Reserve Fund Rules in Florida, Texas, and Arizona: A State-by-State Comparison

When a resale certificate or disclosure document says an association has $200,000 in reserves, that statement means different things in different states. In Florida, it can be evaluated against a legally required study that quantifies what the building needs. In Texas or Arizona, it is simply a balance without a documented benchmark. The reserve disclosure tells you what the association has. Whether that is adequate depends entirely on what the state requires — and the three states covered here have taken dramatically different approaches.

Florida: The Strongest Reserve Mandate in the Country

Florida's reserve framework is, after the post-Surfside reforms, among the most demanding reserve requirements in the United States for condominium associations.

The foundational obligation is in Chapter 718.112(2)(g) of the Florida Statutes, which requires condominium associations to conduct reserve studies and maintain reserve accounts for major common-element components. This requirement predates the Surfside collapse. What the 2022–2025 legislative wave added on top of it is the Structural Integrity Reserve Study (SIRS) requirement for buildings three stories or higher.

What the SIRS adds. The SIRS requirement, established by SB 4-D (2022) and refined by SB 154 (2023), goes beyond a general reserve study in two important ways. First, it specifies the components that must be covered: roof, load-bearing walls, floor, foundation, fireproofing and fire-protection systems, plumbing, electrical systems, waterproofing and exterior painting, windows, and exterior doors. A general reserve study might omit or underweight some of these; a SIRS cannot. Second, the SIRS must be prepared by a licensed engineer or architect — not an in-house assessment or a financial-only reserve specialist. The structural component of the requirement imports professional engineering into what had previously been primarily a financial exercise.

The waiver prohibition. Before 2022, Florida condominium associations could hold a membership vote to waive or reduce reserve contributions. Many did. The Champlain Towers South association, with roughly $706,000 in reserves against a documented need of approximately $10.3 million — a funded status of approximately 6.9% — is the most prominent example of where that option led. Under the post-SB 154 framework, waivers are no longer available for SIRS-covered components. The funding obligation is mandatory.

Milestone inspections as a complement. The reserve framework operates alongside the milestone inspection requirement: buildings must complete a Phase I milestone inspection at 30 years (25 years within three miles of the coast) and every ten years thereafter. If Phase I reveals substantial deterioration, Phase II is required. The SIRS then translates the inspection findings into a capital plan and funding schedule. The two requirements are designed to work together — the inspection identifies what needs attention, the SIRS quantifies the cost, and the reserve mandate requires the association to fund it.

HB 913 (2025) and the timeline. HB 913 extended some reserve-funding phase-in deadlines by approximately two years while also adding an online-publication requirement for minutes and governing documents. The core mandate — fund the SIRS, complete the inspections — was not changed. For buyers, the HB 913 extensions mean some associations may still be in a phase-in period for full SIRS funding, but they are on a legally required path to compliance.

The Florida SIRS article and the Florida condo safety laws timeline cover these requirements in full detail.

Texas: No Reserve Requirement

Texas has no statutory requirement for condominium associations to conduct reserve studies or maintain reserve funds at any particular level. This is stated plainly in the research underpinning this article and confirmed by practice: the Community Associations Institute, which tracks state reserve requirements, identifies Texas as having no mandatory reserve-study requirement.

What Texas disclosure provides. Chapter 82 of the Texas Property Code — the Uniform Condominium Act — governs condominium transactions and resale disclosures. The resale certificate, which was the subject of SB 711's $375 fee cap, discloses the unit's assessment balance and any pending assessments. The association's financials, which SB 711 now requires larger associations to publish online, will include a reserve fund balance line. But the balance is not supported by a documented capital analysis. It reflects what the board has elected to save.

What "voluntary" means in practice. Voluntary reserve funding in Texas is not the same as zero funding. Many Texas associations do maintain reserves, particularly when lender pressure or strong board governance creates an informal standard. Developers sometimes fund initial reserves as part of the transition from developer control to owner control. Some associations maintain reserves at levels that would satisfy conventional financing requirements. But the absence of a legal floor means the range of actual practice is extremely wide. Buyers cannot assume that a reserve balance on a Texas resale certificate represents anything other than what it states.

