Condo turnover report: what it is and what boards must do

Last updated 2026-07-24

What is a condo turnover report?

A condo turnover report is the collection of records, disclosures, and financial statements a developer is legally required to give a condominium association when control passes from the developer to the unit owners. In Florida this event is called "turnover," and it's governed by Florida Statutes section 718.301 ^[1]. The report isn't one single document; it's a bundle: the original declaration and amendments, articles of incorporation, bylaws, rules, minute books, insurance policies, a copy of the certificate of occupancy, all contracts the developer signed on the association's behalf, and a financial accounting. The financial piece matters most to boards taking over. Florida law requires the developer to deliver, or arrange for, a financial statement of the association from the date of incorporation through the date of turnover, and that statement must be reviewed by an independent CPA if annual revenues fall within certain ranges, or audited if revenues exceed the statutory threshold ^[1][2]. This is where new boards find out whether the developer funded reserves properly, whether common expenses were paid on time, and whether there's a shortfall waiting for owners to cover. Turnover isn't optional, and it isn't indefinite. The statute sets a deadline: control transfers to unit owners other than the developer no later than three months after 90 percent of the units in all phases of the condominium have been conveyed to purchasers, or when the developer files for bankruptcy or loses title through foreclosure, whichever happens first, with an outside cap of seven years after the recording of the declaration for phased condominiums (with some variation by size and structure) ^[1]. Boards should confirm the exact trigger dates with counsel, since phased developments and mixed-use buildings have nuances the statute doesn't spell out plainly.

What financial documents must the developer hand over at turnover?

The developer must provide the association's financial records covering the entire period the developer controlled the association, more than the last year. Florida Statutes 718.301(4) requires the developer to deliver all association funds and control of the association's finances, plus books and records that reflect income and expenditures. Specifically, boards should expect: bank statements and reconciliations, the general ledger, all invoices and contracts (management, landscaping, insurance, elevator maintenance), a schedule of reserve fund balances by component, tax returns filed on the association's behalf, and any outstanding developer-guaranteed assessments under the statutory "guaranteed assessment" provisions if the developer used that funding method during the sales period. The law requires this financial statement to be reviewed or audited by an independent CPA. Under section 718.301(4)(c), "the developer shall, at the developer's expense, cause to be delivered to the association, ... a full and detailed accounting ... which shall be certified as being complete and accurate by an independent certified public accountant" ^[1]. Get that CPA report before you sign off that turnover is complete. If the developer resists or delays, that resistance itself is often the clearest warning sign of a funding problem underneath.

What is a reserve study, and why does it matter at turnover?

A reserve study is a professional assessment of an association's major common-area components (roof, paving, painting, elevators, structural elements) that estimates remaining useful life and the cost to repair or replace each item, then models how much money the association needs to save each year to cover those costs without a surprise special assessment. It's the financial planning document that turns "the roof will need replacing eventually" into a dollar figure and a savings schedule. Florida condo law doesn't use the exact phrase "reserve study" the way engineers and reserve specialists do, but it requires associations to maintain statutorily defined reserve accounts for certain components and, since 2022 legislation (following the Champlain Towers South collapse), it requires a Structural Integrity Reserve Study (SIRS) for buildings three stories or more in height ^[3]. A SIRS is a specific, narrower version of a reserve study focused on structural and life-safety components: roof, load-bearing walls, primary structural members, floor, foundation, fireproofing, electrical, plumbing, waterproofing, and pavement, among others listed in the statute ^[3]. At turnover, a new board should treat the reserve study (or SIRS, if the building qualifies) as one of the first things to commission or update, because developer-era reserve funding is often based on partial-funding formulas that legally satisfy pre-turnover requirements but don't reflect what a full SIRS-based schedule will demand going forward. For a deeper walkthrough of what's in a study and how it's built, see reserve study and reserve study for condo association.

What is a reserve study for an HOA (vs. a condo)?

