
- § 718.112(2)(e)2.a., Fla. Stat. (condominium 115 percent substitute budget; no Chapter 720 equivalent)
- § 718.112(2)(k), Fla. Stat. (condominium transfer fee cap; no Chapter 720 equivalent)
- § 553.899, Fla. Stat. (milestone inspections; not limited by association type)
- Session laws: Ch. 2022-269 (SB 4-D); Ch. 2023-228 (CS/CS/HB 919); Ch. 2024-202 (HB 59); Ch. 2024-221 (CS/CS/HB 1203); Ch. 2025-6; Ch. 2025-175 (CS/CS/HB 913, which did not amend Ch. 720); Ch. 2026-14 (SB 104)