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Four Common Mistakes To Check For “Reserve Studies”  Used To Increase the Annual Budget For Next Year & Owner Monthly Costs

Owner monthly costs to increase next year are determined in Annual Budget Meetings starting about November 9th in the Phase B Clubhouse of Golden Lakes Village.  The reserve study to be presented in November budget meetings of our condo zones may be the basis used to  increase owner monthly costs – by changes in the Annual Budget to be voted on soon.  The below link to an article describing common mistakes to look for in reserve studies may help owners to also understand proposed budgets better – changes which will shape our future monthly costs.

Four Mistakes To Avoid When Budgeting Reserves, described in this article by a professional reserve specialist and licensed engineer, highlight some of the major mistakes found in prepartion of reserve studies. Reserve studies analyze factors in the community that seem to require increased budgets that then shape increased owner monthly costs.

Please click this below link to view this article, published in the Florida Community Association Journal:

Topics In This Article:

  1. Unrealistic Replacement Cost and/or Useful Life Estimates
  2. Omitting Major Common Elements or Restoration Projects
  3. Inadequate budget disclosures
  4. Not obtaining necessary votes to “pool” or move reserve funds

About The Author: 

Matthew C. Kuisle, P.E., RS, PRA, is a licensed professional engineer, a reserve specialist, and a professional reserve analyst serving as the Director of Florida Client Services for Reserve Advisors, Inc.

For more information, visit

Extra Readings :

1.  An accountant’s overview of reserve study key parts: 

Article by Glenn Tyndall, CPA, Florida

Click Link:

2.  Condo & HOA Common Expenses;  Can the Association Spend Your Money for That? 

Article by law firm of Becker & Poliakoff

Click Link:

3.  Why Full Association Must Fund Reserves – And Provide Complete Financial Disclosures To Avoid State Fines & Penalties

By Donna Dimaggio, Esq., of the Katzman & Berger Law Firm 

Click Link:

4.  General vs. Limited Proxy Forms – Granting Others Broad Rights To Vote In Meetings As They Want For Owners vs. Granting Others Right To Vote Like You Want. 

By State of Florida – Condominium Regulatory Agency 

Before many meetings in the community, owners are asked to sign forms with boilerplate wording that is not explained, for example granting permission for Resident Directors to vote for one at future meetings with a “General” or a “Limited” Proxy.  Such proxy forms simply ask readers to check a box without explanation of the differences.

But – what is the important difference? A general proxy allows others to vote on a wider variety of matters than an owner may realize, not specifically  listed in the form. The State of Florida explains this difference more fully at the following link in item no. 4:

Click Link:

5.  Basics of Funding Condo Reserves – Are reserves required and why? How much must be in reserves? In what form must reserves be held? When must reserves be replenished? How should reserves be “line-itemed” in the budget?

Explanation by Florida Attorney in article published in Sarasota Herald Tribune newspaper

Click Link:


“For a condo, one of the most comprehensive and easily available guides is an 86-page publication of the Florida Department of Business and Professional Regulation, Division of Condominiums, Florida Condominiums, Timeshares and Mobile Homes, titled Budgets and Reserve Schedules — A Self-Study Training Manual. It is available on the Department’s website at

Reserves for deferred maintenance (performed less frequently than yearly, to maintain the asset’s useful life) and capital expenditures (purchasing or replacing assets that have a useful life over one year, or extending the useful life over one year) are required for certain building components, unless the membership votes annually to waive or reduce reserve funding.

Unless properly waived in whole or in part, condominium associations must reserve funds for roof replacement, building painting and pavement resurfacing (all regardless of cost) as well as for any other item for which the replacement or deferred maintenance cost exceeds $10,000.”

See full article at above link.