Thinking about a condo in Boca Raton or Delray Beach and wondering what “reserves” and “SIRS” really mean for you? You are not alone. These reports can look technical, but they directly affect your monthly costs, your risk of special assessments, and your peace of mind.
In this guide, you will learn what condo reserves and Structural Integrity Reports (often called SIRS) are, how to read them, and how they influence value in southern Palm Beach County. You will also get a practical checklist you can use before you make an offer. Let’s dive in.
Condo reserves, simply explained
Condo reserves are the association’s savings for major repairs and replacements. Think roofs, elevators, exterior painting, waterproofing, pool and parking decks, and common-area HVAC. These are different from the operating budget, which covers day-to-day costs like landscaping, utilities, and management.
When reserves are funded properly, you are less likely to face sudden special assessments. When they are underfunded, the board often has to raise monthly dues or levy an assessment when big work is needed.
What SIRS are and why they matter
A Structural Integrity Report, or SIRS, is an engineering assessment focused on the building’s structural elements and safety conditions. It looks at concrete condition, load-bearing systems, foundations, balconies, exterior walls, and waterproofing that protects the structure.
After the 2021 Surfside tragedy, Florida and some counties increased structural inspection and reporting requirements for certain buildings. Rules continue to evolve, and practices may vary by building height, age, and location. In real life, SIRS often surface immediate or near-term capital needs that a general reserve study might not fully capture. Lenders, insurers, building departments, and buyers use SIRS to evaluate structural risk.
How to read reserve studies
A solid reserve study will include:
- Inventory of major components. Confirm roofs, elevators, exterior painting, waterproofing, garages, and decks are included.
- Remaining useful life and anticipated replacement year. Short windows mean higher near-term costs.
- Current reserve balance and 3–5 year trend. A declining or flat balance with aging components signals pressure ahead.
- Recommended annual contribution and funding method. Compare the recommended number to what the budget actually contributes.
- Percent Funded or Funding Ratio. This snapshot shows how well the reserves match the fully funded target. Higher is better.
- Assumptions and cost escalation. Note inflation or construction cost assumptions.
- Exclusions or qualifiers. Watch for items excluded from reserves or treated as operating expenses.
Reserve metrics to focus on
- Percent Funded. Lower ratios often mean higher assessment risk, especially in older or coastal buildings.
- Contribution gap. If the budget’s reserve contribution is well below what the study recommends, underfunding is likely.
- Special assessment history. Frequent or large assessments hint at deferred maintenance and future risk.
- Dues trend vs. plan. Sharp recent increases without a clear capital plan deserve questions.
How to read a SIRS
A useful SIRS will spell out:
- Scope of inspection. What was inspected, and how comprehensive was it?
- Immediate safety issues. Items that need emergency action should be clearly flagged.
- Short-term capital needs. Repairs likely within 1–5 years matter for your near-term costs.
- Long-term recommendations. Structural work beyond 5 years helps with planning.
- Identified causes. For example, corrosion or water intrusion and the proposed fix.
- Cost estimates and phasing. Look for confidence levels and contingencies.
- Monitoring and follow-up. Recommendations for future inspections show a proactive plan.
SIRS red flags to watch
- Immediate multi-million-dollar repair recommendations without funding in place.
- Low reserve balances paired with near-term structural work.
- Board minutes referencing emergency repairs, litigation over building condition, or deferred maintenance.
What it means for your monthly costs
Your monthly HOA dues include operating expenses plus a reserve contribution. When reserves are low and significant work is coming, boards raise reserve contributions or issue assessments. A few simple concepts help you estimate impact:
- Monthly reserve contribution per unit = Annual recommended reserve contribution ÷ number of units ÷ 12
- Special assessment per unit = Total unfunded cost × your allocation percentage (often equal share but check the declaration)
- Percent Funded = Current reserve balance ÷ fully funded balance × 100
Quick examples
- Example A: A 100-unit building’s reserve study recommends $240,000 per year. That equals about $200 per unit per month for reserves.
- Example B: A SIRS identifies $3,000,000 of immediate work and the current reserve balance is $300,000. The unfunded amount is $2,700,000, or $27,000 per unit if split equally. A board might choose a special assessment, a dues increase that amortizes the cost over time, or a bank loan that adds monthly debt service.
Insurance also interacts with reserves, especially in storm seasons. High wind deductibles can push significant costs to the association and owners after a hurricane. Lenders and insurers review reserve funding and SIRS findings, which can affect financing and insurance availability.
Boca Raton and Delray Beach factors
Local conditions shape what you see in reserve studies and SIRS:
- Building age. Many coastal buildings here date from the 1960s to 1990s, which often means major exterior and waterproofing cycles are due or underway.
