Live In a Condominium or Co-Op? This Is What You Need to Know.

4 min read, By May Galan, SVP Association Management

Gone are the days when condominium and co-op owners could vote to partially fund or waive reserves. Those who have been partially funding or waiving them are looking at some high monthly increases in the next few years to cover all those reserve funds not collected in the past. As seen by new legislation, mandatory milestone Inspections will now be required. These milestone inspections differ from the forty (40) year certifications required for Miami-Dade County condominiums. These newly enacted laws will undoubtedly make it financially more difficult for many to purchase and even remain living in their condominium units. Nonetheless, the Florida Legislature has voted for legislation which would put the safety and lives of those unit owners first by largely focusing on structure integrity and compliance.

So Why Has Florida Enacted This Law?

In 2021, the Champlain Tower Residential Condominium in Surfside tragically collapsed, and 98 residents perished. The cause of the collapse is still being investigated, but it was reported that the building needed structural repairs, that unfortunately, the association did not have reserves available to make them. In response to this tragedy, in 2022, the Florida Legislator passed House Bill 4-D, Mandatory Structural Inspections for Condominium & Cooperative Buildings.

Mandatory "Milestone" Inspections

Milestone inspections are now required for condominiums or co-ops buildings three stories or higher. These Milestone inspections are due 30 years from the building's Certificate of Occupancy date, every ten years after that, and if within 3 miles from the coast, at 25 years and after that, every ten years. A Milestone Inspections means a structural inspection of a building, including an inspection of load-bearing walls and the primary structural members and primary structural systems as those terms defined in s. 627.706, by a licensed architect or engineer authorized to practice in the state of Florida for the purposes of attesting to the life safety and adequacy of the structural components of the building and, to the extent reasonably possible, determining the general structural condition of the building as it affects the safety of such building,  including a determination of any necessary maintenance, repair, or replacement of any structural component of the building.

In Addition: Now Required, a Mandatory Structural Integrity Reserve Study (SIRS)

This report differs from the required Milestone Inspection and a Reserve Study previously required for associations. A Structural Integrity Reserve Study will now be required for buildings existing on or before July 1, 1992. The report must be completed by Dec 31, 2024, for each building on the condominium property three stories or higher in height. This study will be required at least once every ten years for every condominium or co-op building three stories or higher. In addition, associations must have SIRS completed at least every ten years after the condominium's creation for each building on the association's property.

This means that starting with your budget for 2025, each condominium must perform a mandatory "Structural Integrity Reserve Study" of the reserve's funds required for the future major repairs and replacement of the common areas. The study will provide a recommended annual reserve amount that condominiums must collect in 2025. Owners cannot vote not to fund or partially fund reserves. So, if your association has not been funding reserves for years or ever, come 2025, your assessments will most likely skyrocket, and special assessments may be levied to fund your reserves. Not to mention that you will need to add the Milestone Inspections and Structural Integrity Reserve Study costs to your budget for 2024 and which costs will be in the thousands for them.

What About Buildings Less Than Three Stories?

If your building is less than three stories, the legislation states that "in addition to annual operating expenses, the budget must include reserve accounts for capital expenditures and deferred maintenance. These accounts must include, but are not limited to, roof replacement, building painting, and pavement resurfacing, regardless of the amount of deferred maintenance expense or replacement cost, and any other item that a deferred maintenance expense or replacement cost that exceeds $10,000."

While a Milestone Inspection and Structural Integrity Reserve Study will not be required for condominiums three stories or less, a Reserve Study is still required at least once every three years. Therefore, the association should fund the reserves per the studies' recommendation. Hopefully, during the 2023 Legislative Session, clarification will be forthcoming on whether a condominium with less than three stories can waive or reduce reserves for any reserve items required in the SIRS.

As A Condominium or Co-Op Owner, What Should You Do?

The board must distribute a copy of the inspector-prepared summary of the Milestone Inspection Report to each unit owner, regardless of the findings or recommendations in the report. They must also post a copy of the inspector-prepared summary and publish the full report and inspector-prepared summary on the association's website if it is required to have a website. Owners should attend and participate in board meetings and ask the board members and their management company how they comply with these newly enacted laws, when these inspections will be ordered, completed, and how they will be paid for if they still need to be budgeted for. It is important as an owner that you know your building is structurally safe and that your most important investment is being lawfully maintained. And while increasing maintenance fees may hurt your pockets, not funding reserves can detrimentally hurt your association in the long run. No one wants to live in a deteriorating building and no money to fund repairs needed.

One more thing, if you sell your unit, the seller of a condominium or cooperative unit must provide to the potential purchaser a copy of the inspector-prepared summary of the Milestone Inspection Report and a copy of the association's most recent Structural Integrity Reserve Study or a statement that the association has not completed a Milestone Inspection or Structural Integrity Reserve Study. Please make no mistake about it; you will need to disclose to potential buyers of future potential maintenance increases and special assessments based on these reports' reserve requirements that may or may not be currently fully funded.

Get involved with your association and help your boards make the best decision for your properties. A well-maintained property will increase your investment's value, so you must be involved. 

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