Waiver of Reserves Under New Statutory Requirements

south florida condominium
As we conclude 2023 and go into the new year, many Condominium Associations are consulting with legal counsel as to how to best address the changes in the law with regard to waiving reserves. After December 31, 2024, Condominiums with buildings of three (3) stories or higher will no longer be able to waive or reduce certain types of structural integrity reserves (SIRS) as enumerated under the new law. However, what is often overlooked is the fact that there are other changes to Chapter 718 ("Condominium Act") which affect all Condominium Associations, regardless of the height of the building.
Specifically, under the new law which is currently effective, any Condominium Association which wishes to waive reserves that remain waivable (i.e., Condominiums under three (3) stories or for those Condominiums that are three (3) stories or higher, non-SIRS reserves), such reserves may now only be waived or reduced by a majority vote of the total voting interests of the Condominium. This is a major change from the previous statute which only required a majority of those in attendance in person or by proxy at a duly called meeting to waive reserves, as long as a quorum was established. Now, effective as of October of 2023, alI Condominium Associations attempting to waive reserves that remain waivable, will need to meet the higher threshold of obtaining a majority vote of the entire voting interests.
As such, whether you are a Condominium of three (3) stories or higher, or not, it is important that you consult with legal counsel when attempting to waive or reduce reserves in the future. Additionally, it is likely that your voting materials may need to change and should also be reviewed by counsel accordingly.
Steven G. Rappaport is an Equity Partner in the Community Associations Practice Group. Mr. Rappaport handles transactional matters for the firm’s community association clients, including drafting amendments to governing documents, attending Board meetings and elections, handling covenant enforcement disputes, and providing opinions on all aspects of association issues. Learn more about Steven including how to work with him here: https://ssclawfirm.com/steven-g-rappaport?view=employee&id=18
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