No reserve study. No engineer. No mandatory funding. Chapter 720 is a different world, and boards keep assuming it is not.
✓ Reserves are permissive, not required
✓ Established by a majority of total voting interests
✓ Waivable every single budget year
✓ No reserve study required, of any kind
STEP 1
We meet your board
We start with a discovery session to understand your size, needs, and goals. We review past records, current systems, and any lingering messes you want cleaned up.
STEP 2
We Onboard Your Books
We don’t just plug in data. We get everything in sync. That means full reconciliations, setup of vendor and dues tracking, and a financial calendar tailored to your schedule.
STEP 3
We Deliver Every Month
You’ll get board-ready financials on a predictable rhythm, complete with reconciliation notes, variance summaries, and report context. No chasing. No guessing. Always accountable.
STEP 4
We Keep You Compliant
Deadlines, filings, vendor records, audit prep — we make sure your board stays ahead of what matters most. When tax time comes, it’s an easy process because we’ve kept the finances in order.
Reserve planning for Florida homeowners' associations
The absence of a mandate is not the same as the absence of a liability. Chapter 720 does not require an HOA to study its assets, fund them, or keep funding them — but the roof still ages, the pavement still fails, and the bill still arrives. The statute simply leaves the timing of that conversation entirely to the board and the membership.
Ledgerly builds reserve schedules for HOAs on the same discipline a condominium study would apply — component inventory, remaining useful life, replacement cost — and then models what the annual contribution needs to be against what a special assessment would look like if it is deferred. Boards make better decisions with both numbers in front of them, and members vote differently when the alternative is quantified.
7 things HOA boards get wrong about reserves
- 1
Assuming the condominium reserve study rules apply
They do not, at all. No study, no engineer or architect, no statutory component list, no minimum funding floor, no prohibition on waiver, no deadline. If a vendor is selling your HOA a mandatory structural integrity reserve study, ask which statute requires it.
- 2
Not knowing which kind of reserve account you actually have
Statutory reserves under paragraph (d) carry restricted use and a mandatory funding obligation. Voluntary deferred-expenditure accounts carry neither. Find the membership vote that established them, or establish that no such vote exists.
- 3
Forgetting the waiver expires annually
A waiver applies to one budget year. Boards that waived once and stopped calling the vote are budgeting on an authority that lapsed. If the vote is not taken, or fails, or the meeting is inquorate, the budgeted reserves take effect.
- 4
Spending reserve money on something else without the vote
Reserve funds and interest on them stay in the account and may be used only for authorized reserve expenditures unless approved in advance by a majority vote at a quorum meeting. Before turnover, a developer-controlled board needs approval of a majority of all nondeveloper voting interests.
- 5
Expecting the developer to have funded anything
While a developer controls the association it may, but is not required to, include reserves in the budget, and if it does include them it may set the amount. It is not obligated to pay reserve contributions or operating expenses where the declaration substitutes deficit funding. That provision applies to all HOAs existing on or created after July 1, 2021. New boards routinely inherit zero.
- 6
Missing that a developer guarantee changes the answer
Where a developer operates under an assessment guarantee rather than a declaration-based deficit-funding clause, s. 720.308(4)(a) requires it to advance cash sufficient to pay all assessments including the full funding of the reserves unless properly waived. Which regime applies turns on the declaration and the purchase contracts. The two are conflated constantly, and the annual waiver vote is where the difference acquires real financial consequence.
- 7
Believing the disclosure goes on the budget
The prescribed legends attach to the annual financial report, not the proposed budget. Associations copying the condominium approach put them in the wrong document and satisfy neither requirement.
Frequently asked questions — HOA reserves
Does our HOA have to have reserves?
No. Section 720.303(6)(b) is permissive: in addition to annual operating expenses, the budget may include reserve accounts for capital expenditures and deferred maintenance for which the association is responsible.
Note also that subsection (6) is captioned BUDGETS, not reserves. Chapter 720 treats reserves as one optional component of a budget rather than as a regulatory regime.
What are "statutory reserves"?
Chapter 720 recognizes two different kinds of reserve money, and the distinction decides everything else.
Statutory reserves are established under s. 720.303(6)(d) and carry the funding, waiver and restricted-use rules of subsection (6). Once an association provides for them, it must thereafter determine, maintain and waive them in compliance with the subsection — the board has no unilateral power to drop them.
