How to Budget for SIRS Costs | ReservesPro

The board just hired the engineering firm. The SIRS study is scheduled for next month. The quote was $12,000 -- higher than you expected, but the firm came recommended and three other proposals were higher. Now you're sitting with a budget draft for next fiscal year that has the $12K study line in it, and you're trying to figure out what else has to go in. Because you've seen what happens to other boards when the SIRS report comes back and the funding gap turns out to be much bigger than anyone planned for.

You're right to be thinking ahead. SIRS compliance is a two-part cost, and most boards only plan for the first part. The study itself is a one-time expense. The reserve funding the study reveals you need -- that's an ongoing budget item that lasts for the life of the building.

This is the financial walkthrough for treasurers. What the study costs, what the funding gap typically looks like, how to phase increases into the budget, and how to present the math to owners without triggering panic.

SIRS compliance is a two-part cost

When boards talk about "the cost of SIRS," they usually mean the cost of the study itself. That's the visible cost: a one-time engineering and financial analysis expense that shows up as a line item in next year's budget.

The bigger cost is what the study reveals. A SIRS isn't just a report; it's a funding plan. The eight named structural components -- roof, structure, fire protection, plumbing, electrical, waterproofing, windows and exterior doors, and any item over $25K -- each get a remaining useful life estimate and a replacement cost projection. The sum of those obligations, divided across the remaining years of useful life, is what the building needs to contribute to reserves annually.

For most buildings, that annual contribution is meaningfully higher than what they've been contributing. The gap is the real budget impact. Boards that plan for the study without planning for the funding gap get blindsided when the report comes back.

Below covers both costs and how to plan for each.

Cost of the SIRS study itself

Typical range in 2026: $5,000-$16,000+ for the SIRS engagement, depending on:

Building size and unit count. A 30-unit, single-building association is on the lower end. A 200-unit, multi-building campus is on the higher end. The visual inspection scales with square footage and component count.

Building age and condition. Older buildings with limited maintenance documentation take longer to assess. The engineer needs to inventory components, check condition, and estimate remaining useful life. Where records are sparse, fieldwork compensates.

Building complexity. Multiple structures, multiple roof types, complex plumbing or electrical systems, and specialty equipment all add inspection time. Buildings with hurricane-related modifications or non-standard construction often run longer.

Geographic factors. South Florida engineering rates run higher than rural Florida. Limited engineering capacity in some markets pushes prices up further.

Specialty inspections. Drone roof inspections, infrared imaging for waterproofing, and specialty testing for older structural systems can add cost when needed.

What's typically included:

Visual inspection of the eight named SIRS components.
Condition rating for each major asset.
Remaining useful life estimate for each component.
Replacement cost projection (with inflation factoring for components over $25K).
Recommended reserve funding plan.
A written report meeting Florida statutory requirements.

What's sometimes separately billed:

Coordination with milestone inspection (if applicable).
Detailed engineering studies on flagged components.
Re-inspection or supplementary work after initial findings.
Travel and per diem on out-of-region engagements.

When evaluating proposals, look for fixed-fee engagements with clearly defined deliverables rather than hourly arrangements. Budget approximately the proposed fee plus 10-15% for contingency.

For more on hiring a reserve study firm, see how to choose a reserve study company in Florida.

The bigger cost: what the SIRS reveals

The SIRS will almost certainly identify a funding gap between what's currently in reserves for the eight named components and what's actually required.

A simplified illustration. Take a 100-unit Florida mid-rise with the following five-component snapshot:

Component	Replacement cost	Useful life	Years remaining	Annual contribution needed
Roof	$480,000	25 years	8 years	$60,000
Plumbing risers	$620,000	50 years	18 years	$34,400
Electrical service	$200,000	35 years	12 years	$16,700
Waterproofing	$340,000	12 years	4 years	$85,000
Windows/doors	$480,000	30 years	15 years	$32,000
Subtotal	$2,120,000			$228,100

Those five components alone need $228K per year in reserves to fund their replacements on schedule. Add structure (mostly capitalized through milestone-driven repair), fire protection, and the over-$25K bucket, and the total is higher.

For a 100-unit building, that's $2,281 per unit per year, or $190 per month per unit, in reserve contributions for SIRS components alone. Many associations have been contributing significantly less.

The gap between what's currently being contributed and what the SIRS requires is the budget impact every treasurer should be modeling before the SIRS report arrives. Reserves Pro's 30-year projection tool lets you run this analysis with your specific reserve study data.

The eight components you must fund

Florida Statute §718.112(2)(g) specifies that reserves for the eight SIRS components cannot be waived starting January 1, 2026 for qualifying buildings. Those components:

Roof. Including any structural roofing systems.
Load-bearing walls and primary structure. Including foundation, columns, and primary structural elements.
Fireproofing and fire protection systems. Sprinkler systems, fire alarms, smoke control.
Plumbing. Including risers, main lines, and water service equipment.
Electrical systems. Service equipment, main panels, distribution.
Waterproofing and exterior painting. Including building envelope sealing.
Windows and exterior doors. Including doors to common areas.
Any other item over $25,000 in deferred maintenance or replacement cost that affects the components above.

The key point: under current Florida law, for buildings three or more habitable stories tall, reserves for these components must be funded based on the SIRS recommendations. There is no waiver vote available.

