Reserve Study Levels Explained: CAI Level I, II, and III for Florida Condos

Quick Answer: What CAI Level I, II, and III Reserve Studies Mean

A reserve study has two parts under the CAI National Reserve Study Standards: a Physical Analysis and a Financial Analysis. The "levels" simply describe which of those tasks get re-done. Here is the short version:

1. Level I (formally "Full"): all five tasks are performed, including a full component inventory with measurement and an on-site condition assessment. This is the foundation study.
2. Level II (formally "Update, With Site Visit"): the analyst returns to the property and walks it, but the component inventory is verified rather than re-measured. Use it for the periodic on-site refresh.
3. Level III (formally "Update, No Site Visit"): a desktop refresh of the numbers only, with no site visit. It updates life and valuation estimates, fund status, and the funding plan.
4. The funding goal is separate from the level: baseline, threshold, and full funding are spending targets your board chooses, independent of how the study was produced.
5. For Florida's SIRS, the visual inspection is mandatory, so a Level III desktop update alone cannot satisfy the SIRS requirement.

Construction Solutions, Inc. (CSI) helps Northeast Florida boards choose the right reserve study level and meet Florida's SIRS and HB 913 obligations. Call (904) 261-8703 to scope your study.

What is a reserve study, and what are the five tasks the levels turn on and off?

Before the levels make sense, it helps to understand what a reserve study actually contains. The CAI National Reserve Study Standards define a reserve study as two parts working together: a Physical Analysis and a Financial Analysis.

The Physical Analysis answers what you own and what shape it is in. It is made up of three tasks: the component inventory (the list of reserve assets, including how much of each there is), the condition assessment (the on-site evaluation of how those components are holding up), and the life and valuation estimates (how much useful life each component has left and what it will cost to replace).

The Financial Analysis answers whether you have set aside enough money. It is made up of two tasks: fund status (how well funded your reserves are today) and the funding plan (the contribution schedule that keeps you on track going forward).

Those five tasks are the building blocks of every reserve study. The service "levels" are nothing more than which of the five tasks get re-performed. Once you understand that, the rest of this guide is straightforward.

What does a CAI Level I (Full) reserve study include?

What the industry calls "Level I" is formally the Full reserve study. It performs all five tasks, with the component inventory fully quantified (measured and counted) and the condition assessment based on on-site visual observations. In plain terms, the analyst builds the complete picture from the ground up: every reserve component is identified and measured, the property is walked and evaluated in person, remaining useful lives and replacement costs are estimated, and the financial side is calculated from there.

It is worth a small note on terminology, because precision matters in a board setting. "Level I" is widely used industry shorthand, but CAI's literal category name is "Full." When you read an engineering proposal or a reserve study report, you may see either term. They describe the same thing.

A Full study is the right starting point for any association that has never had a professional reserve study, that has had major changes to its components, or whose prior study is too old or too unreliable to update. It is also the appropriate vehicle when you need a fresh, defensible baseline before committing to a long-term funding plan. For a coastal building, the on-site condition assessment in a Full study is where the salt-air reality gets captured, which we return to below.

What does a CAI Level II (Update With Site Visit) reserve study include?

"Level II" is formally the Update, With Site Visit (also called an On-Site Review). It still performs all five tasks, and the condition assessment is still based on on-site visual observations. The key difference from a Full study is the component inventory: in a Level II, the inventory is verified, not re-quantified.

The practical meaning for boards is simple. The analyst returns to the property and walks it again, but relies on the measured inventory from the earlier Full study unless something has changed. If a roof section was added, a pool was resurfaced, or a component was removed, that gets updated. Otherwise, the prior measurements carry forward, and the effort goes into reassessing condition, refreshing remaining-life estimates, updating replacement costs, and recalculating the funding plan.

A Level II update is the natural periodic refresh between Full studies. For Florida condominiums, it is also the appropriate tool for the recurring SIRS cycle, because it preserves the required on-site visual inspection while avoiding the cost of re-measuring components that have not changed.

What does a CAI Level III (No Site Visit) reserve study include, and can it satisfy a SIRS?

"Level III" is formally the Update, No Site Visit (an Off-Site Review). CAI defines it as a reserve study update with no on-site visual observations in which only three tasks are performed: life and valuation estimates, fund status, and the funding plan. There is no component inventory work and no condition assessment, because nobody visits the property. It is, in effect, a desktop refresh of the numbers.