A reserve study for an HOA works the same way conceptually as one for a condo, estimating the remaining life and replacement cost of shared components, but the components and the legal requirements differ. HOAs typically own roads, clubhouses, pools, and irrigation systems rather than a single building's roof and structural elements, and Florida's SIRS mandate under 718.113 applies specifically to condominiums, not to homeowners' associations ^[3]. Homeowners' associations in Florida are governed by Chapter 720, not Chapter 718, and Chapter 720 does not currently impose the same structural reserve study mandate that condos face ^[4]. That said, many HOA governing documents (the declaration or bylaws) require a reserve study or reserve funding plan independent of statute, and lenders (particularly for HOAs seeking Fannie Mae or FHA project approval) may require evidence of adequate reserve funding. Boards should check their own declaration and consult counsel, since "no state mandate" doesn't mean "no obligation." See hoa reserve study for the mechanics specific to homeowners associations.

How much does a reserve study cost?

Reserve study costs in Florida generally run from about $3,000 to $15,000 or more, depending on the size of the property, the number of components being evaluated, and whether it's a full study (with an on-site inspection) or an update study (desktop review of a prior study). A Structural Integrity Reserve Study, because it requires inspection by a licensed engineer or architect and covers specific structural components under 718.113(13), tends to run toward the higher end, and larger or older buildings with more components can push costs higher still. There's no single statewide fee schedule, and pricing varies by region, building complexity, and how many structural elements need individual engineering assessment. Boards should get at least two or three quotes from licensed providers (a reserve specialist for the general study, a licensed engineer or architect for the SIRS structural components as required under 718.111(13) and 718.113(13)) ^[3][5], and should budget for update studies every few years even after the initial one, since materials age and repair costs change with inflation.

What is an HOA assessment (and how is it different from a special assessment)?

An HOA assessment is a fee the association charges to owners to cover shared expenses: routine operating costs like landscaping, insurance, management fees, and utilities for common areas, plus contributions to reserve accounts for future big-ticket repairs. Assessments are typically billed monthly, quarterly, or annually according to the association's budget and governing documents. A special assessment is different: it's a one-time (or limited-duration) additional charge levied outside the regular budget, usually to cover an unexpected or underfunded expense, like a major roof replacement, storm damage repair, or a shortfall discovered during a reserve study or SIRS. Florida condo boards can levy special assessments under authority in the declaration and Chapter 718, but the process (notice requirements, board vote, sometimes owner approval depending on the documents) matters and should be reviewed with counsel before a vote. For a full breakdown of how these work and what triggers them, see hoa special assessment.

How much should an HOA (or condo) have in reserves?

There's no single dollar figure that applies to every association. The honest answer is: enough to cover the full, unreduced replacement cost of every major component identified in a current reserve study or SIRS, funded on a schedule that avoids a lump-sum special assessment when something fails. For Florida condominiums subject to the SIRS requirement, the law removed the ability to waive or reduce reserve funding for the structural components covered by a SIRS, effective for study reports due by December 31, 2024 ^[3][6]. That means condo boards can no longer vote to underfund roof, structural, or waterproofing reserves the way many did in the past through a simple majority vote to waive reserves. Section 718.112(2)(f) requires reserves to be funded based on the SIRS and generally prohibits using reserve funds for anything other than their designated purpose without a vote ^[3]. As a rough industry benchmark (not a legal figure), reserve specialists often talk about a "percent funded" ratio, comparing what's actually saved to what should ideally be saved given component age; nationally, studies by organizations like the Community Associations Institute have found many associations historically funded well below 100 percent, which is part of why Florida changed the law after 2021. Boards should treat the current reserve study's recommended funding schedule as the number to hit, not a generic percentage.

What happens if the developer underfunded reserves before turnover?

If the CPA review or audit performed at turnover shows the developer underfunded reserves, contributed less than required under the association's own budget, or otherwise left a financial shortfall, the new board has options, but time matters. Florida Statutes 718.301 and related provisions allow the association to pursue the developer for amounts owed, and many turnover disputes get resolved (or litigated) specifically over reserve funding gaps. The practical first step is documentation: get the independent CPA's findings in writing, compare them against the developer's original budget disclosures (which developers must provide to buyers under 718.504), and consult association counsel about whether a demand or claim against the developer is warranted before any statute of limitations issues arise. Boards that skip this step and simply start operating under new management often lose the ability to recover shortfalls later, because claims against a developer for financial deficiencies are subject to standard contract or statutory limitations periods that start running at turnover, not whenever the board gets around to reviewing the books.

Are HOA (or condo) special assessments tax deductible?

