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Gary-Mars-2021-2-200x300The firm’s latest Miami Herald “Real Estate Counselor” column by Gary M. Mars appears in today’s print edition of the newspaper and is titled “Community Associations Should Break Ties with Developer, Board Members During Turnover.”  The article focuses on the turnover process by which control of a community’s operations and management is transferred from its developer to the home/condo buyers.  Gary notes that this is one of the most critical junctures for the future administrative and financial wellbeing of all condominium and HOA communities, and those owners who have made the investment to be the charter members of their new association should always begin their takeover with the same vital step: breaking ties with the developers’ board members and experts.  His article reads:

. . . Turnover is when a new community’s unit owners get their opportunity to hire independent legal counsel, financial professionals, and engineers to conduct meticulous audits and inspections. A very careful review of all a community’s rules and business records, as well as the physical state of the entire property, is very much the order the day. The end goal is to hold the developer, as well as its contractor, suppliers and design professionals, accountable for any budget shortfalls and construction deficiencies.

GMars-Herald-clip-for-blog-6-20-22-300x230Given the nature of the task at hand, this work should always begin with the careful vetting of prospective advisor accountants, attorneys and engineers to ensure only independent and highly qualified professionals are retained by the new owner-controlled board, which must be expeditiously transitioned away from any directors and professionals appointed by the developer during its preceding control of the association, or with any ties to the developer.

The financial, engineering and legal experts retained by the new unit owner-controlled board of directors will be charged with representing the interests of all the owners by holding the developer, contractor, suppliers and design professionals to their warranty and financial obligations. They should also be tasked with changing any rules regulating community affairs, collections policies, and construction matters that were in place under the developer’s regime for its primary benefit.

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Given Florida’s nickname as the Sunshine State, it is only fitting that solar energy would be the state’s most popular and effective source of renewable energy. In fact, according to the U.S. Energy Information Administration, renewable energy fueled approximately five percent of Florida’s in-state electricity generation in 2020, and almost two-thirds of that came from solar.

It appears to be a sure bet that rooftop solar installations will be growing in popularity in the years to come for homeowners across the state. For those who own properties in communities with homeowners associations, internet searches will quickly reveal that Florida associations are prohibited by law from blanket denials of such installations. However, that does not mean that they do not have a significant say in the manner and form of solar panel installations in order to maintain the community’s aesthetic standards.

solar-panels-300x200The Florida Solar Rights Act protects homeowners who wish to install solar panels and other renewable energy devices on their property from outright bans. It provides that property owners may not be denied permission to install solar collectors and other renewable energy devices by HOAs or even local municipalities. The law expressly forbids binding agreements that limit access to renewable energy for dwellings.

However, the Act does allow for HOA architectural review boards and committees to determine the specific rooftop location where panels can be installed. Associations are therefore able to require homeowners to follow their set procedures for the prior review and approval of planned alterations and improvements. Review committees may request diagrams and information on the dimensions, location(s), and layout of proposed solar panels, including illustrations. They can also review and approve all the related wiring and electrical components, as well as the proposed height of the panels from the roof.

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RobertoBlanch_8016-200x300The firm’s latest Real Estate Counselor column in today’s Miami Herald is authored by Roberto C. Blanch and titled “Lawmakers Deliver Huge Milestone in Evolution of Florida’s Condo Laws.”  The article focuses on the state legislature’s passage of the most far-reaching condominium safety reforms in Florida since Hurricane Andrew.  It reads:

. . . The changes include many of the proposals from engineering, legal and community association industry task forces aimed at studying the perceived shortcomings that led to the Surfside catastrophe. They require inspections for buildings three stories or higher 30 years after completion and every 10 years thereafter. Buildings within three miles of the coast must be inspected at 25 years, then every 10 years. The first buildings impacted are slated to be those constructed before July 1, 1992, as they must complete their first structural inspections prior to Dec. 31, 2024.

The inspections are aimed at identifying any substantial structural deterioration that may present life-safety dangers, and whether remedial or preventive repairs are recommended. RBlanch-Herald-clip-for-blog-6-5-22-99x300The reports on their findings will be required to be distributed to association unit owners, prospective buyers and local building departments, which may then require the start of repairs within specified timeframes if substantial deficiencies are identified.

Associations will also be required to conduct reserve studies every 10 years for the funding of structural repairs and, most important, beginning by 2025 they will no longer be allowed to waive funding of many reserve components.

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The tragic collapse of Champlain South Tower has prompted various changes state-wide in regards to condominium safety-reforms. Although just last week Florida passed its first ever state-wide condominium safety reform bill, on June 1, 2022 Miami-Dade County’s Board of County Commissioners released an ordinance establishing even more stringent procedures for the recertification process. The following are key takeaways:

  • All buildings (except single-family homes, duplexes, and structures housing fewer than 10 people) must undergo recertification upon reaching 30 years of age and every 10 years thereafter.
  • Local jurisdictions will provide buildings with a courtesy notice one and two years prior to their recertification anniversary.
  • Buildings will also receive a reminder 90 days before the report submission due date of recertification deadline.
  • The same notice schedule applies for the 10-year incremental recertifications.

shutterstock_783519631-300x200Buildings and structures built between 1983-1992 must undergo recertification for their 30-year period on or before March 31, 2024. They are not subject to the courtesy notification requirement.

