Budgeting for Structural Repairs: How a Florida Condominium Board Pays for Milestone and SIRS Work

Jason Hamilton Mikes, JD, MBA
Founder & Managing Shareholder

• Published September 25, 2026
• Reviewed by Jason Hamilton Mikes, JD, MBA, September 26, 2026
• Florida Statutes as of July 1, 2026
• Applies to: Condominiums

A milestone inspection and a structural integrity reserve study together tell your board what the building needs and roughly what it will cost. Neither one gives you the money. Florida law leaves the board four sources: regular assessments through the adopted budget, a special assessment, a line of credit or loan approved by a majority of the total voting interests, and a temporary pause in reserve contributions that expires for budgets adopted after December 31, 2028. Most large projects use more than one of them.

Start with the funding schedule, not the repair estimate

The milestone inspection under § 553.899 and the structural integrity reserve study under § 718.112(2)(g) answer different questions. The inspection describes the condition of the building and what has to be repaired. The study says what the association must set aside, for which components, and over what period. Boards usually read the repair estimate first and the funding schedule second. Reverse that order.

The study must identify each item it inspects, state the estimated remaining useful life and replacement cost, and provide a reserve funding plan that reaches that cost within the useful life. It must also consider the funding method the association intends to use, and the statute names them: regular assessments, special assessments, lines of credit and loans. The study is then updated to reflect the method chosen. That is the Legislature telling boards to decide how they are paying while the study is being prepared, not a year later.

The deadlines are fixed and have passed for most communities. Unit-owner-controlled associations existing on or before July 1, 2022 had to complete a study by December 31, 2025 for each building three stories or higher. An association required to complete a milestone inspection on or before December 31, 2026 could complete both at the same time, and the statute says that in no event may the study be completed after December 31, 2026. § 718.112(2)(g)7. Separately, an association that has completed a milestone inspection may delay a required study for no more than the two consecutive budget years immediately following the inspection, so it can put its money into the inspection's repair recommendations first. § 718.112(2)(g)9. Those provisions do different work and boards confuse them. Our guides to the structural integrity reserve study and to milestone inspection requirements cover each document on its own.

Within 45 days after receiving the study, the association must distribute a copy to each unit owner or deliver a notice that it is available for inspection and copying. § 718.112(2)(g)11. Plan on the number becoming community knowledge. A board with a funding plan ready when the study goes out has an easier meeting.

Which reserve lines the membership may not touch

The annual budget must include reserve accounts for capital expenditures and deferred maintenance. Three components are required regardless of cost: roof replacement, building painting and pavement resurfacing. Beyond those, a reserve account is required for any item with a deferred maintenance expense or replacement cost of $25,000 or more, or the Division's inflation-adjusted amount if that is greater. § 718.112(2)(f)2.a. HB 913 raised that figure from $10,000 in 2025. The Division adjusts it annually using the January Consumer Price Index and posts the current number. § 718.112(2)(f)6.

The required amount is computed by a formula based on the estimated remaining useful life and the estimated replacement cost or deferred maintenance expense of each item, and for an association required to have a reserve study, on the findings and recommendations of the most recent study.

Here is the line that matters most at a budget meeting. The members of a unit-owner-controlled association may determine, by a majority vote of the total voting interests, to provide no reserves or less reserves than the statute requires. That is the discretionary half. The mandatory half is the carve-out in the same provision: an association required to obtain a structural integrity reserve study may not vote to provide no reserves or reduced reserves for the items listed in paragraph (g). § 718.112(2)(f)2.b. So the roof, the load-bearing structure, fireproofing, plumbing, electrical, waterproofing and exterior painting, windows and exterior doors, and any other paragraph (g) item get funded whether or not the membership wants to fund them.

Reserve funds and the interest on them stay in the reserve accounts and may be used only for authorized reserve expenditures unless another use is approved in advance by a majority vote of all the total voting interests. § 718.112(2)(f)3. Accounts may be pooled for two or more required components, but paragraph (g) components may be pooled only with other paragraph (g) components. § 718.112(2)(f)4. Only the voting interests of units subject to assessment for those reserves may vote on waiving, reducing or alternative use, which matters in a multicondominium. § 718.112(2)(f)5.

Our guide on reserve funding requirements covers computing, pooling and voting on reserves. What follows is what a board does once it knows the number and knows it cannot vote the number away.

The four ways to pay, side by side

Every structural funding plan is some combination of these four. What matters is who approves it, how fast the money arrives, and what strings attach.

A fifth option exists in a narrow case. If the local building official determines that an entire condominium building is uninhabitable because of a natural emergency, the board may pause or reduce reserve funding and may spend reserve funds to restore habitability, with contributions resuming when the official determines the building is habitable. § 718.112(2)(f)2.d. That is a hurricane provision, not a budget tool.

The line of credit or loan under § 718.112(2)(f)2.c.(II)

This is the newest of the four and the least understood. A unit-owner-controlled association that must have a structural integrity reserve study may obtain a line of credit or a loan to fund capital expenses required by a milestone inspection or by the reserve study, on approval of a majority of the total voting interests. The statute attaches conditions boards should read before shopping for terms.