A Level III update has its place. If your components were assessed on-site recently and little has changed, a desktop update can keep your funding plan current between site visits at lower cost. But it carries an important limitation in Florida.

Florida's Structural Integrity Reserve Study is, by statute, based on a visual inspection of the condominium property. A Level III "no site visit" update by definition includes no on-site visual observation. That means a Level III update cannot, on its own, satisfy the SIRS visual-inspection mandate. When the SIRS is due for its required refresh, the appropriate vehicle is a Level II update with a site visit, or a new Full study, not a desktop-only update. We explain the SIRS in depth in our complete guide to the Florida SIRS.

Is there a fourth category for new construction?

Yes. CAI's standards actually describe four categories of studies, from exhaustive to minimal, even though the three "Levels" are the common shorthand. The fourth is Preliminary, Community Not Yet Constructed. It is prepared before construction, using the architectural and engineering design documents, to produce budget estimates for a community that does not physically exist yet. It performs the component inventory, life and valuation estimates, and a funding plan, but obviously cannot include a condition assessment of buildings that have not been built.

This category is directly relevant in Northeast Florida, where pre-turnover and new-construction condominiums are common. A Preliminary study lets a developer and an incoming association budget realistically before the building is finished, and it connects to Florida's turnover requirements, which we cover below.

What is the difference between baseline, threshold, and full funding?

This is where boards most often get confused, so it deserves a clear distinction. The level is how the study is produced. The funding goal is the saving-and-spending target your board chooses. They are independent of each other. You can pair any funding goal with any study level.

CAI defines four funding goals:

• Baseline funding: keep the reserve cash balance above zero. This is the least conservative goal and carries the highest special-assessment risk, because the fund is allowed to run down to nearly nothing before each major expense.
• Threshold funding: keep the balance above a chosen dollar amount or percent-funded floor. This sits between baseline and full, giving the board a cushion without targeting 100 percent.
• Full funding: attain and maintain reserves at or near 100 percent funded, meaning the reserve balance roughly matches the depreciated value of the components. This is the most conservative and most costly goal, and it provides the strongest protection against special assessments.
• Statutory funding: set aside the minimum required by law.

The teaching point for boards is this: choosing a Level I study does not commit you to full funding, and choosing a Level II update does not lock you into baseline. The engineer measures and projects; the board decides how aggressively to fund against those projections. For how the funding plan actually gets implemented in your budget, see the section on pooled versus straight-line accounting below.

How is a reserve study different from a Florida SIRS, and do we need both?

A reserve study and a SIRS overlap heavily, but they are not the same thing, and the difference matters legally.

A CAI reserve study is a professional standard. It is the methodology the industry uses to inventory components and plan funding, and it can cover all of your reserve assets, including paving, pools, amenities, and other items that have nothing to do with structural safety.

A SIRS is a Florida legal mandate under Florida Statute 718.112(2)(g). It applies to condominium and cooperative buildings three habitable stories or higher under the Florida Building Code, it is based on a visual inspection of the property, and it is narrower in scope: it focuses on specific structural components defined by statute. The SIRS is the legal requirement; the CAI reserve study is the professional framework. A SIRS can be performed as part of a broader CAI reserve study, which is often the most efficient approach because it covers the legal obligation and the rest of your reserve planning in one engagement.

So the honest answer to "do we need both" is that a properly scoped study can do both jobs at once, but you cannot skip the SIRS, and you cannot let a non-SIRS reserve study or a desktop update stand in for the statutory visual inspection.

What components must a Florida SIRS cover, and what is the $25,000 threshold?

The SIRS must study a defined list of structural components: the roof; load-bearing walls and other primary structural members and structural systems; the floor; the foundation; fireproofing and fire protection systems; plumbing; electrical systems; waterproofing and exterior painting; and windows and exterior doors.

On top of that fixed list, the SIRS must also include any other item with a deferred-maintenance or replacement cost exceeding $25,000 (or the inflation-adjusted amount set by the Division) whose failure would negatively affect one of the listed structural components. The catch-all is tied to items that affect the enumerated structural systems; it is not a blanket requirement to reserve for every expensive item in the community. That distinction is easy to misstate, so boards should rely on the engineer's judgment on what the catch-all captures for their specific building. Our SIRS guide walks through how these components are assessed in the field.

