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Articles Posted in New Legislation

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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Florida’s legislature has received very poor marks for its failure to pass any condominium-safety reforms after the horrific Champlain Towers tragedy.  Many condominium residents and community association attorneys expected the state’s lawmakers would strike a deal on a bill to revamp Florida’s existing condo regulations by requiring periodic inspections of buildings.

Pundits and newspaper columnists are lamenting the fact that the two chambers ultimately could not agree on whether to require condominium associations to maintain financial reserves for major structural maintenance and repairs.  Given the horrific tragedy that claimed 98 lives, not-to-mention the significant number of aging buildings across the state with potential structural deficiencies, it is no surprise that there has been an outcry after the legislature failed to act.

Taking into consideration that this year’s legislative session began just over six months after the collapse, the legislature’s inability to establish mandatory safety reforms and require specific funding conditions for condominiums throughout the state was actually not very surprising.  Florida-legislature2-300x169The issues of high-rise structural inspections, condominium association financial reserves, and mandatory fire sprinklers have flummoxed lawmakers in Florida and other states for decades.

Florida’s legislators should now take the time to work through the difficult details of condominium high-rise safety reforms during the remainder of the year and the pre-session legislative meetings for the 2023 session.  There may not be a one-size-fits-all solution for condominium buildings of varying heights and stages in their lifespan.

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Gary-Mars-2021-2-200x300The firm’s latest Miami Herald “Real Estate Counselor” column authored by Gary M. Mars appears in today’s Neighbors section and is titled “What’s Next for Condo-Safety Reforms After Legislature Fails to Act?”.  The article focuses on the very poor marks that the state legislature has received in newspaper editorials from the Herald and across the state for its failure to pass any condominium-safety reforms after the horrific Champlain Towers tragedy.  It notes the editorials lament that the two chambers ultimately could not reach bicameral agreement on whether to require condominium associations to maintain financial reserves for major structural maintenance and repairs, and they are certainly correct to bemoan the legislative shortfall.  Gary’s article continues:

. . . However, from the point of view of someone who has kept a finger on the pulse of the state’s condominium laws for the past 30 years, the failure of the legislators to pass reforms during the session that began just over six months after the collapse was not surprising. Lawmakers in Florida as well as other states have been grappling with the issues of high-rise structural inspections and condominium association financial reserves for decades, not-to-mention fire sprinkler and suppression systems that can be very difficult and expensive to retrofit into older buildings.

It was perhaps overly auspicious of lawmakers to propose sweeping reforms without having first ironed out many of the important aspects of the proposals in the pre-session legislative meetings. They put forth many of the recommendations from task forces from engineering/construction trade groups and The Florida Bar, but they ultimately could not agree on the details of inspection dates and reserve funding levels.

Miami-Herald-3-27-22-print-page-342x1024Even with no changes to the state’s laws, significant condo-safety reforms are being implemented by lenders after major changes in underwriting requirements from government-sponsored Fannie Mae and Freddie Mac. In fact, many associations have already been struggling to comply with the new requirement from these quasi government agencies for lenders to have the condominium associations for mortgage applicants complete an eight-page form. For towers in their teen years that have never conducted any kind of major engineering inspections, association directors are completely unequipped to attest to their buildings’ current structural integrity in these questionnaires, and the potential legal liabilities would preclude them from making such representations.

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Gary-Mars-2021-2-200x300An article featuring insights from firm shareholder Gary M. Mars appears on the front page of today’s Sun Sentinel.  The article, which is headlined “Failed Condo Safety Bill Leaves Residents, Buyers in Limbo,” focuses on what is in store for condominium safety reforms from lenders and insurers after the measures before the Florida Legislature failed to pass during the 2022 session that ended last week.  The article reads:

. . . Some condo lawyers argue that it was too ambitious to expect that a sweeping safety bill could be passed in a short three-month legislative session.

“I know it was very, very ambitious legislation,” said Gary Mars, a condo lawyer at Siegfried Rivera in Coral Gables.  “It would have taken a lot of effort to get it through all of the machinations developing legislation of this type.”

He noted that not every building is in dire structural straits, or even old enough to be required to follow inspection rules such as the ones in Broward and Miami-Dade counties, which mandate deep-dive studies after 40 years.

Sun-Sentinel-3-21-22-print-page-1-1-100x300“I represent a lot of associations in buildings in their teenaged years,” he said.

“They’re getting sophisticated reports” from their engineers about deferred maintenance issues such as waterproofing, balcony restorations and painting, Mars said.  But the reports don’t cover structural issues.

“They may have wonderful reports, but those reports don’t give the association the ability to check the box” about the building’s overall condition, he said. “There’s not a perfect solution to this problem.”. . .

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The Florida Legislative Session began on January 11th and is expected to wrap up by the end of this week. We’ve been tracking the 21 bills filed throughout the session that would directly impact community associations throughout Florida.  Below is a summary of the proposed bills that are still making their way through the final leg of this year’s session.

