Cooperative Budgets and Reserves: What Chapter 719 Requires of a Florida Co-op Board

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: Cooperatives

A Florida cooperative budgets under section 719.106(1)(e) and (1)(j), not under Chapter 718. The rules look familiar to anyone who has sat on a condominium board, but the dates, the reporting deadlines and the reserve waiver rules are their own. The board proposes a detailed budget, gives 14 days' notice, adopts it at an open meeting, and funds reserves for a statutory list of items. What has changed most in the last three years is how little of that reserve funding a board can still vote away.

What the budget has to contain

Section 719.106(1)(k) sets the content standard in one sentence: the proposed annual budget of common expenses must be detailed and must show the amounts budgeted by accounts and expense classifications, including, where applicable, the expenses listed in section 719.504(20). The same subparagraph sets the adoption deadline. The board must adopt the annual budget at least 14 days before the start of the association's fiscal year.

"Detailed" is doing real work there. A one-page summary showing total operating, total reserves and total revenue does not satisfy the statute. The budget needs line items an owner can read against the prior year, and it needs a separate reserve schedule showing each reserve component. Boards that present a summary at the meeting and promise the detail later have adopted a budget that an owner can credibly attack.

Common expenses themselves are defined at section 719.107: the expenses of operation, maintenance, repair or replacement of the cooperative property, the costs of carrying out the powers and duties of the association, and any other expense designated as a common expense by Chapter 719 or by the cooperative documents. That last clause is why the documents matter as much as the statute when you are deciding whether something belongs in the budget.

Notice, the meeting, and the affidavit

Under section 719.106(1)(e)1., the board must mail, hand deliver or electronically transmit to each unit owner, at the address last furnished to the association, a meeting notice and a copy of the proposed annual budget, not less than 14 days before the meeting at which the budget will be considered.

The statute then adds a step condominium practitioners sometimes miss when they move to a co-op file. Evidence of compliance with the 14-day notice must be made by an affidavit executed by an officer of the association, the manager, or the other person who provided the notice, and that affidavit must be filed among the official records. If the affidavit is not in the records, the association has no easy proof that notice went out, and the budget is exposed.

The budget meeting is a board meeting and is open to owners. Our guide to cooperative board meeting requirements covers the separate notice and posting rules that apply to it.

The 115 percent rule and the substitute budget

If an adopted budget requires assessments in any fiscal or calendar year exceeding 115 percent of the assessments for the preceding year, section 719.106(1)(e) gives owners a check. On written application of 10 percent of the voting interests, the board must call a special meeting of the unit owners within 30 days, on not less than 10 days' written notice to each owner, to consider a substitute budget.

The 115 percent computation is narrower than boards assume. The statute excludes from the calculation any authorized provision for reasonable reserves for repair or replacement of the cooperative property, anticipated expenses not expected to be incurred on a regular or annual basis, insurance premiums, and assessments for betterments to the cooperative property.

For a Southwest Florida co-op, those exclusions matter enormously. A budget that doubles because of a windstorm premium and a new roof reserve may not trigger the substitute-budget right at all. Run the computation before the meeting and put the arithmetic in the packet, because it is the first thing an unhappy owner will ask about.

Reserves: what the budget must fund

Section 719.106(1)(j)2.a. requires the budget, in addition to annual operating expenses, to include reserve accounts for capital expenditures and deferred maintenance. Three items are named in the statute:

• Roof replacement.
• Building painting, whether or not the painting is a deferred maintenance expense or a capital expenditure.
• Pavement resurfacing, on the same basis.
• Any other item for which the deferred maintenance expense or replacement cost exceeds $25,000, or the inflation-adjusted amount determined by the Division, whichever is greater.

The $25,000 figure was raised from $10,000 by HB 913 in 2025, and the Division adjusts it for inflation and publishes the adjusted amount. Use the Division's current figure rather than the number in the statute if the Division's figure is higher.

The reserve amount for each item is computed using the item's estimated remaining useful life and estimated replacement cost or deferred maintenance expense. Where the association is required to have a structural integrity reserve study, that study supplies those numbers, which is why the structural integrity reserve study and the budget are now a single exercise rather than two.

What is left of the reserve waiver

The waiver still exists, but it has been carved down to the point where most residential co-ops cannot use it for the expensive items.

