Can a condo fund SIRS reserves with a line of credit?

Once a SIRS reserve study sets the annual reserve for the eight statute items, the board cannot ask owners to waive it. For many older buildings the figure is a shock, especially where years of partial funding left the reserve thin. Since HB 913 took effect on July 1, 2025, Florida law has been clearer that borrowing is one lawful way to meet the schedule. Clearer is not the same as simple, so here is how it works and what boards weigh before using it.

What the statute says

Section 718.112(2)(f) lists the ways reserves may be funded: regular assessments, special assessments, lines of credit and loans. Special assessments, lines of credit and loans need approval by a majority of the total voting interests, meaning a majority of all units, not just those at the meeting.

For an owner-controlled association that is required to have a SIRS, the statute adds a specific permission: it may secure a line of credit or a loan to fund the repairs and replacements required by a milestone inspection or a SIRS. The funding has to be immediately available to the board, without further approval by the members, so the board can draw when the work comes due.

The House staff analysis of HB 913 describes two further points: owners may vote to rely on a line of credit instead of fully funding the reserves each year, with clear notice, and a secured line of credit must be disclosed to later buyers. If a board is considering this route, have the association’s attorney confirm how the enacted text treats both before drafting the ballot.

Why boards consider it

The case for a line of credit is cash flow. A building can owe a large sum over a few years for, say, roof and balcony work, with a much lower steady-state reserve after that. Raising the whole peak through assessments can force owners on fixed incomes to sell. A credit line spreads the peak over a longer period, with the debt repaid from future assessments.

It also gives the board certainty. A committed facility that can be drawn without another vote means a contractor can be signed when the bids are good, rather than when the special assessment finally collects.

Why boards hesitate

Borrowing is not free money. Interest adds to the total cost, sometimes substantially over a long term. Lenders typically secure the facility on the association’s right to collect assessments, so a default has consequences for every owner. And because the line must be disclosed to buyers, it can affect how the building looks in a sale, even when the plan is sound.

There is also a reserve-study point. The SIRS funding schedule aims to have each item’s cost in hand by the end of its remaining life. A credit line changes the shape of that plan: the item is paid for when it comes due, then repaid. The provider should model the repayment as part of the funding plan, so the next decade’s assessments are visible.

Questions to put to the SIRS provider

• Model the plan two ways: fully funded from assessments, and with the proposed credit line. Show the annual reserve and the per-unit monthly figure for both.
• Include interest at a stated rate and term, and show the total paid over the life of the facility.
• Confirm the baseline plan still keeps the reserve cash balance above zero in every year.
• Show which SIRS items the line would pay for, and when.

Questions to put to the lender and attorney

• What does the lender take as security, and what happens if assessments fall short?
• Can the facility be drawn in stages as each item comes due?
• What exactly must be disclosed to buyers, and in which documents?
• Does the declaration or bylaws add requirements to the statute’s vote?

Pooled accounts and the pause

Two other HB 913-era tools often sit alongside a credit line. Reserves for two or more SIRS items can now be held in a pooled account, which lets a building use one item’s balance while another’s builds, reducing how much it needs to borrow. And for budgets adopted on or before December 31, 2028, an association that completed a milestone inspection in the prior two calendar years may pause or reduce reserve contributions for up to two budgets, with a majority of total voting interests, to fund the repairs that inspection recommended.

Used together, a pooled account, a short pause and a modest credit line can turn an impossible single-year assessment into a manageable plan. The point of each is timing. None of them removes the obligation to fund the SIRS items.

A simple illustration

The cost page works through one invented eight-story, 72-unit building whose straight-line SIRS reserve comes to about $405,000 a year, or about $469 per unit per month. Suppose its roof and waterproofing both come due within three years while the reserve is nearly empty. Assessing the full catch-up at once might double owners’ payments for those years. A credit line drawn for those two items and repaid over a longer period could hold the increase to a fraction of that, at the cost of interest. The provider’s two-way model shows the trade in numbers the owners can vote on.

These figures are illustrative, not a recommendation. Whether borrowing suits a given association depends on its balance, its owners and its lender, and the vote has to follow the statute and the documents. Ask the association’s attorney to review the plan before it goes to owners.