  • Buildings built between 1983-1986 are exempt from the 30-year recertification requirement, only if a 40-year recertification report for the building would be otherwise due before March 31, 2024, and such report is timely submitted.
  • Within 90 days of the Notice of Required Inspection, a written report must be submitted to a building official certifying that the building is both structurally and electrically safe for continued occupancy. Submission of a report will also be deemed timely if submitted any time between two (2) years before the building’s recertification anniversary.

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Condominium safety reforms were very much in the spotlight during this year’s regular session following the unforgettable tragedy in Surfside, Florida. Though legislators could not agree on legislation pertaining to safety reforms during the regular session, they successfully did so during a special session. In a surprising move, Senate Bill 4-D unanimously passed in both the House and Senate and was recently signed into law by the Governor. The following are the key takeaways from the 88-page bill:

The “Milestone Inspection”

  • Florida has now imposed a state-wide structural inspection program for condominium and cooperative associations that are three (3) stories or more in height defined as a “milestone inspection.”
  • Community association managers or management companies contractually hired by a condominium association that is subject to this inspection must comply with this section as directed by the board.
  • Milestone inspections must be performed by December 31 of the year in which the building reaches 30 years in age, based on the issue date of the building’s certificate of occupancy, and every 10 years thereafter. Buildings located within 3 miles of the coastline must perform a milestone inspection by December 31 of the year in which they reach 25 years in age, and every 10 years thereafter.  Buildings with a certificate of occupancy that was issued on or before July 1, 1992 must have the initial milestone inspection performed before December 31, 2024.
  • Condominium and cooperative associations are responsible for the scheduling and costs associated with the milestone inspection.
  • Milestone inspection means a structural inspection of a building’s load-bearing walls and primary structural members/systems.
  • Milestone inspections must be performed by a Florida licensed engineer/architect who must attest to the life safety and adequacy of structural components of the building. To the extent that it’s reasonably possible, the inspection must determine the general structural condition of the building as it affects the safety of building, such as necessary maintenance, repairs and replacements of structural components.
  • “Substantial structural deterioration” is described as substantial structural distress that negatively affects the building’s general structural condition and integrity.

fla-legislature-300x198Milestone inspections will consist of two phases:

    • Phase one — Visual examination of habitable/nonhabitable areas of building. If there are no signs of structural deterioration found, phase two is not required.
    • Phase two — If substantial deterioration is found during phase one, phase two may involve destructive or nondestructive testing at the inspector’s discretion. This additional inspection may be as extensive or limited as necessary to fully assess areas of distress.
    • Architect/engineer who performed inspections must submit a sealed copy of the inspection report and findings to both the association and appropriate local building official
  • Local enforcement agencies will provide buildings required to comply with this law notice of required inspection by certified mail.
  • Upon receiving notice, condominium/cooperative associations will have 180 days to complete phase one of the inspection.

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Many Florida condominiums are responding to new inspection and structural-integrity requirements from lenders and insurers by planning for projects to bolster and repair their aging towers. For such major construction projects, competitive bids are literally a must, as they are mandated by Florida law. However, for very small associations as well as for some other types of services and contracts, obtaining competing bids from multiple vendors is not required by state law.

In fact, for small condominium associations with 10 units or less, their owners may opt out of competitive bids with a two-thirds majority vote. For all other condominium associations, bids are required for any agreement for the procurement of goods and services that will exceed 5% of the association’s budget, with exceptions for contracts for the hiring of association employees, and contracts for attorneys, accountants, architects, community association managers, timeshare management firms, engineers, and landscape architects.

Bids-post-photo-300x200Additionally, in cases of an emergency or recovery from storms and other catastrophes, or if the vendor is the only provider of the goods or services being sought in the county where the association is located, competitive bids are not required.

While condominium associations are required to obtain competitive bids for materials, equipment and services that exceed 5% of the total annual budget, including reserves, they are not required to accept the lowest bid, and only two competing bids will suffice to meet the requirement.

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RobertoBlanch_8016-200x300Just two days after his insights were featured in the Miami Herald‘s initial article on the Florida legislature’s proposed new condominium-safety reforms, Roberto Blanch‘s input on the changes that unanimously passed in both the House and Senate on the state’s condominium associations and owners were prominently featured in the newspaper’s follow up report on today’s front page.  The article, which is headlined “‘A Major Move Forward in Safety.’ A Look at How Condo Reforms Will Work,” focuses on the new requirements for condominiums to conduct regular building inspections and build sufficient cash reserves to cover structural maintenance and repairs.  The article reads:

. . . The changes are laid out in a set of amendments to Florida’s condo law approved by the state House and Senate on Tuesday and Wednesday. In a surprise, the Legislature acted swiftly this week during a special session designed to address the home-insurance crisis after coming under substantial public pressure for doing nothing to shore up condo inspections and regulations  following the Surfside tragedy, which claimed 98 lives.

