Florida Condo Reserves & Assessments Explained

Buying a condo in Pompano Beach is exciting, but your real monthly cost is more than a mortgage and HOA dues. Reserves, milestone inspections, and special assessments can change your budget and even your financing options. If you understand how these pieces work in Florida, you can buy with more confidence and fewer surprises. This guide breaks it all down and shows you exactly what to review before you make an offer. Let’s dive in.

Florida rules at a glance

Florida condominiums are governed by the Florida Condominium Act, often called Chapter 718. You can find statute text on the Florida Legislature site by searching the Florida Condominium Act (Chapter 718, Florida Statutes). The Florida Department of Business and Professional Regulation oversees condos statewide and publishes consumer information and forms through the Florida DBPR condominium division.

Local governments, including Broward County and the City of Pompano Beach, handle building codes, permits, and inspection enforcement. After the 2021 Surfside tragedy, state and local rules increased scrutiny of older buildings, especially on structural safety. You should plan to check with Broward County building services for any local inspection requirements or records tied to your prospective building.

What condo reserves are

Reserve funds are set aside by the association for major repairs and future replacement of big-ticket items. Think roof replacement, exterior painting, structural repairs, pool resurfacing, and other building systems that wear out over time. Healthy reserves reduce the chance of surprise special assessments and support stable property values.

Associations typically budget for reserves each year, sometimes using a professional reserve study to guide funding levels. Florida law addresses reserve accounting and disclosures, and associations provide reserve information in resale or estoppel certificates. You have the right to review budgets, financials, reserve balances, and certain records before you close.

How to judge reserves

When you review a condo, look for practical signs that reserves are on track:

• A recent reserve study by a qualified professional.
• Clear reserve balances and a funding schedule showing contributions over time.
• Notes on planned capital projects and how they will be paid for.
• A history of frequent or large special assessments, which can signal underfunding.
• CPA or auditor comments in financials that flag weaknesses or shortages.

Low reserves often lead to special assessments, tighter lender scrutiny, and potential insurance challenges. If you are an investor, reserve shortfalls can hit cash flow and reduce returns when a project needs work.

Milestone inspections in Broward

In Florida, many older multiunit buildings face required structural or milestone inspections. These inspections are typically completed by licensed engineers and focus on structural integrity and major repair needs. Local governments set timing and reporting rules, and they may require follow-up plans if deficiencies are found.

For a Pompano Beach purchase, confirm whether the association has completed any required milestone inspections. Ask for engineering reports, permits, meeting minutes, and any budget plans tied to repairs. You can also verify local rules and records with Broward County building services, and check association communications for updates on timelines and funding.

Special assessments and your budget

A special assessment is a charge the association levies in addition to regular dues. It helps cover unplanned expenses, large repairs, or projects when reserves and the operating budget are not enough. Common triggers include structural issues, damage, insurance shortfalls, or big capital projects.

The process for approving an assessment depends on the association’s governing documents and Florida law. Boards may approve assessments, sometimes with a member vote, and some associations borrow funds for large projects. Loans usually show up as ongoing debt-service assessments until paid off.

Here is a simple way to model cost:

• Per-unit share = total special assessment multiplied by your unit’s percentage interest (or as defined by the declaration).
• Monthly impact if paid over time = per-unit share divided by the number of months, plus any association interest.

Example: If your share is $12,000 and the association offers a 24-month plan, your added monthly cost is $12,000 divided by 24, which equals $500 per month, plus any interest the association charges.

Financing and insurance impact

Lenders will review project health before approving your mortgage. Many loan programs look at reserve funding, delinquency rates, pending assessments, insurance coverage, and litigation. If a condo project falls outside program guidelines, certain loans may not be available until issues are resolved. Read more about program standards at HUD condo project approval, Fannie Mae condo project standards, and Freddie Mac condominium requirements.