Voluntary deferred expenditure accounts are line items a board simply budgets. Section 720.303(6)(c)2. says expressly that these funds are not subject to the statutory restrictions on use and are not calculated under the statute.
Two accounts can look identical on a balance sheet and be governed by completely different rules. Which one you have depends on how it was created.
How do statutory reserves get established?
An association is deemed to have provided for reserve accounts upon the affirmative approval of a majority of the total voting interests. The approval may come by vote at a duly called membership meeting or by written consent.
The approval must do two things: state that reserve accounts shall be provided for in the budget, and designate the components for which they are established. There is no statutory component list in Chapter 720 — the components are whatever the membership designated.
Once approved, the board must include the reserve accounts in the next fiscal year's budget and each year thereafter.
Reserves may also arrive by being established by the developer, or by being required by the declaration, articles or bylaws.
How easily can they be waived?
Very. And the asymmetry with establishment is the thing to understand.
Establishing statutory reserves takes a majority of the total voting interests. Waiving or reducing them takes only a majority vote at a meeting at which a quorum is present — a much smaller number.
And the waiver applies only to one budget year. It has to be re-taken annually. If the meeting is called and the result is not achieved, or a quorum is not present, the reserves as included in the budget go into effect by default.
After turnover, the developer may vote its remaining voting interests to waive or reduce funding. Chapter 720 imposes no non-developer-majority requirement on the waiver vote.
Can statutory reserves be terminated altogether?
Yes, and this has no condominium counterpart for structural components. Section 720.303(6)(b) provides that nothing precludes the termination of a reserve account upon approval of a majority of the total voting interests, after which the terminating reserve account is removed from the budget.
So the same threshold that creates statutory reserves can dissolve them. Easy in, easier out, and reversible.
What disclosure do we have to give owners?
Two prescribed conspicuous-type legends, and they attach to the annual financial report required by subsection (7) — not to the proposed budget. Chapter 720 has no budget-face reserve disclosure comparable to the condominium regime.
One legend applies where the budget does not provide for statutory reserves and the association is responsible for capital repairs that may result in a special assessment. It tells owners the budget does not provide fully funded reserves, that special assessments may result, and that owners may elect to provide for fully funded reserves on approval of a majority of the total voting interests.
The other applies where the budget funds deferred-expenditure accounts that were not created under paragraph (d). It tells owners those funds are not subject to the statutory restrictions and are not calculated under the statute.
An association with fully funded statutory reserves triggers neither legend.
Quick answers on HOA reserves
How is the reserve amount computed?
By a formula based on the estimated remaining useful life and estimated replacement cost or deferred maintenance expense of each reserve item. The association may adjust replacement reserve assessments annually to reflect changes in cost or useful life. That single sentence is the entirety of the statutory methodology — no prescribed method, no required preparer qualifications, no required inspection.
Can we pool reserves?
Yes. Funding formulas must be based on a separate analysis of each required asset or a pooled analysis of two or more. Chapter 720 imposes no pooling-specific solvency test, unlike the condominium provisions.
Is any Florida HOA required to have a reserve study?
No. Chapter 720 requires no reserve study of any kind. Note this is a statement about state law — a lender, an insurer, or your own governing documents may require one regardless.
Did the 2024 HOA legislation change reserves?
No. The 2024 HOA bill amended s. 720.303, but not the reserve provisions — the text of subsection (6) is identical across the 2023 and 2025 editions. Its financial changes were elsewhere: audited statements for associations with 1,000 or more parcels, the consecutive-year bar on reduced financial reporting, a debit-card prohibition, and owner accounting requests.
Is anything coming?
Nothing enacted. In the 2026 session, seven bills cited s. 720.303 and only a reviser's bill passed. None of the bills that died would have imposed condominium-style reserve requirements on HOAs — the two that touched turnover inspections did so for cooperatives, not for Chapter 720 associations.
Should we fund reserves anyway?
That is a board judgment, not a legal one, and the honest answer is that the statute does not help you make it. What the statute does do is make the alternative visible: the prescribed disclosure for an unreserved budget tells owners in conspicuous type that special assessments may result. Boards that treat that legend as a warning rather than a formality tend to have easier conversations later.
The Truth Is
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