A Structural Integrity Reserve Study (SIRS) provides a financial blueprint for effectively saving and managing funds, ensuring that the necessary capital is available for timely repairs and replacements of critical infrastructure and assets within the development.
Florida Legislature Senate Bill 4-D (SB-4D) sets requirements for condominium and cooperative buildings three or more stories in height in the State of Florida and establishes a statewide inspection program, requiring condominium and cooperative associations to conduct milestone structural inspections and perform Structural Integrity Reserve Studies (SIRS) to ensure that building infrastructure remains safe, operable, and structurally sound. A Structural Integrity Reserve Study (SIRS) is a financial plan used to set aside the appropriate amount of money required for capital repairs and replacements for the development's critical infrastructure and assets.
What are the Fiduciary and Legal Implications?
Effective December 31, 2024, condominium and cooperative associations in the State of Florida must properly fund items identified in the Structural Integrity Reserve Study (SIRS).
It is a breach of a board member or officer’s fiduciary duty if an association fails to complete a Structural Integrity Reserve Study (SIRS). SIRS are required every 10 years and must be retained on record for at least 15 years.
It is a breach of the board member or officer’s fiduciary duty if an association fails to properly fund structural integrity reserves, related to items identified in the Structural Integrity Reserve Study (SIRS).
Using or reducing structural integrity reserve funds is prohibited. Structural integrity reserve funds can only be used for the specific item identified in the Structural Integrity Reserve Study (SIRS).
Failure to comply with SB-4D can result in liability on the part of board members.
Key Components Included in Structural Integrity Reserve Studies (SIRS)
Roofs
Plumbing Systems
Primary structural components
waterproofing and exterior painting
fireproofing and fire protection systems
windows and exterior doors
electrical systems
load-bearing walls
Deferred maintenance expense(s) exceeding $10,000, for which the failure to replace or maintainsuch item(s) negatively impacts any of the aforementioned categories
State of Florida Requirements
The State of Florida requires that a structural integrity reserve study (SIRS) be completed every 10 years. Many variables can alter the study after it is completed which may result in significant underfunding or overfunding of the reserve account. Examples of variables that can change the recommended funding are:
Timing of proposed projects
Maintenance practices of reserve components
Changes in interest rates on invested reserves
Changes in inflationary cost of labor, equipment and materials
Recommendations from Milestone Inspections
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