The lender standard. Conventional financing guidelines impose a reserve-adequacy standard that operates independently of state law. Associations where the reserve contribution represents a very small share of the operating budget may face difficulty qualifying for conventional financing approval. Buyers in Texas should confirm that the association's reserve picture meets applicable financing requirements — a practical constraint that functions somewhat like a reserve standard even in the absence of statutory obligation.

Arizona: Disclosure Without a Mandate

Arizona's approach is a middle position that is sometimes misread. The state imposes a reserve disclosure requirement — ARS 33-1260 requires condominium associations with 50 or more units to disclose reserve balances and any existing reserve study to prospective buyers — but no reserve funding requirement.

What ARS 33-1260 requires. The disclosure obligation is enforceable. Qualifying associations must disclose both the current reserve balance and any reserve study in their possession. The study, if one exists, will contain a recommended funding schedule. The association is not required by ARS 33-1260 to follow that schedule. But the disclosure means a buyer has access to whatever analysis exists, which may include a professional engineer's recommendation that the board has elected not to follow.

The study-optional problem. The disclosure requirement creates a situation where some Arizona associations have reserve studies and some do not. For associations that have commissioned a study, the buyer can evaluate the balance against the study's recommendation. For associations without a study, the disclosure is only a balance — and the balance has no professional benchmark behind it. ARS 33-1260 requires the association to disclose whatever exists; it does not require the study to exist.

The scale threshold. The 50-unit threshold means smaller Arizona associations are not subject to the ARS 33-1260 disclosure requirement at all. Buyers of units in smaller condominium communities may receive no reserve-related disclosure beyond the balance on a resale certificate, unless they specifically request the information.

Side-by-Side: What the Disclosure Actually Means

| | Florida | Texas | Arizona | |---|---|---|---| | Reserve study required? | Yes (SIRS for 3+ story buildings; Chapter 718.112(2)(g) for all condos) | No | No | | Study must be by licensed engineer/architect? | Yes (SIRS requirement) | N/A | Not required | | Reserve funding required? | Yes — waivers prohibited for SIRS items | No | No | | Disclosure to buyers? | Yes — SIRS and reserve balance disclosed | Reserve balance in resale certificate | Yes for 50+ unit associations (balance + any study) under ARS 33-1260 | | Waiver available? | Not for SIRS-covered components | N/A — no mandate to waive | N/A — no mandate to waive |

Implications for Buyers Across State Lines

The comparison has a direct practical implication for how buyers should approach due diligence in each state.

In Florida, the disclosure package should include a current SIRS (not more than three years old for a compliant association), a milestone inspection report, and a reserve balance that can be evaluated against the SIRS funding plan. The analysis is still necessary — a funded-status number in the SIRS tells you exactly where the association stands relative to what it needs — but the legal framework has done some of the structural work for you.

In Texas and Arizona, the analysis begins one step earlier. There may be no study to cross-reference. The reserve balance on the resale certificate is a starting point, not a conclusion. The relevant question is whether the building's age, condition, and capital needs are reflected in the balance at all — and the only way to answer that question is to commission an independent review or engage management in a direct conversation about capital planning.

A separate article covers how to read a reserve study when one is available, including the percent-funded methodology and what the numbers mean in practical terms.

This article compares state statutory frameworks as of mid-2025. It is not legal or financial advice. Reserve adequacy depends on site-specific factors — building age, component condition, remaining useful life of major systems — that vary substantially across individual associations. Buyers with specific concerns about reserve adequacy should consult a community association attorney or a licensed reserve specialist.

Sources

• Florida Statute §718.112 — Bylaws; reserve requirements and SIRS
• CS/CS/SB 154 (2023) — Condominium and Cooperative Associations; SIRS mandate
• Arizona Revised Statutes §33-1260 — Resale of units; reserve disclosure for 50+ unit associations
• Texas Property Code Chapter 82 — Uniform Condominium Act