1. The general waiver. Under section 719.106(1)(j)2.b., a unit-owner-controlled association may determine, by a majority vote of the total voting interests, to provide no reserves or less adequate reserves for a fiscal year.
2. Before turnover. A developer-controlled association may not vote to waive or reduce reserves before turnover under section 719.301.
3. The carve-out that matters. Section 719.106(1)(j)2.c. provides that for a budget adopted on or after December 31, 2024, a unit-owner-controlled association that must obtain a structural integrity reserve study may not determine to provide no reserves, or reserves less adequate than required, for the items listed in paragraph (k). Those are the roof, the structure and load-bearing elements, fireproofing and fire protection systems, plumbing, electrical, waterproofing and exterior painting, windows and exterior doors, and any other item over the threshold whose failure would affect one of those.

Two relief valves remain. Section 719.106(1)(j)3. allows reserves to be funded by regular assessments, special assessments, a line of credit or a loan, and allows a unit-owner-controlled association required to have a study to borrow for capital expenses required by a milestone inspection or by the study. And for budgets adopted through December 31, 2028, an association that has completed a milestone inspection may pause or reduce reserve contributions for no more than two consecutive budget years. There is also a narrow pause during a declared natural emergency where a local official has determined the building to be uninhabitable.

What a cooperative budget carries that a condominium budget does not

In a cooperative the association holds legal title to the real property. Owners hold shares in the association plus a proprietary lease or other muniment of title. That ownership structure changes what can appear in the budget, and it is worth being precise about which differences are real.

An underlying blanket mortgage or ground lease is an association obligation. If the cooperative property is encumbered by a blanket mortgage in the association's name, or if the association holds the land under a ground or recreation lease, the debt service or the rent is an association-level cost funded through assessments on every owner. A condominium association has no analogue to this. Section 719.104(7) gives the association the power to purchase land or a recreation lease, with the vote the documents require, and section 719.112 creates a rebuttable presumption of unconscionability for certain long-term leases. Where such an encumbrance exists, it belongs in the budget as its own line and should be described in the proprietary lease and the offering materials.

Real property taxes usually are not. This is the point boards and even some practitioners get backwards, because the New York cooperative model works the other way. Section 719.114 provides that ad valorem taxes and special assessments by taxing authorities are assessed against the cooperative parcels and not upon the cooperative property as a whole. Each owner is taxed on their own parcel and pays the county directly. Do not budget for the community's property taxes unless your association's particular circumstances put them at the association level, which is the exception rather than the rule.

Section 719.114 carries a second point worth knowing. Contractual provisions relating to a cooperative parcel that has been sold for taxes or special assessments survive and are enforceable after issuance of a tax deed. A tax deed purchaser does not take free of the cooperative documents.

Financial reporting tiers and deadlines

Section 719.104(4) sets the year-end reporting obligation. Within 90 days after the end of the fiscal or calendar year, or annually on the date provided in the bylaws, the board must prepare and complete, or contract with a third party to prepare and complete, a financial report for the preceding year. Within 21 days after the report is completed or received, but no later than 120 days after year end, the association must give each member a copy or a written notice that a copy is available on request at no charge.

The level of report depends on total annual revenues:

A majority of the voting interests present at a duly called meeting may vote to waive the compilation, review or audit requirement for a fiscal year and accept a lower level of reporting. During developer control the developer may vote to waive the audit for the first two years.

Note the 120-day outside date. HB 913 extended the condominium delivery window to 180 days, and that change did not carry over to Chapter 719 as the section currently reads. A management company running one calendar for both property types will deliver a co-op report late. Our guide to reading an association financial report covers what the board should be looking for once the report arrives.

Assessment frequency and the Division online account

Section 719.106(1)(g) requires assessments to be made against unit owners not less frequently than quarterly, in an amount no less than is required to provide funds in advance for all anticipated current operating expense and for all unpaid operating expense previously incurred. A board that stops assessing because the association is sitting on cash is not following the statute, and it is also setting up the cash-flow gap that leads to a mid-year special assessment.

Separately, section 719.501(3) requires every cooperative association to create and maintain an online account with the Division of Florida Condominiums, Timeshares, and Mobile Homes, and to keep its contact, building and assessment information current there. The Division may also request the structural integrity reserve study through that account. The obligation is easy to satisfy and easy to forget; put it on the same annual calendar as the budget and the financial report. Our annual budget planning guide sets out the sequence.

Contact Hamilton Mikes

Hamilton Mikes works with cooperative boards and managers across Lee, Collier and Charlotte Counties on budget adoption, reserve funding and waiver analysis, and the reporting deadlines that follow. Call 239-594-7227 or visit our Budgeting and Financial Reporting page.