RBlanch-Herald-clip-for-blog-5-27-22-281x300The reform law generally hews to detailed findings and recommendations issued after Surfside by public-interest groups that include the Florida Bar, the Miami-Dade County Grand Jury, a consortium of Florida professional engineer associations, and the Community Associations Institute, a national organization that represents thousands of associations, managers and residents.

The reforms had broad but not uniform support from principal sectors of the condo industry, including association representatives, condo lawyers and real estate brokers.  Together, backers say, the reforms should markedly boost confidence in the safety of  Florida’s condos.

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RobertoBlanch_8016-200x300The firm’s Roberto Blanch was the first independent expert source quoted in a report in today’s Miami Herald on a new bill filed yesterday during Florida’s legislative special session on home insurance that appears to be on track to be the most significant overhaul of the state’s condominium laws in decades. It was passed by the full Senate yesterday and is poised to be approved by the House today.

The proposed measures, which are in direct response to the horrific Champlain Towers tragedy that claimed 98 lives, include statewide inspections for aging condominium buildings and requirements for condo associations to hold money in reserves to pay for repairs. The bill also requires developers of new buildings to fund reserves, and it imposes legal liabilities on board members who ignore inspection requirements.

The Miami Herald article, which appears under the headline “Legislature Reaches Deal on Condos,” reads:

. . . [The bill] would require condominium associations to conduct reserve studies every decade to make sure they have the resources to finance needed structural repairs. RBlanch-Herald-clip-for-blog-5-25-22-300x192Starting in 2025, they would be barred from waiving a requirement that they put money in reserves to make structural repairs, although they could continue to waive collecting reserve funds for other improvements.

There are hundreds of condo buildings in South Florida and more across the state that would need to ramp up funding quickly if the bill passes, said Roberto Blanch, a Miami-based condo attorney for Siegfried Rivera.

“That is very likely going to impart upon [condo associations] a heavy financial burden,” Blanch said. “It’s kind of like quitting smoking cold turkey. There’s not going to be any gradual step-down for these folks. That could, in some buildings, become a very tough pill to swallow.”

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Nicole-Kurtz-2021-200x300The firm’s latest Miami Herald “Real Estate Counselor” column authored by Nicole R. Kurtz appears in today’s Neighbors section and is titled “Federal and State Reforms Necessary to Address Florida’s Residential Insurance Woes.”  It focuses on the precarious state of Florida’s home insurance market, which will be the subject of a special session by the state legislature this week.  Nicole’s article reads:

. . . An article by the Miami Herald’s Ben Conarck recently chronicled how the horrific Champlain Towers collapse “has further inflamed an exodus of insurers no longer willing to underwrite policies in an increasingly risky Florida condo marketplace.” It noted that condominium associations are being forced to resort to the surplus market for less coverage at costlier rates.

“Condo associations are having a hard time getting their pre-Surfside policies renewed, forced instead to sift through estimates for less protective plans that cost twice as much, or higher. Those lucky enough to renew their policies are doing so at 30% to 50% premium increases,” according to Conarck’s expert sources.

Herald-clip-for-blog-5-22-22-1-100x300They also indicate “[s]piraling costs and tighter restrictions in both the insurance and lending industries have led to a new fear that some particularly troubled condo buildings will be uninsurable. Companies are going to be demanding inspection and financial records — and even meeting minutes — to determine how much risk is in any given building.”

Indeed, some analysts are predicting that the state’s residential insurance market is nearing a total collapse. They point to the six property and casualty companies that offered homeowners insurance in the state but have liquidated since 2017, with two more that are in the liquidation process this year.

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A recent case from Leesburg, Florida, illustrates why community associations should avoid issuing and using debit cards in the name of the association.

According to a recent report by Leesburg News (www.Leesburg-News.com), John Joseph O’Connor was arrested and stands accused of stealing nearly $3,000 from the Coachwood Colony HOA by making multiple ATM withdrawals with the association’s debit card shortly after he resigned as president. The transactions were discovered by the association’s new treasurer, who reviewed the bank statements after joining its board of directors and discovered nine unauthorized ATM withdrawals totaling $2,972.

The astute treasurer contacted the bank and was told that the debit card used for all the transactions was the one issued to O’Connor.

cwood-300x161The Lake County Sheriff’s Office was notified, and a deputy questioned O’Connor who said he lost his wallet with the HOA’s debit card and had reported it to the bank. However, further investigation revealed that he had never reported the card missing, and ATM surveillance video proved to be incriminating. He was arrested and released on a $7,000 bond, and is scheduled to appear in Lake County Court on May 31.

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