Strategic Reserve Planning: SIRS, LOC Funding, and New Investment Options – Insights from Association Leadership Webinar Series S6, E8

In the latest episode of Castle Group’s Association Leadership Webinar Series, Season 6, Episode 8, Castle Group recently hosted another insightful episode of the Association Leadership Webinar Series. In this session, industry experts Brian Street, Executive Vice President of Field Operations at Castle Group and Donna DiMaggio Berger, Esq. of Becker & Poliakoff detailed the new responsibilities under Florida House Bill 913 (HB 913), set to take effect on July 1 bill’s significant operational and financial impacts on community associations. Here are the key takeaways: 

1. Email Voting Framework Introduced. Boards can now implement a framework for email voting on association matters, including board elections. Associations that have not adopted online voting must designate a specific email address for ballot submissions. Submitted ballots must include unit number, full name, and a statutory disclaimer informing owners about the waiver of ballot secrecy. The previous requirement to send 14 days’ advance written notice of the meeting at which electronic voting resolution would be considered has been eliminated.  The decision to offer online voting as a voting option for an election is also no longer a board decision alone as owners may petition their board to adopt electronic voting for an election.
2. Physical Presence Required for Membership Meetings. The annual membership meeting and election, if conducted via video conference, now requires a physical quorum of the board to be present at the meeting location. All video conference meetings must also have a physical location and be recorded and posted on the association’s website, and recordings must be maintained as official records.
3. Budgeting Changes: 115% Threshold Rule. If a proposed budget exceeds 115% of the previous year’s budget (excluding insurance, mandatory reserves, and milestone/SIRS costs), boards must present a substitute budget for membership approval which eliminates “discretionary expenditures”. If members do not approve the substitute budget, the original budget takes effect.
4. Mandatory DBPR Registration. By October 1, associations must register with the Florida Department of Business and Professional Regulation (DBPR), disclosing extensive operational and financial details. Updates are required annually and within 30 days of any changes.
5. Structural Integrity Reserve Study (SIRS) Deadline Extended. The deadline for conducting the SIRS has been extended to December 31, 2025. Boards can, with membership approval, temporarily pause SIRS funding for no more than two years only if repairs identified in the SIRS or milestone inspections are underway. A new SIRS must be conducted to resume funding post-pause.
6. Reserve Funding Flexibility.  Boards may now fund reserves through special assessments, budgets, lines of credit, or loans, subject to approval by a majority of the total voting interests. 
7. Reserve Investment Clarifications.  Associations may invest funds in a combination of CDs or deposit accounts without a membership vote. Boards must use best efforts to make prudent investment decisions and cannot delegate responsibility solely to the treasurer.
8. Management Company Licensing Confirmation. Boards are now statutorily required to confirm that their management company or manager holds an active license. Enhanced conflict of interest disclosures apply and management contracts are voidable if these disclosures are not performed.
9. Enhanced DBPR Enforcement. The DBPR has been granted increased authority to investigate compliance with SIRS, milestone inspections, reserves, and recordkeeping. This elevates the importance of meticulous document management and timely updates on association websites.
10. Importance of Board Education. Board members must be fully informed and engaged. Certification requirements include continuing education, especially for HOA boards. Attendance at training sessions and boot camps is strongly recommended for both current and prospective board members.

With substantial regulatory changes and operational complexities, early planning and collaboration among board members, management, legal, and financial advisors are essential for compliance and effective community governance. 

To watch the full webinar, visit https://castlegroup.com/webinar/asl-s6-e8-strategic-reserve-planning-sirs-loc-funding-and-new-investment-options/.