LACK OF RESERVE FUNDS?
Published November 3, 2023
Whenever you see Op-Eds in the local media in the moment, you
will see their “Editorial Boards” blaming the Legislature for
the financial problems owners of hi-rise condominium units are
I know that many condo owners may not like my opinion, but I
think the Florida Legislature is only partially to blame for the
financial disaster we are going to see in the near future.
The legislators in 2010 listened to the industry
representatives: The Community Association Institute,
many of the so-called “specialized law firms” and
community association managers. They all lobbied heavily against
mandatory reserve funds, claiming it would be a too heavy burden
on the finances of the condo owners. The legislature listened
and enacted a law (with bi-partisan votes), allowing the owners
to vote down fully funded reserves. And many of these owners did
vote down fully funded reserves – as expected. I can fully
understand their motives: It’s a lot more fun to go on a cruise
instead of paying for fully funded reserves.
But the results of this law enacted in 2010 [FS
718.112(2)(f)2.] are now disastrous for many condo
owners: Many associations have no – or barely any -- reserve
funds – and the deadlines for inspections and costly maintenance
and structural repairs ( created by SB 154 ) are getting closer
and closer. Many owners will be forced to sell because they will
be unable to pay for the much increased maintenance fees (or
special assessments) or will in the end face foreclosure on
Allowing owners to vote down fully funded reserves was
short-sighted and many owners will now pay the price: Losing
their home! The folks who lobbied in 2010 against fully funded
reserves are already licking their chops, looking forward to
extra income in late fees, liens and foreclosures.
I know condo owners don’t want to hear it: Owners of single
family homes have to pay as well for many repairs when their
homes are coming of age: New roofs, new air-condition units –
and the long list goes on and on. There is nobody going to help
these owners pay for these costs. That leaves the question: Why
did many unit-owners think that reserve funds for maintenance
and structural repairs were not necessary?
These are the folks I blame for the financial disaster many
hi-rise condominium unit-owners will be facing soon:
The Developers who are keeping the maintenance fees
artificially low in order to sell more high-priced units.
The Realtors, who are telling potential buyers that
condo-living is “EASY LIVING”.
The Community Association Institute members, who rather
wanted the owners’ money in their pockets instead of being
in the reserve funds for necessary maintenance and repairs.
The Florida Legislature for listening to the “industry” in
And last not least: The Unit-owners who voted not to fund
The blame is far spread, but if common sense would have been
used, all these problems could have been avoided.
Now blaming the Florida Legislature is the easy way out. I don’t
want to read the headlines of all these “fancy” media outlets,
if we would be facing another catastrophe like we saw in 2021 in
Surfside when the Champlain Towers South collapsed killing 98
people, because there was no money for desperately needed
structural repairs. Then the same editorial boards would blame
the Legislature for not taking the necessary steps to prevent
such a catastrophe.
Isn’t that the way the media works nowadays?
Jan Bergemann is president of Cyber Citizens For Justice,
's largest state-wide property owners' advocacy group.
CCFJ works on legislation to help owners living in
associations. He moved to
in 1995 - hoping to retire. He moved into a HOA, where the
developer cheated the homeowners and used the association dues
for his own purposes. End of retirement!
CCFJ was born in the year 2000, when some owners met in
- finding out that power is only in numbers. Bergemann was a
member of Governor Jeb Bush's HOA Task force in 2003/2004.
The organization has two websites to inform interested
homeowners and condo owners:
News Website: http://www.ccfj.net/.
Educational Website: http://www.ccfjfoundation.net/.
We think that only owners can really represent owners, since all
service providers surely have a different interest! We are
trying to create owner-friendly laws, but the best laws are
useless without enforcement. And enforcement is totally lacking