Buying a Condo in Florida: What New Laws, Reserve Requirements, and Lender Rules Mean for Buyers

Florida's condo market looks attractive on paper — lower prices than single-family homes, coastal locations, low-maintenance lifestyle. What's less visible is the financial and legal transformation the market has undergone since 2021, when the Champlain Towers South in Surfside collapsed, killing 98 people.

The legislation that followed has fundamentally changed what it means to own a condo in Florida. Buyers who don't understand these changes are walking into significant financial risk.

What Changed After Surfside: Senate Bill 4-D and HB 913

Florida's legislature responded to Surfside with Senate Bills 4-D and 154, followed by refinements under House Bill 913 (2025). These laws impose mandatory structural inspections, reserve funding requirements, and disclosure obligations on condominium and cooperative associations statewide.

Mandatory Milestone Inspections

Any condominium or cooperative building that is three or more habitable stories in height must undergo mandatory milestone structural inspections:

• Statewide baseline: The initial inspection is due by December 31 of the year the building turns 30 years old (measured from the original Certificate of Occupancy), then every 10 years after.
• Coastal buildings (within 3 miles of the shoreline): Local building departments can lower the trigger to 25 years based on environmental wear from salt air and humidity.

The inspection has two phases:

• Phase 1: A visual examination of major structural components by a licensed architect or professional engineer. If no "substantial structural deterioration" is found, the process ends here.
• Phase 2: Triggered only if Phase 1 finds substantial deterioration. Involves destructive testing, load capacity analysis, and a formal remediation plan.

If a building fails its milestone inspection and has not completed remediation, it presents serious legal, financial, and lender warrantability risks for buyers.

Structural Integrity Reserve Studies (SIRS)

Every condominium association with a building three or more stories tall must commission a Structural Integrity Reserve Study (SIRS) every 10 years. Under HB 913, the initial deadline to complete the first SIRS was December 31, 2025.

The SIRS evaluates eight mandatory structural categories and calculates a reserve funding schedule:

1. Roof systems
2. Load-bearing walls, floors, foundations, and balconies
3. Fireproofing and fire protection systems
4. Plumbing systems
5. Electrical infrastructure
6. Structural waterproofing and exterior painting
7. Windows and exterior doors (the building envelope)
8. Elevators and parking structures

The critical change: effective January 1, 2026, associations are legally prohibited from waiving or reducing reserve funding for structural components identified in the SIRS. Full funding based on the SIRS schedule is mandatory. For decades, condo boards voted to waive reserve contributions to keep monthly HOA fees low — that option is now gone.

What This Means for Buyers: Higher HOA Fees and Special Assessments

The elimination of reserve waivers has created a painful reckoning in Florida's older condo market. Associations that spent years underfunding reserves are now required to accelerate funding to catch up, while simultaneously funding new SIRS requirements.

The consequences:

• Monthly HOA fees have risen dramatically in many older buildings — sometimes doubling or more.
• Buildings with severe deferred maintenance have levied special assessments — one-time charges per unit — ranging from tens of thousands to over $100,000 in extreme cases to fund structural repairs.
• The prohibition on waiving reserves means buyers who purchase in underfunded buildings inherit the funding obligation.

Florida condo values dropped 9.9% statewide in the 12 months ending mid-2025, largely because of these dynamics. The lower purchase prices in older buildings are not necessarily a bargain — they may reflect the market pricing in future assessment risk.

The Fannie Mae Warrantability Problem

Getting conventional mortgage financing for a Florida condo has become significantly more complex. Under Fannie Mae Lender Letter LL-2026-03, underwriting standards for condo projects have been tightened:

• Limited Review is retired (effective August 3, 2026): The simplified review process that allowed high-down-payment buyers to bypass reserve reviews no longer exists. All established condo projects must pass a full review.
• 15% Reserve Funding Mandate (effective January 4, 2027): Association budgets must allocate at least 15% of total annual assessment income to capital reserves. The prior threshold was 10%. Exception: if the association has a qualified independent reserve study completed within three years, and the budget funds the highest recommended allocation from that study.
• Delinquency Limits: If more than 15% of units are 60+ days past due on HOA assessments, the entire project becomes non-warrantable — meaning no conventional Fannie Mae or Freddie Mac financing.
• Deferred Maintenance Ineligibility: Buildings with unresolved critical repairs, evacuation orders, or significant deferred maintenance in primary systems (balconies, elevators, foundations, electrical) are categorized as ineligible for conventional financing.

A non-warrantable condo is not unlendable — but your financing options shrink dramatically. Portfolio lenders and non-QM lenders may still lend, typically at higher rates and requiring larger down payments. And FHA financing for condos requires FHA project approval, which many Florida buildings haven't pursued.

Your 7-Day Review Window

Under HB 913, non-developer resale condo buyers in Florida have 7 days after receipt of all required condominium disclosures to review and, if desired, rescind the contract. The required disclosures include:

• The association's current Structural Integrity Reserve Study (SIRS)
• Any milestone inspection reports
• The current year's budget
• The most recent financial statements and reserve account balances
• Any pending or anticipated special assessments

Use this time. Read the SIRS carefully — specifically the underfunding gap (the difference between what's needed and what's currently in reserves) and the projected assessment timeline. Ask the management company directly whether any special assessments are planned or under discussion. That information may not be in the documents but is legally required to be disclosed.

What to Check Before Making an Offer on a Florida Condo

1. Request the SIRS and milestone inspection report. If the building is 25+ years old and hasn't completed its SIRS or milestone inspection, that's a red flag.

2. Review the reserve balance relative to SIRS requirements. The SIRS should show current reserve balances versus recommended funding levels. A building with 30% or less of required reserves funded is a high-risk purchase.

3. Check HOA fee history and pending increases. Ask for the last three years of meeting minutes. Any board discussion of assessments, special projects, or reserve catch-up funding will appear there.

4. Verify warrantability with your lender. Before you get emotionally invested in a specific unit, ask your lender to check whether the project is currently approved for conventional financing. Some lenders have internal warrantability databases that answer this quickly.

5. Ask about litigation. Any current or recent litigation involving the association must be disclosed in the estoppel certificate. A building in active litigation over construction defects or deferred maintenance issues is complex.

6. Review the estoppel certificate. The estoppel, which the association is required to provide, discloses all outstanding dues, violations, pending assessments, and capital contribution fees owed by the seller. Read it carefully — you're not required to inherit the seller's outstanding balance, but special assessments that the association has not yet formally levied may not appear.

The Market Opportunity (With Eyes Open)

Not every Florida condo is a financial trap. Newer buildings (post-2002 construction), well-funded associations, and non-coastal locations present a different risk profile than a 1975-built beachfront tower. The post-Surfside legislation has been brutal for the latter category — and may have created real value in well-run buildings as prices across the sector have softened.

The key is doing the work. The Florida First-Time Home Buyer Guide includes a condo due diligence checklist built around the SIRS review process, the Fannie Mae warrantability framework, and the seven-day rescission window — so you can evaluate any building systematically before committing.

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