• The amount is not open-ended. The line of credit or loan must be sufficient to fund the cumulative amount of any previously waived or unfunded portions of the required reserve funding and of the most recent structural integrity reserve study. A board cannot borrow a fraction and call the reserve obligation satisfied.
• The funds must be immediately available to the board. The money must be accessible to fund required repair, maintenance or replacement expenses without further member approval. Do not accept a facility whose draw conditions require another owner vote.
• It must be disclosed. The arrangement goes into the annual financial statement delivered to owners under § 718.111(13) and into the disclosures provided to prospective purchasers under § 718.503.
• It is not available to everyone. The provision does not apply to an association controlled by a developer, an association in which the nondeveloper unit owners have been in control for less than one year, or an association controlled by one or more bulk assignees or bulk buyers.

One practical point. Association lending in Florida is normally secured by an assignment of the right to levy and collect a special assessment, so the owner vote authorizing the loan and the board action levying the pledged assessment are usually taken together. Borrowing also shifts the cost of today's repair onto whoever owns the unit when the payments come due, which is a choice the board should record in the minutes.

The temporary pause and the date it ends

For a budget adopted on or before December 31, 2028, an association that has completed a milestone inspection under § 553.899 within the previous two calendar years may, on approval of a majority of the total voting interests, temporarily pause reserve fund contributions or reduce the amount of reserve funding, for no more than two consecutive annual budgets, for the purpose of funding repairs recommended by the milestone inspection. § 718.112(2)(f)2.e.

Each condition is a place a board can go wrong. The milestone inspection must be complete, and complete within the previous two calendar years. The pause requires a majority of the total voting interests, not a majority of those present or voting. It runs for no more than two consecutive annual budgets. The same exclusions apply as for the loan: developer control, less than one year of nondeveloper control, and bulk assignee or bulk buyer control.

The December 31, 2028 date is a sunset on the tool, not on the repair obligation. A board that pauses for the 2027 and 2028 budgets is back to full reserve funding for 2029 with the same building and a larger backlog.

Sequencing: fund the work before you sign for it

The most expensive mistake is not choosing the wrong funding method. It is committing the association to the work before the money exists. A phase two milestone report starts a clock: repairs must commence within 365 days of the report under § 553.899. That clock creates pressure to sign something, and contractors know it. A workable order of operations:

1. Get the milestone report and the reserve study, and have counsel and the engineer turn them into a scope of work with a cost range, not a single number.
2. Decide the funding mix and price each piece: what the reserves hold, what a special assessment would have to be, what a loan would cost, whether a pause applies.
3. Solicit bids. A contract for materials, equipment or services exceeding 5 percent of the total annual budget including reserves must be in writing and competitively bid under § 718.3026(1). The association need not take the lowest bid.
4. Take the owner vote the funding method requires, if any, before the board signs. A loan and an alternative use of reserve funds each need a majority of the total voting interests.
5. Levy the assessment or close the loan, then execute the construction contract, with its payment schedule matched to the funding schedule rather than the contractor's preference.
6. Document it. Put the engineer's recommendation, the bids, the vote tallies and the funding math in the board packet and the minutes.

Where the schedule will not allow that order, the answer is usually a conditional agreement: a contract whose obligation to proceed is expressly contingent on the funding vote or the loan closing, with a defined date and a limited pre-construction scope the association can afford now. That is a drafting problem worth the legal fee. Our guide to major repair projects covers the contract side.

Getting the number into the budget without tripping the 115 percent rule

Any meeting at which a proposed annual budget will be considered must be open to all unit owners. At least 14 days before it, the board must hand deliver, mail, or electronically transmit to each owner a notice of the meeting and a copy of the proposed budget, and the person providing the notice must execute an affidavit of compliance that is filed in the official records. § 718.112(2)(e)1. That affidavit is the evidence that saves the budget if the adoption is challenged.

If the proposed budget requires assessments exceeding 115 percent of assessments for the preceding fiscal year, the board must simultaneously propose a substitute budget containing no discretionary expenditures, present it at the budget meeting before adoption, and give owners the chance to adopt it. It is adopted only if approved by a majority of all voting interests, or a greater percentage if the bylaws require one. If owners do not adopt it, the board's proposed budget may be adopted. § 718.112(2)(e)2.a.

Here is the part that surprises boards in a structural repair year, usually in a good way. The 115 percent calculation excludes any authorized provision for required reserves for repair or replacement of the condominium property, excludes anticipated expenses the board does not expect to incur on a regular or annual basis for the repair, maintenance or replacement of the paragraph (g) items, and excludes insurance premiums. § 718.112(2)(e)2.b. A budget that jumps sharply because reserve funding for structural components went up may not trigger the substitute budget requirement at all. Run the calculation with the exclusions applied and keep the worksheet. If a developer still controls the board, assessments may not exceed 115 percent of the prior year without approval of a majority of all voting interests. § 718.112(2)(e)2.c.

Funding structural work through reserves and regular assessments spreads the cost. A special assessment gets cash faster but restricts what the money may be spent on. Most boards that handle this well use both and explain the split to owners before the vote.

Contact Hamilton Mikes

Hamilton Mikes helps condominium boards in Lee, Collier and Charlotte Counties turn a milestone report and a reserve study into a funding plan that holds up: the owner votes, the assessment resolutions, the loan documents and the construction contracts, in the right order. Call 239-594-7227 or visit our Budgeting and Financial Reporting page.