Insurance costs also affect association budgets and your dues. The master policy’s coverage limits and deductibles matter, especially in coastal markets where premiums can rise. For statewide updates and consumer guidance on property insurance trends, check the Florida Office of Insurance Regulation. Ask for the association’s master policy declarations and talk with your insurance agent about potential coverage gaps.

Document checklist for buyers

Requests before offer or closing

• Declaration, bylaws, articles, and all amendments.
• Current operating budget and prior year budgets.
• Most recent financial statements, preferably audited or CPA compiled.
• Reserve study and current reserve account balances, including line items and the firm that prepared the study.
• Minutes of board and membership meetings for the last 12 to 24 months.
• Notices of any past, proposed, or adopted special assessments, with payment terms.
• Engineering and structural reports, including milestone inspection reports, plus contractor bids or scopes.
• Master insurance declarations, coverage limits, deductibles, and any notices of changes.
• Litigation summary and any legal contingency reserves.
• Estoppel or resale certificate close to closing that shows current assessments, arrears, and special assessment obligations.
• Upcoming meeting notices and packages that may include votes on spending.

Red flags to watch

• No recent reserve study or a reserve balance that does not match known capital needs.
• Frequent or large special assessments in recent years.
• High percentage of owners who are delinquent on dues.
• Pending structural inspections or repairs without a clear plan to fund them.
• Large deductibles or coverage gaps in the master policy.
• Significant or ongoing litigation involving the association or developer.
• Governance changes that reduce member checks and balances.

Budgeting checklist

• Build a conservative monthly budget: mortgage principal and interest, HOA dues, property taxes and insurance, plus a contingency for special assessments.
• Model three scenarios: no assessment, a one-time assessment, and a dues increase.
• Verify your unit’s allocation method, equal shares or percentage interest.
• Confirm if payment plans are offered for assessments and what interest applies.

Contract protections

• Add a contingency to review association documents with the right to cancel if unsatisfactory.
• Require a current estoppel or resale certificate that shows all assessments and arrears before closing.
• If there is an unresolved inspection or structural issue, consider asking for escrowed funds or negotiated seller contributions toward imminent assessments.

Local steps in Pompano Beach

• Contact Broward County building services to check local inspection rules and look up permits tied to major repairs.
• Ask the association or seller for recent milestone inspection reports and any budgets or assessments for remediation.
• Review Broward County public records for recorded documents or liens through the Broward County Clerk of Courts public records.

These steps help confirm a building’s inspection status and whether funding plans are in place.

How this shapes your strategy

If reserves are healthy and milestones are up to date, you reduce your risk of a large surprise bill. If reserves are thin and big projects are coming, price and terms should reflect that reality. Work with your lender early to confirm project eligibility and budget in a cushion for assessments.

When you narrow down buildings, compare their reserve trajectory and inspection results, not just list price and dues. A condo with stable reserves and a clear plan can be the better value over time, even if dues are slightly higher today.

The bottom line

You can buy a Pompano Beach condo with confidence when you know how reserves, milestone inspections, and special assessments affect both your payment and your financing. Ask for the right documents, read them closely, and model your budget across different scenarios. If you want a local, consultative partner to help you review association health and plan a smart offer, connect with Matthew Heinz. Schedule a Free Consultation.

FAQs

What are Florida condo reserves?

• Reserves are association funds set aside for major repairs and replacements, such as roofs and structural work, to reduce the need for surprise special assessments.

How do milestone inspections affect buyers?

• Milestone inspections identify structural needs and can lead to repair plans, permits, and funding decisions that may increase dues or require assessments.

Can a special assessment be charged after I buy?

• Yes. Associations can levy assessments under their governing documents and Florida law, and you are responsible for your unit’s share after closing.

Will a pending assessment affect my mortgage?

• It might. Lenders and loan programs review project health; some will require disclosure, and certain loans may be unavailable until issues are resolved.

How do I verify past assessments and reserve health?

• Request the reserve study, recent financials, meeting minutes, and the estoppel or resale certificate, which disclose balances, assessments, and arrears.