As always, we will inform our readers as to which of the proposed bills become new law, and we will also provide a comprehensive summary of those bills and their impact on community associations. In addition, given the anticipated changes that might come into effect for the state regarding the funding of reserves and new inspection requirements for condominium buildings, we encourage readers to also stay on the lookout for possible changes at local levels.  For example, we recently covered a new Miami-Dade ordinance that requires community associations located in the county to upload certain documents and information to a new publicly accessible database (click here to learn more).

Residential Associations — SB 394 and related HB 547 revise the certification and educational requirements for boards of directors of residential community associations. Newly elected or appointed board members would be required to certify by affidavit that they have read their association’s declaration, articles of incorporation, bylaws and written policies AND will attend a division-approved board certification course. If passed, this law would be effective July 1, 2022.

Florida-legislature-photo-thumb-300x198-300x198Condominium & Homeowners Associations Flags — CS/SB 438 and related HB 465 permit owners in condominium associations and mandatory homeowners associations to display a flag representing the United States Space Force on designated holidays. If passed, this law would come into effect on July 1, 2022.

Display of Flags in Residential Associations — SB 1716 and related HB 1371 authorize owners of condominium associations to display The United States flag, the official flag of the State of Florida, a flag that represents specific special forces, a POW-MIA flag and certain first responder flags, even if the association’s covenants, restrictions, rules or requirements prohibit owners from displaying flags. This act will take effect July 1, 2022, if passed.

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The demands for increased access to condominium financial records and structural reports in Florida after the horrific Champlain Towers tragedy are leading to possible changes at the state and local levels, and they just led to a new local ordinance in Miami-Dade County.

On March 1st, the Miami-Dade Board of County Commissioners unanimously approved an ordinance establishing a searchable database for financial statements and structural reports, among other information and documentation, for residential community associations located in Miami-Dade County. The new ordinance requires community associations in Miami-Dade County, including all condominium, cooperative, and homeowners’ associations, to upload certain documents and information to the county’s database, along with a written registration with the Miami-Dade County Department of Regulatory and Economic Resources, by Feb. 1st of each year, beginning on February 1, 2023.

MCboard-300x169The ordinance provides that the documents uploaded to the database will be publicly accessible on the county’s website, and will also be searchable. Some of the documents to be attached to the annual registration submitted to the county include the following: the name of the community association; the name and contact information for the association’s property manager or other designated agent; a list of all officers and directors of the association, including their contact information; a link to the association’s website, if any; a legible copy of the association’s governing documents; a list containing the association’s planned capital projects from the date of registration through February 1st of the following year; a copy of the association’s current budget and financial statements, including any applicable current or approved special assessments; and all reports issued within the last 10 years on the structural status of the property governed by the association, including recertification reports, if applicable.

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The new condominium safety financing requirements from Fannie Mae and Freddie Mac have drawn a great deal of attention, but the Florida Legislature appears to be poised to go one step further in its response to the horrific Champlain Towers tragedy.

The Florida House and Senate are both moving forward with bills that would add new inspection requirements on condominium buildings. A bill that is now ready to go before the full Senate, SB 1702 would require condominiums that are three stories or taller and located within three miles of the coast to undergo initial inspections 20 years after completion and every seven years thereafter. Buildings in other areas would be required to be inspected after 30 years and every 10 years thereafter.

Flalegislature-300x169The Florida House has taken up its own version of the bill (HB 7069). Its proposal would require initial inspections to occur 25 years after completion, and buildings further inland would have their first inspection at 30 years. Additional inspections would be required every 10 years.

The House and Senate bills also include differences over reserve studies, which are used to determine the level of funds a condominium community needs to maintain in reserve for future renovations and repairs. The differences between the two bills are likely to soon be consolidated into a final bill for bicameral consideration.

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The market for homes and condominiums throughout the South Florida region is now thriving, and many of the area’s community associations are seeing more document requests from prospective buyers than ever before. Florida law mandates associations provide certain documents to prospective buyers, and several bills are now being considered by the state’s lawmakers to increase access to association financial and engineering records.

Florida law dictates that associations must provide prospective buyers with the community’s declaration, articles of incorporation, bylaws and any related amendments, as well as the rules of the association. They must also provide them with a Q&A/fact sheet covering voting rights, use and leasing restrictions, fees and assessments, and outstanding litigation with liabilities in excess of $100,000.

Flalegislature-300x169These documents may be provided in hardcopy or digital forms, but digital records are preferred and can be prepared for easy access via a shareable weblink. The records must also be made available for scanning, copying or photographing, so hardcopies should also be available for use as needed. Only the “actual cost” involved in preparing and providing the documents may be passed on to prospective buyers, so there should not be any costs for cases in which only digital access is requested and provided.

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