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How to Plan for Aging Infrastructure in Your HOA

As Florida HOAs age, so does their infrastructure. To that end, HOAs need to have a plan for how they will address both ongoing maintenance needs as well as larger infrastructure improvements. This is not only because budget planning for aging infrastructure is a best practice, but it’s also now the law.

Why Structural Integrity Needs to Be Part of Your Reserves

Structural improvements like new roofs or foundational upgrades can take a significant bite out of an HOA’s budget. To ensure adequate funding is available when the time comes for repairs, the Florida legislature recently passed Senate Bill 4-D. 

Several important provisions in the bill are critical for condo associations to know but in terms of planning for structural upgrades, here is what HOAs need to know.

As part of the new law, Florida condo associations will be required to conduct structural integrity reserve studies every 10 years. A structural reserve study includes an inspection of elements including the roof, load-bearing walls and other primary structural members, the floor, foundation, fireproofing and fire protection systems, plumbing, electrical systems, waterproofing and exterior painting, windows, and any other items requiring replacement or repair costs that exceed $10,000.

Once the reserve study is completed by a qualified architect or engineer, the condo association will receive results that detail the following items: 

  • The common areas that were visually inspected
  • Their estimated remaining useful life and the replacement cost or deferred maintenance expense of those areas
  • The recommended annual reserve amount needed to cover the estimated replacement cost of each common area item inspected
How to Budget for Future Infrastructure Expenses

Per the bill, funding reserves is not something unit owners will be able to opt out of. Associations will be required by law to have enough money in reserves to fund all necessary repairs to maintain the structural integrity of their condo building.

The structural reserve study will serve as a guide for how much the HOA needs to allocate to reserves each year, but you should consider all aspects of your budget when making determinations. Review your previous year’s budget to serve as a guide as well as conduct a financial analysis to identify any new financial challenges or opportunities. 

Preparing for your association’s annual budget is a crucial task that requires careful planning and analysis. A well-crafted budget will serve as a roadmap for financial success and ensures the long-term stability of your condominium association. If you have questions about where to start, our team at Dania Fernandez and Associates, P.A. is here to help. Contact us to learn more about how we can assist your Miami condo association. 

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