Who is legally allowed to perform our SIRS?

Under Florida Statute 718.112(2)(g), a SIRS may be performed by an engineer licensed under Chapter 471, an architect licensed under Chapter 481, or a person certified as a reserve specialist or professional reserve analyst by the Community Associations Institute or the Association of Professional Reserve Analysts.

It is worth being precise about what the statute does and does not require. The law applies that same three-category list to the visual-inspection portion of the SIRS: the study, "including the visual inspection portion," must be performed or verified by a Chapter 471 engineer, a Chapter 481 architect, or a CAI/APRA-certified reserve specialist or professional reserve analyst. In other words, the SIRS visual inspection is not restricted to engineers and architects only. That engineer-or-architect-only requirement belongs to a different inspection: the milestone inspection, whose Phase One visual examination must be performed by a licensed engineer or architect under Florida Statute 553.899. A licensed professional engineering firm is well suited to either role: CSI can perform or verify the SIRS visual inspection, carry the work through to the funding analysis, and handle a milestone inspection where one is also due. You can review the broader bill in our explainer on what HB 913 means for your condo association in 2026.

What is the SIRS deadline, and what should boards do now?

HB 913 extended the SIRS completion deadline for existing associations from December 31, 2024 to December 31, 2025, with a later date of December 31, 2026 available where the SIRS is aligned with a milestone inspection. The bill took effect July 1, 2025. Boards should treat the SIRS as a current compliance obligation, not a distant future target, and get a qualified professional engaged promptly if the study is not done. One caveat as you plan: legislation in the 2026 session may further adjust SIRS timing and milestone coordination, so confirm the current deadline that applies to your association before relying on a fixed date.

The SIRS is not a one-time exercise either. It must be updated at least every 10 years after the condominium's creation. Because the update must include the required visual inspection, the right vehicle for that 10-year refresh is a Level II update with a site visit or a new Full study, never a Level III desktop update by itself. Many boards find it efficient to coordinate that cycle with milestone-inspection timing.

What is a "baseline funding plan," and is funding at baseline enough?

HB 913 requires the SIRS to recommend a reserve funding schedule based on a baseline funding plan, meaning a plan in which reserve funding for each budget year is sufficient to keep the reserve cash balance above zero. This statutory baseline mirrors CAI's baseline funding goal.

Here is the nuance every board should absorb: the statutory baseline is the floor, the minimum the SIRS must recommend. It is not a ceiling, and it is not a statement that baseline funding is "enough." Baseline funding carries the highest special-assessment risk of any funding goal, because it deliberately lets the reserve balance run down close to zero before each major expense. Associations remain free to fund more conservatively, at a threshold or at full funding, and many should. Do not read the statutory minimum as a recommendation to fund only to that minimum.

Can our owners still vote to waive or reduce reserves?

For most boards, this is the biggest behavior change in recent Florida law. Before 2025, condominiums routinely held an annual vote to waive or reduce reserve funding. That option is gone for the mandatory structural (paragraph (g)) components. After December 31, 2024, unit owners of an owner-controlled association may no longer vote to provide no reserves, or less than the required reserves, for SIRS components.

HB 913 did add narrow relief. An association that completed a milestone inspection within the prior two years that recommended repairs may, by majority vote of the voting interests and for budgets adopted on or before December 31, 2028, temporarily pause or reduce reserve contributions for no more than two consecutive annual budgets. A separate pause is available, without owner approval, when the building is declared uninhabitable. Crucially, an association that pauses or reduces contributions must perform a SIRS before resuming them. This is targeted relief tied to active repair work, not a return to open-ended annual reserve waivers.

How does the SIRS relate to the milestone inspection?

The SIRS and the milestone inspection are complementary but distinct, and they live in different parts of Florida law. The SIRS is governed by Chapter 718. The milestone inspection is governed by Florida Statute 553.899.

Milestone inspections are required for condominium and cooperative buildings three habitable stories or more. The first inspection is generally due by December 31 of the year the building reaches 30 years of age, based on the certificate of occupancy, and they recur every 10 years thereafter. Phase One is a visual examination; Phase Two, which involves testing, is required only if Phase One identifies substantial structural deterioration. We cover the mechanics in our guides to Florida's milestone inspection requirements and the revised milestone inspection law.

Because both can require on-site work, coordinating them saves money and disruption, but they are separate legal obligations with their own timelines. One does not replace the other.