Generally, no. For most owners, a special assessment paid to a condo or HOA for capital improvements (a new roof, structural repairs, elevator replacement) is treated like a capital expenditure that adds to the cost basis of the property, not a deductible expense in the year paid. The IRS doesn't allow homeowners to deduct routine HOA assessments or special assessments for their personal residence the way they might deduct mortgage interest or property tax ^[7]. There are narrow exceptions. If the unit is a rental property, special assessments may be deductible as a business expense or depreciated as a capital improvement, depending on what the assessment funds; consult IRS Publication 527 (Residential Rental Property) and a tax professional, since the rules turn on whether the assessment is for a repair (potentially deductible) versus an improvement (typically capitalized and depreciated) ^[7]. Boards aren't in a position to give tax advice to owners, and shouldn't try; refer owners to a CPA or the IRS guidance directly.

What documents should a new board request at turnover, beyond finances?

Beyond the audited or reviewed financial statement, Florida Statutes 718.301(4) lists specific items the developer must turn over, and a new board should check each one off individually rather than accepting a general assurance that "everything's included." The list includes: the original recorded declaration of condominium and all amendments; a certified copy of the articles of incorporation and bylaws; a copy of the rules and regulations; the minute books, including all minutes from the developer-controlled period; a copy of the certificate of occupancy for each building; all association insurance policies currently in force; copies of all contracts the association is party to (management agreements, service contracts, leases); the association's employee records if applicable; and all engineering and architectural plans and specifications used in the construction of the improvements, which matter directly for future milestone inspections and SIRS work. A board that receives an incomplete turnover package should put the gaps in writing and follow up formally, ideally through counsel, rather than letting it slide. Missing structural plans, in particular, can make the eventual milestone inspection and SIRS process slower and more expensive, since engineers doing those assessments benefit enormously from original construction documents rather than having to infer conditions from scratch.

How does turnover connect to milestone inspections and SIRS deadlines?

Turnover often happens years before a building's first milestone inspection is due (buildings need their initial milestone inspection by the time they reach 30 years old, or 25 years old if within three miles of the coast, under 553.899 ), but the documents exchanged at turnover directly affect how smoothly those later inspections go. A board that inherits complete structural plans, past inspection or maintenance records, and a properly scoped reserve study is in a much better position when the milestone inspection and SIRS deadlines arrive, because the engineer performing those assessments has a paper trail to work from. A board that inherits gaps often pays more for the engineer's time just to reconstruct basic facts about the building's construction. This is also where an organized board compliance system earns its cost. A $199 one-time Building-Specific Board Compliance Kit won't replace the licensed professionals required by statute to actually perform the SIRS, the milestone inspection, or the CPA review at turnover, but it does organize the resulting documents, tracks the statutory deadlines by building age and coastal proximity, and keeps the board's communication with owners on schedule so nothing gets missed between turnover and the next major deadline.

What's the difference between turnover and a reserve fund transition after a legislative change?

Turnover is a one-time legal event tied to developer control ending. Reserve fund transitions, by contrast, are ongoing changes to how much money an association is legally required to hold, and Florida has had several of those since 2022 in response to the Surfside collapse. Boards sometimes confuse the two because both involve financial disclosures and both can trigger a special assessment conversation. But they're separate: turnover is about the developer handing the association to the owners (718.301); the post-2022 reserve reforms are about how condo associations statewide must fund and report reserves regardless of when turnover happened (718.112, 718.113) ^[3][1]. A board could be 20 years past turnover and still be adjusting to the newer SIRS reserve-funding mandates for the first time. For background on how the legislature has adjusted reserve deadlines and relief provisions since the original 2022 law, see florida condo reserve fund relief.

Frequently asked questions

What is a reserve study?

A reserve study is a professional evaluation of an association's major common components (roofs, paving, elevators, structural elements) that estimates remaining useful life and replacement cost, then sets a savings schedule so the association can pay for future repairs without a surprise special assessment. Florida condos three stories or taller must complete a specific version, the Structural Integrity Reserve Study, under Florida Statutes 718.113 ^[3].

What is a reserve study for an HOA?

It's the same concept applied to homeowners' associations: an assessment of shared components like roads, clubhouses, and pools, estimating replacement costs and timelines. Florida's mandatory SIRS law under Chapter 718 applies to condominiums, not HOAs under Chapter 720, though many HOA governing documents or lenders may still require a reserve study independent of state law ^[3][4].