- Coastal exposure. Salt air and humidity speed concrete spalling, rebar corrosion, and waterproofing breakdown. Oceanfront and Intracoastal locations typically face higher repair frequency and cost.
- Hurricanes and storms. Roofs, exteriors, and windows see repeated wind and water stress. After major events, master policy deductibles can be large.
- Flood zones and elevation. Lower levels, garages, and slabs can need more frequent attention in flood-prone areas.
- Insurance market. Deductibles and premiums for buildings have been volatile. Higher deductibles shift more cost to associations after a casualty.
In short, older or waterfront properties often show higher recommended reserve contributions and more urgent SIRS items. That does not mean you should avoid them; it means you should price and plan accordingly.
Buyer due diligence checklist
Request and review at least the following before you make an offer:
- Latest association budget and financials for the last 3 years
- Most recent full reserve study and any updates, with dates and methodology
- SIRS and any structural engineer reports, plus invoices for recent major work
- Board meeting minutes for the last 12–24 months and any special meeting notices
- Current reserve balance and a schedule of planned capital projects
- List of active lawsuits or claims involving the association
- Master insurance declarations, including hurricane/wind deductible percentages and coverage limits
- Certificate of status and estoppel showing delinquencies and pending assessments
- Resolutions authorizing loans or notices of planned special assessments
Smart questions to ask
- When were the last full reserve study and SIRS completed, and which recommendations were implemented?
- What is the current percent funded, and what is the plan to reach the recommendation?
- Are any major projects or assessments planned in the next 1–5 years?
- How many units are delinquent, and what is the dollar total?
- What are the wind and hurricane deductible terms on the master policy?
- Are there any disputes or litigation related to building condition?
Red flags that warrant caution
- No recent reserve study or SIRS for an older or taller building
- Reserve balance far below recommendations with no credible funding plan
- SIRS calling for substantial near-term structural repairs without a funding source
- Large or recurring special assessments in recent years
- High delinquency rates among owners
- Litigation tied to construction defects or building condition
- Insurance limits or deductibles that could leave the association to cover large repairs
Professional next steps if concerns appear
- Order an independent engineering inspection focused on structure and envelope
- Ask a reserve specialist or CPA with HOA experience to review study assumptions
- Consult a Florida real estate attorney on how assessments are allocated in the declaration and your exposure
- Speak with your lender about how reserves and SIRS may affect condo approval and loan terms
How to compare buildings and make a confident offer
- Match documents across buildings. Compare a recent reserve study to another recent study, and a recent SIRS to another recent SIRS. Transparency with a funded plan can be worth a premium.
- Adjust price for true cost. A condo with similar list price but higher reserve needs or likely assessments is effectively more expensive over time.
- Weigh financing and insurance. Some buildings may face stricter lender or insurer conditions, which impacts your options and timing.
- Use negotiation levers. You can request updated estoppels, ask for closing credits, seek seller-paid assessments, require escrow for known work, or make your offer contingent on satisfactory review of reserves and SIRS.
Quick glossary
- Reserve study: A planning report that inventories components, estimates lifespans and costs, and recommends annual savings.
- Percent funded: How the current reserve balance compares to the fully funded target. Higher is better.
- SIRS: An engineering assessment of structural elements and critical safety issues.
- Special assessment: A one-time charge to owners to fund work not covered by current reserves.
Ready to compare buildings in East Boca or Delray with confidence? If you want a local, data-driven read on reserves and SIRS before you write an offer, reach out to Helena Hall for a calm, thorough walkthrough.
FAQs
What are condo reserves and how do they differ from monthly HOA fees?
- Reserves are long-term savings for major repairs and replacements, while monthly HOA fees also cover operating costs like utilities, landscaping, and management.
Why does a SIRS matter when buying a Boca Raton condo?
- A SIRS highlights structural conditions and near-term capital needs, which can influence safety, assessment risk, financing, insurance, and your total cost of ownership.
How do reserves affect my monthly HOA dues?
- Dues include a reserve contribution; if reserves are underfunded or big projects are coming, the board may raise dues or levy a special assessment to cover the gap.
What documents should I review before making a condo offer in Palm Beach County?
- Ask for the latest budget and financials, reserve study and updates, SIRS and engineer reports, minutes, insurance declarations, reserve balances, estoppel, and any loan or assessment authorizations.
What red flags in a reserve study or SIRS should pause my purchase?
- Low percent funded, missing recent studies, immediate structural repairs without funding, recurring assessments, high delinquencies, litigation, or insurance gaps.
How can I protect myself from surprise special assessments?
- Get complete documents early, ask targeted questions, consider an independent engineer review, consult a Florida real estate attorney, and use contingencies, credits, or escrows in your offer.