This is different from the pre-SB 4-D era, when owners could vote to waive or reduce reserve contributions. For SIRS components, that flexibility no longer exists.

How to build SIRS costs into your annual budget

A practical sequence for treasurers preparing a budget that incorporates SIRS impact:

1. Get the SIRS study. Or, if it's not yet complete, use your current reserve study supplemented with conservative estimates for the SIRS components. Final numbers will replace estimates once the SIRS arrives.

2. Identify the funding gap. Compare the SIRS-recommended annual contribution to the current reserve contribution. The difference is the gap.

3. Decide on the phase-in timeline. A 100% jump in dues in a single budget cycle is politically difficult and sometimes structurally unworkable. Phasing the increase over 2-3 budget cycles is common practice for boards facing significant gaps.

4. Build the budget around the new contribution rate. Total reserve contributions, total operating expenses, total assessments per unit. Show the math clearly.

5. Communicate to owners well in advance. Budget meetings require 14-day notice. The communication should happen sooner. Show the gap, explain the cause (SIRS requirements, no-waiver rule), and present the phase-in plan.

A useful framing for the budget meeting: the SIRS funding gap exists whether or not the board funds it. The choice is between paying it incrementally through reserves (the funded approach) or paying it in a lump sum later through special assessments (the deferred approach). The math always favors paying incrementally.

Full funding vs. minimum compliance

A subtle point worth naming. The SIRS recommends a funding plan that meets the statutory minimum. Many boards interpret this as "the right" funding level. It isn't. It's the floor.

Several reasons full funding is the better target:

Buffer for cost escalation. Construction costs rise. Inflation factoring in the SIRS uses a defensible assumption, but actual cost increases can exceed projections. Funding above the minimum provides cushion.

Buffer for early failures. Components don't always make it to their projected useful life. A roof rated for 25 years might fail at 22. Full funding accommodates the variance.

Buffer for non-SIRS components. A SIRS-mandated funding plan covers only the eight named components. A traditional reserve study covers all capital assets. The traditional reserve study's full funding number is typically higher than the SIRS minimum.

Predictable assessments. Full funding makes special assessments rare. Anything below full funding leaves residual risk.

The Reserves Pro Method makes this case in detail at reservespro.com/method/fund-it-fully. The principle is what we call paying for the wear on your watch: each year of an asset's life is funded by contributions during that year, with enough cushion to prevent assessments when reality diverges from projection.

For boards new to the concept, see:

How to present the budget to owners

The conversation with owners is where most boards either succeed or fail at SIRS compliance funding.

Frame it as protection, not punishment. The increased reserve contributions exist to prevent special assessments, preserve property values, and ensure the building meets its legal obligations. Each of those is in owners' direct interest.

Show the cost of the alternative. Buildings that under-fund face special assessments down the line. Property values are demonstrably affected by reserve health. Insurance complications arise. The cost of staying status quo is higher than the cost of fully funding, paid in a worse way (lump sum) at a worse time (when problems are visible).

Use the 30-year projection to make the math visual. A spreadsheet showing year-by-year reserve balance under the current contribution rate vs. the SIRS-recommended rate is significantly more persuasive than a verbal argument. Owners can see the trajectory. They can see what happens in year 8 when the roof comes due without adequate reserves.

Be transparent about the timeline. If the increase is phased over 2-3 years, say so. If the new contribution level is permanent, say so. Owners respond to clarity about what they're agreeing to.

Document the meeting and the decisions. Budget approvals and reserve contribution decisions should be in the meeting minutes with the underlying analysis attached. This protects the board legally and ensures continuity if board membership changes.

FAQ

Can a condo association waive SIRS reserve funding? No. For buildings three or more habitable stories tall qualifying for SIRS under Florida Statute §718.112(2)(g), reserve funding for the eight named structural components cannot be waived starting January 1, 2026. This is a change from the pre-SB 4-D era, when owners could vote to waive or reduce reserve contributions. The no-waiver rule applies specifically to SIRS components; reserves for non-SIRS capital assets in qualifying buildings may still be subject to waiver under the governing documents.

How often does a condo need a new SIRS? At least every 10 years under Florida Statute §718.112(2)(g). Some buildings update more frequently, particularly when major capital work changes the building's component inventory or when cost data has shifted significantly. The SIRS is distinct from the milestone inspection requirement, which applies at 25 years (or 30 in some inland counties) and recurs every 10 years thereafter.

What if our SIRS reveals urgent structural repairs? SIRS reports that flag immediate safety concerns or urgent structural needs require prompt board action. Florida law requires the board to address findings appropriately, which may include emergency special assessments, association loans, or rapid mobilization of existing reserves. Boards facing urgent SIRS findings should consult their association attorney about the legal obligations, the engineer who performed the study about remediation priority, and a reserve advisor about funding the work.

Can we use a loan instead of reserves for SIRS-required work? Associations can use loans to fund capital work, but loans don't replace the reserve funding requirement -- they supplement it. The SIRS-mandated annual reserve contribution still has to be funded each year regardless of whether the association is also carrying loan debt for specific projects. In practical terms, loans are sometimes used for catch-up work on underfunded buildings while the reserve contributions are simultaneously increased to prevent future shortfalls.

This post is general information about Florida condominium law and is not legal, financial, or engineering advice. For specific decisions about SIRS compliance and reserve funding, consult a licensed Florida attorney, CPA, and qualified reserve specialist or engineer.