What is an HOA assessment?

An HOA assessment is the regular fee owners pay to cover shared operating costs and reserve contributions, set through the association's annual budget. It's distinct from a special assessment, which is a separate, often one-time charge levied to cover an unexpected or underfunded major expense outside the normal budget cycle.

What is a condo assessment?

A condo assessment works the same way as an HOA assessment: a regular charge to owners covering operating expenses and reserve funding, authorized under the association's budget and the declaration of condominium filed under Florida Statutes Chapter 718 ^[1]. Special assessments are the separate, non-routine version used for unbudgeted or emergency expenses.

How much should an HOA have in reserves?

There's no universal dollar figure; the target is whatever a current reserve study says is needed to fully fund replacement of major components on schedule. For Florida condos, the SIRS-covered components can no longer be underfunded by owner vote as of reports due by December 31, 2024, under changes to Florida Statutes 718.112 ^[3][6].

How much does a reserve study cost in Florida?

Costs generally range from roughly $3,000 to $15,000 or more, depending on property size, number of components evaluated, and whether it's a full study with an on-site inspection or a desktop update. Structural Integrity Reserve Studies, which require a licensed engineer or architect, tend to cost more than a standard reserve study.

Are HOA special assessments tax deductible?

Generally no, for a personal residence. The IRS treats most special assessments as capital improvements that add to the property's cost basis rather than a deductible expense. Rental property owners may have different treatment; check IRS Publication 527 and consult a tax professional for the specifics of your situation ^[7].

What is a condo turnover report exactly?

It's the full package of records a developer must give the association when owner control begins: financial statements (reviewed or audited by an independent CPA), the declaration and bylaws, insurance policies, contracts, minute books, and construction plans, all required under Florida Statutes 718.301 ^[1].

When does condo turnover happen in Florida?

Generally no later than three months after 90 percent of units in all phases have been sold to purchasers, or sooner if the developer files bankruptcy or loses title through foreclosure, with additional timing rules for phased condominiums under Florida Statutes 718.301 ^[1]. Confirm exact triggers with your association's counsel, since phased projects have variations.

What if the developer didn't fund reserves properly before turnover?

The independent CPA review or audit required at turnover should reveal any shortfall. The board should document the finding in writing and consult counsel promptly about pursuing a claim against the developer, since limitations periods for such claims generally start running at turnover, not whenever the board gets around to reviewing the books.

Does a condo turnover report include the reserve study?

Not always as a separate professional study, but it must include the association's financial records showing how much was collected and held for reserves during developer control. A new board should commission its own current reserve study or SIRS shortly after turnover, since developer-era reserve funding often used different assumptions.

Is a Structural Integrity Reserve Study the same as a reserve study?

No. A SIRS is a specific, narrower type of reserve study required for Florida condo buildings three stories or taller, covering only structural and life-safety components listed in Florida Statutes 718.113(13), such as roof, load-bearing walls, and waterproofing. A general reserve study can cover a broader range of components, including non-structural ones.

Sources

1. Florida Senate, Florida Statutes 718.301 (Transfer of association control): Turnover deadlines, developer document delivery requirements, and CPA-certified financial accounting requirement
2. Florida Senate, Florida Statutes 718.111: Financial report/audit requirements for condominium associations based on revenue thresholds
3. Florida Senate, Florida Statutes 718.113 (Maintenance; reserve accounts, SIRS): Structural Integrity Reserve Study requirement, covered components, and reserve funding rules
4. Florida Senate, Florida Statutes Chapter 720 (Homeowners' Associations): HOAs are governed by Chapter 720, separate from condominium reserve requirements under Chapter 718
5. Florida Senate, Florida Statutes 718.112 (Bylaws): Prohibition on waiving or reducing SIRS-covered reserve funding for reports due by December 31, 2024
6. Internal Revenue Service, Publication 527, Residential Rental Property: Tax treatment of capital improvements versus deductible repair expenses for rental property
7. Florida Senate, Florida Statutes 553.899 (Building safety; condominium and cooperative buildings): Milestone inspection deadlines at 30 years, or 25 years for coastal buildings within three miles