Recent News

    In a surprise move, the Florida Legislature decided in its Special Session to take up the “Surfside legislation” that did not pass during the Regular Session earlier this year. A Bill (HB 5D) was adopted with little debate and unanimously by the Senate on May 24, 2022 and by the House on May 25. As of press time, the law has not been sent to the Governor, but it is expected to be signed and become law at some point in the next 30 days. Here are some of the highlights of the 88 page Bill, which is somewhat complicated and will need to be studied, digested, and discussed with the association’s advisors, including me, your legal counsel.
    If a condominium or cooperative building is 3 or more stories in height, a “milestone inspection” is required and must be performed by a licensed architect or engineer. The inspection must be performed within 30 years from the date the Certificate of Occupancy (“CO”) was issued for the building. However, if the building is within 3 miles from the coastline, the milestone inspection must be performed within 25 years of the CO date.
    The law is being phased in by requiring buildings that received a CO before July 1, 1992, to complete the first milestone inspection by December 31, 2024. The new law requires the “local enforcement agency,” presumably the local building department, to send notice to associations of the milestone inspection requirement. The association then has 180 days to perform a “Phase 1” inspection.
    The Phase 1 inspection requires the architect or engineer to perform a visual inspection of the property and undertake a qualitative assessment of the building’s condition. If the Phase 1 inspection reveals no signs of structural deterioration, then a “Phase 2” inspection is not required. A Phase 2 inspection is required if structural deterioration is noted. The Phase 2 inspection may require destructive testing, at the inspector’s direction. Please note that the terms “milestone inspection” and “substantial structural deterioration” are defined in the new statute. So, your engineer or architect must be aware and conduct the inspection accordingly.
    The engineer or architect performing either a Phase 1 or Phase 2 inspection must prepare a written inspection report. The report must be sealed and have a separate summary pointing out its material findings. The report must be given to the association and the building official with jurisdiction over the building.
    The new statute lists the minimum categories which must be addressed in the milestone inspection report, by reference to the new statutory requirement for a “structural reserve study,” discussed below. The association must distribute the milestone inspection report to all unit owners, regardless of its findings. Delivery must be by mail, personal delivery, or email to those who have consented to receive electronic notice. The association must also post a copy of the summary in a conspicuous place on the property. The association must post the full report on its website, if the association is legally required to have a website.
    The new law gives local building officials discretion to prescribe timelines and penalties for non-compliance. County commissions may adopt ordinances establishing timelines for necessary repairs identified in a report, and such repairs must be commenced within 365 days after receiving the report.
    The definition section of the statute adds the term “structural integrity reserve study” to the definitions included in the regulation of condominiums. The law requires that these reserve studies must be maintained as part of the official records of the association for 15 years, the same as for the milestone inspections discussed above. Renters are entitled to inspect the foregoing reports.
    Perhaps the most significant change to the law from an operational perspective is the budget adoption process, particularly regarding reserves. The reserve schedule will be required to include any items identified in a newly required “structural integrity reserve study.” The initial study must be completed by December 31, 2024 and must be performed at least every 10 years for buildings 3 stories and higher. As was the case with the milestone report, your reserve analyst must be familiar with these new requirements.
    Effective December 31, 2024, an association may not vote to waive or reduce reserves for the items listed in the structural integrity reserve study.
    The structural integrity reserve study must include: roofs; load bearing walls or other primary structural members; floors; foundations; fireproofing and fire protection systems; plumbing; electrical systems; waterproofing and exterior paint; windows; any other item which exceeds $10,000 in deferred maintenance cost and was identified by the engineer or architect performing the inspection portion of the structural integrity reserve study.
    Failure to complete the milestone inspections and reserve study in a timely and proper manner “is a breach of an officer’s and director’s fiduciary relationship to the unit owners.” The Division of Florida Condominiums, Time Shares and Mobile Homes is given rulemaking authority related to milestone inspections and structural integrity reserve studies, is required to obtain various information from associations before the end of this year, and must compile a searchable list on its website related to the information it receives.