Does our coastal building need a milestone inspection earlier?

This is one of the most common questions on Amelia Island, in Ponte Vedra, Atlantic Beach, and Jacksonville Beach, and it comes wrapped in a persistent myth. Florida Statute 553.899 allows a local enforcement agency to require the first milestone inspection at 25 years instead of 30, based on local conditions such as proximity to salt water. Many Northeast Florida beachfront municipalities are positioned to invoke that earlier trigger, so coastal boards should not assume the 30-year clock. Confirm your local building official's policy.

Now the myth: the often-repeated "three miles from the coast" figure is not in the statute. The law says "proximity to salt water," which is a judgment made by the local enforcement agency, not a fixed three-mile line. Do not rely on a distance rule you read online. Ask your municipality directly what trigger applies to your building.

Do new-construction condos need a SIRS at developer turnover?

Yes. A SIRS is part of the developer's turnover package under Florida Statute 718.301 for new-construction condominiums three stories or higher. SB 154 made the SIRS one of the mandatory turnover deliverables, so an incoming association receives reserve-funding transparency at the moment control changes hands. This is also where CAI's Preliminary, Community Not Yet Constructed study fits naturally: it lets the developer and the future association budget for reserves before the building is even complete, and it sets up the first Full study once the property is built and can be inspected on-site.

What does "pooled" versus "straight-line" reserve accounting mean for our budget?

The funding plan in a study has to be implemented in an actual budget, and Florida law gives boards a choice of method. Straight-line (also called component) accounting funds each asset in its own separate reserve, while pooled (cash-flow) accounting funds the group of components together and lets cash move among them as needed. Pooled accounting generally offers more flexibility; straight-line offers more visibility into each component.

Two practical points for Florida boards. First, the board may change between pooled and straight-line methods without a member vote. Second, there is a statutory restriction for structural reserves: SIRS (paragraph (g)) components may only be pooled with other (g) components, and must be kept separate from ordinary reserves. In other words, you can pool your structural reserves together, but you cannot blend them with non-structural amenity funds. This is how the funding goal you chose, baseline, threshold, or full, actually shows up in the line items of your annual budget.

Why does the salt-air environment change the math for Northeast Florida condos?

For coastal condominiums in Nassau and Duval counties, the salt-air environment is the dominant variable, and it changes the numbers in ways inland buildings never see. Chloride-driven corrosion attacks post-tensioned and reinforced concrete, waterproofing and exterior paint fail faster, and windows, doors, and railings deteriorate sooner. In the on-site condition assessment of a Level I study, that typically translates into shorter remaining useful lives and higher replacement costs than a comparable inland building.

Two consequences follow. First, a coastal building's baseline funding number is usually higher than an inland building's, because the components wear out faster. Second, desktop-only Level III updates are riskier between full studies on the coast, because conditions can move quickly and a desktop refresh will not catch new deterioration. Given hurricane exposure and the now-limited ability to waive reserves, coastal boards are generally better served funding the structural components at threshold or full funding rather than parking at the statutory baseline. Keeping the exterior envelope in good condition also slows that deterioration; our guide to building envelope maintenance and reserve planning connects directly to this point.

Why did the CAI standards change, and how does this all connect?

The CAI Reserve Study Standards were substantially updated in 2023, announced on July 12, 2023, in direct response to the 2021 partial collapse of Champlain Towers South in Surfside. The update emphasized incorporating preventive maintenance and structural-inspection considerations into the reserve study process. The three service levels remained the framework; what changed was the seriousness with which structural condition is woven into reserve planning. That national shift is the same impulse that drove Florida to mandate the SIRS, the milestone inspection, and the reserve-funding changes in SB 154 and HB 913.

For a Northeast Florida coastal building, the cadence that fits all of this is consistent: a CAI-standard Level I baseline study to establish the picture, Level II site-visit updates on the 10-year cycle to satisfy the SIRS visual inspection, the milestone inspection coordinated on its own statutory trigger (possibly at 25 years on the coast), and a funding goal set at threshold or full rather than bare baseline. As a Florida-licensed professional engineering firm headquartered in the region, CSI can perform or verify the SIRS visual inspection the statute requires, perform the milestone inspection's engineer-led Phase One where one is due, combine the two efficiently when the timing aligns, and produce the studies at the level your building actually needs. You can learn more about our work on our services page.